TCR_Public/120515.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Tuesday, May 15, 2012, Vol. 16, No. 134

                            Headlines

AFA FOODS: Debtor & Yucaipa Sued Over Layoffs
ALL LAND INVESTMENTS: Court Dismisses Chapter 11 Case
AMERICA WEST: Denly Utah Discloses 46.2% Equity Stake
AMERICAN APPAREL: Incurs $7.8 Million Net Loss in First Quarter
AMERICAN APPAREL: GCIC Discloses 18.4% Equity Stake

ANGELO ROMANO: 9th Cir. BAP Affirms Ruling on Richardson Fees
APPLIED MINERALS: Incurs $4 Million Net Loss in First Quarter
ATP OIL: Incurs $145.1 Million Net Loss in First Quarter
AVANTAIR INC: Incurs $1.1 Million Net Loss in First Quarter
BEAZER HOMES: Elizabeth Acton Named to Board of Directors

BERNARD L. MADOFF: Dist. Judge's Opinion in Refco Presages Rulings
BLUEGREEN CORP: Closes Sale of Bluegreen for $29 Million
BOWLES SUB: Parcel A Hires Lapp Libra as Bankruptcy Counsel
CAPITOL INFRASTRUCTURE: Judge Allows Capitol to Reject Contracts
CASCADE BANCORP: Eleven Directors Elected at Annual Meeting

CATALYST PAPER: Reports $25.6 Million First Quarter Net Loss
CHINA SHENGDA: Gets Non-Compliance Notice From NASDAQ
CINRAM INT'L: Lenders Agree to Extend Waiver to May 30
CONTRACT RESEARCH: Has Approval for Settlement, Loan and Bonuses
CORBIN PARK: BAP Says Mortgagee Has Priority Over Mechanic's Lien

DELTA PETROLEUM: Court Approves Laramie as Plan Sponsor
DEX ONE: Seven Directors Elected at Annual Meeting
DOLLAR THRIFTY: Moody's Raises CFR/PDR to 'B1'; Outlook Stable
ECOSPHERE TECHNOLOGIES: Files Form 10-Q; Posts $746,781 Q1 Loss
ELEPHANT TALK: Incurs $6 Million Net Loss in First Quarter

ELEPHANT TALK: Files Form S-3, Registers 90.4-Mil. Common Shares
EMERALD PERFORMANCE: Upsized Loan No Impact on Moody's 'B2' CFR
EMMIS COMMUNICATIONS: Swings to $79.5-Mil. Net Income in 2011
ENTREMED INC: Regains Compliance With Equity Listing Requirement
EPICEPT CORP: Incurs $4.7 Million Net Loss in First Quarter

GEOMET INC: Transfers Listings to the NASDAQ Capital Market
GEORGE VAN WAGNER: Ch. 7 Trustee Didn't Abandon Causes of Action
GMX RESOURCES: Files Form 10-Q, Incurs $37.8MM Net Loss in Q1
GREENMAN TECHNOLOGIES: Gregory Ho Discloses 39.5% Equity Stake
GUSHAN ENVIRONMENTAL: Gets NYSE Notice of Non-Compliance

HALO COMPANIES: Whitley Penn Succeeds Montgomery as Accountants
HARRISBURG, PA: Officials Seek to Halt State Receivership Case
HEALTH NET: Moody's Retains 'Ba3' Sr. Debt Rating, Outlook Stable
HENRY FAJARDO: MFC Twin Builders Goes Back to State Court
HOMER CITY: Moody's Cuts Rating on Pass Through Bonds to 'Caa1'

HORNE INTERNATIONAL: Amends Loan Pact with Messrs. Horne & Foster
HOSTESS BRANDS: KPS Capital Reportedly Eyeing Cakes Maker
HOUGHTON MIFFLIN: To Swap Debt for New Equity Via Ch. 11
HOUGHTON MIFFLIN: Moody's Cuts CFR/PDR to 'Ca'; Outlook Stable
HUGHES TELEMATICS: Incurs $15.6 Million Net Loss in Q1

INTELSAT SA: Receives Additional Tenders of $1.5MM 9 1/2% Notes
ISTAR FINANCIAL: Files Form 10-Q, Incurs $46MM Net Loss in Q1
JAMES RIVER: Michael Cook Holds 4.3% of Class A Common Shares
LIBERTY HARBOR: Sues Former Business Partner Over 'Invalid' Deed
LIGHTSQUARED INC: Case Summary & 20 Largest Unsecured Creditors

LIGHTSQUARED INC: Files for Bankruptcy As It Deals With FCC
LL MURPHREY: Court Pegs Recapitalized Debt at $6.18-Mil.
LOTHIAN OIL: Creditor Asks 2nd Circ. to Resolve Jurisdiction Row
MARRICK PROPERTIES: St. Petersburg Boutique Hotel in Chapter 11
MILESTONE SCIENTIFIC: Incurs $355,000 Net Loss in First Quarter

MPG OFFICE: Files Form 10-Q, Posts $10.4-Mil. Net Income in Q1
MORGANS HOTEL: Incurs $14.5 Million Net Loss in First Quarter
MSR RESORT: Judge Sides With Hilton in Property Management Row
NAVISTAR INTERNATIONAL: Wellington Ceases to Hold 5% Stake
NAVISTAR INTERNATIONAL: Franklin Discloses 12.4% Equity Stake

NES RENTALS: Moody's Affirms 'Caa1' CFR, Rates Term Loan 'Caa2'
NEWPAGE CORP: Hearing Rescheduled Amid Dewey & LeBoeuf Woes
NO FEAR RETAIL: Liquidated, Paying Unsecured Creditors 2% to 6%
NORTEL NETWORKS: Close to Ending Fight With Asian Units
NORTEL NETWORKS: In Mediation With Asian, LatAm Affiliates

NORTHCORE TECHNOLOGIES: Envision Wins Consumers Choice Award
NRG ENERGY: Moody's Changes Outlook to Negative, Retains Ba3 CFR
OILSANDS QUEST: CCAA Creditor Protection Extended to June 29
OMNICOMM SYSTEMS: Incurs $3.4 Million Net Loss in First Quarter
OTTILIO PROPERTIES: Files for Chapter 11 Anew

OVERLAND STORAGE: Incurs $3.8 Million Net Loss in March 31 Qtr.
PEGASUS RURAL: Xanadoo to Hold June 26 Auction for Tower Assets
PINNACLE AIRLINES: Steelworkers Object to $74.3MM DIP Deal
PRINCE SPORTS: Agrees to License Iconic Brands to Battle Sports
PSS WORLD: Moody's Says Strategic Transformation Plan Credit Neg

QUANTUM FUEL: Incurs $7.8 Million Net Loss in First Quarter
QUIGLEY CO: Not Abandoning Reorganization After Loss on Appeal
REDDY ICE: Debtors and Creditors Oppose Official Equity Committee
REFCO INC: Dist. Judge Opinion Presages Rulings in Madoff
REFLECT SCIENTIFIC: Incurs $259,000 Net Loss in First Quarter

REGAL ENTERTAINMENT: Three Directors Elected at Annual Meeting
REGAL ENTERTAINMENT: Registers Add'l 5MM Shares Under 2002 Plan
RESIDENTIAL CAPITAL: Files for Chapter 11 in New York
RESIDENTIAL CAPITAL: Case Summary & 50 Largest Unsecured Creditors
ROYAL MANOR: 6th Cir. Affirms Order Denying Gordons' Claims

SAN ANTONIO OPERA: Files in Chapter 7 to Liquidate
SOLAR TRUST: Gets Court Approval to Auction Assets
SOUTH BAY LUBE: Files for Chapter 11 in Tampa
STEREOTAXIS INC: Files Form 10-Q; Incurs $5.8MM Net Loss in Q1
STONECREST FIN'L: Perpetual Care Trust Fund Not Estate's Asset

SUFFOLK REGIONAL: Files for Ch. 9 Again After Law Passed
THERMOENERGY CORP: Security Investors Holds 8.4% Equity Stake
UNIGENE LABORATORIES: Files Form 10-Q, Incurs $6MM Loss in Q1
VERENIUM CORP: Reports $30.1 Million Net Income in Q1
VITAMINSPICE INC: Says Jehu Hand's New Suit is Frivolous

VITRO SAB: Vulture Funds Ordered to Pay Legal Fees
VITRO SAB: NY Appeals Court Won't Enforce Mexican Court Ruling
VITRO SAB: Scores Two Victories Over Bondholders in Mexico
WESTLAKE CHEMICAL: Moody's Confirms 'Ba3' CFR; Outlook Stable
WHITETAIL WOODS: Marine Bank Wins Dismissal of Bankruptcy Case

Z TRIM HOLDINGS: Sells 744,711 Shares to Brightline for $1.1MM

* S&P: Global Default Count Rises Over the Last Six Months
* Junk Default Rates Increase Fractionally in April

* Large Bank Stress Testing Guidance Finalized

* Large Companies With Insolvent Balance Sheets

                            *********

AFA FOODS: Debtor & Yucaipa Sued Over Layoffs
---------------------------------------------
AFA Foods Inc. and its owner Yucaipa Cos. were sued in bankruptcy
court Thursday for a mass firing without giving workers the 60
days notice required by the Worker Adjustment Retraining and
Notification Act, commonly known as the Warn Act.

Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that according to the complaint, after AFA's bankruptcy
filing, a plant closed and 200 workers were fired without notice
required by the Warn Act, according to the complaint.  The lawsuit
is intended to be a class action on behalf of all AFA workers
fired without the required notice.

Max Stendahl at Bankruptcy Law360 reports that lead plaintiff
Nadia Sanchez claimed she was fired from her job at AFA's Los
Angeles plant, part of mass layoffs the company instituted in the
days after its April 2 bankruptcy filing.  AFA called the
employees into a meeting and told them they were being terminated.

                          About AFA Foods

King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the
largest processors of ground beef products in the United States.
The Company has five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds.  AFA has seven facilities capable of producing
800 million pound of ground beef annually.  Revenue in 2011 was
$958 million.

Yucaipa Cos. acquired the business in 2008 and currently owns 92%
percent of the common stock and all of the preferred stock.

AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.

Judge Mary Walrath presides over the case.  Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel.  FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants.  Kurtzman
Carson Consultants LLC serves as noticing and claims agent.

As of Feb. 29, 2012, on a consolidated basis, the Debtors' books
and records reflected approximately $219 million in assets and
$197 million in liabilities.

Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Chapter 11 cases of AFA Investment Inc., AFA Foods and their
debtor-affiliates.  McDonald Hopkins LLC and Potter Anderson &
Corroon LLP represents the Committee.

Judge Mary Walrath on May 8 entered procedures for the sale of
substantially all assets of AFA Foods and its affiliates.
Although no buyer is yet under contract, bids are due June 19,
followed by an auction June 21 and a hearing for sale approval on
June 26.  AFA has the right to select a stalking horse bidder or
bidders by June 11.  The plants will be offered for sale either in
groups or individually.

Pending sale, the Chapter 11 effort is being financed with a loan
of about $60 million provided by existing lenders General Electric
Capital Corp. and Bank of America Corp.


ALL LAND INVESTMENTS: Court Dismisses Chapter 11 Case
-----------------------------------------------------
The Bankruptcy Court dismissed the Chapter 11 case of All Land
Investments LLC.  On March 9, 2012, the Court denied confirmation
of All Land Investment's Plan and set a hearing to determine
whether the bankruptcy case should be dismissed.  The hearing was
held April 5, during which the Debtor advised the Court it had no
objection to the dismissal.  No other party also stepped forward
to lodge an objection.  The dismissal order was issued April 12.

Newark, Delaware-based All Land Investments, LLC, operates a real
estate business.  The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 09-13790) on Oct. 29, 2009.
Gary F. Seitz, Esq., at Rawle & Henderson LLP, serves counsel to
the Debtor in the Chapter 11 case.  The Company disclosed
$20.2 million in assets and $22.8 million in liabilities as of the
Chapter 11 filing.


AMERICA WEST: Denly Utah Discloses 46.2% Equity Stake
-----------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Denly Utah Coal, LLC, and its affiliates
disclosed that, as of July 14, 2011, they beneficially own
32,952,247 shares of common stock of America West Resources, Inc.,
representing 46.2% of the shares outstanding.

Denly Utah previously reported beneficial ownership of 21,467,884
common shares or a 40.9% equity stake as of March 31, 2011.

A copy of the amended filing is available for free at:

                        http://is.gd/JPun4u

                         About America West

Based in Salt Lake City, Utah, America West Resources, Inc., is an
established domestic coal producer engaged in the mining of clean
and compliant (low-sulfur) coal.  The majority of the Company's
coal is sold to utility companies for use in the generation of
electricity.

The Company reported a net loss of $16.35 million on
$11.08 million of total revenue for the nine months ended
Sept. 30, 2011.  The Company had a net loss of $16.14 million on
$10.07 million of total revenue for the year ended Dec. 31, 2010,
Following a net loss of $8.70 million on $11.01 million of total
revenue during the prior year.

The Company's balance sheet at Sept. 30, 2011, showed
$31.47 million in total assets, $23.12 million in total
liabilities, and $8.35 million in total stockholders' equity.

As reported by the TCR on April 21, 2011, MaloneBailey, LLP, in
Houston, Texas, expressed substantial doubt about America West's
ability to continue as a going concern, following the 2010
financial results.  The independent auditors noted that the
Company has a working capital deficit and has incurred significant
losses.


AMERICAN APPAREL: Incurs $7.8 Million Net Loss in First Quarter
---------------------------------------------------------------
American Apparel, Inc., reported a net loss of $7.89 million on
$132.66 million of net sales for the three months ended March 31,
2012, compared with a net loss of $20.74 million on $116.06
million of net sales for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed $331.38
million in total assets, $288.97 million in total liabilities and
$42.41 million in total stockholders' equity.

John Luttrell, Chief Financial Officer of American Apparel, Inc.,
stated, "We are pleased with our first quarter results and solid
improvements across all of our businesses.  Our wholesale and
online channels both reported record sales for the quarter, and we
are highly encouraged by the continued momentum in comparable
sales from our retail stores, both domestic and international.
Though the first quarter is historically our slowest quarter of
the year, significant sales growth and the related leveraging of
fixed costs helped us meaningfully reduce our EBITDA loss.  We
expect key initiatives in the areas of merchandise planning,
supply chain, IT systems, and inventory control to drive further
sales and expense improvements for the balance of the year.
Accordingly, we reiterate our adjusted EBITDA guidance of $32 to
$40 million for the full year 2012."

A copy of the press release is available for free at:

                        http://is.gd/XYRHaz

                       About American Apparel

Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel.  As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.

Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.

In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being.  Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece.  The deal allows the investors to purchase additional
27.4 million shares at the same price.

The Company reported a net loss of $39.31 million in 2011 and a
net loss of $86.31 million in 2010.


AMERICAN APPAREL: GCIC Discloses 18.4% Equity Stake
---------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, GCIC Ltd. disclosed that, as of April 30, 2012, it
beneficially owns 20,005,216 common shares of Americal Apparel,
Inc., representing 18.38% undiluted.  The shares are held within
mutual funds or other client accounts managed by GCIC Ltd. acting
as Investment Counsel and Portfolio Manager.  A copy of the filing
is available for free at http://is.gd/ehSh4C

                        About American Apparel

Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel.  As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.

Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.

In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being.  Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece.  The deal allows the investors to purchase additional
27.4 million shares at the same price.

The Company reported a net loss of $39.31 million in 2011 and a
net loss of $86.31 million in 2010.

The Company's balance sheet at March 31, 2012, showed $331.38
million in total assets, $288.97 million in total liabilities and
$42.41 million in total stockholders' equity.


ANGELO ROMANO: 9th Cir. BAP Affirms Ruling on Richardson Fees
-------------------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the Ninth Circuit affirmed
both the bankruptcy court's order on Richardson & Richardson,
P.C.'s second and final fee application in the bankruptcy case of
Angelo and Sharon Romano, and the bankruptcy court's order denying
Mr. Richardson's motion under Rule 90232 made with respect to the
court's order on fees.

The Romanos hired Richardson to file their bankruptcy case, to
represent them in that case, and to sue West Fourth Avenue, LLC,
for lender liability.

The bankruptcy court -- based on the Romanos' objections, the
absence of meaningful authorization of Richardson's services,
Richardson's unreasonable billing practices, and his lack of
candor -- limited Richardson's fee award to the amount the Romanos
already had paid -- $21,339 -- thereby disallowing $31,352 of the
total $52,991 Richardson had requested in fees and costs.

Angelo and Sharon Romano owned and operated a trucking business.
The Romanos borrowed money from a hard money lender, West Fourth
Avenue LLC, and in exchange gave Fourth Avenue a deed of trust on
the real property they used in operating their trucking business.
The trucking business began experiencing financial difficulties,
and the Romanos advised Fourth Avenue that they would not be able
to repay the loan on its due date.  The Romanos and Fourth Avenue
engaged in loan modification negotiations, but those negotiations
broke down, and Fourth Avenue commenced foreclosure proceedings.
The Romanos thereafter filed their chapter 11 bankruptcy case
(Case No. 09-23446) on Sept. 22, 2009.

The United States Trustee twice sought to convert the Romanos'
bankruptcy case from chapter 11 to chapter 7, once on Jan. 26,
2010, and again on Feb. 16, 2010.  According to the Romanos, the
U.S. Trustee advocated for conversion because Richardson missed
deadlines for filing a proposed chapter 11 plan on behalf of the
Romanos.

The Romanos asserted that Richardson should not receive
compensation for responding to the U.S. Trustee's conversion
efforts.

In response, Richardson contended: (1) the United States Trustee
over-reacted to the missed filing deadlines, and (2) the Romanos
caused him to miss the filing deadlines because they did not
provide him with sufficient information to file a plan.

The appellate case is RICHARDSON & RICHARDSON, P.C., Appellant, v.
ANGELO ANTHONY ROMANO; SHARON MARIE ROMANO, Appellees, BAP No. AZ-
11-1434-MkPaD (9th Cir. BAP).  A copy of the decision dated May 7,
2012, is available at http://is.gd/IJlURpfrom Leagle.com.


APPLIED MINERALS: Incurs $4 Million Net Loss in First Quarter
-------------------------------------------------------------
Applied Minerals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss attributable to the Company of $4.05 million on $55,402
of revenue for the three months ended March 31, 2012, compared
with a net loss attributable to the Company of $1.69 million on
$44,468 of revenue for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed $10.68
million in total assets, $5.24 million in total liabiilties and
$5.44 million in total stockholders' equity.

The Company has incurred material recurring losses from
operations.  At March 31, 2012, the Company had a total
accumulated deficit of approximately $43,084,500.  For the three
months ended March 31, 2012, and 2011, the Company sustained net
losses from exploration stage before discontinued operations of
approximately $4,056,700 and $1,695,100, respectively.  The
Company said that these factors indicate that it may be unable to
continue as a going concern for a reasonable period of time.  The
Company's continuation as a going concern is contingent upon its
ability to generate revenue and cash flow to meet its obligations
on a timely basis and management's ability to raise financing or
dispose of certain non-core assets as required.  If successful,
this will mitigate the factors that raise substantial doubt about
the Company's ability to continue as a going concern.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/gPlAXg

                       About Applied Minerals

New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a
leading global producer of halloysite clay used in the development
of advanced polymer, catalytic, environmental remediation, and
controlled release applications.  The Company operates the Dragon
Mine located in Juab County, Utah, the only commercial source of
halloysite clay in the western hemisphere.  Halloysite is an
aluminosilicate clay that forms naturally occurring nanotubes.

The Company reported a net loss attributable to the Company of
$7.48 million in 2011, a net loss attributable to the Company of
$4.76 million in 2010, and a net loss attributable to the Company
of $6.76 million in 2009.

                         Bankruptcy Warning

At Dec. 31, 2011, and 2010, the Company had accumulated deficits
of $39,183,632 and $31,543,411, respectively, in addition to
limited cash and unprofitable operations.  For the year ended
Dec. 31, 2011, and 2010, the Company sustained net losses before
discontinued operations of $7,476,864 and $4,891,525,
respectively.  As of March 15, 2012, the Company has not
commercialized the Dragon Mine and has had to rely on cash flow
generated from the sale of stock and convertible debt to fund its
operations.  If the Company is unable to fund its operations
through the commercialization of the Dragon Mine, the sale of
equity or debt or a combination of both, it may have to file
bankruptcy.


ATP OIL: Incurs $145.1 Million Net Loss in First Quarter
--------------------------------------------------------
ATP Oil and Gas Corporation filed with the U.S. Securities and
Exhange Commission its quarterly report on Form 10-Q disclosing a
net loss attributable to common shareholders of $145.07 million on
$146.61 million of oil and gas production revenues for the three
months ended March 31, 2012, compared with a net loss attributable
to common shareholders of $119.54 million on $166.50 million of
oil and gas production revenues for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed $3.63
billion in total assets, $3.48 billion in total liabilities,
$115.81 million in redeemable noncontrolling interest, $71.18
million in 8% convertible perpetual preferred stock, and a $34.44
million total shareholders' deficit.

A copy of the Form 10-Q is available for free at:

                         http://is.gd/tOtnJo

A copy of the press release announcing the financial results is
available for free at http://is.gd/98AsP3

                            About ATP Oil

Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused in
the Gulf of Mexico, Mediterranean Sea and North Sea.  The Company
trades publicly as ATPG on the NASDAQ Global Select Market.


AVANTAIR INC: Incurs $1.1 Million Net Loss in First Quarter
-----------------------------------------------------------
Avantair, Inc., reported a net loss attributable to common
stockholders of $1.10 million on $40.05 million of total revenue
for the three months ended March 31, 2012, compared with a net
loss attributable to common stockholders of $1.32 million on
$36.48 million of total revenues for the same period a year ago.

The Company reported a net loss attributable to common
stockholders of $4.42 million on $116.64 million of total revenue
for the nine months ended March 31, 2012, compared with a net loss
attributable to common stockholders of $10.94 million on
$108.85 million of total revenue for the same period during the
prior year.

The Company's balance sheet at March 31, 2012, showed
$98.86 million in total assets, $132 million in total liabilities,
$14.77 million in series A convertible preferred stock, and a
$47.91 million total stockholders' deficit.

Steven Santo, Chief Executive Officer of Avantair said, "Though
these results are better than one year ago and our prior quarter,
we are not satisfied and will continue to focus on taking
appropriate actions to achieve sustainable and growing
profitability.  During our recent quarter, we undertook a series
of actions in the sales and finance areas of our business, which
we believe will improve our operating results."

A copy of the press release is available for free at:

                        http://is.gd/k2BFaS

                        About Avantair Inc.

Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR)
-- http://www.avantair.com/-- sells fractional ownership
interests in, and flight hour card usage of, professionally
piloted aircraft for personal and business use, and the management
of its aircraft fleet.  According to AvData, Avantair is the fifth
largest company in the North American fractional aircraft
industry.

Avantair also operates fixed flight based operations (FBO) in
Camarillo, California and in Caldwell, New Jersey.  Through these
FBOs and its headquarters in Clearwater, Florida, Avantair
provides aircraft maintenance, concierge and other services to its
customers as well as to the Avantair fleet.

The Company reported a net loss of $2.57 million on $76.58 million
of total revenue for the six months ended Dec. 31, 2011, compared
with a net loss of $8.88 million on $72.36 million of revenue for
the same period a year ago.


BEAZER HOMES: Elizabeth Acton Named to Board of Directors
---------------------------------------------------------
Beazer Homes USA, Inc., has elected Elizabeth S. Acton to its
Board of Directors effective May 10, 2012.  Ms. Acton, who brings
considerable expertise and over 35 years of experience in
financial management, will also serve on the Board of Directors'
Finance and Audit Committees.

As Executive Vice President and Chief Financial Officer of
Comerica Inc. since 2002, Ms. Acton was instrumental in
successfully guiding Comerica through the deepest recession in
recent history, enabling the bank to maintain its credit rating
throughout the downturn.  Ms. Acton transitioned to Executive Vice
President, Finance in November 2011 preceding her retirement in
April 2012.  Comerica is a financial services company with over
$62 billion in assets.  Prior to joining Comerica, Ms. Acton was
Vice President-Treasurer at Ford Motor Company, where she had
responsibility for worldwide automotive and financial services
treasury activities.

Ms. Acton holds a bachelor of arts degree from the University of
Minnesota and a master of business administration from Indiana
University.

                         About Beazer Homes

Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia.  Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."

The Company's balance sheet at Dec. 31, 2011, showed $1.87 billion
in total assets, $1.67 billion in total liabilities, and
$200.38 million in total stockholders' equity.

                            *     *     *

Beazer carries (i) a 'B-' issuer credit rating, with "stable"
outlook, from Standard & Poor's, (ii) 'Caa2' probability of
default and corporate family ratings from Moody's, and
(iii) 'B-' issuer default rating, with stable outlook, from Fitch
Ratings.

Fitch said in November 2010 that the ratings and Outlook for
Beazer reflect the company's healthy liquidity position, improved
capital structure as well as the challenges still facing the
housing market.  Fitch expects existing home sales will decline
7.5% in 2010 and increase 6% in 2011.

S&P said that although Beazer's business and liquidity profiles
have improved, S&P doesn't anticipate raising its ratings on the
company over the next 12 months because S&P expects costs
associated with the company's heavy debt load will weigh on
profitability.

In a credit opinion issued in March 2012, Moody's said that the
Caa2 corporate family rating reflects Moody's expectation that
Beazer's operating and financial performance, while improving
modestly, will remain weak over the next two years. More
specifically, Moody's assumes that elevated debt leverage, on-
going operating losses, and declining tangible equity will
continue over this time period. In addition, Moody's expects that
Beazer's cash flow generation, which was a negative $113 million
on a reported basis (and a negative $106 million on a Moody's-
adjusted basis) over the trailing 12 months ended December 31,
2011, will continue to be weak in fiscal 2012 and 2013, as the
benefits of inventory liquidation have largely played out and the
company pursues land investments.


BERNARD L. MADOFF: Dist. Judge's Opinion in Refco Presages Rulings
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge Jed Rakoff in New York opined
Wednesday that bankruptcy judges can't make final rulings in
fraudulent transfer suits, the opposite result reached by the
bankruptcy judge in the same case involving Refco Inc.

According to the report, Judge Rakoff said that in a "core" matter
such as a fraudulent transfer suit, he must give effect to the
"clear intent" of Congress by sending the case back to the
bankruptcy court for report and recommendation.  Judge Rakoff's
decision May 9 likely indicates how he will rule in hundreds of
cases before him involving the liquidation of Bernard L. Madoff
Investment Securities LLC.

The report recounts that the fraudulent transfer lawsuit was filed
by a trust created under the Chapter 11 plan for Refco.  The
defendant sought to remove the case from the bankruptcy court to
the district court under Stern v. Marshall, where the U.S. Supreme
Court ruled in June that bankruptcy courts lack power under the
Constitution to make final rulings based on claims arising under
state law.  Addressing the question of his power in a decision in
November in the Refco case, U.S. Bankruptcy Judge Robert Drain
concluded that he retained power to make final rulings in
fraudulent transfer cases even with Stern on the books.  Judge
Drain reasoned that even if he were to dismiss the suit, his
ruling would go up on appeal under the so-called de novo standard.
Thus, Drain believed, he could enter a final order on a motion to
dismiss.

Judge Rakoff, according to the report, said that Drain's reasoning
was "flawed."  Because Stern doesn't give the bankruptcy court
ability to make final orders, the grant of a motion to dismiss
shouldn't be given "res judicata or collateral estoppel effect,"
the judge said.  Judge Rakoff said that fraudulent transfer suits
invoke "private rights" where the final decision can only be made
in a district court.  The suit involved "core" disputes the
bankruptcy judge had been handling for three years, Judge Rakoff
said.  "Having the benefit of the report and recommendation (by
the bankruptcy court) will save the district court and the parties
an immense amount of time," Judge Rakoff concluded. As a result,
he sent the suit back to the bankruptcy judge for further
processing.

In view of the defendants' demand for a jury trial, Judge Rakoff
said he "may withdraw the reference if and when a trial is
necessary."

According to Mr. Rochelle, Judge Rakoff's decision in the Refco
case likely presages decisions he will issue in hundreds of
lawsuits arising out of the Madoff liquidation where he is being
asked to remove the case from the bankruptcy judge and decide on
fraudulent transfer claims himself as a result of the Stern
decision.  In Madoff lawsuits, Rakoff is generally making
decisions himself on what he says are issues of non-bankruptcy
law.  In the Madoff cases, Judge Rakoff has yet to decide the same
issues he ruled on yesterday in Refco, namely, whether the cases
should remain in district court or be returned to the bankruptcy
court.

The case in district court is Kirschner v. Agoglia, 11- 8250, U.S.
District Court, Southern District of New York (Manhattan).  The
case in bankruptcy court is Kirschner v. Agoglia (In re Refco
Inc.), 07-3060, U.S. Bankruptcy Court, Southern District of New
York (Manhattan).

                         About Refco Inc.

Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore.  Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products.  Refco was one of the largest global clearing firms for
derivatives.  The Company had operations in Bermuda.

The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No.
05-60006).  J. Gregory Milmoe, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represented the Debtors in their restructuring
efforts.  Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors.  Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006.  That Plan became effective on Dec. 26,
2006.  Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.

                      About Bernard L. Madoff

Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion.  On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970.  The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.).  Mr. Picard has retained AlixPartners LLP as claims
agent.

On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893).  The case is before Hon. Burton Lifland.  The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.

On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).

The Chapter 15 case was later transferred to Manhattan.  In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.

Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)

The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.

Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts.  Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds.  Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.


BLUEGREEN CORP: Closes Sale of Bluegreen for $29 Million
--------------------------------------------------------
Bluegreen Corporation had completed the sale of its Bluegreen
Communities business to Southstar Development Partners, Inc., for
a purchase price of $29.0 million in cash and certain other
contingent consideration.  In connection with the sale, Bluegreen
satisfied Communities' debt obligations, primarily its H4BG
Communities Facility, which had an outstanding balance of
approximately $20.2 million.  Bluegreen satisfied this obligation
in full, along with accrued interest and a $2.0 million deferred
fee.

The Company does not expect to recognize a significant gain or
loss in connection with the transaction.  In addition, the Company
does not expect to realize significant net cash proceeds after
repayment of the Communities debt, the expenses of the
transaction, and the satisfaction of certain liabilities
associated with Bluegreen Communities that are remaining with the
Company following the transaction.

                       About Bluegreen Corp.

Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.

Bluegreen reported a net loss attributable to the Company of
$17.25 million in 2011, a net loss attributable to the Company of
$43.96 million in 2010, and a net loss attributable to the Company
of $3.57 million in 2009.

The Company's balance sheet at Dec. 31 2011, showed $1.09 billion
in total assets, $789.01 million in total liabilities and $308.36
million in total shareholders' equity.

                           *     *     *

In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable.  S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010.  At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011.  While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales.  In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.


BOWLES SUB: Parcel A Hires Lapp Libra as Bankruptcy Counsel
-----------------------------------------------------------
Bowles Sub Parcel A, LLC, seeks Bankruptcy Court permission to
employ Ralph V. Mitchell and the law firm of Lapp, Libra, Thomson,
Stoebner & Pusch, Chartered, to represent it in connection with
all matters relating to its chapter 11 case.

The attorneys and paralegal who will provide services and their
hourly rates are:

     $430 per hour for Ralph V. Mitchell,
     $250 per hour for Tyler D. Candee,
     $310 per hour for Rosanne H. Wirth,
     $160 per hour for paralegal services,
     and the normal hourly rate for other attorneys in the firm.

Mr. Mitchell, a shareholder of the firm, disclosed that:

     (a) Lapp Libra regularly represents Wells Fargo Bank, N.A.
         and its affiliates.  Wells Fargo Bank. N.A. is trustee
         for the registered holders of J.P. Morgan Chase
         Commercial Mortgage Securities Corp. Commercial Mortgage
         Pass-Through Certificates, Series 2004-LN2, the main
         secured creditor in the Debtor's case.  Wells Fargo Bank
         has advised us that it has virtually no interaction with
         the borrowers in these types of structured transactions
         and will play no role in the bankruptcy.  Wells Fargo
         Bank has advised Lapp Libra that it regularly waives any
         conflict under the circumstances and has similarly waived
         any conflict with this representation.

     (b) Lapp Libra filed five additional Chapter 11 cases for
         affiliates of the Debtor.  Lapp Libra does not believe
         that there are any inter-company claims although all of
         the six debtors owe debts to affiliates Hoyt Properties,
         Inc., and Steve Hoyt.

Mr. Mitchell attests that Lapp Libra is a "disinterested person"
as that term is defined in 11 U.S.C. Sec. 101(14), and does not
hold or represent any interest adverse to the Debtor with respect
to matters upon which it is to be engaged.  Lapp Libra has
received no compensation from any party in connection with the
case except the Debtor paid Lapp Libra $25,000 as retainer.

From the retainer, Lapp Libra has paid the filing fee of $1,046.
From the retainer, Lapp Libra has also paid itself for work done
prior to the filing from April 17, 2012 through May 8, 2012, in
the amount of $1,082.  The balance of $21,872 is now being held in
Lapp Libra's trust account.

                 About StoneArch II/WCSE Entities

StoneArch II/WCSE Minneapolis Industrial LLC in 2007 acquired
various limited liability companies, which in turn owned 27
industrial multi-tenant properties located in Minneapolis/St. Paul
in Minnesota.  The properties were divided into four separate
pools: A, B, C, and D.

Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC, which jointly
own the properties in pool D, sought Chapter 11 protection (Bankr.
D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011.  A
Chapter 11 plan has been filed for the pool D debtors.  The plan,
if approved, would allow the existing owners to maintain operation
of the properties.

Bowles Sub Parcel A, LLC, and five other entities, which jointly
own parcels A, B and C, filed for Chapter 11 protection (Bankr. D.
Minn. Case Nos. 12-42765, 12-42768, 12-42769, 12-42770, 12-42772,
and 12-42774) on May 8, 2012.  Each of the May 8 Debtors estimated
$10 million to $50 million in assets.

The other May 8 debtors are Fenton Sub Parcel A, LLC, Bowles Sub
Parcel B, LLC, Fenton Sub Parcel B, LLC, Bowles Sub Parcel C, LLC,
and Fenton Sub Parcel C, LLC.

Judge Nancy C. Dreher oversees the May 8 Debtors' cases, taking
over from Judge Gregory F. Kishel.

The May 8 Debtors tapped Lapp Libra Thomson Stoebner & Pusch as
counsel.  Steven B. Hoyt, as chief manager, signed the Chapter 11
petitions.


CAPITOL INFRASTRUCTURE: Judge Allows Capitol to Reject Contracts
----------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that a Delaware
bankruptcy judge cleared Capitol Infrastructure LLC on Thursday to
reject hundreds of telecommunications contracts, but vowed to
protect consumers from an immediate cutoff of their phone and
Internet services.

Law360 relates that Capitol -- which builds and maintains systems
for distributing television, phone and Internet at apartment
complexes and other housing developments -- caused an uproar among
customers when it sought to quickly reject contracts at 240
properties immediately after filing for bankruptcy two weeks ago,
threatening to disrupt communications for thousands of people.

                   About Capitol Infrastructure

Capitol Infrastructure, LLC, a Cary, North Carolina-based provider
of communication services operating under the name of Connexion
Technologies, filed a Chapter 11 petition (Bankr. D. Del. Case No.
12-11362) on April 26, 2012.  David M. Fournier, Esq., at Pepper
Hamilton LLP, serves as counsel to the Debtor.

Prior to the financial crisis that precipitated the Chapter 11
filing, the Debtors served communities with operations in 48
states and had 102,460 video customers, 14,034 voice customers and
47,993 data customers.  During the year ended Dec. 31, 2011, the
Debtors had 570 full time employees and had annual revenues from
its service provider business of $69.2 million.

The Debtor estimated up to $10 million in assets and up to
$100 million in debts.

Capitol concluded earlier in 2012 that its "deteriorating
relationship with DirecTV and their overall corporate complexity
made it highly unlikely the debtors would be able to obtain
adequate financing in a timely fashion," according to its CEO.

Capitol is owned by Capitol Broadband LLC, which isn't in
bankruptcy.


CASCADE BANCORP: Eleven Directors Elected at Annual Meeting
-----------------------------------------------------------
Cascade Bancorp held its 2012 annual meeting of shareholders on
May 8, 2012.  Four proposals were submitted to and approved by the
Company's shareholders.  The holders of 43,999,374 shares of
common stock, 93.06% of the outstanding shares entitled to vote as
of the record date, which constituted a quorum, were represented
at the meeting in person or by proxy.

At the Annual Meeting, the shareholders elected each director
nominee to the Board of Directors, namely:

   (1) Jerol E. Andres;
   (2) Chris Casciato;
   (3) Michael Connolly;
   (4) Henry H. Hewitt;
   (5) Judith A. Johansen;
   (6) LaMont Keen;
   (7) James B. Lockhart III;
   (8) Patricia L. Moss;
   (9) Ryan R. Patrick;
  (10) Thomas M. Wells; and
  (11) Terry E. Zink.

The shareholders ratified the appointment of BDO USA, LLP, as the
Company's independent auditor for 2012.  The shareholders approved
by a non-binding advisory vote the compensation paid to the
Company's Named Executive Officers and approved an amendment to
the Plan permitting stock awards that would otherwise be paid to a
non-employee director for his or her service to be paid to an
entity designated by the director.

                       About Cascade Bancorp

Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its
wholly-owned subsidiary, Bank of the Cascades, offers full-service
community banking through 32 branches in Central Oregon, Southern
Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho.
Cascade Bancorp has no significant assets or operations other than
the Bank.

Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank
of The Cascades.  The rating company says that the institution
currently demonstrates what it considers to be significant
weaknesses and has also failed some of the basic tests it uses to
identify fiscal stability.  "Even in a favorable economic
environment," Weiss says, "it is our opinion that depositors or
creditors could incur significant risks."

Cascade reported a net loss of $47.27 million in 2011, a net loss
of $13.65 million in 2010, and a net loss of $114.83 million in
2009.

The Company's balance sheet at March 31, 2012, showed
$1.31 billion in total assets, $1.17 billion in total liabilities,
and $134.05 million in total stockholders' equity.


CATALYST PAPER: Reports $25.6 Million First Quarter Net Loss
------------------------------------------------------------
Catalyst Paper recorded a net loss of $25.6 million in the first
quarter of 2012 due primarily to the impact of restructuring and
reorganization expenses of $27.6 million.  Before specific items,
the net loss was $9.6 million.  This compared with a net loss of
$708.0 million and $41.7 million before specific items in the
fourth quarter which was impacted by significant impairment
charges on Canadian operations and on Snowflake mill lands,
restructuring costs and foreign exchange.

Earnings before interest, tax, depreciation and amortization
(EBITDA) in the first quarter was $18.1 million and EBITDA before
restructuring costs was $23.3 million compared with EBITDA of $2.8
million and EBITDA before restructuring costs of $8.7 million in
the prior quarter.

"Our first quarter was dominated by restructuring and we focused
relentlessly on liquidity and cash flow management," said Catalyst
President & CEO Kevin J. Clarke.  "We are continuing to work hard
with stakeholders to put the necessary fundamentals in place to
enable Catalyst to emerge from creditor protection as a stronger
and more viable enterprise.  At the same time, we are keeping our
operations running smoothly.  In the first quarter, we achieved
production gains and an improved safety record across all mills,
maintained a strong order book and reached a new competitive five-
year labour agreement at our BC mills which took effect on May 1,
2012."

                       Performance Overview

Sales volumes in Q1 were up over the prior quarter due in large
part to pulp sales.  Sales revenues, however, were down slightly
compared with Q4 due to lower transaction prices in pulp and
coated grades, the stronger Canadian dollar and lower sales
volumes for higher value coated and uncoated specialty grades.
Sales revenues improved from a year earlier driven by higher paper
and pulp volumes along with marginally higher paper prices.
Substantially lower pulp prices offset much of these gains.

Operating rates for directory remained strong in the quarter as
capacity reductions kept pace with declining demand while
newsprint operating rates were similar to the previous year.  Mill
and machine closures and curtailments helped offset the
significant decline in Q1 demand for coated and uncoated specialty
grades.

Operating costs for the quarter were reduced by the deferral of
certain maintenance projects, including a maintenance outage on
our pulp assets originally scheduled for March that was moved to
April.

Our reduced liquidity in the first quarter resulted primarily from
compressed vendor credit terms, and restructuring and
reorganization costs.  The delay in collection of our HST refund
claims due to a federal tax audit put further strain on our cash
on hand and liquidity.  Total liquidity decreased by $99.5 million
from the same quarter in the prior year.

                       About Catalyst Paper

Catalyst Paper Corp. -- http://www.catalystpaper.com/--
manufactures diverse specialty mechanical printing papers,
newsprint and pulp.  Its customers include retailers, publishers
and commercial printers in North America, Latin America, the
Pacific Rim and Europe.  With four mills, located in British
Columbia and Arizona, Catalyst has a combined annual production
capacity of 1.9 million tons.  The Company is headquartered in
Richmond, British Columbia, Canada and its common shares trade on
the Toronto Stock Exchange under the symbol CTL.

Catalyst on Dec. 15, 2011, deferred a US$21 million interest
payment on its outstanding 11.00% Senior Secured Notes due 2016
and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15,
2011.  Catalyst said it was reviewing alternatives to address its
capital structures and it is currently in discussions with
noteholders.  Perella Weinberg Partners served as the financial
advisor.

In early January 2012, Catalyst entered into a restructuring
agreement, which will see its bondholders taking control of the
company and includes an exchange of debt for equity.  The
agreement said it would slash the company's debt by C$315.4
million ($311 million) and reduce its cash interest expenses.
Catalyst also said it will continue to "operate and satisfy" its
obligations to customers, trade creditors, employees and retirees
in the ordinary course of business during the restructuring
process.

On Jan. 17, 2012, Catalyst applied for and received an initial
court order under the Canada Business Corporations Act (CBCA) to
commence a consensual restructuring process with its noteholders.
Affiliate Catalyst Paper Holdings Inc., filed for creditor
protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D.
Del. Case No. 12-10219) on the same day and sought recognition of
the Canadian proceedings.

Catalyst joins a line of paper producers that have succumbed to
higher costs, increased competition from Asia and Europe, and
falling demand as more advertisers and readers move online.  In
2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy
protection, followed by SP Newsprint Co., owned by newsprint
magnate and fine art collector Peter Brant.  In December, Wausau
Paper said it will close its Brokaw mill in Wisconsin, cut 450
jobs and exit its print and color business.

The Supreme Court of British Columbia granted Catalyst creditor
protection under the CCAA until April 30, 2012.

As of Dec. 31, 2011, the Company had C$737.6 million in total
assets and C$1.35 million in total liabilities.


CHINA SHENGDA: Gets Non-Compliance Notice From NASDAQ
-----------------------------------------------------
China Shengda Packaging Group Inc. received a letter from the
NASDAQ Stock Market on May 7, 2012 indicating that, for the
previous 30 consecutive business days, the bid price of the
Company's common stock had closed below the minimum $1.00 per
share requirement for continued inclusion on The NASDAQ Global
Market under NASDAQ Listing Rule 5450(a)(1).  The letter did not
indicate the Company's non-compliance with any other listing
requirement.  The notification has no effect at this time on the
listing of the Company's common stock, which will continue to
trade on the NASDAQ Global market under the symbol CPGI.

The Company has been provided 180 calendar days, or until Nov. 5,
2012, to regain compliance.  If at any time before this date the
Company's common stock has a closing bid price of $1.00 or more
for a minimum of 10 consecutive business days, NASDAQ staff will
notify the Company that it has regained compliance.

If the Company has not regained compliance by November 5, 2012, it
may be eligible for additional time.  The Company would be
required to meet certain continued listing requirements and the
initial listing criteria for The NASDAQ Global Market except for
the bid price requirement and will need to provide written notice
of its intention to cure its deficiency during the second
compliance period.  If it meets these criteria, NASDAQ staff will
notify the Company that it has been granted an additional 180 day
compliance period.  If the Company is not eligible for an
additional compliance period, NASDAQ will provide the Company with
written notification that its common stock will be delisted.  At
that time, the Company can appeal NASDAQ's determination to delist
its common stock to a NASDAQ Hearings Panel.

The Company intends to consider all available options to resolve
the deficiency and regain compliance with the NASDAQ minimum bid
price requirements. In addition, the Company intends to explore
other options for the listing of its common stock.

                        About China Shengda

China Shengda Packaging Group Inc. -- http://www.cnpti.com/--
is a packaging company in China.  It is principally engaged in the
design, manufacturing and sale of flexo-printed and color-printed
corrugated paper cartons in a variety of sizes and strengths. It
also manufactures corrugated paperboards, which are used for the
production of its flexo-printed and color-printed cartons.  The
company provides paper packaging solutions to a wide variety of
industries, including food, beverage, cigarette, household
appliance, consumer electronics, pharmaceuticals, chemicals,
machinery and other consumer and industrial sectors in China.


CINRAM INT'L: Lenders Agree to Extend Waiver to May 30
------------------------------------------------------
Cinram International Income Fund on May 1, 2012 the Fund disclosed
that its first and second lien senior lenders agreed to extend
their waiver of certain financial covenants, consistent with
previously granted and disclosed waivers.  These waivers were
extended to May 30, 2012 but can be terminated under certain
circumstances by the lenders on or after May 15, 2012.

                    About Cinram International

With headquarters in Toronto, Ontario, Canada, Cinram
International Inc. is one of the world's largest independent
manufacturers, replicators and distributors of DVDs and audio CDs.

In April 2012 Standard & Poor's Ratings Services lowered its
ratings on Cinram International, including its long-term corporate
credit rating on the company to 'CC' from 'CCC'.  "We base the
downgrade on what we view as Cinram's weak liquidity position and
poor operating performance, with reported revenue and EBITDA
dropping 28% and 79% in 2011, compared with 2010, which resulted
in the company's need for waivers to its financial covenants.
Furthermore, Cinram is in discussions with a number of
counterparties concerning strategic alternatives for the business,
which we believe could lead to a debt restructuring given the
ongoing deterioration in its business. A distressed debt
restructuring would constitute an event of default under our
criteria," S&P said.


CONTRACT RESEARCH: Has Approval for Settlement, Loan and Bonuses
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Contract Research Solutions Inc. accomplished three
objectives at a May 9 hearing in U.S. Bankruptcy Court in
Delaware:

    * The court approved a global settlement with the creditors'
      committee allowing lenders to buy the business without
      objection from unsecured creditors.   The settlement
      provides that the lenders won't use their secured deficiency
      claims to take any part of the $1.5 million carved out for
      unsecured creditors.

    * The judge also approved a bonus program for company
      executives, along with final financing for the Chapter 11
      case.  The settlement carves out $1.5 million for payment to
      holders of unsecured claims or other uses the committee
      finds necessary.

    * The judge also gave final approval for $15 million in
      financing provided by the secured lenders.  The loan
      agreement calls for converting $15 million in pre-bankruptcy
      debt into an obligation of the company in reorganization.
      As part of the settlement, the committee agreed not to
      oppose final financing approval.

According to the report, the bonus program would pay executives
$1.3 million if the business is sold to first-lien lenders under
the agreement worked out before bankruptcy.  Cetero admitted that
the proposed bonuses have "some retentive effect."  The company
was referring to a provision added to bankruptcy law in 2005 in
which Congress banned retention bonuses to senior executives of
bankrupt companies.

                          About Cetero

Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012.
Cetero's 19 affiliates also sought bankruptcy protection (Bankr.
D. Del. Case Nos. 12-11005 to 12-11023).

Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction.  The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers.  Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort.  The procedures require that the
bidding protocol be approved by April 12 and an auction be held
between April 30 and May 5.  Competing bids are due three days
prior to the auction date.  The hearing for approval of the sale
must take place prior to May 10.

Assets are $205 million, with debt total $248 million.  There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit.  The second-lien loan
is $25 million.  Second-lien lenders have agreed to the sale.

Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility.  Bank of Montreal serves as the
Canadian agent.  Freeport is also the agent under the second lien
facility.

Judge Kevin Gross oversees the case.  Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel.  Stikeman Elliott LLP serves as Canadian
counsel.  Carl Marks Advisory Group LLC serves as restructuring
advisor.  Epiq Bankruptcy Solutions serves as claims and notice
agent.  Jefferies & Company Inc. serves as financial advisors.
The petitions were signed by Michael T. Murren, CFO.

The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.

Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three
persons to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Contract Research Solutions, Inc., et al.
The Committee tapped Morris Anderson & Associates, Ltd., as its
financial advisors.

Cetero will hold an auction on May 15 to learn whether anyone will
beat an offer from first-lien lenders to buy the business in
exchange for $50 million in debt.  The sale will have the lenders
assume $30 million in liabilities while providing for the payment
of costs of the Chapter 11 case, along with liabilities entitled
to priority.


CORBIN PARK: BAP Says Mortgagee Has Priority Over Mechanic's Lien
-----------------------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the Tenth Circuit affirmed
the bankruptcy court's order determining that, under Kansas law,
the interest of a construction lender/mortgagee in a retail
shopping center development has priority over their mechanic's
lien claims.  Two general contractors and four subcontractors took
an appeal from the ruling.  The Tenth Circuit BAP held that the
bankruptcy court committed no reversible error in determining the
priority of interests between the claimants, and Bank of America's
mortgage has priority over the contractors' mechanic's liens.

The contractors and subcontractors are Brown Commercial
Construction Company, O'Donnell & Sons Construction Company, ARR
Roofing LLC, doing business as Boone Brothers Roofing, Wachter
Electric Company, McCorkendale Construction, Inc., and Ball Kelly
LLC.

A copy of the Tenth Circuit BAP's decision dated May 7, 2012, is
available at http://is.gd/9xSj10from Leagle.com.

                       About Corbin Park

Corbin Park, L.P., owns a large portion of a partially developed
97-acre shopping center known as "Corbin Park", which is located
at the intersection of Metcalf Avenue and West 135th Street in
Overland Park, Kansas.  The Debtor acquired the Property from
previous owners and developers State Line LLC and 135 Metcalf LLC.
Invesco Ltd., investing at least $38 million, and Metcalf's in-
house agent Cormac formed Corbin Park to purchase the Property.
Bank of America agreed to advance up to $107 million in
construction loans to Corbin Park.

Based in Omaha, Nebraska, Corbin Park sought Chapter 11 protection
(Bankr. D. Kan. Case No. 10-20014) on Jan. 5, 2010.  Carl R.
Clark, Esq., and Jeffrey A. Deines, Esq., at Lentz Clark Deines
PA, represent the Debtor.  The Debtor estimated $50 million to
$100 million in assets and $10 million to $50 million in debts as
of the Petition Date.


DELTA PETROLEUM: Court Approves Laramie as Plan Sponsor
-------------------------------------------------------
Delta Petroleum Corporation obtained U.S. Bankruptcy Judge Kevin
J. Carey's approval of Delta's choice of Laramie Energy II, LLC as
the sponsor of a plan of reorganization to be proposed by Delta.

Laramie and Delta have entered into a non-binding term sheet
describing a transaction by which Laramie and Delta will form a
new joint venture, Piceance Energy LLC Piceance Energy, whose
assets will comprise Laramie's and Delta's Piceance Basin assets,
will be owned 66.66% by Laramie, and 33.34% by a newly reorganized
Delta Petroleum.  In addition to the 33.34% membership interest,
Piceance Energy will distribute $75 million to Reorganized Delta.
The $75 million in cash proceeds will be used to pay the Company's
bankruptcy expenses and to repay secured debt.  Reorganized Delta
will retain the Company's interest in the Point Arguello unit of
offshore California, other miscellaneous assets, and certain tax
attributes.  It is anticipated that the common stock of
Reorganized Delta will be owned by the Company's creditors. The
Company's current shareholders are not expected to receive any
consideration under the reorganization plan as currently
contemplated.

                       About Delta Petroleum

Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil.  Natural gas comprises over 90% of Delta's production
services.  The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.

Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business.  Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007.  In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.

W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel.  Conway Mackenzie is the
Debtors' restructuring advisor.  Evercore Group L.L.C. is the
financial advisor and investment banker.  The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent.  The
petition was signed by Carl E. Lakey, chief executive officer and
president.

Delta will hold an auction for the business on March 26, 2012.  No
buyer is under contract.  There is $57.5 million in financing for
the Chapter 11 effort.

The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.


DEX ONE: Seven Directors Elected at Annual Meeting
--------------------------------------------------
Dex One Corporation held its annual meeting of stockholders on
May 8, 2012.  At the meeting, Dex One stockholders elected seven
individuals to the Board of Directors to serve until Dex One's
2013 Annual Meeting of Stockholders and until their respective
successors are duly elected and qualified or until their earlier
resignation or removal.  The newly elected directors are:

   (1) Jonathan B. Bulkeley;
   (2) Eugene I. Davis;
   (3) Richard L. Kuersteiner;
   (4) W. Kirk Liddell;
   (5) Mark A. McEachen;
   (6) Alfred T. Mockett; and
   (7) Alan F. Schultz.

The stockholders approved, on an advisory basis, Dex One's
executive compensation and ratified the appointment of KPMG LLP as
Dex One's independent registered public accounting firm for 2012.

                           About Dex One

Dex One, headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search.  Revenue was
approximately $1.1 billion for the LTM period ended Sept. 30,
2010.

R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852).  They emerged from bankruptcy on Jan. 29,
2010.  On the Effective Date and in connection with its emergence
from Chapter 11, RHD was renamed Dex One Corporation.

Dex One reported a net loss of $518.96 million in 2011 compared
with a net loss of $923.59 million for the eleven months ended
Dec. 31, 2010.

The Company's balance sheet at March 31, 2012, showed $3.14
billion in total assets, $3.09 billion in total liabilities and
$48.87 million in total shareholders' equity.

                           *     *      *

As reported in the April 2, 2012 edition of the TCR, Moody's
Investors Service has downgraded the corporate family rating (CFR)
for Dex One Corporation's to Caa3 from B3 based on Moody's view
that a debt restructuring is inevitable.  Moody's has also changed
Dex's Probability of Default Rating (PDR) to Ca/LD from B3
following the company's purchase of about $142 million of par
value bank debt for about $70 million in cash.  The Caa3 rating
also reflects Moody's view that additional exchanges at a discount
are likely in the future since the company amended its bank
covenants to make it possible to repurchase additional bank debt
on the open market through the end of 2013.

As reported by the TCR on April 4, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Cary, N.C.-based
Dex One Corp. and related entities to 'CCC' from 'SD' (selective
default).  "The upgrade reflects our assessment of the company's
credit profile after the completion of the subpar repurchase
transaction in light of upcoming maturities, future subpar
repurchases, and our expectation of a continued week operating
outlook," explained Standard & Poor's credit analyst Chris
Valentine.


DOLLAR THRIFTY: Moody's Raises CFR/PDR to 'B1'; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service raised the Corporate Family and
Probability of Default Ratings (CFR and PDR) of Dollar Thrifty
Automotive Group, Inc. to B1 from B2. The upgrade reflects Moody's
expectation that the company will be able to sustain credit
metrics that are solidly supportive of the B1 rating level as a
result of its strong position in the value segment of the daily
car rental market, favorable industry fundamentals, and a prudent
financial strategy. The rating also anticipates that the company
will maintain an adequate liquidity profile.

Ratings Rationale

Notwithstanding these positive factors, the B1 rating also
recognizes that Dollar could pursue share repurchases or other
shareholder-friendly actions that could increase leverage or
narrow the current liquidity position. However, Dollar has a very
efficient operating structure and competitive returns. In
addition, its capital structure, unlike that of other peers,
includes only fleet debt and has no burdensome corporate debt. As
a result, its credit metrics are very strong for the B1 rating
level. Although, shareholder friendly actions would weaken these
measures from their currently robust levels, Moody's expects that
they would be measured and would enable Dollar to maintain credit
metrics that are consistent with the B1 rating.

The Speculative Grade Liquidity rating is SGL-3 and the rating
outlook is stable.

The stable outlook reflects the company's highly competitive
position in the daily car rental market and strong credit metrics
balanced against the potential for measured shareholder-friendly
actions that might be undertaken.

Dollar's liquidity position is supported by a $450 million secured
credit facility that matures during 2017. After letter of credit
usage, availability under the facility is about $300 million.
Dollar's cash position approximates $500 million. In addition, the
company has capacity of $420 million under its VFN facility with a
revolving usage period extending to October 2013. These liquidity
sources, amounting to approximately $1.2 billion provide adequate
coverage for the company's fleet purchase requirements and the
approximately $500 million in debt maturing during the coming
twelve months.

Important industry fundamentals that support the B1 rating are the
discipline fleet management strategies being employed by the major
car rental companies and the strong used car market. Although
pricing within the sector will remain competitive, the resistance
to over fleeting by the rental companies and the healthy used car
market should support adequate return measures.

Dollar's rating would be considered for further positive action
only after there is greater clarity with respect to the company's
long-term financial strategy, particularly relating to dividend
and share repurchase levels, and the level of corporate debt the
company might carry. Credit metric levels that could support
positive movement in the rating include EBIT/Interest
approximating 2.25x, debt/EBITDA in the area of 2.75x, and
retained cash flow to debt of 25%. Any upward movement in the
rating would also be contingent upon the preservation of a sound
liquidity position.

The most likely source of stress on the rating would come from an
aggressive dividend or share repurchase strategy. Metric levels
that might indicate pressure on the rating include EBIT/Interest
approximating 1.25x and debt/EBITDA in the area of 4x.

The Hertz Corporation (CFR B1 under review for possible downgrade)
may proceed with an attempt to acquire Dollar. Moody's does not
anticipate that an acquisition by Hertz would result in any
erosion in the risk posed to Dollar's current debt-holders due to
change of control provisions. Nevertheless, if Hertz resubmits an
offer for Dollar, the company's rating would be reassessed based
on the terms of the proposal.

The Hertz Corporation (CFR B1 under review for possible downgrade)
had made a prior unsuccessful offer to acquire Dollar, and could
proceed to make a future bid for the company. Moody's notes that
Dollar's bank credit facility contains a change of control
provision that would likely result in a termination of the
facility and require repayment of any outstandings in the event
that Hertz were to acquire the company. Consequently, while
Moody's does not anticipate that an acquisition by Hertz would
pose any additional risk to the facility, Dollar's rating would be
reassessed based on the terms of any new offer.

The principal methodology used in rating Dollar Thrifty Automotive
Group was the Global Equipment and Automotive Rental 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.


ECOSPHERE TECHNOLOGIES: Files Form 10-Q; Posts $746,781 Q1 Loss
---------------------------------------------------------------
Ecosphere Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $746,781 on $8.36 million of total revenues for the
three months ended March 31, 2012, compared with a net loss of
$3.74 million on $2.22 million of total revenues for the same
period during the prior year.

The Company reported a net loss of $5.86 million in 2011,
a net loss of $22.66 million in 2010, and a net loss of $19.05
million in 2009.

The Company's balance sheet at March 31, 2012, showed $10.69
million in total assets, $5.33 million in total liabilities, $4
million in total redeemable convertible cumulative preferred
stock, and $1.35 million in total equity.

A copy of the Form 10-Q is available for free at:

                       http://is.gd/ab4Fol

                  About Ecosphere Technologies

Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH)
-- http://www.ecospheretech.com/-- is a diversified water
engineering, technology licensing and environmental services
company that designs, develops and manufactures wastewater
treatment solutions for industrial markets.  Ecosphere, through
its majority-owned subsidiary Ecosphere Energy Services, LLC
("EES"), provides energy exploration companies with an onsite,
chemical free method to kill bacteria and reduce scaling during
fracturing and flowback operations.


ELEPHANT TALK: Incurs $6 Million Net Loss in First Quarter
----------------------------------------------------------
Elephant Talk Communications Corp. filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $6 million on $8.58 million of revenue
for the three months ended March 31, 2012, compared with a net
loss of $4.71 million on $8.50 million of revenue for the same
period during the prior year.

The Company's balance sheet at March 31, 2012, showed $54.23
million in total assets, $21.95 million in total liabilities and
$32.28 million in total stockholders' equity.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/NhfKPL

                       About Elephant Talk

Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK)
-- http://www.elephanttalk.com/-- is an international provider of
business software and services to the telecommunications and
financial services industry.

The Company reported a net loss of $25.31 million in 2011, a net
loss of $92.48 million in 2010, and a net loss of $17.29 million
in 2009.


ELEPHANT TALK: Files Form S-3, Registers 90.4-Mil. Common Shares
----------------------------------------------------------------
Elephant Talk Communications, Corp., filed with the U.S.
Securities and Exchange Commission a Form S-3 relating to the sale
and other disposition of an aggregate of 23,421,704 shares of
common stock of the Company, issuable upon exercise of the
following warrants:

    (a) an aggregate of 10,571,368 warrants issued by the Company
        to certain parties on Sept. 30, 2008;

    (b) an aggregate of 7,677,385 warrants issued by the Company
        to certain parties on Aug. 18, 2008;

    (c) an aggregate of 3,829,286 warrants issued by the Company
        to certain parties on March 17, 2010;

    (d) 75,000 and 18,859 warrants to certain parties on Jan. 4,
        2011, and Feb. 23, 2012, respectively; and

    (e) an aggregate of 1,249,806 warrants issued at various times
        to QAT II Investments SA.

This prospectus also relates to the sale of up to a total of
67,061,083 shares of common stock that may be sold from time to
time by CMV II Invest CVA, Herman Spliethoff, Albert Poliak, et
al.  The selling stockholders may sell all or a portion of the
shares of common stock held by them from time to time directly or
through one or more broker-dealers or agents.  If the shares of
common stock are sold through broker-dealers or agents, the
selling stockholders will be responsible for underwriting
discounts or commissions or agent's commissions.

The Company's common stock is quoted on the NYSE Amex under the
symbol "ETAK".  The closing price for the Company's common stock
on May 4, 2012, was $1.90 per share.

A copy of the prospectus is available for free at:

                       http://is.gd/1Iy48u

                       About Elephant Talk

Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK)
-- http://www.elephanttalk.com/-- is an international provider of
business software and services to the telecommunications and
financial services industry.

The Company reported a net loss of $25.31 million in 2011, a net
loss of $92.48 million in 2010, and a net loss of $17.29 million
in 2009.

The Company's balance sheet at March 31, 2012, showed $54.23
million in total assets, $21.95 million in total liabilities and
$32.28 million in total stockholders' equity.


EMERALD PERFORMANCE: Upsized Loan No Impact on Moody's 'B2' CFR
---------------------------------------------------------------
Moody's Investors Service said the $30 million increase in Emerald
Performance Holding Group, LLC's term loan to $300 million from
$270 million will not affect the firm's Corporate Family Rating
(CFR) or term loan rating.

The principal methodology used in rating Emerald Performance
Holding Group, LLC was the Global Chemical Industry Methodology,
published in December 2009. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.

As reported by the Troubled Company Reporter-Europe on April 24,
2012, Moody's assigned a first time B2 Corporate Family Rating
(CFR) to Emerald Performance Holding Group, LLC and a B1 rating to
its proposed six-year $270 million Term Loan.  Proceeds from the
new term loan are expected to be used to refinance the company's
current term loan facility due in 2013, repay the outstanding
balance on the revolver, and for expenses.
The outlook is stable.

The following summarizes the ratings activity:

Emerald Performance Holding Group, LLC

Ratings assigned:

Corporate family rating -- B2

Probability of default rating -- B2

Outlook: Stable

Emerald Performance Materials, LLC

$270 million Sr Sec 1st Lien Term Loan due 2018 -- B1
(LGD3, 36%)

Outlook: Stable

Emerald Performance Holding Group, LLC, headquartered in Cuyahoga
Falls, Ohio, is a producer of specialty chemicals used in a wide
range of food and industrial applications. The company is owned by
funds managed by Sun Capital Partners Inc., and reported sales of
roughly $665 million for 2011.


EMMIS COMMUNICATIONS: Swings to $79.5-Mil. Net Income in 2011
-------------------------------------------------------------
Emmis Communications Corporation filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
a net income attributable to common shareholders of $79.49 million
on $236 million of net revenues for the year ended Feb. 29, 2012,
compared with a net loss attributable to common shareholders of
$25.26 million on $250.75 million of net revenues for the year
ended Feb. 28, 2011.

The Company's balance sheet at Feb. 29, 2012, showed $340.76
million in total assets, $347.28 million in total liabilities,
$46.88 million in series A cummulative convertible preferred
stock, and a $53.39 million total deficit.

A copy of the Form 10-K is available for free at:

                        http://is.gd/VGigNI

                     About Emmis Communications

Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria.  The company also publishes six
regional and two specialty magazines.

                           *     *     *

Emmis carries Caa2 corporate family rating and a Caa3 probability
of default rating from Moody's.

In July 2011, Moody's Investors Service placed the ratings of
Emmis on review for possible upgrade following the company's
earnings release for 1Q12 (ended May 31, 2011) including
additional disclosure related to the pending sale of controlling
interests in three radio stations. The sale of the majority
ownership to GCTR will generate estimated net proceeds of
approximately $100 million to $120 million, after taxes, fees and
related expenses. Emmis will retain a minority equity interest in
the operations of the three stations and Moody's expects senior
secured debt to be reduced resulting in improved credit metrics.


ENTREMED INC: Regains Compliance With Equity Listing Requirement
----------------------------------------------------------------
EntreMed, Inc. has received notice from the Nasdaq Stock Market
indicating that, based on the Company's completed financing
described in the Company's Form 8-K dated May 4, 2012, the NASDAQ
staff has determined that the Company complies with Listing Rule
5550(b).

The Company was previously notified that it was not in compliance
with Nasdaq Listing Rule 5550(b) and was granted an extension
until May 21, 2012 to comply.  Listing Rule 5550(b) requires
listed companies to have a minimum $2,500,000 stockholders'
equity, $35,000,000 market value of listed securities, or $500,000
net income from continuing operations.  In accordance with NASDAQ
Marketplace Rules, NASDAQ will continue to monitor the Company's
ongoing compliance with Rule 5550(b) and will require the Company
to evidence compliance upon filing its periodic report for the
quarter ending June 30, 2012, or it may be subject to delisting
which can be appealed.

Dr. Ken Ren commented, "The Company is now in compliance, and we
expect and are confident that we will remain compliant upon filing
our Form 10-Q for the quarter ending June 30, 2012.  As we execute
on our clinical initiatives, compliance with NASDAQ listing
requirements continues to be part of our long-term plans."

                         About EntreMed

EntreMed, Inc. -- http://www.entremed.com/-- is a clinical-stage
pharmaceutical company committed to developing ENMD-2076, a
selective angiogenic kinase inhibitor, for the treatment of
cancer. E NMD-2076 is currently completing a multi-center Phase 2
study in ovarian cancer and completed several Phase 1 studies in
solid tumors, multiple myeloma, and leukemia.


EPICEPT CORP: Incurs $4.7 Million Net Loss in First Quarter
-----------------------------------------------------------
EpiCept Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common stockholders of $4.70 million on $241,000
of revenue for the three months ended March 31, 2012, compared
with a net loss attributable to common stockholders of
$2.46 million on $238,000 of revenue for the same period a year
ago.

The Company's balance sheet at March 31, 2012, showed $6.16
million in total assets, $23.30 million in total liabilities and a
$17.14 million total stockholders' deficit.

A copy of the Form 10-Q is available for free at:

                         http://is.gd/1F9qNx

                      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.

Epicept 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.


GEOMET INC: Transfers Listings to the NASDAQ Capital Market
-----------------------------------------------------------
GeoMet, Inc. disclosed that its application to transfer the
listing of its common stock and preferred stock from The NASDAQ
Global Market to The NASDAQ Capital Market has been approved by
NASDAQ.  The transfers will be effective at the opening of
business on May 14, 2012.  The Company's common stock and
preferred stock will continue to trade under the symbols "GMET"
and "GMETP", respectively.

The Company has been advised by NASDAQ that it has until Aug. 1,
2012 to regain compliance with the minimum bid price rule for its
common stock while listed on The NASDAQ Capital Market.  On, or
prior to this date, the bid price of the Company's common stock
must close at $1.00 per sha re or more for a minimum of ten (10)
consecutive business days. If compliance is not regained, and the
Company does not receive an extension of the deadline for
compliance, the Company's common and preferred shares will be
subject to delisting.

                         About GeoMet, Inc.

GeoMet, Inc. is an independent energy company primarily engaged in
the exploration for and development and production of natural gas
from coal seams and non-conventional shallow gas.  Its principal
operations and producing properties are located in Alabama, West
Virginia and Virginia.


GEORGE VAN WAGNER: Ch. 7 Trustee Didn't Abandon Causes of Action
----------------------------------------------------------------
Chief District Judge John Preston Bailey affirmed these decisions
of the United States Bankruptcy Court for the Northern District of
West Virginia:

     (1) a Nov. 22, 2010, order finding that certain causes
         of action had not been abandoned by the trustee of George
         Van Wagner's bankruptcy estate;

     (2) three Aug. 1, 2011, orders settling claims in various
         bankruptcy proceedings; and

     (3) two Aug. 11, 2011, orders granting motions to expunge
         notices of lis pendens.

Mr. Van Wagner took the appeal.

The matter stems from the Chapter 7 bankruptcy cases commenced by
Mr. Van Wagner and hits affiliated companies.

On Sept. 24, 2007, Hickory Ridge, LLC, filed a Chapter 7
bankruptcy petition with the United States Bankruptcy Court for
the Northern District of West Virginia.  Robert Trumble was
appointed Chapter 7 trustee for Hickory Ridge.  Vanwood LLC filed
a Chapter 7 bankruptcy petition on Dec. 27, 2007, with the
Bankruptcy Court.  Mr. Trumble was appointed trustee of Vanwood's
estate.  On March 28, 2008, George Van Wagner filed a voluntary
Chapter 11 petition with the Bankruptcy Court, which was converted
to a Chapter 7 proceeding on July 1, 2009.  Thomas Fluharty was
appointed the trustee of Mr. Van Wagner's estate.

Mr. Van Wagner filed two civil lawsuits in the Circuit Court of
Berkeley County, West Virginia, alleging the Chapter 7 trustee of
his personal estate had abandoned certain causes of action and
business interests.  In the state civil proceedings, Mr. Van
Wagner asserted rights on behalf of himself, Hickory Ridge, or
Vanwood.

The appellate case is GEORGE VAN WAGNER, Plaintiff, v. ATLAS TRI-
STATE SPE, LLC, et al., Defendants, Civil Action No. 3:11-CV-75
(N.D. W.Va.).  A copy of the Court's May 8, 2012 Memorandum
Opinion is available at http://is.gd/nmUsACfrom Leagle.com.


GMX RESOURCES: Files Form 10-Q, Incurs $37.8MM Net Loss in Q1
-------------------------------------------------------------
GMX Resources Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $37.87 million on $17.40 million of oil and gas sales for the
three months ended March 31, 2012, compared with a net loss of
$51.82 million on $29.37 million of oil and gas sales for the same
period a year ago.

The Company's balance sheet at March 31, 2012, showed $502.38
million in total assets, $468.47 million in total liabilities and
$33.91 million in total equity.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/Kme50g

                        About GMX Resources

GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma.  GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas.  GMXR has 7 producing wells in New Mexico.  The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production.  GMXR's goal is to grow and
build shareholder value every day.

The Company reported net losses of $206.44 million in 2011,
$138.29 million in 2010, and $181.08 million in 2009.

                           *     *     *

In November 2011, Moody's downgraded the rating of GMX Resources'
corporate family rating (CFR) to 'Caa3' from 'Caa1', the
Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the
Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3.  The
outlook is negative.

The downgrade of GMX's PDR and note ratings reflect the company's
announcement that greater than 50% of the holders of the notes due
2019 have accepted a proposed exchange offer, which Moody's views
as a distressed exchange.  The lowering of the CFR and SGL ratings
reflects Moody's expectation of potential liquidity issues through
the first quarter of 2013, as well as elevated leverage following
the issuance of at least $100 million of proposed secured notes
under the exchange offer and a proposed $55 million volumetric
production payment (VPP), both of which the company expects to be
executed before the end of 2011.  Moody's treats VPPs as debt in
Moody's leverage calculations.  The negative outlook reflects the
potential for the CFR and note ratings to be lowered if liquidity
deteriorates further.

As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on GMX Resources Inc.
to 'SD' (selective default) from 'CC'.  "We also lowered the
company's issue-level ratings to 'D' from 'CC', reflecting its
completion of an exchange offer for a portion of its $200 million
11.375% senior notes due 2019," S&P said.

"The rating actions follow the company's announcement that it has
completed the exchange offer for its 11.375% senior notes due
2019," said Standard & Poor's credit analyst Paul B. Harvey.  "The
exchange offer included $53 million principle of 11.375% senior
notes that accepted an exchange of $1,000 principle for $750
principle of new 11% senior secured notes due 2017.  We consider
the completion of such an exchange, at a material discount to par,
to be a distressed exchange and, as such, tantamount to a default
under our criteria."


GREENMAN TECHNOLOGIES: Gregory Ho Discloses 39.5% Equity Stake
--------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Gregory P. Ho and his affiliates disclosed that, as of
April 30, 2012, they beneficially own 23,266,664 common shares of
Greenman Technologies, Inc., representing 39.5% of the shares
outstanding.  A copy of the filing is available for free at:

                        http://is.gd/vC7pKE

                   About Greenman Technologies

Lynnfield, Mass.-based GreenMan Technologies, Inc. (OTC QB: GMTI)
through its two alternative energy subsidiaries, American Power
Group, Inc. ("APG") and APG International, Inc. ("APGI"), provides
a cost-effective patented dual fuel conversion technology for
diesel engines and diesel generators.

The Company reported a net loss of $6.81 million for the year
ended Sept. 30, 2011, compared with a net loss of $5.64 million
the year before.

The Company's balance sheet at Dec. 31, 2011, showed $3.68 million
in total assets, $7.03 million in total liabilities, and a
$3.34 million total stockholders' deficit.

For Fiscal 2011, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern.  Schechter Dokken Kanter Andrews & Selcer, Ltd., in
Minneapolis, Minnesota, noted in its report that the Company has
continued to incur substantial losses from operations, has not
generated positive cash flows and has insufficient liquidity to
fund its ongoing operations.


GUSHAN ENVIRONMENTAL: Gets NYSE Notice of Non-Compliance
--------------------------------------------------------
Gushan Environmental Energy Limited received a letter from the New
York Stock Exchange notifying the Company that it was not in
compliance with one of the NYSE's standards for continued listing
of the Company's American depositary shares on the exchange.

Specifically, the NYSE indicated that it considers the Company to
be "below criteria" because, as of Dec. 31, 2011, its average
global market capitalization over a consecutive 30 trading-day
period was less than $50 million and, at the same time, its total
stockholders' equity was less than $50 million.  On April 27,
2012, the Company reported that as of Dec. 31, 2011, its total
shareholders' equity attributable to the Company was approximately
$36.2 million.  As of Dec. 31, 2011, the Company's global market
capitalization over a consecutive 30 trading-day period was $27.5
million.

Under NYSE continued listing rules, the Company has 90 days from
the receipt of the letter to submit a plan advising the NYSE of
definitive action the Company has taken, or is taking, that would
bring it into conformity with the applicable standards within 18
months of receipt of the letter.  If the NYSE staff determines
that the Company has not made a reasonable demonstration of an
ability to come into conformity with the applicable standards
within 18 months, the NYSE staff will promptly initiate suspension
and delisting procedures.  Otherwise, if the NYSE staff accepts
the plan, the Company will be subject to semi-annual review by the
NYSE staff for compliance with this plan until either the Company
is able to demonstrate that it has returned to compliance for a
period of two consecutive quarters or the expiration of the 18
month period.  The NYSE staff will promptly initiate suspension
and delisting procedures if the Company fails to meet the
continued listing standards at the end of the 18 month period.
The Company currently intends to submit such a plan and is
exploring alternatives for curing the deficiency and regaining
compliance with the NYSE's continued listing standards.

The Company's business operations and Securities and Exchange
Commission reporting requirements are unaffected by this letter.

The Company's ADSs will remain listed on the NYSE under the symbol
GU but will be assigned a ".BC" indicator by the NYSE to signify
that the Company is currently not in compliance with the NYSE's
continued listing standards.

                     About Gushan Environmental

Gushan Environmental Energy Limited produces biodiesel, a
renewable, clean-burning and biodegradable fuel and a raw material
used to produce chemical products, primarily from used cooking
oil, and by-products from biodiesel production, including
glycerine and plant asphalt.  Gushan sells biodiesel directly to
users, such as marine vessel operators and chemical factories, as
well as to petroleum wholesalers and individual retail gas
stations.  The Company has seven production facilities, located in
the Sichuan, Hebei, Fujian and Hunan provinces and in Beijing,
Shanghai and Chongqing, with a combined annual production capacity
of 490,000 tons. Gushan's Sichuan production facility is currently
in operation.  Gushan also operates a copper products business in
China which manufactures copper rods, copper wires, copper
granules and copper plates primarily from recycled copper.
Currently, the copper products business has two plants, with a
daily production capacity of approximately 210 tons of recycled
copper products.


HALO COMPANIES: Whitley Penn Succeeds Montgomery as Accountants
---------------------------------------------------------------
Halo Companies, Inc., dismissed Montgomery, Coscia, Greilich LLP
as its independent registered public accounting firm and appointed
Whitley Penn, LLP, as the Company's new independent registered
public accounting firm.  The Board of Directors of the Company
approved the change of independent registered public accounting
firms.

MCG's independent auditor's report dated March 30, 2012, furnished
in connection with the Company's annual report on Form 10-K for
the period ended Dec. 31, 2011, and MCG's independent auditor's
report dated March 31, 2011, furnished in connection with the
Company's annual report on Form 10-K for the period ended Dec. 31,
2010, did not include an adverse opinion or a disclaimer of
opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles, except that each such independent
auditor's report contained an qualification raising substantial
doubt about the Company's ability to continue as a going concern.

During the Company's most recent fiscal year and the subsequent
interim period prior to May 10, 2012, there were no disagreements
with MCG on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of MCG,
would have caused it to make reference to the matter thereof in
connection with its report.

Prior to the appointment of WP as the Company's independent
registered public accounting firm, neither the Company nor anyone
acting on its behalf consulted with WP regarding either (a) the
application of accounting principles to a specific completed or
contemplated transaction, or the type of audit opinion that might
be rendered on the Company's financial statements, and neither a
written report or oral advice was provided to the Company that WP
concluded was an important factor considered by the Company in
reaching a decision as to the accounting, auditing or financial
reporting issue, or (b) any matter that was the subject of a
disagreement identified in response to Item 304(a)(1)(iv) of
Regulation S-K and the related instructions or an event identified
in response to Item 304(a)(1)(v) of Regulation S-K.

                       About Halo Companies

Allen, Texas-based Halo Companies, Inc., is a nationwide real
estate investment, asset management and financial services company
that provides technology and asset management solutions to asset
owners as well as real estate and financial services to
financially distressed consumers which can be applied individually
or utilized as a comprehensive workout strategy.

Halo Companies reported a net loss of $2.50 million in 2011,
compared with a net loss of $3.63 million in 2010.

The Company's balance sheet at Dec. 31, 2011, showed $1.63 million
in total assets, $4.32 million in total liabilities, and a
$2.69 million total shareholders' deficit.

For the year ended Dec. 31, 2011, Montgomery Coscia Greilich LLP,
in Plano, Texas, expressed substantial doubt about the ability of
the Company to continue as a going concern.  The independent
auditors noted that Halo Companies, Inc., has incurred losses
since its inception and has not yet established profitable
operations.


HARRISBURG, PA: Officials Seek to Halt State Receivership Case
--------------------------------------------------------------
Elected officials of Harrisburg, Pa., asked a judge to suspend the
state's takeover of city finances until a court investigates the
resignation of former receiver David Unkovic.

                   About Harrisburg, Pennsylvania

The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator.  The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.

The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938).  The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.

Judge Mary D. France presided over the Chapter 9 case.  Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel.  The petition estimated $100 million to $500 million in
assets and debts.  Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.

Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy.  The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues.  The city is the primary guarantor under each
bond issue.  The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.

The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition.  The state
later adopted a new law allowing the governor to appoint a
receiver.

Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.

In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).

Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.

That same month, the state governor appointed David Unkovic as
receiver for Harrisburg.  Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.

Mr. Unkovic resigned as receiver March 30, 2012.


HEALTH NET: Moody's Retains 'Ba3' Sr. Debt Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed Health Net, Inc.'s Ba3 senior
debt rating and the Baa3 insurance financial strength (IFS) rating
of its operating company. The outlook on the ratings was changed
to stable from positive. The rating action follows weak reported
first quarter 2012 results.

Ratings Rationale

Commenting on the change to a stable outlook, Moody's said that as
a result of the unexpected first quarter 2012 financial results
and a downward revision to the company's guidance, it is unlikely
that Health Net would meet the EBITDA, coverage and membership
growth target expectations to achieve an upgrade in the next 18
months. The rating agency added that the unanticipated financial
results, impacted by problems in the reporting of claims, also
raise questions about the company's risk management.

Moody's noted that the failure of the company to identify the
magnitude of a delay in claims submissions due to new federal
guidelines resulted in Health Net under-reserving for medical
claim costs at the end of 2011. The resulting adverse prior period
development of $67 million lowered results in the first quarter of
2012 and forced the company to recast its medical cost projection
for 2012, increasing the projection by another $67 million.
Moody's commented that if there are additional adverse
developments or if utilization increases above Health Net's
pricing assumption, results could worsen.

The rating agency added that this latest development follows a
series of operational issues at the company over the last few
years including marketing sanctions imposed by the Center for
Medicare and Medicaid Services (CMS) from November 2010 through
August 2011, and a large litigation settlement in early 2011.
While the company has overcome these issues in the past, and has
positioned itself for improved earnings and growth, there are
concerns that additional operational problems may arise.

Offsetting these concerns, Moody's noted the company's substantial
membership base of over 5 million members, including 3 million
TRICARE members. Health Net recently retained the TRICARE contract
for the North Region, which it has serviced since 2004. The new
contract, which commenced in April 2011, is for a one-year period
and contains three one-year option periods, which, if exercised,
would extend the contract until March 31, 2015. The company was
also selected to participate in a proposed three-year
demonstration project in California that aims to improve the
coordination of care for low-income seniors and people with
disabilities who are dually eligible for Medicare and Medi-Cal
(Medicaid). Although additional CMS approvals are needed as well
as the finalization of rates and contract terms, Moody's
conservatively estimates Health Net could add as much as $3
billion in annual revenues.

Moody's indicated that if EBITDA is above 5% with organic
membership growth above 1%, EBITDA interest coverage is above 10x,
and the NAIC risk based capital (RBC) ratio is maintained at or
above 200% of company action level (CAL), Health Net's ratings
could be upgraded. Conversely, the following could result in a
downgrade: EBITDA margins falling below 2%; membership loss of 10%
or more over a 12 month period; the RBC ratio decreasing to below
150% of CAL; or a loss or impairment of one of the company's
government contracts.

The following ratings were affirmed with a stable outlook:

Health Net, Inc. -- senior unsecured debt rating at Ba3.

Health Net of California, Inc. -- insurance financial strength
rating at Baa3.

Health Net, based in Woodland Hills, California, reported total
revenues of $2.8 billion for the first three months of 2012. As of
March 31, 2012, the company had total medical membership
(excluding Part D) of approximately 5.6 million and reported
shareholders' equity of $1.4 billion.

The principal methodology used in rating Health Net was Moody's
Rating Methodology for U.S. Health Insurance Companies published
in May 2011.

Moody's insurance financial strength ratings are opinions about
the ability of insurance companies to punctually pay senior
policyholder claims and obligations.


HENRY FAJARDO: MFC Twin Builders Goes Back to State Court
---------------------------------------------------------
Magistrate Judge Sheila K. Oberto issued Findings and
Recommendations remanding the case, MFC TWIN BUILDERS, LLC,
Plaintiff, v. HENRY DOLOSO FAJARDO; JK DENTAL CLINIC; and DOES
1-10, inclusive, Defendants, Case No. 1:12-cv-00219-AWI-SKO (E.D.
Calif.).

The case was removed from the Fresno County Superior Court to the
U.S. District Court for the Eastern District of California on Feb.
14, 2012, by Henry Doloso Fajardo and JK Dental Clinic.  On March
14, 2012, MFC Twin Builders filed a motion to remand the case to
state court.  On March 14, 2012, MFC Twin Builders also filed a
request that the Court enter the defaults of Mr. Fajardo and JK
Dental Clinic.  On April 10, 2012, MFC Twin Builders filed a
motion for sanctions pursuant to Rule 11 of the Federal Rules of
Civil Procedure.

The Court also recommends that the defaults of Mr. Fajardo and JK
Dental Clinic be entered.

On Feb. 6, 2012, MFC Twin Builders filed a verified complaint
asserting a claim for unlawful detainer against Mr. Fajardo and JK
Dental Clinic.  The complaint alleges that, on Dec. 12, 2008,
Mr. Fajardo executed a "Construction Collateral Deed of Trust"
conveying the property located at 2100 E. Clinton Avenue, Fresno,
California, to secure payment of a promissory note made by JP
Unlimited LLC in the amount of $1,300,000, payable to Metro
Funding Corporation.  The Construction Collateral Deed of Trust
indicates that JP is a California limited liability company that
entered into a loan agreement with Metro in the amount of
$1,300,000.

Pursuant to the Construction Collateral Deed of Trust, Mr. Fajardo
agreed to guaranty that loan by pledging the Property.

An assignment of the deed of trust was made by Metro to MFC
Funding, LLC, which was recorded on Dec. 15, 2008.

JP defaulted in payment of the note and, on Jan. 26, 2010, a
notice of default and an election to sell under the deed of trust
was recorded.  On Feb. 14, 2011, Metro assigned its interests in
the deed of trust to MFC Funding, LLC.

On Feb. 15, 2011, MFC Funding assigned its interests under the
deed of trust to MFC Real Estate LLC.  On March 23, 2011, notice
was given that the Property was to be sold at public auction on
April 20, 2011.

Mr. Fajardo filed a Chapter 11 petition (Bankr. E.D. Calif. Case
No. 11-14536) on April 19, 2011.  The April 20, 2011 trustee's
sale was postponed until June 1, 2011.  On May 25, 2011, the
Bankruptcy Court issued an order dismissing Mr. Fajardo's
bankruptcy petition.

On May 31, 2011, Fajardo filed another Chapter 11 bankruptcy
petition.  The trustee's sale scheduled for June 1, 2011, was
postponed twice and renoticed for August 24, 2011.

On July 28, 2011, the Bankruptcy Court entered an order granting
MFC Real Estate relief from the automatic stay relating to Mr.
Fajardo's bankruptcy petition.  In granting relief from the
automatic stay, the Bankruptcy Court found that the filing of the
bankruptcy petition was part of a scheme to delay, hinder, and
defraud creditors that involved multiple bankruptcy filings
affecting the Property.

On Aug. 15, 2011, MFC Real Estate assigned its interest under the
deed of trust to the Plaintiff.

On Aug. 24, 2011, the Property was sold to the Plaintiff at the
trustee's sale.  The Plaintiff alleged that, at the time of the
sale, the Defendants, who were not tenants, but instead the prior
owners of the Property, were in possession of the Property and
have remained in possession after that sale.

On Oct. 28, 2011, the Plaintiff served on the Defendants a written
Notice to Quit the premises.  The Defendants failed to comply with
the Notice to Quit, which provided the Defendants until Nov. 1,
2011, to vacate the Property.  On that same day, Mr. Fajardo filed
a new Chapter 13 bankruptcy petition in the Bankruptcy Court.  On
Dec. 16, 2011, the Bankruptcy Court issued an order confirming
that the automatic stay was not in effect as to Mr. Fajardo's
third Chapter 13 bankruptcy petition.

On Feb. 5, 2012, the Plaintiff filed an unlawful detainer action
in Fresno County Superior Court against the Defendants seeking the
reasonable rental value of the Property since Aug. 26, 2011.  The
caption of the complaint indicates that the amount prayed for does
not exceed $25,000, and the matter is designated as a limited-
jurisdiction civil case because the amount in controversy does not
exceed $25,000.

No response to the Plaintiff's complaint was filed in state court.
On Feb. 14, 2012, a Notice of Removal was filed on behalf of Mr.
Farjardo and JK Dental Clinic.  Following removal, no response to
the complaint was filed in federal court by either Defendant.

On March 14, 2012, the Plaintiff filed a motion to remand and also
requested that defaults of both Defendants be entered. On April
10, 2012, the Plaintiff filed a motion for sanctions pursuant to
Rule 11 of the Federal Rules of Civil Procedure.  On April 18,
2012, Mr. Fajardo filed an opposition to the motion to remand.  No
opposition to the Plaintiff's Rule 11 motion was filed.

A copy of the Court's May 9, 2012 Findings and Recommendations is
available at http://is.gd/Jeh0Pgfrom Leagle.com.


HOMER CITY: Moody's Cuts Rating on Pass Through Bonds to 'Caa1'
---------------------------------------------------------------
Moody's Investors Service downgraded Homer City Funding LLC's pass
through bonds to Caa1 from B2. The outlook remains negative.

Ratings Rationale

The rating downgrade to Caa1 reflects Moody's assumption of a
likely prepackaged bankruptcy filing of the Project to effectuate
a restructuring of Homer City's debt obligations as described in
the Project's May 2012 8-K filing. The debt restructuring at Homer
City Funding is expected to involve a deferral of scheduled
principal payments and conversion of cash pay interest into pay-
in-kind from October 1, 2012 through and including April 1, 2014.

The debt restructuring is necessitated by new environmental rules
that effectively require Homer City to install SO2 scrubbers for
Units 1 & 2 that is estimated to cost $700-$750 million.
Additionally, challenging market conditions of high coal prices
and low power prices have materially depressed Homer City's cash
flows and Homer City is not expected to have sufficient cash flow
to fully service senior rent in 2012. Low natural gas prices have
been a major driver of low power prices and have diminished Homer
City's competitive position relative to efficient gas fired
plants. These challenging long-term market conditions further
support the downgrade to the Caa1 rating.

The Caa1 rating also reflects expectations of high ultimate
recovery prospect for bondholders assuming subordinated capital is
provided to Homer City to fund the needed environmental capital
improvements. On April 2, 2012, a wholly owned subsidiary of GE
and Kiewit Power Constructors Co. executed an engineering,
procurement, and construction agreement (the "EPC Agreement") to
install emissions control equipment that is estimated to cost
approximately $700 million to $750 million. According to Homer
City's recent 8-K, a wholly owned subsidiary of GE is prepared to
provide the capital to fund the EPC Agreement in the form of an
equity contribution. As part of the overall restructuring of Homer
City, Moody's also expects an affiliate of General Electric
Capital Corporation (GECC) will obtain the economic benefits and
majority ownership of all of all the operating assets of Homer
City.

The negative outlook considers uncertainty regarding the final
form of the debt restructuring and the related uncertainty
concerning long-term value of the project which largely depend
upon an improvement in market fundamentals including energy and
capacity prices.

The rating could stabilize if Homer City is able to complete a
debt restructuring on terms that do not negatively affect recovery
prospects for debt holders.

The rating could be downgraded if the proposed restructuring does
not proceed as currently contemplated, which would include the
inability to complete the environmental capital spend at Homer
City. Failure of the contemplated restructuring would likely
result in a significant loss to debt holders and the rating could
drop by one or more notches in such a scenario.

Homer City Funding LLC is a Delaware limited liability company and
special purpose funding vehicle created for the purpose of
engaging in a sale-leaseback transaction involving a 1,884
megawatts (MW) coal fired plant in Homer City, PA which has been
leased by EME Homer City Generation L.P (EME Homer City). EME
Homer City is an indirect wholly owned subsidiary of Edison
Mission Energy (EME: Caa2 Corporate Family Rating). EME, an
independent power producer, is a wholly owned subsidiary of Edison
International (EIX: Baa2 Issuer Rating). An affiliate of General
Electric Capital Corporation (GECC) is expected to obtain the
economic benefit and majority ownership of all the operating
assets of Homer City as part of an overall restructuring of Homer
City.

The principal methodology used in this rating was the Power
Generation Projects rating methodology published in December 2008.

The last rating action was on October 7, 2011, when Homer City's
rating was downgraded to B2 from Ba3.


HORNE INTERNATIONAL: Amends Loan Pact with Messrs. Horne & Foster
-----------------------------------------------------------------
An amendment was made to the Loan Agreement dated Dec. 27, 2011,
made with Darryl K. Horne, President and Chairman of the Board of
Directors of Horne International, Inc., pursuant to which the
Company and Mr. Horne agreed to amend the payment in lieu of cash
conversion.  (Section ii) of the Note to read as follows:

   (ii) In lieu of cash payments, the Lender shall have the option
        to convert the entire principal loan balance to Horne
        International Inc. common stock as described in paragraph
        3 of the Loan Agreement between Horne International Inc.
        and Trevor Foster dated December 27, 2011.  The conversion
        price shall be equal to $.10 per share of Horne
        International Inc. Common Stock.

On May 4, 2012, an amendment was made to the Loan Agreement dated
Dec. 27, 2011, made with Trevor Foster pursuant to which the
company and Mr. Foster agreed to amend the payment in lieu of cash
conversion.  (Section ii) of the Note to read as follows:

   (ii) In lieu of cash payments, the Lender shall have the option
        to convert the entire principal loan balance to Horne
        International Inc. common stock as described in paragraph
        3 of the Loan Agreement between Horne International Inc.
        and Trevor Foster dated December 27, 2011.  The conversion
        price shall be equal to $.10 per share of Horne
        International Inc. Common Stock.

                     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 on $5.68 million of revenue for the 12 months ended Dec.
25, 2011, compared with a net and total comprehensive loss of
$1.04 million on $3.43 million of revenue 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.


HOSTESS BRANDS: KPS Capital Reportedly Eyeing Cakes Maker
---------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reports that private equity
firm KPS Capital Partners LP is one of at least two bidders that
have placed formal offers to purchase Hostess Brands Inc.,
offering a potential lifeline for the cakes maker as it struggles
through a contentious bankruptcy, according to a Thursday news
report.

The bids likely ranged between $500 million and $600 million, a
New York Post report said, citing an anonymous source, Law360
relates.

                       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.


HOUGHTON MIFFLIN: To Swap Debt for New Equity Via Ch. 11
--------------------------------------------------------
Educational publisher Houghton Mifflin Harcourt said Friday that
it's soliciting votes on a prepackaged bankruptcy reorganization
that eliminates $3.1 billion in debt by giving up control of the
company to creditors.

The Company has already obtained support from 70% of the lending
group (secured bank facilities and secured notes).  The Boston-
based company is currently soliciting votes from lenders,
bondholders and stockholders.

In addition, HMH has obtained a $500 million financing commitment,
which will provide sufficient liquidity to support seasonal
working capital swings.  US bank, Citigroup Global Markets is
providing the debt facility.

"We are excited to have reached an agreement with our lenders and
bondholders on a financial restructuring plan that will equitize
our current long-term debt and put HMH in a financially stronger
position for the future," said Linda K. Zecher, President and
Chief Executive Officer of HMH. "With a more appropriately-sized
capital structure and greater financial flexibility, along with
our world-class brand and innovative digital education solutions,
we will be well-positioned to accelerate our growth initiatives
and expand our digital platform."

Under the prepackaged Chapter 11 plan:

    * HMH will convert its existing bank and bond debt into 100%
      of the equity in the reorganized Company;

    * trade creditors and other unsecured creditors will be paid
      in full in the ordinary course.

    * If their class votes in favor of the restructuring plan,
      existing equity holders will receive warrants exercisable
      for up to 5% of the equity in the reorganized Company.

Because of the high level of support it has obtained from its
lenders and bondholders for the plan, the Company expects to
complete this financial restructuring quickly, likely by the end
of June 2012.

The Company's restructuring counsel is Paul, Weiss, Rifkind,
Wharton & Garrison LLP and its financial advisor is Blackstone.
The lenders' restructuring counsel is Akin Gump Strauss Hauer &
Feld LLP and their financial advisor is Houlihan Lokey Capital,
Inc.

                       Reverse Takeover

Financier Barry O'Callaghan founded the group when his electronic
publishing business, Riverdeep PLC, completed a $5 billion
reverse takeover of Houghton Mifflin in 2006.  Riverdeep paid
$1.75 billion in cash and assumed $1.61 billion in debt from the
private investment firms Thomas H. Lee Partners, Bain Capital and
The Blackstone Group.

Reuters relates that by 2007 the group was the biggest education
publisher in the US, and in 2008, Mr. O'Callaghan estimated his
personal wealth at over EUR1 billion.  However, the financial
collapse in September of that year pulled the rug out from under
HMH, which suffered as education spending in the US fell.

In 2010, the group was forced into a balance sheet restructuring
that saw lenders owed $7 billion take a majority stake in the
business.  The deal wiped out EUR170 million in equity held by
Irish investors.  The agreement provided for a reduction in the
senior debt to $3 billion from the current $5 billion, with new
equity issued to the senior debt holders, conversion of the
$2 billion mezzanine debt into equity and warrant, receipt of
$650 million of new cash from the sale of new equity.  Annual
interest expense was also reduced by 75%.

According to Reuters, Mr. O'Callaghan left the company last year,
but remains as chairman of an offshoot, EPMG, which has education
publishing businesses in China and India.

US hedge fund Paulson, led by billionaire John Paulson, is
currently the biggest shareholder of HMH.

                  About Houghton Mifflin Harcourt

Houghton Mifflin Harcourt -- http://www.hmhco.com/-- claims to be
among the world's largest providers of pre-K-12 learning
materials.  Its education products and services are used by 57
million students throughout all 50 U.S. states and 120 countries.
With origins dating back to 1832, the Company also publishes an
extensive line of reference works and award-winning literature for
adults and young readers.

Fitch Ratings notes that HMH continues to be a leader in the K-12
educational material and services sector, capturing 41% of 2011
market share (adoption and open territory market [excluding
Advanced Placement Sales] -- based on Association of American
Publishers (AAP) and company data).


HOUGHTON MIFFLIN: Moody's Cuts CFR/PDR to 'Ca'; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service lowered Houghton Mifflin Harcourt
Publishers Inc.'s (HMH) Corporate Family Rating (CFR), Probability
of Default Rating (PDR) and debt instrument ratings to Ca from
Caa3. The rating action reflects the high likelihood of a near-
term default following HMH's announcement that it reached an
agreement with more than 70% of its lenders and bondholders to
convert all of its existing debt to equity. HMH plans to shortly
file for Chapter 11 bankruptcy to facilitate a pre-packaged
reorganization that the company expects to complete by the end of
June 2012. The rating outlook is stable.

Downgrades:

  Issuer: Houghton Mifflin Harcourt Publishers Inc.

    Corporate Family Rating, Downgraded to Ca from Caa3

    Probability of Default Rating, Downgraded to Ca from Caa3

    Senior Secured Bank Credit Facility, Downgraded to Ca from
    Caa3 (no change to LGD4 - 53% assessment)

    Senior Secured Regular Bond/Debenture, Downgraded to Ca from
    Caa3 (no change to LGD4 - 53% assessment)

Outlook Actions:

  Issuer: Houghton Mifflin Harcourt Publishers Inc.

    Outlook, Changed To Stable From Negative

Ratings Rationale

HMH's Ca CFR is based on the announced plan to shortly file for
bankruptcy and Moody's view that the family recovery rate in a
restructuring would be slightly below 50% based on a scenario in
which earnings rebound from 2011 levels over the next 3-5 years.
Moody's will lower the PDR to D once HMH files for bankruptcy and
expects to withdrawal the existing ratings shortly thereafter. The
conversion of debt to equity will meaningfully reduce HMH's
leverage and cash interest burden, and provide the company with
greater operating flexibility. HMH's plans to pay existing trade
and other unsecured creditors in full in the ordinary course of
business.

The stable rating outlook reflects Moody's view that the current
ratings appropriately reflect the expected loss in the proposed
near-term restructuring.

Moody's does not believe an upgrade to ratings based on the
existing capital structure is likely. As noted, the PDR will be
downgraded to D from Ca once HMH files for bankruptcy. The CFR and
debt instrument ratings could be downgraded if Moody's revises its
expected family recovery rate lower.

The principal methodology used in rating HMH was the Global
Publishing Industry Methodology published in December 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Houghton Mifflin Harcourt Publishers Inc., headquartered in
Boston, MA, is one of the three largest U.S. education publishers
focusing on the K-12 market with approximately $1.3 billion of
revenue for fiscal year ended December 2011.


HUGHES TELEMATICS: Incurs $15.6 Million Net Loss in Q1
------------------------------------------------------
HUGHES Telematics, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $15.62 million on $22.07 million of total revenues
for the three months ended March 31, 2012, compared with a net
loss of $22.71 million on $15.96 million of total revenues for the
same period a year ago.

The Company's balance sheet at March 31, 2012, showed
$110.18 million in total assets, $211.81 million in total
liabilities, and a $101.62 million total stockholders' deficit.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/3FNPgD

                      About HUGHES Telematics

Atlanta, Ga.-based HUGHES Telematics, Inc. is a telematics
services company that provides a suite of real-time voice and data
communications services and applications for use in vehicles and
is developing additional applications for use within and outside
of the automotive industry.

HUGHES reported a net loss of $85.35 million in 2011, a net loss
of $89.56 million in 2010, and a net loss of $163.66 million in
2009.

In its report on the Company's 2011 financial results,
PricewaterhouseCoopers LLP, in Atlanta, Georgia, expressed
substantial doubt about the Company's ability to continue as a
going concern.  The independent auditors noted that the Company
has incurred recurring losses from operations and has a net
capital deficiency.


INTELSAT SA: Receives Additional Tenders of $1.5MM 9 1/2% Notes
---------------------------------------------------------------
Intelsat Jackson Holdings S.A. commenced tender offers to purchase
for cash any and all of its outstanding $701,913,000 aggregate
principal amount of 9 1/2% Senior Notes due 2016 and up to
$470,000,000 aggregate principal amount of its outstanding
$1,048,220,000 aggregate principal amount of 11 1/4% Senior Notes
due 2016.  On April 26, 2012, Intelsat Jackson purchased
$48,042,000 aggregate principal amount of the 9 1/2% Notes and
$10,059,000 aggregate principal amount of the 11 1/4% Notes, in
each case that were tendered prior to 5:00 p.m. New York City time
on Wednesday, April 25, 2012, pursuant to the Tender Offers.  Each
of the Tender Offers expired at 12:00 midnight, New York City time
on Wednesday, May 9, 2012.

On May 10, 2012, Intelsat Jackson was advised by Global Bondholder
Services Corporation, as the depositary for the Tender Offers,
that after the Early Tender Time and prior to the Expiration Time,
Intelsat Jackson had received tenders of an additional $1,502,000
aggregate principal amount of the 9 1/2% Notes and no additional
tenders of the 11 1/4% Notes pursuant to the Tender Offers.
Including accrued and unpaid interest, on May 10, 2012, Intelsat
Jackson paid $1,618,305 in consideration for the 9 1/2% Notes
tendered after the Early Tender Time and prior to the Expiration
Time.

                          About Intelsat

Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite
communications services worldwide through a global communications
network of 54 satellites in orbit as of Dec. 31, 2009, and ground
facilities related to the satellite operations and control, and
teleport services.  It had US$2.5 billion in revenue in 2009.

Washington D.C.-based Intelsat Corporation, formerly known as
PanAmSat Corporation, is a fully integrated subsidiary of Intelsat
S.A., its indirect parent.  Intelsat Corp. had US$7.70 billion in
assets against US$4.86 billion in debts as of Dec. 31, 2010.

The Company reported a net loss of $433.99 million in 2011, a net
loss of $507.77 million in 2010, and a net loss of $782.06 million
in 2009.

The Company's balance sheet at March 31, 2012, showed $17.40
billion in total assets, $18.52 billion in total liabilities,
$49.51 million in noncontrolling interest and a $1.16 billion
total Intelsat S.A. shareholder's deficit.

                          *     *     *

Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings
from Standard & Poor's.  It has 'Caa1' corporate family and
probability of default ratings from Moody's Investors Service.


ISTAR FINANCIAL: Files Form 10-Q, Incurs $46MM Net Loss in Q1
-------------------------------------------------------------
iStar Financial Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $46.04 million on $94.70 million of total revenues for the
three months ended March 31, 2012, compared with net income of
$83.90 million on $110.24 million of total revenues for the same
period during the prior year.

The Company's balance sheet at March 31, 2012, showed
$7.58 billion in total assets, $6.08 billion in total liabilities,
and $1.50 billion in total equity.

A copy of the Form 10-Q is available for free at:

                       http://is.gd/TtJ0xb

                      About iStar Financial

New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity.  The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.

The Company reported a net loss of $25.69 million in 2011,
compared with net income of $80.20 million in 2010.

                           *     *     *

As reported by the TCR on March 29, 2011, Fitch Ratings has
upgraded the Issuer Default Rating to 'B-' from 'C'.
The upgrade of iStar's IDR is based on the improved liquidity
profile of the company, pro forma for the new senior secured
credit agreement (the new financing) that extends certain of the
company's debt maturities, relieving the overhang of significant
secured debt maturities in June 2011.

As reported by the Troubled Company Reporter on March 22, 2011,
Standard & Poor's said that it raised its counterparty credit
rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it
from CreditWatch where it was placed with positive implications on
Feb. 23.  The outlook is stable.

"The upgrade reflects the company's closing of a $2.95 billion
senior secured credit facility, which it will use to refinance the
company's existing secured bank facilities and repay a portion of
the company's unsecured debt," said Standard & Poor's credit
analyst Jeffrey Zaun.  If S&P's analysis of the new secured
facility indicates 100% or more collateral coverage, S&P will rate
the issue 'BB-'.  If S&P's analysis of collateral indicates less
than 100% coverage, S&P will rate the issue 'B+'.


JAMES RIVER: Michael Cook Holds 4.3% of Class A Common Shares
-------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Michael W. Cook Asset Management, Inc., d/b/a
SouthernSun Asset Management disclosed that, as of April 30, 2012,
it beneficially owns 1,526,955 shares of Class A common stock of
James River Coal Co representing 4.31% of the shares outstanding.
A copy of the filing is available for free at http://is.gd/Tj8hMn

                        About James River

Headquartered in Richmond, Virginia, James River Coal Company
(NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines,
processes and sells bituminous steam and industrial-grade coal
primarily to electric utility companies and industrial customers.
The company's mining operations are managed through six operating
subsidiaries located throughout eastern Kentucky and in southern
Indiana.

The Company reported a net loss of $39.08 million in 2011,
compared with net income of $78.16 million in 2010.

The Company's balance sheet at March 31, 2012, showed $1.36
billion in total assets, $984.91 million in total liabilities and
$383.57 million in total shareholders' equity.

                           *     *     *

In March 2012, Standard & Poor's Ratings Services lowered its
corporate credit rating on James River to 'B-' from 'B'.  "The
downgrade and ongoing CreditWatch listing reflect our view that
James River Coal's 2012 operating performance will be lower than
we previously expected," said Standard & Poor's credit analyst
Megan Johnston.  "We believe that demand for thermal coal will
continue to be negatively affected by natural gas substitution and
recent warmer weather trends.  Absent increasing natural gas
prices or a warmer-than-normal summer, thermal coal prices may
continue to decline to lower levels than we previously
anticipated."

In April 2012, Moody's Investors Service affirmed the company's B3
corporate family rating (CFR) and SGL-3 speculative grade
liquidity rating, indicating an adequate liquidity position.  The
B3 CFR is principally constrained by a high cost position, high
leverage, meaningful decrease in thermal coal prices, and
likelihood of margin compression in thermal coal business as
existing contracts roll off over the next year. The ratings also
consider relatively high thermal coal inventories and generally
stagnant coal demand at the power utilities.


LIBERTY HARBOR: Sues Former Business Partner Over 'Invalid' Deed
----------------------------------------------------------------
Jake Simpson at Bankruptcy Law360 reports that Liberty Harbor
Holding LLC hit a former business partner with an adversary suit
Thursday, claiming a deed the partner purports to hold on a joint
development is not valid.

Law360 relates that Liberty Harbor said SWJ Holdings LLC
improperly assumed 100 percent of ownership of the 19-acre Liberty
Harbor development site in Jersey City in 2006.

                     About Liberty Harbor

Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along
with two affiliates, sought Chapter 11 protection (Banrk. D. N.J.
Lead Case No. 12-19958) in Newark on April 17, 2012.  Liberty, as
of April 16, 2012, had total assets of $350.08 million, comprising
of $350 million of land, $75,000 in accounts receivable and $458
cash.  The Debtor says that it has $3.62 million of debt,
consisting of accounts payable of $73,500 and unsecured non-
priority claims of $3,540,000.  The Debtor's real property
consists of Block 60, Jersey City, NJ 100% ownership Lots 60, 70,
69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D.

Affiliates that filed separate petitions are: Liberty Harbor II
Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor
North, Inc. (Case No. 12-19964).

Judge Novalyn L. Winfield presides over the case.  The petition
was signed by Peter Mocco, managing member.


LIGHTSQUARED INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: LightSquared Inc.
        450 Park Avenue
        Suite 2201
        New York, NY 10022

Bankruptcy Case No.: 12-12080

Debtor-affiliates that filed separate Chapter 11 petitions:

        Debtor                                   Case No.
        ------                                   --------
        LightSquared LP                          12-12081
        LightSquared Corp.                       12-12082
        LightSquared Network LLC                 12-12083
        One Dot Six Corp.                        12-12084
        TMI Communications Del. Ltd. Partnership 12-12085
        ATC Technologies LLC                     12-12086
        LightSquared Bermuda Ltd.                12-12088
        LightSquared Finance Co                  12-12089
        LightSquared GP Inc.                     12-12091
        LightSquared Inc. of Virginia            12-12092
        LightSquared Investors Holdings Inc.     12-12093
        LightSquared Subsidiary LLC              12-12094
        One Dot Four Corp.                       12-12095
        One Dot Six TVCC Corp.                   12-12096
        SkyTerra (Canada) Inc.                   12-12097
        SkyTerra Holdings (Canada) Inc.          12-12098
        SkyTerra Investors LLC                   12-12099
        SkyTerra Rollup LLC                      12-12101
        SkyTerra Rollup Sub LLC                  12-12102

Type of Business: LightSquared was the first private mobile
                  satellite-communications company to offer
                  wholesale mobile satellite services throughout
                  North America to both companies and government
                  agencies for bandwidth power and capacity,
                  telephony resale, data and dispatch services and
                  retail voice users.

                  LightSquared planned to develop a wholesale 4G
                  LTE wireless broadband communications network
                  integrated with satellite coverage across the
                  United States.  But the plan hit a roadblock
                  when the U.S. military and others complained
                  that the planned service would disrupt global
                  positioning system equipment.

                  Web site: http://www.lightsquared.com/

Chapter 11 Petition Date: May 14, 2012

Court: U.S. Bankruptcy Court
       Southern District of New York

Judge: Hon. Shelley C. Chapman

Debtors'
Counsel:    Matthew S. Barr, Esq.
            Steven Z. Szanzer, Esq.
            Karen Gartenberg, Esq.
            MILBANK, TWEED, HADLEY & MCCLOY LLP
            1 Chase Manhattan Plaza
            New York, NY 10005-1413
            Tel: (212) 530-5000
            Fax: (212) 530-5219
            E-mail: mbarr@milbank.com
                    sszanzer@milbank.com
                    kgartenberg@milbank.com

Debtors'
General
Canadian
Counsel:    FRASER MILNER CASGRAIN LLP

Debtors'
Investment
and
Financial
Advisor:    MOELIS & COMPANY

Debtors'
Financial
Advisor:    ALVAREZ & MARSAL NORTH AMERICA, LLC

Debtors'
Claims and
Noticing
Agent:      KURTZMAN CARSON CONSULTANTS LLC
            2335 Alaska Avenue
            El Segundo, CA 90245
            Tel: (877) 499-4509

Debtors'
Information
Officer:    ALVAREZ & MARSAL CANADA INC.

Total Assets: $4.48 Billion as of Feb. 29, 2012

Total liabilities: $2.29 billion as of Feb. 29, 2012

Estimated Debts:  More than $1 billion

The petition was signed by Marc R. Montagner, chief financial
officer and interim co-chief operating officer.

Consolidated Lift of 20 Largest Unsecured Creditors:

        Entity                     Nature of Claim    Claim Amount
        ------                     ---------------    ------------
Boeing Satellite Systems Inc.      Trade              $7,483,005
2260 E. Imperial Hwy.
El Segundo, CA 90245
Attn: Mr. W. James McNerney Jr.
Preside and CEO
Tel: (310) 364-4000
Fax: (310) 364-6677

Alcatel-Lucent                     Trade              $7,343,549
3 Av. Octave Greard
75007 Paris, France
Attn: Mr. Ben Verwaayen
Chief Executive Officer
Tel: +33 (0) 40 76 10 10
E-mail: execoffice@alcatel-lucent.com

AnyDATA Corporation               Trade                 $690,000
5 Oldfield
Irvine, CA 92618
Attn: Dr. Soon B. Shin
President & CEO
Tel: (949) 900-6040
Fax: (949) 600-9909

Bandrich, Inc.                    Trade                 $390,600
No. 188, 7f, Baociao Rd
Sin-Dian City
Taipei, Taiwan 23146
Attn: Dr. Wen-Yi Kuo
CEO
Tel: +866-2-2799-8851
Fax: +866-2-2799-8812

Burson-Marsteller                 Trade                 $264,761
230 Park Avenue South
New York, NY 10003-1528
Attn: Mr. Tony Telloni
Market Leader
Tel: (212) 614-4000
Fax: (212) 598-5320

Level 3 Communications LLC        Trade                 $169,436

Oracle Inc.                       Trade                 $163,979

SBA Structures Inc.               Trade                 $100,800

SBA Towers III LLC                Trade                  $77,350

USAC                              Professional           $56,686

Liebert Services Inc.             Trade                  $39,115

Westar Satellite Services LP      Landlord               $38,451

Shockey Scofield Solutions, LLC   Professional           $35,000

Intelsat                          Landlord               $32,609

SED Systems                       Landlord               $31,640

Cyberbridge                       Trade                  $28,969

Mehlman Capitol Strategies        Professional           $20,000

Verizon                           Trade                  $15,716

AT&T                              Trade                  $15,181

Polaris Logistics                 Landlord               $11,770


LIGHTSQUARED INC: Files for Bankruptcy As It Deals With FCC
-----------------------------------------------------------
Mobile communications company LightSquared Inc. and 19 of its
affiliates filed Chapter 11 bankruptcy petitions Monday in
Bankruptcy Court in Manhattan as the Company seeks to resolve
regulatory issues that have prevented it from building its coast-
to-coast integrated satellite 4G wireless network.

LightSquared, which has invested more than $4 billion to deploy an
integrated satellite-terrestrial network that will provide next
generation, high-speed mobile services on a nationwide basis, said
it fully expects to continue normal operations throughout the
bankruptcy process.  The company said all of its distribution
partners and customers, including public safety, emergency
response, government and military users of LightSquared's
satellite-based communications services can continue to rely on
LightSquared to provide them with mission critical communications
services.

Jacqueline Palank, writing for Dow Jones Newswires, reports the
bankruptcy filing was made hours ahead of the expiration of a deal
to keep LightSquared from defaulting on its debt.  The Wall Street
Journal's Mike Spector and Dow Jones' Greg Bensinger reported
Sunday that people familiar with the matter said LightSquared was
preparing to file for bankruptcy after negotiations with lenders
to avoid a potential debt default faltered.  LightSquared and its
lenders had until 5 p.m. Monday to reach a deal.

The Hon. Shelley C. Chapman, who has been assigned to the case,
will convene the first hearing in the case Tuesday afternoon at
3:00 p.m. (Eastern Time), and consider so-called First Day motions
filed by the Debtors.

                        Road to Bankruptcy

LightSquared's state-of-the-art satellite -- launched in 2010 --
is intended to combine 4G LTE terrestrial technology to create a
nationwide communications system that offers superior coverage and
mobile broadband speeds.

However, in February the U.S. Federal Communications Commission
told LightSquared it would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries.

A month later, LightSquared suffered another setback when Sprint
terminated a master services agreement effective March 16, 2012.
Under the deal, LightSquared and Sprint had worked closely
together to weather the delays in the build-out of the terrestrial
broadband mobile network throughout the United States.

While LightSquared deemed Sprint's exit beneficial given
LightSquared's reduced operations and liquidity, its prepetition
lenders considered the termination of the Sprint Master Services
Agreement would trigger cross-defaults under the company's
prepetition credit agreements.

               Discussions with Prepetition Lenders

Recognizing the liquidity constraints on its business operations
and necessity of an extended period in which to resolve its issues
with the FCC as well as to streamline its business operations and
financial obligations, LightSquared began negotiations with
prepetition lenders in February 2011 to waive, among others, the
then potential events of default asserted by the prepetition
lenders.

LightSquared Inc. owes $322,333,494 under a July 2011 prepetition
term loan facility with U.S. Bank National Association, as
successor administrative agent to UBS AG, Stamford Branch.

Meanwhile, affiliate LightSquared LP owes $1,700,571,106 under an
October 2010 credit facility with UBS AG, Stamford Branch and
Wilmington Trust FSB, as agents.

Throughout the first quarter of 2012, LightSquared faced liquidity
challenges.  LightSquared LP was obligated to make a $25 million
interest payment to its prepetition lenders on March 30, which
reduced the availability of cash on hand to LightSquared LP.

On March 15, 2012, LightSquared was able to secure a waiver under
the July 2011 facility and a short, 45-day waiver, subsequently
extended by two waivers each granting an additional seven days,
under the October 2010 facility.

The maturity date for the July 2011 facility was extended from
July 1, 2012, to Dec. 31, 2012, and a 2% non-cash fee was paid to
the UBS AG, Stamford Branch, as administrative agent, for the
ratable account of each July 2011 lender.

Philip Falcone's Harbinger Capital Partners, which indirectly owns
96% of LightSquared's outstanding common stock, also agreed to
subordinate amounts owing to it under facility to amounts owing to
the other lenders in exchange for 2.5 million penny warrants.

During the 59-day period, LightSquared and the Prepetition Lenders
attempted to negotiate a global restructuring that would provide
LightSquared with the liquidity and runway necessary to resolve
its issues with the FCC.  Despite working diligently and in good
faith, however, LightSquared and the Prepetition Lenders were not
able to consummate a global restructuring on terms acceptable to
all interested parties.

"The Debtors were thus faced with no option but to commence these
Chapter 11 Cases as the Debtors believed the Prepetition Lenders
would attempt to exercise remedies and sweep the very cash
necessary to conduct LightSquared's business and provide
LightSquared with the requisite time to address FCC concerns,"
LightSquared said in papers filed in court.

WSJ's Mr. Spector and Dow Jones' Mr. Bensinger, citing unnamed
sources, reported Sunday that Mr. Falcone 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 sources
also said 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.

In April, Matthew Goldstein, writing for Reuters, reported that
two people familiar with the situation said a number of
LightSquared debt holders have joined together to retain
bankruptcy attorney Thomas Lauria, Esq., who heads White & Case's
global restructuring group.  According to Reuters, the unnamed
sources said the creditors' group includes billionaire activist
investor Carl Icahn, hedge fund manager David Tepper and
investment firms Fortress Investment Group and Capital Research
and Management Company.  Reuters said the institutional investors
own some of the $1.6 billion in bank debt that LightSquared sold
to raise money for its planned network.

LightSquared said in court filings it intends to vigorously defend
its rights in the ongoing 2012 Public Notice process with the FCC,
while simultaneously pursuing a resolution with the FCC and other
federal government agencies that will permit it to deploy its
terrestrial network.  LightSquared noted that the process may last
up to two years.

As of the Petition Date, the Debtors employed roughly 168 people
in the United States and Canada.  As of Feb. 29, 2012, the Debtors
had $4.48 billion in assets (book value) and $2.29 billion in
liabilities.

                     Bye Carl, Hello Charlie!

WSJ's Mr. Spector and Dow Jones' Mr. Bensinger earlier this month
reported 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 Carl Icahn where Mr. Icahn sold his roughly $250
million worth of LightSquared debt.  The bank-debt trade hasn't
yet settled, leaving those in the negotiations unsure of the
ultimate buyer, the people close to the matter said.

According to the report, one person familiar with the matter said
Mr. Icahn sold his debt for about 60 cents on the dollar or a bit
higher, giving him a profit on his original purchase when the debt
was trading between 40 cents and 50 cents.  Mr. Icahn didn't
respond to requests for comment.

                       Canadian Proceedings

LightSquared also intends to seek ancillary relief in Canada on
behalf of all of the Debtors, pursuant to the Companies' Creditors
Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the
Ontario Superior Court of Justice (Commercial List) in Toronto,
Ontario, Canada.  The purpose of the ancillary proceedings is to
request the Canadian Court to recognize the Chapter 11 cases as a
"foreign main proceeding" under the applicable provisions of the
CCAA to, among other things, protect the Debtors' assets and
operations in Canada.  The Debtors named affiliate LightSquared LP
to act as the "foreign representative" on behalf of the Debtors'
estates.

In addition to its operations in the United States, LightSquared
has certain assets and limited operations in Canada.  Three of the
Debtors are incorporated in Canada: SkyTerra Holdings (Canada)
Inc., SkyTerra (Canada) Inc. and LightSquared Corp.

                          Breathing Room

Marc Montagner, interim co-chief operating officer and chief
financial officer of LightSquared, said, "The filing was necessary
to preserve the value of our business and to ensure continued
operations. The voluntary Chapter 11 filing is intended to give
LightSquared sufficient breathing room to continue working through
the regulatory process that will allow us to build our 4G wireless
network."

"All of our efforts are focused on concluding this process in an
efficient and successful manner," he added.

LightSquared said it intends to work with all key constituents to
conduct an orderly restructuring process to maximize its asset
value and to exit Chapter 11 in the quickest and most efficient
manner possible.  LightSquared expects that its current management
team will continue to lead the company throughout this process.

According to Dow Jones' Ms. Palank, Mr. Falcone told Harbinger
Capital Partners investors Monday that Chapter 11 protection for
LightSquared was the best option for the wireless venture and he
vowed to carry out plans to build a nationwide high-speed mobile
broadband network.

"I am focused, as I have been throughout the course of this
investment, on preserving and maximizing the value of LightSquared
for the benefit of Harbinger's investors," Mr. Falcone said in a
note to investors obtained by The Wall Street Journal.  A
bankruptcy filing "was a necessary and appropriate decision by
LightSquared to preserve its value."

Harbinger Capital Partners and certain of its managed and
affiliated funds and wholly owned subsidiaries, including HGW US
Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital
Partners SP, Inc., are represented in the case by:

          Stephen Karotkin, Esq.
          Debra A. Dandeneau, Esq.
          Ronit J. Berkovich, Esq.
          WEIL, GOTSHAL & MANGES LLP
          767 Fifth Avenue
          New York, NY 10153
          Telephone: (212) 310-8000
          Facsimile: (212) 310-8007
          E-mail: stephen.karotkin@weil.com
                  debra.dandeneau@weil.com
                  ronit.berkovich@weil.com

New York-based LightSquared was incorporated in Delaware in 1985.
On March 29, 2010, SkyTerra Communications, Inc., LightSquared's
predecessor company, consummated a merger with Sol Private Corp.,
resulting in certain Harbinger Capital Partners investment funds
acquiring all of the outstanding stock of SkyTerra not previously
held by Harbinger.  Following the consummation of the merger,
SkyTerra continued as the surviving corporation and was wholly
owned by Harbinger through HGW US Holding Company, L.P.  SkyTerra
later changed its name to LightSquared Inc. on July 20, 2010.


LL MURPHREY: Court Pegs Recapitalized Debt at $6.18-Mil.
--------------------------------------------------------
Bankruptcy Judge J. Rich Leonard clarified that, pursuant to the
Court's Dec. 16, 2011 order, the amount of Recapitalized Debt as
defined by the Fourth Amended Plan of Reorganization of L.L.
Murphrey Company is set at $6,186,362, and the liability of the
pre-petition guarantors is capped at this amount.

In the lawsuit, L.L. MURPHREY COMPANY, LARRY BARROW, LOIS BARROW,
AND DORIS MURPHREY, PLAINTIFFS, v. D.A.N. JOINT VENTURE III, L.P.,
DEFENDANT, Adv. Proc. No. 11-00139-8-JRL (Bankr. E.D.N.C.), the
defendant sought reconsideration of the Dec. 16, 2011 order
granting summary judgment for the plaintiffs on their computation
of the amount of Recapitalized Debt as defined in the Plan, and
denying summary judgment on the defendant's counterclaim dealing
with identification of collateral.

Although the Bankruptcy Court did not enter a final judgment on
the basis of the December order, the defendant filed a notice of
appeal which is currently pending in the U.S. District Court.  The
Defendant now seeks a determination from the Bankruptcy Court that
the earlier order did not resolve all of the claims in the action,
and thus is not final.

Although all of the issues raised by the pleadings were fully
discussed at the hearing on Nov. 21, 2011, the Bankruptcy Court
agrees the December order does not clearly dispose of all of them.

The lawsuit advances two claims for relief.  In Count 1, it seeks
declaratory relief both as to the amount of the debt to be
recapitalized, and also as to the liability of the guarantors.  In
Count 2, it seeks injunctive relief prohibiting the defendant from
attempting to collect any amount in excess of the plaintiffs'
assertions as to the recapitalized amount and scope of guarantor
liability.

The answer, in turn, advances two counterclaims.  The first
counterclaim deals with the issue of collateral identification
determined adversely to the defendant in the December order.  The
second counterclaim asserts the reopening of the bankruptcy case
as a material default, an issue decided adversely to the defendant
in the Court's ruling on the motion to dismiss of Oct. 12, 2011.

In his May 10, 2012 Order, Judge Leonard ruled that:

     -- the request for injunctive relief is denied;
     -- relief is denied defendant on its two counterclaims; and
     -- the action is dismissed.

In matching the court's orders to the claims and counterclaims
asserted, Judge Leonard said it is clear there has never been a
ruling on the two issues of injunctive relief and guarantor
liability fairly raised as claims.

According to Judge Leonard, the issue regarding injunctive relief
is easily resolved.  There has been no showing that the defendant
has made any impermissible attempts to collect a debt inconsistent
with the court's rulings, and there is no basis on which to infer
that it will not abide by any final adjudication of these issues.
Accordingly, the requisite showing of irreparable harm for
injunctive relief has not been made.

A copy of the Court's May 10, 2012 Order is available at
http://is.gd/DXAmrcfrom Leagle.com.

                        About L.L. Murphrey

L.L. Murphrey Company is North Carolina corporation engaged in the
swine business, with its principal place of business in Greene
County, North Carolina.  LLM filed for chapter 11 bankruptcy
(Bankr. E.D.N.C. Case No. 00-03213) on June 8, 2000.  On July 13,
2001, the Court entered an order confirming the Debtor's fourth
amended plan of reorganization.


LOTHIAN OIL: Creditor Asks 2nd Circ. to Resolve Jurisdiction Row
----------------------------------------------------------------
Lana Birbrair at Bankruptcy Law360 reports that a Lothian Oil Inc.
creditor asked the Second Circuit on Tuesday to resolve a
jurisdictional fight over sanctions and other issues in a suit
accusing the bankrupt oil company of conspiracy that has bounced
between state, federal and bankruptcy courts in New York and
Texas.

Appellant Israel Grossman, who launched New York state suits along
with others seeking additional payouts under Lothian's
reorganization plan, asked the Second Circuit in a brief to
determine whether a New York bankruptcy court could enforce
sanctions by a Texas bankruptcy, according to Law360.

                         About Lothian Oil

Based in Midland, Texas, Lothian Oil Inc. was a privately
owned oil and gas company.  Lothian and six affiliates filed for
chapter 11 protection (Bankr. W.D. Tex. Case No. 07-70121) on
June 13, 2007.  The Debtors were represented by lawyers at Haynes
and Boone, LLP.  When Lothian sought bankruptcy, it listed assets
and debts between $1 million to $100 million.  On June 27, 2008,
the bankruptcy court confirmed a plan of liquidation.


MARRICK PROPERTIES: St. Petersburg Boutique Hotel in Chapter 11
---------------------------------------------------------------
Marrick Properties LLC, the operator of the Pier Hotel, filed a
petition for Chapter 11 reorganization (Bankr. M.D. Fla. Case No.
12-07179) on May 9 in Tampa, Florida.

Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Pier Hotel calls itself the oldest continuously
operating hotel in St. Petersburg, Florida.  Built in 1921 near
the waterfront, the hotel has 33 rooms and $1.3 million owing to
secured creditors. A court filing lists the property as worth
$675,000.  Originally known as the Hotel Scott, the hotel was
restored in 2000, according to the website.

A case summary for Marrick Properties is in the May 14, 2012
edition of the Troubled Company Reporter.


MILESTONE SCIENTIFIC: Incurs $355,000 Net Loss in First Quarter
---------------------------------------------------------------
Milestone Scientific Inc. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss applicable to common stockholders of $355,181 on $1.92
million of net product sales for the three months ended March 31,
2012, compared with a net loss applicable to common stockholders
of $141,644 on $2.42 million of net product sales for the same
period during the prior year.

The Company reported a net loss of $1.48 million in 2011, compared
with a net loss of $614,508 in 2010.

The Company's balance sheet at March 31, 2012, showed
$6.47 million in total assets, $4.62 million in total liabilities
and $1.85 million in total stockholders' equity.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/xdcVvI

                    About Milestone Scientific

Piscataway, N.J.-based Milestone Scientific Inc. (OTC BB: MLSS)
-- http://www.milestonescientific.com/-- is engaged in pioneering
proprietary, highly innovative technological solutions for the
medical and dental markets.  Central to the Company's IP platform
and product development strategy is its patented CompuFlo(R)
technology for the improved and painless delivery of local
anesthetic.

In its report on the Company's 2011 financial results, Holtz
Rubenstein Reminick LLP, in New York, expressed substantial doubt
about the Company's ability to continue as a going concern.  The
independent auditors noted that the Company has suffered recurring
losses from operations since inception.

MPG OFFICE: Files Form 10-Q, Posts $10.4-Mil. Net Income in Q1
--------------------------------------------------------------
MPG Office Trust, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $10.46 million on $87.99 million of total revenue
for the three months ended March 31, 2012, compared with a net
loss of $39.98 million on $79.33 million of total revenue for the
same period a year ago.

The Company's balance sheet at March 31, 2012, showed
$2.19 billion in total assets, $3.11 billion in total liabilities,
and a $913.35 million total deficit.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/oCR0wZ

The 2012 annual meeting of stockholders of the Company will be
held on Friday, July 27, 2012, at 8:00 am (local time) at the Omni
Los Angeles Hotel, located at 251 South Olive Street, Los Angeles,
California 90012.  At that time, holders of record of the
Company's common stock will be asked to elect six directors and
holders of record of the Company's 7.625% Series A Cumulative
Redeemable Preferred Stock will be asked to elect two directors.
Holders of record of the Company's common stock will also be asked
to vote upon any and all such other matters as may properly come
before the Annual Meeting.  The Board has fixed the close of
business on May 24, 2012, as the record date for the determination
of stockholders entitled to notice of, and to vote at, the Annual
Meeting and at any continuation, postponement or adjournment
thereof.

                        About MPG Office Trust

MPG Office Trust, Inc., fka Maguire Properties Inc. --
http://www.mpgoffice.com/-- is the largest owner and operator of
Class A office properties in the Los Angeles central business
district and is primarily focused on owning and operating high-
quality office properties in the Southern California market.  MPG
Office Trust is a full-service real estate company with
substantial in-house expertise and resources in property
management, marketing, leasing, acquisitions, development and
financing.

The Company has been focused on reducing debt, eliminating
repayment and debt service guarantees, extending debt maturities
and disposing of properties with negative cash flow.  The first
phase of the Company's restructuring efforts is substantially
complete and resulted in the resolution of 18 assets, relieving
the Company of approximately $2.0 billion of debt obligations and
potential guaranties of approximately $150 million.

The Company reported net income of $98.22 million in 2011,
compared with a net loss of $197.93 million in 2010.


MORGANS HOTEL: Incurs $14.5 Million Net Loss in First Quarter
-------------------------------------------------------------
Morgans Hotel Group Co. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $14.49 million on $43.29 million of total revenues
for the three months ended March 31, 2012, compared with a net
loss of $32.86 million on $54.40 million of total revenues for the
same period a year ago.

The Company's balance sheet at March 31, 2012, showed $544.25
million in total assets, $642.07 million in total liabilities,
$5.41 million in redeemable noncontrolling interest, and a
$103.23 million total deficit.

                     About Morgans Hotel Group

Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector.  Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London.  Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico.  Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.

The Company reported a net loss of $87.95 million in 2011, a net
loss of $83.64 million in 2010, and a net loss of $101.60 million
in 2009.


MSR RESORT: Judge Sides With Hilton in Property Management Row
--------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that a New York
bankruptcy judge ruled Friday for a Hilton Worldwide Inc. unit in
a dispute with MSR Resort Golf Course LLC over a property
management agreement, rejecting the debtor's claim that Hilton was
equitably estopped from enforcing the deal.

Law360 says MSR had sought a declaratory judgment that Hilton
can't enforce so-called nondisturbance and attornment agreements
that would give the company legal recourse for MSR's breach of the
property management agreements because Hilton didn't disclose the
NDAs in 2007 estoppel certificates.

                          About MSR Resort

MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.

On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding.  CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc., a joint
venture affiliated with Winthrop Realty Trust, and affiliates of
Capital Trust, Inc.

Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts
before the Jan. 28 foreclosure.

Following the acquisition, five of the resorts with mortgage debt
scheduled to mature on Feb. 1, 2011, were sent to Chapter 11
bankruptcy by the Paulson and Winthrop joint venture affiliates.
MSR Resort Golf Course LLC and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan
on Feb. 1, 2011.  The resorts subject to the filings are Grand
Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta
Resort and Club and PGA West, Doral Golf Resort and Spa, and
Claremont Resort and Spa.

James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel.  Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor.  Kurtzman Carson
Consultants LLC is the Debtors' claims agent.

The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings.  In its
schedules, debtor MSR Resort disclosed $59,399,666 in total assets
and $1,013,213,968 in total liabilities.

The resorts have agreement with lenders allowing the companies to
remain in Chapter 11 at least until September 2012.  Donald Trump
has a contract to buy the Doral Golf Resort and Spa in Miami for
$170 million. There will be an auction to learn if there is a
better bid. The resorts have said that Trump's offer price implies
a value for all the properties "significantly" exceeding the
$1.5 billion in debt.

The Official Committee of Unsecured Creditors is represented by
Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston &
Bird LLP, in New York.


NAVISTAR INTERNATIONAL: Wellington Ceases to Hold 5% Stake
----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Wellington Management Company, LLP, disclosed
that, as of April 30, 2012, it beneficially owns 269,805 shares of
common stock of Navistar International Corporation representing
0.39% of the shares outstanding.  Wellington previously reported
beneficial ownership of 4,598,123 common shares or a 6.55% equity
stake as of Dec. 31, 2011.  A copy of the amended filing is
available for free at http://is.gd/ITgbyX

                    About Navistar International

Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans.  It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets.  The company also provides truck and diesel
engine parts and service.  Another affiliate offers financing
services.

The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.

                           *     *     *

Navistar has a 'BB-/Stable/--' corporate credit rating from
Standard & Poor's and a 'B1' Corporate Family Rating and
Probability of Default Rating from Moody's Investors Service.

Moody's said in October 2010 that Navistar's B1 rating could
improve if the North American truck market remains on track for a
sustained recovery into 2011, and Navistar's operational
initiatives to moderate its vulnerability to the truck cycle show
evidence of taking hold.


NAVISTAR INTERNATIONAL: Franklin Discloses 12.4% Equity Stake
-------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Franklin Resources, Inc., disclosed that, as of
Dec. 31, 2011, they beneficially own 8,498,858 shares of common
stock of Navistar International Corporation representing 12.4% of
the shares outstanding.  A copy of the filing is available for
free at http://is.gd/xk9X0l

                    About Navistar International

Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans.  It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets.  The company also provides truck and diesel
engine parts and service.  Another affiliate offers financing
services.

The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.

                           *     *     *

Navistar has a 'BB-/Stable/--' corporate credit rating from
Standard & Poor's and a 'B1' Corporate Family Rating and
Probability of Default Rating from Moody's Investors Service.

Moody's said in summary credit opinion at the end of April 2012
that the B1 Corporate Family Rating of Navistar International
reflects the company's highly competitive position in the North
American medium and heavy duty truck markets, and the continuing
recovery in demand. It also reflects the progress Navistar
continues to make in implementing a strategy that should reduce
its vulnerability to cyclical downturns and strengthen returns.
The key elements of this strategy include: expanding its scale and
operating efficiencies by offering a full line of medium and
heavy-duty trucks equipped with Navistar engines; building its
position in international truck and engine markets through
alliance and joint ventures; and, strengthening its domestic
dealer network.


NES RENTALS: Moody's Affirms 'Caa1' CFR, Rates Term Loan 'Caa2'
---------------------------------------------------------------
Moody's Investors Service affirmed the credit ratings of NES
Rentals Holdings, Inc., including the Corporate Family Rating of
Caa1 and assigned a Caa2 rating to the proposed maturity extended
second lien term loan. NES Rentals is in the process of amending
and extending its $82.8 million senior secured second lien term
loan. The amendment will extend the maturity of approving lenders
from July 2013 to October 2014. Concurrently, the outlook was
changed to positive from stable based on expected continued
improvement in operating performance over the intermediate term
with the Company being well positioned to capitalize on the
improvement in the underlying factors supporting the positive U.S.
equipment rental industry demand trends.

Moody's has taken the following rating actions:

Issuer: NES Rentals Holdings, Inc.

Ratings Assigned:

Second lien senior secured term loan due 2014 Caa2 (LGD-5, 83%)

Ratings Affirmed (with updated LGD assessments):

Corporate Family Rating, at Caa1

Probability of Default Rating, at Caa1

Second lien term loan due 2013, at Caa2 (LGD-5, 83%) from
(LGD-5, 77%)

$150 million second lien notes due 2015, at Caa2 (LGD-5, 83%)
from (LGD-5, 77%)

Outlook positive

Ratings Rationale

The change in rating outlook to positive reflects Moody's
expectation of a continued moderate improvement in the overall US
equipment rental markets and the factors underlying that growth.
Continued growth over the intermediate term is expected to stem
from higher rental rates and utilization through 2012 as well as
continued anticipated growth in the industrial end-markets and to
a lesser degree, growth in the non-residential construction
industry. An improvement in operating results for NES in recent
periods also confirms the expectation that this trend should
continue as the overall industry recovers from the 2009 through
mid-2010 economic downcycle. The company's proposed amendment and
maturity date extension of its $83 million second lien term loan
further support the positive outlook change as the company's debt
maturity profile would be extended. However, Moody's notes that
the proposed refinancing would also result in higher pricing on
the second lien term loan, thereby increasing interest expense.

The affirmation of the Caa1 corporate family rating reflects the
high leverage and weak interest coverage. Although metrics have
been improving, there continues to be uncertainty regarding the
degree of expected U.S. economic growth and the highly cyclical
nature of the equipment industry. In addition, due to the absence
of a meaningful amount of free cash flow anticipated over the
intermediate term, any meaningful credit metric improvement would
likely emanate from EBITDA improvement rather than debt reduction.
The ratings consider the company's adequate liquidity
characterized by its anticipated moderately positive free cash
flow as well as availability under its ABL facility that matures
in 2014.

The primary factor that would contribute to an improvement in NES'
corporate family rating would include the sustainment of an
adequate liquidity profile, debt/EBITDA below 6.0 times and EBIT
to interest approaching 1 times (Moody's FM adjusted basis).

The ratings and/or outlook would be negatively impacted if
EBIT/interest turns negative, debt/EBITDA exceeds and is sustained
above 6.0 times or if adequacy of the liquidity profile were to
come into question.

The principal methodology used in rating NES Rentals Holdings,
Inc. was the Global Equipment and Automobile Rental 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.

NES Rentals Holdings, Inc., based in Chicago, Illinois and
majority-owned by Diamond Castle Investments, is an equipment
rental company in the U.S. NES has more than 70 branches across 27
states. Revenues for the last twelve months ended March 31, 2012
totaled $289 million.


NEWPAGE CORP: Hearing Rescheduled Amid Dewey & LeBoeuf Woes
-----------------------------------------------------------
In view of challenges facing Dewey & LeBoeuf LLP, the bankruptcy
counsel to NewPage Corp., the Debtors, their creditors committee
and the Debtors' prepetition lenders entered into a stipulation to
adjourn to June 22 the hearing on the committee's request for
standing to sue the lenders.  The hearing was originally set for
May 17.  The deadline to object to the committee's request also
has been moved to June 11.  The reply deadline is now June 18.
Meanwhile, the committee's deadline to make a challenge has been
extended to June 26.

According to the May 10 edition of the Troubled Company Reporter,
citing a report by Bill Rochelle, the bankruptcy columnist for
Bloomberg News, the Official Unsecured Creditors' Committee wants
to sue secured lenders, contending that the debt-financed
acquisition of the North American division of Stora Enso Oyj was a
fraudulent transfer because the assets were pledged to secured
lenders to raise cash for the deal.  NewPage and its owners put no
equity into the acquisition, the committee said.  Two years later,
when NewPage couldn't carry the debt load, the committee says the
company "took on even more expensive replacement" debt.  As a
result, the committee argues it should be allowed to file a
lawsuit to knock out the secured status of lenders providing the
first-lien, second-lien and revolving credits.  The committee
noted that, in return for postpetition financing to support the
Chapter 11 case, NewPage is barred from suing.

                        About NewPage Group

Headquartered in Miamisburg, Ohio, NewPage Corporation was the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended Dec. 31, 2010.  NewPage owns paper mills
in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and
Nova Scotia, Canada.

NewPage Group, NewPage Holding, NewPage, and certain of their U.S.
subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del.
Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011.  Its
subsidiary, Consolidated Water Power Company, is not a part of the
Chapter 11 proceedings.

Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage
Port Hawkesbury Corp., brought a motion before the Supreme Court
of Nova Scotia to commence proceedings to seek creditor protection
under the Companies' Creditors Arrangement Act of Canada.  NPPH is
under the jurisdiction of the Canadian court and the court-
appointed Monitor, Ernst & Young in the CCAA Proceedings.

Initial orders were issued by the Supreme Court of Nova Scotia on
Sept. 9, 2011 commencing the CCAA Proceedings and approving a
settlement and transition agreement transferring certain current
assets to NewPage against a settlement payment of $25 million and
in exchange for being relieved of all liability associated with
NPPH.  On Sept. 16, 2011, production ceased at NPPH.

Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M.
Abelson, Esq., Dewey & LeBoeuf LLP, in New York, serve as counsel
in the Chapter 11 case.  Laura Davis Jones, Esq., at Pachulski
Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-
counsel.  Lazard Freres & Co. LLC is the investment banker, and
FTI Consulting Inc. is the financial advisor.  Kurtzman Carson
Consultants LLC is the claims and notice agent.  In its balance
sheet, the Debtors disclosed $3.4 billion in assets and $4.2
billion in total liabilities as of June 30, 2011.

The Official Committee of Unsecured Creditors is represented in
the case by Quinn Emanuel Urquhart & Sullivan LLP and Young
Conaway Stargatt & Taylor, LLP as counsel.

Attorneys for the Bank of New York Mellon are:

          Robert J. Dehney, Esq.
          Daniel B. Butz, Esq.
          MORRIS NICHOLS ARSHT & TUNNELL LLP
          1201 N. Market Street
          P.O. Box 1347
          Wilmington, DE 19899-1347
          Tel: 302-658-9200
          Fax: 302-658-3989

               - and -

          Dennis F. Dunne, Esq.
          Evan R. Fleck, Esq.
          Samuel A. Khalil, Esq.
          MILBANK, TWEED, HADLEY & McCLOY LLP
          1 Chase Manhattan Plaza
          New York, NY 10005
          Tel: 212-530-5000
          Fax: 212-530-5219

              - and -

          Andrew M. Leblanc, Esq.
          MILBANK, TWEED, HADLEY & McCLOY LLP
          1850 K Street NW, Suite 1100
          Washington, DC 20006
          Tel: 202-835-7500
          Fax: 202-263-7586

               - and -

          Edward Zujkowski, Esq.
          Paul T. Weinstein, Esq.
          EMMET MARVIN & MARTIN, LLP
          120 Broadway
          New York, NY 10271
          Tel: 212-238-3090
          Fax: 212-238-3100

The ad hoc group of second lien noteholders is represented by:

          Ira S. Dizengoff, Esq.
          Philip C. Dublin, Esq.
          Joanna F. Newdeck, Esq.
          AKIN GUMP STRAUSS HAUER & FELD LLP
          One Bryant Park
          New York, NY 10036-6745
          Tel: 212-872-1000
          Fax: 212-872-1002

Wilmington Trust, N.A., is represented by:

          Patrick Sibley, Esq.
          PRYOR CASHMAN LLP
          7 Times Square
          New York, NY 10036
          Tel: 212-326-0152
          Fax: 212-798-6332

NewPage prevailed over most objections from the official
creditors' committee and won agreement from the bankruptcy judge
on final approval of $600 million in secured financing.

Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan for NewPage.


NO FEAR RETAIL: Liquidated, Paying Unsecured Creditors 2% to 6%
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors of No Fear Retail Stores Inc. will be paid
2% or 6% of their claims, depending on which of the related
companies owes the debt, as the result of approval the bankruptcy
court gave last week to a liquidating Chapter 11 plan.  All
creditor classes voted in favor of the plan.  Creditors of Simo
Holdings Inc. are to receive 6% of their $22.4 million in claims,
according to the disclosure statement explaining the plan.
Creditors of No Fear MX, with about $1 million in claims, are
anticipated to take home 2%, as are creditors of No Fear Retail
Stores on their $10.6 million in claims.

The report recounts that when it became evident the retailer
couldn't survive on its own, sales were organized.  Ryderz
Compound Inc. bought the inventory and store operations under a
contract valued at $3.08 million.  Ryderz won the auction bidding
against liquidators, thus saving jobs of store employees.
Separately, the trademarks and intellectual property were sold to
Brands Holdings Ltd. under a contract valued at $11.1 million.
Brands opened the auction with a bid of $6.25 million.  The sales
were enough to pay off secured debt, including a $3.6 million loan
to finance the Chapter 11 case.

                     About No Fear Retail

Carlsbad, California-based No Fear Retail Stores, Inc., was a
retailer of action, sports, and casual youth lifestyle apparel and
accessories, targeting young adults and teens.  It operated 41
retail locations in California, Oregon, Arizona, Florida, Nevada,
North Carolina, and Texas.

No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Calif. Case No. 11-02896) on Feb. 24, 2011.  David S. Kupetz,
Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the
Debtor's bankruptcy counsel.  The Debtor tapped Jones Day as
special intellectual property counsel; Avant Advisory Group's
George Blanco as chief restructuring officer, and Venturi &
Company LLC, as financial advisors.

The Debtor estimated disclosed $31,648,063 in assets and
$12,552,985 in liabilities as of the Chapter 11 filing.

Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897)
and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898)
filed separate Chapter 11 petitions on Feb. 24, 2011.

Tiffany L. Carroll, the Acting U.S. Trustee for Region 15,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors of No Fear MX.  Pachulski Stang Ziehl & Jones
LLP represents the Committee.  BDO USA LLP serves as financial
advisor to provide financial advisory services to the Committee.

Gibson Dunn & Crutcher LLP is the counsel for the Debtors'
creditors panel.  Lapidus & Lapidus acts as special litigation
Counsel for the Debtors.


NORTEL NETWORKS: Close to Ending Fight With Asian Units
-------------------------------------------------------
American Bankruptcy Institute reports that Nortel Networks Inc.,
the telecommunications company being liquidated in bankruptcy, may
soon settle a fight with its Asian and Latin American units over
their share of more than $7 billion Nortel made from asset sales.

                      About Nortel Networks

Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.

Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List).  Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.

The Monitor sought recognition of the CCAA Proceedings in the
U.S. by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164).  Mary
Caloway,Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll &
Rooney PC, in Wilmington, Delaware, serves as the Chapter 15
petitioner's counsel.

Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009.
Judge Kevin Gross presides over the case.  James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel.  The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.

The Office of the United States Trustee for the District of
Delaware has appointed an Official Committee of Unsecured
Creditors in respect of the Debtors, and an ad hoc group of
bondholders has been organized.

Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.

The Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor.  The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee.  The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.

Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection.  On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A.  On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.

Nortel has collected almost $9 billion for distribution to
creditors. Of the total, US$4.5 billion came from the sale of
Nortel's patent portfolio to Rockstar Bidco, a consortium
consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM
Ericsson, Microsoft Corp., Research In Motion Limited, and Sony
Corporation.  The consortium defeated a $900 million stalking
horse bid by Google Inc. at an auction.  The deal closed in July
2011.

Nortel Networks has filed a proposed plan of liquidation in the
U.S. Bankruptcy Court.  The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.


NORTEL NETWORKS: In Mediation With Asian, LatAm Affiliates
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nortel Networks Inc. is mediating with affiliates
from Asia and Latin America over how to divvy up proceeds from the
sale of the companies' assets.  Nortel is also in mediation with
European affiliates under supervision of Ontario Chief Justice
Warren K. Winkler with regard to intercompany claims.  Mediation
is intended to devise a formula dividing sale proceeds among the
Nortel companies in the U.S., Canada and abroad.

                       About Nortel Networks

Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.

Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List).  Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.

The Monitor sought recognition of the CCAA Proceedings in the
U.S. by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164).  Mary
Caloway,Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll &
Rooney PC, in Wilmington, Delaware, serves as the Chapter 15
petitioner's counsel.

Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009.
Judge Kevin Gross presides over the case.  James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel.  The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.

The Office of the United States Trustee for the District of
Delaware has appointed an Official Committee of Unsecured
Creditors in respect of the Debtors, and an ad hoc group of
bondholders has been organized.

Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.

The Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor.  The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee.  The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.

Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection.  On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A.  On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.

Nortel has collected almost $9 billion for distribution to
creditors. Of the total, US$4.5 billion came from the sale of
Nortel's patent portfolio to Rockstar Bidco, a consortium
consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM
Ericsson, Microsoft Corp., Research In Motion Limited, and Sony
Corporation.  The consortium defeated a $900 million stalking
horse bid by Google Inc. at an auction.  The deal closed in July
2011.

Nortel Networks has filed a proposed plan of liquidation in the
U.S. Bankruptcy Court.  The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.


NORTHCORE TECHNOLOGIES: Envision Wins Consumers Choice Award
------------------------------------------------------------
Northcore Technologies Inc.'s portfolio company, Envision Online
Media Inc. has received a Consumers Choice Award.

As previously announced, Northcore has acquired Envision, an
Ottawa based software development company and Microsoft Partner.
Envision has been one of the most respected boutique solutions
providers in the National Capital Area for over a decade and
brings a complementary product and skill set to Northcore.

The Consumer Choice Award for Business Excellence was received in
the category of Internet Web Design and was the result of a
sophisticated polling process.  The research was undertaken by the
largest independent Canadian-owned research company, L‚ger
Marketing.

The Consumer Choice Award Group is unique in that it is the only
organization in North America to recognize business excellence by
conducting research that surveys both the consumer and business
community with statistical accuracy.

"We have been very impressed with Todd Jamieson and his team,"
said Amit Monga, CEO of Northcore Technologies.  "This award
provides further evidence of the superior level of customer
service that is the standard practice at Envision.  The focus on
client satisfaction is one of the core values we share as an
enterprise and was an important factor in our acquisition."

Further disclosure on Envision's portfolio and capabilities can be
found on their web presence located at www.envisiononline.ca.

                          About Northcore

Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment.  Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.

Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE.  Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.

The Company reported a loss and comprehensive loss of C$3.93
million in 2011, compared with a loss and comprehensive loss of
C$3.03 million in 2010.

The Company's balance sheet at Dec. 31, 2011, showed
C$2.91 million in total assets, C$415,000 in total liabilities and
C$2.49 million in total shareholders' equity.


NRG ENERGY: Moody's Changes Outlook to Negative, Retains Ba3 CFR
----------------------------------------------------------------
Moody's Investors Service changed the rating outlook for NRG
Energy, Inc. to negative from stable while affirming the company's
long-term ratings. Concurrent with this rating action, Moody's
changed NRG's Speculative Grade Liquidity Rating to SGL-2 from
SGL-1. Ratings affirmed include the company's Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) at Ba3, its
senior secured rating at Baa3, and its senior unsecured debt at
B1.

"The change in rating outlook to negative reflects the expected
deterioration in credit metrics due to the challenging macro
environment for unregulated power companies which is compressing
margins and weakening sustained cash flow", said A.J. Sabatelle,
Senior Vice President of Moody's. "The rating affirmation factors
in the company's capital investment program which is substantial
and multi-faceted, and expected to be funded by either internal
sources or previously arranged financing agreements."

Ratings Rationale

NRG's Ba3 CFR reflects the relatively strong historical credit
metrics based upon margins that were underpinned by hedges,
contracts or sales from NRG's retail business. For the last three
fiscal years, Moody's calculates the ratio of CFO pre-W/C (cash
flow) to debt averaged 16.4%, cash flow coverage of interest
expense averaged 3.3x, and the ratio of free cash flow to debt
averaged nearly 4.5%, comfortably positioning NRG in the "Ba"
rating category. However, consolidated financial results
deteriorated materially during 2011 and during the twelve months
ending 03/31/3012. Specifically, Moody's calculates that cash flow
to debt declined to 10.6% and 9.1%, respectively, and cash flow
coverage of interest was 2.5x and 2.3x, respectively, over these
two most recent periods. In light of the expected continuation of
low natural gas prices, a weak economic recovery, and continued
fuel switching from coal to natural gas, Moody's would anticipate
NRG's performance to be similar to its most recent results for the
next several years. Moody's recognizes that some of the
deterioration in financial performance can be attributed to the
incurrence of approximately $1.7 billion of additional debt to
finance the construction of solar generation plants and a natural
gas fired plant being retrofitted in the Western US. Moody's
further acknowledges that all of these projects have long-term
power purchase agreements in place with investment grade
counterparties which Moody's views favorably from a credit
perspective since they will provide a high degree of cash flow
certainty over the next several years. Moody's consolidates all
debt obligations when calculating NRG's credit metrics. These key
credit metrics still show deterioration to levels more in line
with a "high B-rated" unregulated power company even if one
excludes the $1.7 billion of project level debt, given the
approximate $600 million decline in cash flow incurred during 2011
and the 12 months ending 03/31/2012. In light of current
expectations for power prices over the next several years, Moody's
believes that NRG's financial metrics are likely to remain in line
with other "B- rated" unregulated power issuers, with cash flow to
debt at around 10% and cash flow coverage of interest at 2.5x.

The negative outlook further factors in the margin erosion that
has occurred and expected to continue in both NRG's wholesale and
retail operations. Not surprisingly, low natural gas prices, a
struggling economy, decline in capacity prices, lower volumes from
coal to gas switching, and higher coal prices are all contributing
factors to the 22% decline in the wholesale power segment's gross
margin experienced during 2011. Of additional concern is the
margin decline witnessed in the retail business, a segment that
NRG believes should offset the expected weak results in wholesale.
Specifically, Moody's calculates that Reliant's gross margin per
kilowatt hour of electricity sold declined by 13.7% during 2011
and by an additional 6.2% during the first quarter 2012. Some of
this decline can be attributed to the costs associated with adding
new customers which is a company focus. However, Moody's remains
skeptical about the company's ability to continue to add customers
and maintain margins in light of the competitive pressures and the
already thin margins that exist in the retail business.

The rating affirmation considers the company's large capital
spending program which is multi-dimensional covering traditional
and non-traditional aspects of the sector. While funding for these
programs has been arranged, Moody's is guarded about the size
($2.7 billion for the 12 months ending 03/31/2012) and the
complexity of aspects of the program, particularly for a company
whose market capitalization hovers around $3.7 billion.
Additionally, the company plans to implement a common dividend of
$0.36 share or about $80 million annually with the first quarterly
payment expected to occur during the second half of 2012. Moody's
understands that the size of the dividend is expected to have some
relationship with the earnings stream expected from the company's
solar investments. While the introduction of the common dividend
will predictably return capital to shareholders over the next
several years, it may have delayed the implementation of
additional share repurchases. Nevertheless, Moody's believes that
the company will continue to pursue initiatives that provides
greater financial flexibility for future shareholder rewards
programs. In the end, the manner in which NRG manages its
discretionary capital remains an important rating factor.

The ratings for NRG's individual securities were determined using
Moody's Loss Given Default (LGD) methodology. Moody's observes
that changes to the capital structure at NRG which increases the
relative amount of secured debt while decreasing the relative
amount of unsecured debt could result in a lower instrument rating
for the senior secured revolver, the secured term loan, the
Dunkirk Power bonds, and the Indian River Power bonds, even if
NRG's fundamental credit quality remains unchanged.

NRG's speculative grade liquidity rating of SGL-2 reflects Moody's
expectation that the company will maintain a good liquidity
profile over the next 4-quarter period as a result of internal
cash flow generation plus continued access to credit availability,
continued headroom under the company's covenants and the ability
to raise cash from asset sales, if necessary. Total liquidity at
March 31, 2011, was approximately $2.4 billion, including credit
facility availability of approximately $1.2 billion and
unrestricted cash on hand of around $1.0 billion. NRG has publicly
stated that its minimum unrestricted cash balance is $700 million,
which Moody's believes is a weakness in NRG's current liquidity
profile given the size of the company's near-term capital spend.
NRG's liquidity is aided by the existence of standalone financing
arrangements to fund the capital investments for the construction
of solar generation power plants and the retrofitting of its
natural gas-fired plants. Moody's anticipates that the decline in
energy margins will reduce the headroom under the company's
financial covenants but Moody's anticipates the company to remain
comfortably in compliance on a ongoing basis. Moody's also
observes that NRG owns assets that could be monetized for
additional liquidity. Also, from a collateral hedging standpoint,
NRG's working capital requirements continue to be aided by the
company's ownership of affiliated retail supply businesses, which
collectively reduce potential collateral posting requirements.

The negative rating outlook reflects the margin erosion that is
occurring in both NRG's wholesale and retail operations, which is
contributing to financial performance more in line with a "B"
rated unregulated power issuer. The negative rating outlook
further considers the company's very large capital spending
program anticipated over the next few years, particularly when
compared to NRG's market capitalization of approximately $3.7
billion. While previously arranged standalone financing
arrangements help to mitigate the liquidity and funding risk for
the current capital program, the negative outlook reflects Moody's
belief that management will continue to pursue initiatives that
facilitate the implementation of shareholder reward programs or
make capital investments that are less supportive of credit
quality.

In light of the negative rating outlook, the substantial capital
investment program, and the continued weak market for unregulated
power in most regions, limited prospects exist for the ratings to
be upgraded in the near-term. However, to the extent that
management is able to complete the construction of its numerous
solar project investments on a timely basis, unregulated power
margins show modest levels of improvement, and future capital
spending materially abates, the ratings outlook could stabilize.

The rating could be downgraded should material problems surface
with the company's growth strategies, if weaker than expected
market conditions persist across NRG's generation fleet or if the
company materially alters its capital allocation program in a way
detrimental to creditors.

The methodologies used in this rating were Unregulated Utilities
and Power Companies published in August 2009, and Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.

Headquartered in Princeton, New Jersey, NRG's power plants provide
approximately 25,000 megawatts of generation capacity, primarily
in Texas and the northeast, south central and western regions of
the US. NRG's retail businesses, Reliant Energy, Green Mountain
Energy, and Energy Plus, combined serve more than
2 million residential, business, commercial and industrial
customers in Texas and, increasingly in select markets in the
northeast US. NRG also owns generating facilities in Australia and
Germany.


OILSANDS QUEST: CCAA Creditor Protection Extended to June 29
------------------------------------------------------------
Oilsands Quest Inc. has requested and obtained an extension of the
order from the Alberta Court of Queen's Bench providing creditor
protection under the Companies' Creditors Arrangement Act, which
was to expire May 18, 2012.  Creditor protection under the CCAA
will now expire on June 29, 2012, unless further extended as
required and approved by the Court.

As previously announced, Oilsands Quest is conducting a process to
solicit offers to acquire, restructure or recapitalize the
Company, with the assistance TD Securities Inc.  While various
proposals were received from potential investors, none of these
proposals are currently in a form that the Company believes would
result in a sale or investment that would be in the best interests
of Oilsands Quest or its stakeholders.  Negotiations are
continuing to determine whether certain of the proposals could be
amended to form the basis of an acceptable transaction to be
brought before stakeholders and the Court for approval.

There can be no assurance that the Solicitation Process will
result in a financing or a sale of the Company or in any other
transaction.

Trading in the common shares of Oilsands Quest remains suspended
while the NYSE Amex determines whether to resume trading or to
delist the Company for failure to meet listing requirements.

                      About Oilsands Quest

Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is
exploring and developing oil sands permits and licences, located
in Saskatchewan and Alberta, and developing Saskatchewan's first
commercial oil sands discovery.


OMNICOMM SYSTEMS: Incurs $3.4 Million Net Loss in First Quarter
---------------------------------------------------------------
OmniComm Systems, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $3.37 million on $3.76 million of total revenues for
the three months ended March 31, 2012, compared with a net loss of
$3.89 million on $3.31 million of total revenues for the same
period during the prior year.

The Company's balance sheet at March 31, 2012, showed $3.38
million in total assets, $27.94 million in total liabilities and a
$24.55 million total shareholders' deficit.

The Company said that its ability to continue in existence is
dependent on its having sufficient financial resources to bring
products and services to market for marketplace acceptance.  As a
result of the Company's historical operating losses, negative cash
flows and accumulated deficits for the period ending March 31,
2012, there is substantial doubt about the Company's ability to
continue as a going concern.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/GzeafB

                       About OmniComm Systems

Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB)
-- http://www.OmniComm.com/-- provides customer-driven Internet
solutions to pharmaceutical, biotechnology, research and medical
device organizations that conduct life changing clinical trial
research.  OmniComm Systems, Inc has U.S. headquarters in Fort
Lauderdale, Fla. and European headquarters in Bonn, Germany, with
satellite offices in New Jersey and the United Kingdom, as well as
sales offices throughout the U.S. and Europe.

OmniComm Systems reported a net loss of $3.52 million in 2011,
compared with a net loss of $3.13 million in 2010.

Webb & Company, P.A., in Boynton Beach, Florida, 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 has a net loss
attributable to common shareholders of $3.73 million, a negative
cash flow from operations of $311,000, a working capital
deficiency of $6.68 million, and a stockholders' deficiency of
$21.2 million.


OTTILIO PROPERTIES: Files for Chapter 11 Anew
---------------------------------------------
Totowa, New Jersey-based Ottilio Properties LLC filed a bare-bones
Chapter 11 petition (Bankr. D.N.J. Case No.  12-22318) in Newark
on May 11, 2012.

According to the docket, the schedules of assets and liabilities
and statement of financial affairs are due May 25, 2012.  The
Debtor's exclusive right to file a plan expires Sept. 10, 2012.

The Debtor estimated assets of up to $50 million and debt of up to
$10 million in its Chapter 11 petition.

According to NorthJersey.com, Otillo Properties owns the Ottilio
Building at 555 Preakness Avenue.  The building, built in the
1960s, is a well-known architectural oddity in Totowa. The
building was erected by demolition contractor Carmen Ottilio, who
adorned the lobby with stone fixtures from the old Paramount
Theater in Manhattan and installed at the entrance a 20-foot-high
wrought-iron gate, salvaged from the Vatican pavilion at the 1964
New York World's Fair.

Ottilio Properties first filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 11-34641) on Aug. 18, 2011.  But in December 2011,
Valley National Bank successfully won dismissal of the case
arguing that the filing was made in bad faith, as it was a
desperate effort to delay a foreclosure sale.  The Hon. Morris
Stern dismissed the 2011 case.

Judge Stern has been assigned to the new case.


OVERLAND STORAGE: Incurs $3.8 Million Net Loss in March 31 Qtr.
---------------------------------------------------------------
Overland Storage reported a net loss of $3.82 million on $15.15
million of net revenue for the three months ended March 31, 2012,
compared with a net loss of $3.36 million on $17.12 million of net
revenue for the same period during the prior year.

The Company reported a net loss of $13.46 million on $44.33
million of net revenue for the nine months ended March 31, 2012,
compared with a net loss of $10.77 million on $52.62 million of
net revenue for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed $41.32
million in total assets, $37.30 million in total liabilities and
$4.02 million in shareholders' equity.

"We've made significant progress towards achieving our strategic
objectives and positioning Overland Storage for growth and
profitability," said Eric Kelly, President and CEO of Overland
Storage.  "Our ability to sequentially grow revenue from our
fiscal second to third quarter for the first time in five years
confirms that the strategy we have established is beginning to
take hold.  In addition, our SnapServer DX Series revenue more
than doubled, which further validates the investments we have made
in these products."

A copy of the press release is available for free at:

                         http://is.gd/1mS4of

                       About Overland Storage

San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.

The Company reported a net loss of $14.50 million on $70.19
million of net revenue for the fiscal year ended June 30, 2011,
compared with a net loss of $12.96 million on $77.66 million of
net revenue during the prior fiscal year.

Moss Adams LLP, in San Diego, California, noted that the Company's
recurring losses and negative operating cash flows raise
substantial doubt about the Company's ability to continue as a
going concern.


PEGASUS RURAL: Xanadoo to Hold June 26 Auction for Tower Assets
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports the bankrupt subsidiaries of Xanadoo Co. will hold an
auction on June 26 to learn whether anyone will pay more than the
$3 million offered by Rhino Communications Inc. for the tower
facilities.  Under auction and sale procedures approved May 10 by
the bankruptcy court in Delaware, competing bids are due June 19.
A hearing to approve the sale will take place June 28.

Separately, the Xanadoo companies, according to the report,
arranged a May 23 hearing for approval of an auction in August to
sell most of the frequency assets.  The company is reserving the
right to cancel the auction and instead propose a reorganization
plan supported by financing to enable an emergence from Chapter
11.  No buyer is yet under contract for the frequency sale.

                   About Pegasus Rural Broadband

Pegasus Rural Broadband, LLC, and its affiliates, including
Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 11-11772) on June 10, 2011.

The Debtors are subsidiaries of Xanadoo Company, a 4G wireless
Internet provider.  Xanadoo Co. was not among the Chapter 11
filers.

The subsidiaries sought Chapter 11 protection after they were
unable to restructure $52 million in 12.5% senior secured
promissory notes that matured in May.  The notes are owing to
Beach Point Capital Management LP.

Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless
high-speed broadband service, including digital phone services,
under the Xanadoo brand utilizing licensed frequencies in the 2.5
GHz frequency band.  As of May 31, 2011, XLC served 12,000
subscribers in Texas, Oklahoma and Illinois.  In the summer of
2010, the Debtors closed all of their retail stores and kiosks in
its six operating markets and severed all fulltime sales
personnel.  Since the closings, the Debtors relied one key
retailer in each market to serve as local point of presence to
market customer transactions.

Judge Peter J. Walsh presides over the case.  Rafael Xavier
Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., and Jonathan
M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware,
serve as counsel to the Debtor.  NHB Advisors Inc. is their
financial advisors.  Epiq Systems, Inc., is the claims and notice
agent.

Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each
estimated assets of $100 million to $500 million and debts of
$50 million to $100 million.

The Chapter 11 filing followed the maturity in May 2011 of almost
$60 million in secured notes owing to Beach Point Capital
Management LP.

The Court denied a motion by the secured noteholders to dismiss
the Chapter 11 case and appoint a Chapter 11 trustee.

The companies filed a proposed reorganization plan in February
predicting sale of licenses in the 700 megahertz spectrum would
pay all secured and unsecured creditors in full, with interest.
In a separate filing, the companies said the assets will be turned
over to secured lenders if there is neither a lender nor a buyer
to finance a plan.  The plan will be funded either by a new loan
or by selling the business and the assets.


PINNACLE AIRLINES: Steelworkers Object to $74.3MM DIP Deal
----------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that the United
Steelworkers objected in a New York court Thursday to Pinnacle
Airlines Corp.'s request for $74.3 million in financing, claiming
the proposed package comes with conditions that would hamstring
the bankrupt regional airline and impair collective bargaining
with the union.

Law360 relates that Pinnacle offers flights from hubs to smaller
outlying cities for ticketed passengers of Delta Air Lines Inc.
and United Airlines Inc.  As part of its Chapter 11 filing,
Pinnacle said it would obtain a $74.3 million debtor-in-possession
loan from Delta.

                      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.


PRINCE SPORTS: Agrees to License Iconic Brands to Battle Sports
---------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that Prince Sports Inc.
agreed Wednesday to license its iconic brands to Battle Sports
Science LLC in a deal that will return at least $15 million to the
ailing tennis equipment supplier and keep it in the game for the
upcoming season.

Law360 says the agreement, which requires the approval of a
Delaware bankruptcy judge, allows Battle Sports Science the right
to source, market and distribute Prince products in the U.S.
through the end of 2017.

                        About Prince Sports

Prince Sports, Inc. and its U.S. affiliates filed voluntary
petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case
NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that
contemplates the transfer of ownership to Authentic Brands Group
(ABG)-Prince LLC.

Founded in 1970, Prince Sports has a 42-year track record of
developing premium quality products for the racquet sports
industry.  The Company pioneered many innovative designs,
including the "oversized" racquet, the "longbody" racquet, and
technology for racquet applications such as Triple Threat, 03 and
EX03.  Prince sells its products through brands like "Ektelon,"
which sells racquetball racquets, footwear and gloves and "Viking
Athletics," through which it sells platform tennis paddles, balls
and gloves.  Prince is distributed in over 100 countries.

Lincolnshire Management Inc. acquired Prince from Benneton Group,
the parent company of United Colors of Benneton, in 2003.
Lincolnshire Management sold Prince to Nautic Partners in August
2007.

The Debtor has a Chapter 11 plan where (ABG)-Prince LLC, which
acquired the secured debt from GE Capital and Madison Capital,
will be acquiring 100% of the new equity in exchange of the
discharge of the debt.

Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors.  The Debtors have also tapped FTI Consultin, Inc., to
provide David J. Woodward as Chief Restructuring Officer, and
provide additional personnel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent.


PSS WORLD: Moody's Says Strategic Transformation Plan Credit Neg
----------------------------------------------------------------
Moody's Investors Service said that PSS World Medical, Inc.'s
ratings are unaffected by the company's announcement that it has
embarked on a strategic transformation plan. The announcement is
slightly credit negative because of execution risk and its net
negative impact on EBITDA.

As reported by the Troubled Company Reporter-Europe on Feb. 15,
2012, Moody's assigned Ba3 corporate family and probability of
default ratings to PSS World. In addition, Moody's assigned a Ba3
rating to the proposed $250 million notes, due 2022 and a SGL-2
speculative grade liquidity rating. PSS World is expected to use
the proceeds from the proposed notes issuance to repay borrowings
under its credit facility and partially pre-fund the repayment of
2008 convertible notes. The outlook is stable.

These ratings were assigned:

Corporate family rating, assigned Ba3;

Probability of default rating, assigned Ba3;

$250 million senior unsecured notes, assigned Ba3 (LGD4, 51%);

Speculative grade liquidity rating, assigned SGL-2.

PSS World is a national distributor of medical products and
supplies, healthcare information technology, and pharmaceutical
products and provider of professional and consulting services to
the physician, long-term care, assisted living, home health care
and hospice markets. The company's revenues for the year ended
March 30, 2012 were $2.1 billion.


QUANTUM FUEL: Incurs $7.8 Million Net Loss in First Quarter
-----------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc., filed with the
U.S. Securities and Exchange Commission its quarterly report on
Form 10-Q disclosing a net loss attributable to stockholders of
$7.81 million on $5.99 million of total revenue for the three
months ended March 31, 2012, compared with a net loss attributable
to stockholders of $5.25 million on $6.75 million of total revenue
for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed
$51.54 million in total assets, $17.48 million in total
liabilities, and $34.06 million in total stockholders' equity.

Alan P. Niedzwiecki, President and CEO, stated, "We continue to
expand our natural gas tank sales which is driving revenue growth,
which we expect to continue in calendar 2012."  Mr. Niedzwiecki
continued, "The renewable energy side of our business is also
expanding with our recent acquisition of the Zephyr Wind Farm,
which added 10 megawatts of electricity generation capacity to our
renewable energy portfolio.  We intend to continue the development
efforts on certain renewable energy projects with strategic
partners as we build out the renewable energy segment of our
business."

                           Going Concern

Based on current projections and estimates, the Company does not
believe its principal sources of liquidity will be sufficient to
fund its operating activities and obligations as they become due
over the next twelve months.  In order for the Company to have
sufficient capital to execute its business plan, fund its
operations and meet its debt obligations over this twelve month
period, the Company will need to extend the maturity dates of the
$4.0 million of convertible debt that the Company refers to as the
"Unsecured 'B' Convertible Notes" that come due in the fourth
quarter of 2012 and raise additional capital.  Although the
Company has been successful in the past in extending its debt
obligations and raising debt and equity capital, the Company
cannot provide any assurance that it will be successful in doing
so in the future to the extent necessary to be able to fund all of
its business plans, operating activities and obligations through
March 31, 2013, which raises substantial doubt about the Company's
ability to continue as a going concern.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/jOPnL7

                         About Quantum Fuel

Based in Irvine, California, Quantum Fuel Systems Technologies
Worldwide, Inc., is a fully integrated alternative energy company
and considers itself a leader in the development and production of
advanced clean propulsion systems and renewable energy generation
systems and services.

Quantum Fuel reported a net loss attributable to stockholders of
$38.49 million on $24.47 million of total revenue for the eight
months ended Dec. 31, 2011, compared with a net loss attributable
to stockholders of $6.52 million on $10.51 million of total
revenue for the same period a year ago.  The Company reported a
net loss of $11.03 million for the year ended April 30, 2011,
following a net loss of $46.29 million during the prior year.

Haskell & White LLP, in Irvine, California, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that Company incurred significant
operating losses and used a significant amount of cash in
operations during the eight months ended Dec. 31, 2011.


QUIGLEY CO: Not Abandoning Reorganization After Loss on Appeal
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Quigley Co. told the bankruptcy judge Thursday that
the company will remain in Chapter 11 and attempt to emerge by
September regardless of an April opinion from a federal appeals
court.  Pfizer Inc. may attempt a final appeal to the U.S. Supreme
Court, the bankruptcy judge was told.

As reported in the April 12 edition of the Troubled Company
Reporter, the U.S. Court of Appeals in Manhattan wrote a 34-page
opinion April 10 and upheld the district court ruling that parent
Pfizer isn't entitled to complete protection from asbestos claims
under the umbrella of Quigley's Chapter 11 case.  The circuit
court, in an opinion by Circuit Judge Debra Ann Livingston, ruled
that Quigley's bankruptcy can't protect Pfizer against claims it
was the "apparent manufacturer" of an asbestos-laden product even
though Quigley was the actual manufacturer.  A copy of the Second
Circuit's decision is available at http://is.gd/9p0AXGfrom
Leagle.com.

The appeal in the circuit court was Quigley Co. Inc. v. Law
Offices of Peter G. Angelos (In re Quigley Co. Inc.), 11-2635,
U.S. Court of Appeals for the Second Circuit (Manhattan). The
appeal in district court was In re Quigley Co. Inc., 10-01573,
U.S. District Court, Southern District of New York (Manhattan).

                         About Quigley Co.

Quigley Co. was acquired by Pfizer in 1968 and sold small amounts
of products containing asbestos until the early 1970s.  In
September 2004, Pfizer and Quigley took steps that were intended
to resolve all pending and future claims against the Company and
Quigley in which the claimants allege personal injury from
exposure to Quigley products containing asbestos, silica or mixed
dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11
plan and a settlement with Chrysler.

Quigley filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a
proposed global resolution of all pending and future asbestos-
related personal injury liabilities.

Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte
Roth & Zabel LLP, represent the Debtor in its restructuring
efforts.  Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Unsecured Creditors.  When
the Debtor filed for protection from its creditors, it disclosed
$155,187,000 in total assets and $141,933,000 in total debts.

In April 2011, the bankruptcy judge approved a plan-support
agreement with Pfizer and an ad hoc committee representing 30,000
asbestors claimants.

A May 20, 2011 opinion by District Judge Richard Holwell concluded
that Pfizer was directly liable for some asbestos claims arising
from products sold by its now non-operating subsidiary Quigley.


REDDY ICE: Debtors and Creditors Oppose Official Equity Committee
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Reddy Ice Holdings Inc. and the official committee
representing unsecured creditors oppose creation of an additional
official committee to represent shareholders.  The Debtor and the
unsecured creditors committee agree that the company is insolvent,
meaning that the 17 cents is a "gift," they say.

By seeking an official equity committee, shareholders are
"requesting that the estates pay for its legal expenses in trying
to negotiate a bigger gift," the committee's counsel from
Pachulski Stang Ziehl & Jones LLP said in a filing with the U.S.
Bankruptcy Court in Dallas, according to the report.

The report relates that to justify having an official committee,
the shareholders contend that the company is solvent. Reddy Ice,
as evidence of insolvency, pointed to a regulatory filing as of
Dec. 31 showing $434 million in assets surpassed by $531 million
in liabilities.  The company also noted that the second-lien notes
traded at an average of 37 cents on the dollar this year, and in a
range between 18 cents and 29 cents since the Chapter 11 filing.
The notes traded Thursday for 25.5 cents, according to Trace, the
bond-price reporting system of the Financial Industry Regulatory
Authority.

                          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.


REFCO INC: Dist. Judge Opinion Presages Rulings in Madoff
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge Jed Rakoff in New York opined
Wednesday that bankruptcy judges can't make final rulings in
fraudulent transfer suits, the opposite result reached by the
bankruptcy judge in the same case involving Refco Inc.

According to the report, Judge Rakoff said that in a "core" matter
such as a fraudulent transfer suit, he must give effect to the
"clear intent" of Congress by sending the case back to the
bankruptcy court for report and recommendation.  Judge Rakoff's
decision May 9 likely indicates how he will rule in hundreds of
cases before him involving the liquidation of Bernard L. Madoff
Investment Securities LLC.

The report recounts that the fraudulent transfer lawsuit was filed
by a trust created under the Chapter 11 plan for Refco.  The
defendant sought to remove the case from the bankruptcy court to
the district court under Stern v. Marshall, where the U.S. Supreme
Court ruled in June that bankruptcy courts lack power under the
Constitution to make final rulings based on claims arising under
state law.  Addressing the question of his power in a decision in
November in the Refco case, U.S. Bankruptcy Judge Robert Drain
concluded that he retained power to make final rulings in
fraudulent transfer cases even with Stern on the books.  Judge
Drain reasoned that even if he were to dismiss the suit, his
ruling would go up on appeal under the so-called de novo standard.
Thus, Drain believed, he could enter a final order on a motion to
dismiss.

Judge Rakoff, according to the report, said that Drain's reasoning
was "flawed."  Because Stern doesn't give the bankruptcy court
ability to make final orders, the grant of a motion to dismiss
shouldn't be given "res judicata or collateral estoppel effect,"
the judge said.  Judge Rakoff said that fraudulent transfer suits
invoke "private rights" where the final decision can only be made
in a district court.  The suit involved "core" disputes the
bankruptcy judge had been handling for three years, Judge Rakoff
said.  "Having the benefit of the report and recommendation (by
the bankruptcy court) will save the district court and the parties
an immense amount of time," Judge Rakoff concluded. As a result,
he sent the suit back to the bankruptcy judge for further
processing.

In view of the defendants' demand for a jury trial, Judge Rakoff
said he "may withdraw the reference if and when a trial is
necessary."

According to Mr. Rochelle, Judge Rakoff's decision in the Refco
case likely presages decisions he will issue in hundreds of
lawsuits arising out of the Madoff liquidation where he is being
asked to remove the case from the bankruptcy judge and decide on
fraudulent transfer claims himself as a result of the Stern
decision.  In Madoff lawsuits, Rakoff is generally making
decisions himself on what he says are issues of non-bankruptcy
law.  In the Madoff cases, Judge Rakoff has yet to decide the same
issues he ruled on yesterday in Refco, namely, whether the cases
should remain in district court or be returned to the bankruptcy
court.

The case in district court is Kirschner v. Agoglia, 11- 8250, U.S.
District Court, Southern District of New York (Manhattan).  The
case in bankruptcy court is Kirschner v. Agoglia (In re Refco
Inc.), 07-3060, U.S. Bankruptcy Court, Southern District of New
York (Manhattan).

                      About Bernard L. Madoff

Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion.  On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970.  The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.).  Mr. Picard has retained AlixPartners LLP as claims
agent.

On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893).  The case is before Hon. Burton Lifland.  The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.

On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).

The Chapter 15 case was later transferred to Manhattan.  In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.

Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)

The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.

Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts.  Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds.  Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.

                         About Refco Inc.

Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore.  Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products.  Refco was one of the largest global clearing firms for
derivatives.  The Company had operations in Bermuda.

The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No.
05-60006).  J. Gregory Milmoe, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represented the Debtors in their restructuring
efforts.  Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors.  Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006.  That Plan became effective on Dec. 26,
2006.  Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.


REFLECT SCIENTIFIC: Incurs $259,000 Net Loss in First Quarter
-------------------------------------------------------------
Reflect Scientific, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $259,293 on $325,017 of revenue for the three months
ended March 31, 2012, compared with a net loss of $192,232 on
$587,582 of revenue for the same period during the prior year.

The Company reported a net loss of $1.18 million in 2011,
compared with a net loss of $1.77 million in 2010.

The Company's balance sheet at March 31, 2012, showed $3.97
million in total assets, $4.59 million in total liabilities and a
$616,976 total shareholders' deficit.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/bzLDRw

                      About Reflect Scientific

Orem, Utah-based Reflect Scientific, Inc., is engaged in the
manufacture and distribution of innovative products targeted at
the life science market.  Customers include hospitals and
diagnostic laboratories, pharmaceutical and biotech companies,
universities, government and private sector research facilities,
and chemical and industrial companies.

After auditing the 2011 results, Mantyla McReynolds, LLC, 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 has experienced recurring losses from
operations and negative working capital.


REGAL ENTERTAINMENT: Three Directors Elected at Annual Meeting
--------------------------------------------------------------
Regal Entertainment Group held its annual meeting of stockholders
on May 9, 2012.  The stockholders elected all three director
nominees at the Meeting to serve as Class I directors until the
Annual Meeting of Stockholders in 2015, namely: (a) Charles E.
Brymer, (b) Michael L. Campbell and (c) Alex Yemenidjian.

The stockholders approved the compensation of the Company's Named
Executive Officers and ratified the selection of KPMG LLP as the
Company's Independent Registered Public Accounting firm for the
fiscal year ending Dec. 27, 2012.  The stockholders also approved
the amendments to the Incentive Plan to increase the number of
Class A common stock authorized for issuance by a total of
5,000,000 shares and extend the term to May 9, 2022.

                   About Regal Entertainment Group

Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE:
RGC) -- http://www.REGmovies.com/-- is the largest motion picture
exhibitor in the world.  Regal's theatre circuit, comprising Regal
Cinemas, United Artists Theatres and Edwards Theatres, operates
6,739 screens in 545 locations in 38 states and the District of
Columbia.  Regal operates theatres in 43 of the top 50 U.S.
designated market areas.

The Company's balance sheet at March 29, 2012, showed
$2.30 billion in total assets, $2.85 billion in total liabilities,
and a $552.60 million total deficit.

                           *     *     *

Regal Entertainment carries 'B1' corporate family and probability
of default ratings from Moody's Investors Service, 'B+' issuer
default rating from Fitch Ratings, and 'B+' corporate credit
rating from Standard & Poor's Ratings Services.

Moody's said in February 2011 that Regal's B1 CFR reflects the
trade-offs between the relative stability and the small magnitude
of the company's cash flow stream.  With no change expected in
either parameter, and with very good liquidity, the rating outlook
is stable.

S&P said in February that the rating reflects S&P's view that the
company's aggressive financial policies will likely cause leverage
to remain elevated over the intermediate term.  Furthermore,
Regal's revenue and EBITDA trends are highly dependent on the
performance of the U.S. box office.  Other rating factors include
the company's participation in the mature and highly competitive
U.S. movie exhibition industry, exposure to the fluctuating
popularity of Hollywood films, and the long-term risk of increased
competition from the proliferation of entertainment alternatives.


REGAL ENTERTAINMENT: Registers Add'l 5MM Shares Under 2002 Plan
---------------------------------------------------------------
Regal Entertainment Group filed with the U.S. Securities and
Exchange Commission a Form S-8 registering 5 million shares of
Class A common stock issuable under the Company's 2002 Stock
Incentive Plan.

On May 10, 2002, Regal Entertainment filed with the SEC a
registration statement on Form S-8 covering the registration of
11,194,354 shares of its Class A common stock authorized for
issuance under the Regal Entertainment Group 2002 Stock Incentive
Plan as then in effect.  Pursuant to the 2002 Plan and Rule 416 of
the Securities Act, the number of shares of Class A common stock
covered by the Original Registration Statement increased from
11,194,354 to 16,110,241 shares due to anti-dilution adjustments
made in connection with the Company's payment of extraordinary
cash dividends on July 1, 2003 and June 2, 2004.

On Aug. 8, 2005, the Company filed with the Commission under the
Securities Act a registration statement on Form S-8 covering the
registration of an additional 1,889,759 shares of its Class A
common stock authorized for issuance under an amendment to the
2002 Plan, bringing the total authorized shares from 16,110,241 to
18,000,000.  Pursuant to the 2002 Plan and Rule 416 of the
Securities Act, the number of Class A common stock covered by the
2005 Registration Statement increased from 18,000,000 to
18,319,207 shares due to anti-dilution adjustments made in
connection with the Company's payment of extraordinary cash
dividends on April 13, 2007 and Dec. 30, 2010.

On March 13, 2012, the Company's Board of Directors approved
amendments to the 2002 Plan.  The amendments increase the number
of shares of Class A common stock available for issuance
thereunder by a total of 5,000,000 shares from 18,319,207 to
23,319,207, subject to adjustment, and extend the term of the Plan
from May 3, 2012 to May 9, 2022.  On May 9, 2012, the stockholders
of the Company approved the amendments.

A copy of the Form S-8 is available for free at:

                        http://is.gd/pfTQyM

                  About Regal Entertainment Group

Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE:
RGC) -- http://www.REGmovies.com/-- is the largest motion picture
exhibitor in the world.  Regal's theatre circuit, comprising Regal
Cinemas, United Artists Theatres and Edwards Theatres, operates
6,739 screens in 545 locations in 38 states and the District of
Columbia.  Regal operates theatres in 43 of the top 50 U.S.
designated market areas.

The Company's balance sheet at March 29, 2012, showed
$2.30 billion in total assets, $2.85 billion in total liabilities,
and a $552.60 million total deficit.

                           *     *     *

Regal Entertainment carries 'B1' corporate family and probability
of default ratings from Moody's Investors Service, 'B+' issuer
default rating from Fitch Ratings, and 'B+' corporate credit
rating from Standard & Poor's Ratings Services.

Moody's said in February 2011 that Regal's B1 CFR reflects the
trade-offs between the relative stability and the small magnitude
of the company's cash flow stream.  With no change expected in
either parameter, and with very good liquidity, the rating outlook
is stable.

S&P said in February that the rating reflects S&P's view that the
company's aggressive financial policies will likely cause leverage
to remain elevated over the intermediate term.  Furthermore,
Regal's revenue and EBITDA trends are highly dependent on the
performance of the U.S. box office.  Other rating factors include
the company's participation in the mature and highly competitive
U.S. movie exhibition industry, exposure to the fluctuating
popularity of Hollywood films, and the long-term risk of increased
competition from the proliferation of entertainment alternatives.


RESIDENTIAL CAPITAL: Files for Chapter 11 in New York
-----------------------------------------------------
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14.

Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.

ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.

ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.

ResCap filed a number of first day motions intended to allow it to
operate in the ordinary course of business during the process.

First day motions filed include requests to (i) extend the
deadline to file schedules and statements, (ii) hire advisors and
counsel, (iii) pay prepetition obligations to employees and
customers, (iv) obtain DIP financing, and (v) sell the assets in
the event the plan is not confirmed.   An emergency first day
hearing before June Martin Glenn was held May 14, 2012.  A
continued first day hearing is scheduled for May 15 at 11:00 a.m.

The Chapter 11 process is designed to:

    * permit ResCap to continue as a going concern during the
      reorganization process, and continue to provide
      uninterrupted, high quality service to its mortgage
      customers and business partners;

    * permit ResCap to continue to originate new mortgage loans,
      service its more than 2.4 million consumer mortgage loans,
      and offer loan modifications that allow homeowners to stay
      in their homes;

    * permit the ResCap business, post-reorganization and under
      new ownership, to continue to play an important role in
      preserving home ownership, providing necessary financing for
      home ownership, and contributing to bringing increasing
      stability to the U.S. mortgage markets;

    * provide ResCap with the opportunity to maximize value for
      its stakeholders;

    * permit ResCap to address legacy litigation and other
      liabilities in a manner that is fair to creditors; and

    * preserve the existing jobs of ResCap's employees, and
      contribute to the creation of additional jobs in the United
      States in the mortgage sector when ResCap's business
      operations emerge from the reorganization process under new
      ownership.

The Chapter 11 filings are intended to facilitate ResCap's sale of
substantially all of its assets.  It has agreed to sell:

   (1) its mortgage origination and servicing businesses to
       Nationstar Mortgage LLC, and

   (2) its legacy portfolio, consisting mainly of mortgage loans
       and other residual financial assets, to Ally Financial.

Together, the asset sales are expected to generate approximately
$4 billion in proceeds.

                    Sale to Nationstar and Ally

The Debtors began soliciting offers for the assets prepetition.
According to the Debtors, Ally's offer was $200 million higher
than the next highest bid for the legacy portfolio.  Nationstar's
offer was the highest bid for the largest portion of the Debtors'
assets and operations.

Majority of Nationstar is owned by investment funds managed by
affiliates of Fortress Investment Group, LLC.

The Debtors are seeking approval to consummate the sales of
certain assets under a Plan.  In the unlikely event, however, that
the Debtors do not obtain confirmation of the Plan, a sale motion
allows the Debtors to pursue an alternative course of action and
immediately move forward with the Sales under Section 363(b) of
the Bankruptcy Code.

The Debtors have filed the sale motion, seeking to commence two
sale transactions where Nationstar would be the stalking horse
bidder for the mortgage business and Ally opening the auction for
the legacy portfolio.  The Debtors propose a Sept. 14, 2012
deadline for initial bids, a Sept. 25 auction, and a sale hearing
in October.

The auction will be conducted as a close auction, open only to
qualified bidders, due to the sensitive nature of the assets being
sold.

The purchased assets under the Nationstar Asset Purchase Agreement
also include mortgage servicing rights and servicer advances
belonging to Ginnie Mae.  A qualified bidder can elect to bid on
the Ginnie Mae MSRs independently or as part of their bid for all
of the Nationstar Purchased Assets.  The price for the Nationstar
Purchased Assets is $2.3 billion, of which approximately $200
million relates to the Ginnie Mae MSRs.

AFI is the proposed stalking horse bidder for the sale of the
Debtors' legacy portfolio, which consists mainly of mortgage loans
and other residual financial assets.  In consideration for the
sale of the Purchased Assets under the AFI APA to BMMZ, sellers
will receive $1.6 billion if the sale is consummated pursuant to a
Chapter 11 plan of the Debtors, subject to adjustment.  If the
sale is consummated pursuant to a section 363 sale outside of a
Chapter 11 plan, the sellers will receive $1.4 billion, subject to
adjustment.

This dual APA structure allows for certain combinations of sale
transactions, ensuring that the Debtors will receive the highest
or best value for the assets.  A qualified bidder may bid on the
Nationstar Purchased Assets and/or the AFI Purchased Assets.
Alternatively, a qualified bidder may bid solely on the Ginnie Mae
MSRs, or the Ginnie Mae MSRs and the AFI purchased assets.

Because of the significant funding needed to maintain the
servicing business, the Debtors' very limited access to capital,
and the ongoing concerns of various federal and state regulatory
authorities, the Debtors believe that it is imperative to move
forward with the sale process quickly.  In addition, approval is
critical to compliance with the Debtors' postpetition financing
arrangements.

The Debtors say while Ally Financial is an insider, extensive
measures have been taken to ensure the fairness of the sale
process.

The Debtors propose bid protections for Nationstar.  If
Nationstar's bid is not the Successful Bid, Nationstar will
receive a break-up fee of $72 million (of which 8.44% is allocable
to the Ginnie Mae MSRs), plus reimbursement of Nationstar's
actual, reasonable, out-of-pocket expenses not to exceed $10
million.

                    $1.45 Billion DIP Financing

ResCap has secured a $1.45 billion debtor-in-possession financing
from Barclays Bank PLC, as sole lead arranger and administrative
agent on behalf of a syndicate of lenders.  ResCap believes the
financing will provide it with sufficient liquidity to consummate
the contemplated asset sales.

The Debtors seek authority to obtain postpetition financing on a
secured, superpriority basis from (i) Barclays Bank PLC, as
Administrative Agent on behalf of a syndicate of lenders and (ii)
Ally Financial in the form of postpetition draw(s) under the AFI
secured loan agreement (AFI LOC).  In addition, the Debtors intend
to use cash collateral (as that term is defined in 11 U.S.C. Sec.
363(a) to pay expenses of operating their business.  AFI, the
holders of the junior secured notes, and prepetition lender
Citibank N.A. each has consented to the use of their cash
collateral.

The DIP Lenders have agreed to provide:

  (i) revolving loans in an aggregate principal amount up to
      $200,000,000 with an interest rate of LIBOR + 4.00% per
      annum and

(ii) term loans in (a) an aggregate principal amount up to
      $1,050,000,000 with an interest rate of LIBOR + 4.00%, and
      (b) an aggregate principal amount up to $200,000,000 with an
      interest rate of LIBOR + 6.00%, each with a LIBOR floor of
      1.25% per annum.

Under the AFI deal, the Debtors are permitted to make postpetition
draw(s) under the AFI LOC in an amount up to $150,000,000 (which
amount may be increased to $220,000,000 subject to agreement
between the Debtors and AFI), with an interest rate of LIBOR +
4.00% per annum (with a LIBOR floor of 1.25% per annum).

                         Road to Bankruptcy

From time to time since 2009, ResCap or AFI has considered a sale
of the Debtors' operations as an entirety or in significant parts,
whether through a sale of assets or a sale of ResCap's equity, but
the consideration offered was insufficient, particularly in light
of potential buyers' unwillingness to assume most of the Debtors'
liabilities.

ResCap blames most of its woes to the continuing adverse economic
climate, particularly in the residential mortgage industry.

James Whitlinger, CFO of ResCap, explains that starting in 2007,
the mortgage and capital markets experienced severe stress due to
credit concerns and housing market contractions, which have led to
record declines in home values and a continuing glut of homes
available for sale and those in foreclosure.

The Debtors had net losses of $5.6 billion and $4.5 billion in the
years ended Dec. 31, 2008 and 2009, respectively. Adverse market
conditions also resulted in a significant decline in the fair
value of the Debtors' assets, particularly the MSRs and other
mortgage loan assets.  Without capital contributions from AFI, the
Debtors would have breached their Consolidated Tangible Net Worth
covenant on a number of occasions

The Debtors believed that 2010 would mark a turnaround for
themselves and the economy.  In order to continue originating
mortgage loans in the only available liquid markets and maintain
their origination and servicing platforms, the Debtors entered
into settlement agreements with Fannie Mae and Freddie Mac with
respect to a substantial portion of their representation and
warranty claims.  Despite aggregate settlement payments of $786.5
million (in respect of underlying mortgage loans with aggregate
UPB of $377.3 billion), the Debtors still achieved net income of
$575.1 million in 2010.

The Debtors, together with AFI, began taking numerous steps to
survive and continue to offer affordable mortgage loans to
homeowners and mortgage servicing to public and private investors.
Those steps have included debt restructurings, asset sales,
downsizings and capital contributions from AFI.

Beginning in 2010, however, the Debtors began to contend with
additional matters.  Non-GSE and Ginnie Mae representation and
warranty claims continued to increase.  In the latter half of
2010, the "robo-signing" allegations relating to foreclosure
documentation began to affect the entire mortgage loan industry.
Starting in October 2010, representatives of federal and state
governments, including the United States Department of Justice,
began investigating the procedures followed by mortgage servicing
companies and banks, including ResCap and GMAC Mortgage, in
connection with mortgage foreclosure home sales and evictions.
There were also a number of separate state law investigations and
enforcement actions.

In 2011, ResCap had a consolidated net loss of $845.1 million
primarily due to continuing economic uncertainty, interest rate
volatility and the adverse effects on the valuation of MSRs
arising from market speculation regarding potential government?
required mortgage loan refinancing programs.  In addition, the
Debtors continued to lack liquidity and capital and the market
began to perceive that AFI's support for the Debtors was
weakening, thus increasing the Debtors' hedging costs and putting
severe constraints on Ally Bank's ability and desire to create and
maintain MSRs in amounts consistent with historical levels.

On April 13, 2011, as a result of an examination conducted by the
Board of Governors of the Federal Reserve System and the Federal
Deposit Insurance Company, ResCap and GMAC Mortgage -- together
with AFI and Ally Bank -- entered into a consent order with the
FRB and the FDIC.  The consent order required ResCap and GMAC
Mortgage to make improvements to various aspects of their
residential mortgage loan servicing business and undertake a risk
assessment of their mortgage servicing operations.  The order also
requires the Debtors to conduct a review of certain past
residential mortgage foreclosure actions, which review is expected
to cost $180 million.

On Feb. 9, 2012, AFI, ResCap, and certain other of the Debtors,
along with the four largest servicers of mortgage loans in the
United States, reached an agreement in principle with the federal
government, 49 state attorneys general, and 48 state banking
departments with respect to the DOJ/AG Investigation.  Pursuant to
the DOJ/AG Settlement, in February 2012, ResCap paid approximately
$110.0 million to a trustee, who is to distribute all such
settlement funds to federal and state governments. In addition,
AFI, ResCap and the other Debtors committed to provide a minimum
of $200 million towards borrower relief.  AFI and ResCap also
agreed with the Federal Reserve System on a civil money penalty of
$207 million related to the same activities that were the subject
of the DOJ/AG Settlement.

While ResCap had $110.4 million of consolidated net income for the
three months ended March 31, 2012, there is no assurance that the
Debtors will be able to generate net income for the entirety of
2012.

According to Mr. Whitlinger, the Debtors, with the support of AFI,
have already taken numerous steps to survive and continue to offer
mortgage loans to homeowners and mortgage servicing to public and
private investors.  Those steps have included debt restructurings,
asset sales, downsizings and capital contributions from AFI. Those
steps are no longer sufficient, and the Debtors now find that they
must file for relief under Chapter 11.

                        Restructuring Plan

As part of Ally Financial's support for the Chapter 11 cases and
the restructuring plan, Ally Financial and ResCap have reached a
global settlement of potential claims each entity and its
affiliates had against the other, which settlement will provide
ResCap with substantial value.  In the unlikely event that ResCap
does not obtain confirmation of its proposed reorganization plan,
ResCap will still seek to close the sales to Nationstar and Ally
Financial.

In addition, ResCap has obtained support for a restructuring plan
premised upon the sales from holders of ResCap's junior secured
notes holding a significant amount of the outstanding notes.
Also, ResCap has obtained support from, and entered into a
settlement agreement with, institutional investors in residential
mortgage-backed securities issued by ResCap's affiliates.  At
present, institutional investors holding more than 25% of at least
one class in each of 290 securitizations have agreed to support
the reorganization.  These 290 securitizations have an aggregate
original principal balance of approximately $165 billion.  As a
total of 392 securitizations, with an aggregate original principal
balance of approximately $221 billion, remain outstanding, it is
clear that the ResCap reorganization has broad support among
institutional investors.  The settlements are subject to
Bankruptcy Court approval.

Given the support of Ally Financial, the debtholders, and other
constituencies, ResCap is hopeful that its restructuring plan will
be approved by the fourth quarter of 2012.

Milestones agreed to by the parties under the Plan Support
Agreement are:

    * The Debtors will obtain interim approval of the DIP
      financing facilities on or before May 18, 2012,

    * The Debtors will file the Chapter 11 plan and disclosure
      statement on or before June 15, 2012.

    * The Debtors will obtain final approval of the DIP financing
      facilities on or before 50 days following the Petition Date.

    * On or before 90 days following the Petition Date, the
      bankruptcy court will have entered an order approving the
      Disclosure Statement.

    * On or before Oct. 31, 2012, the Bankruptcy Court will have
      entered an order confirming the Plan.

    * On or before Dec. 15, 2012, the effective date of the Plan
      will have occurred.

                       Advisors & Attorneys

Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap.  Morrison & Foerster LLP is acting as legal
adviser to ResCap.  Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel.  Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.

Ray C. Schrock, Esq. -- ray.schrock@kirkland.com -- at Kirkland &
Ellis LLP, in New York, serves as counsel to Ally Financial.

                     Ally Repayment to Treasury

"The action by ResCap will enable Ally to achieve a permanent
solution to its legacy mortgage risks and put these issues behind
us," said Ally Chief Executive Officer Michael A. Carpenter.
"This action, along with pursuing alternatives for the
international businesses, will allow Ally to focus 100 percent of
its energies on further strengthening its already leading U.S.
auto finance and direct banking franchises."

Ally has paid approximately $5.5 billion to the U.S. Treasury,
which has enabled the taxpayer to recover about one-third of the
investment made in the company.  Upon successful completion of the
announced strategic initiatives, Ally expects to have returned a
total of two-thirds of the taxpayer's investment.

Ally has agreed to take certain steps to support the stability of
ResCap and its leading mortgage servicing platform during the
Chapter 11 cases. Those steps include:

    * making a cash contribution of $750 million to the ResCap
      Chapter 11 estate upon confirmation of the plan;

    * making a stalking horse bid for up to $1.6 billion of
      ResCap-owned mortgages currently marked at 45% of UPB;

    * providing ResCap a $150 million debtor in possession
      financing facility;

    * supporting ResCap's consumer lending originations during
      the process; and

    * other arrangements to support ResCap's Chapter 11 plan.

Ally is expected to record an associated charge of $1.3 billion in
the second quarter of 2012.  The estimated charge is primarily
driven by a write-down to zero of Ally's $400 million equity
investment in ResCap, the $750 million cash contribution and $130
million related to the establishment of a mortgage repurchase
reserve at Ally Bank that replaces a reserve previously held at
ResCap.  Absent the determination by the ResCap board of directors
to file for Chapter 11, ResCap would have required billions of
dollars of support from its parent to meet its obligations, which
would have substantially delayed Ally's plans to repay the
remaining capital investment to the U.S. Treasury.

                           About ResCap

Residential Capital and its affiliates are a leading residential
real estate finance company indirectly owned by Ally Financial
Inc., which is not a Debtor.  The Debtors and their non-debtor
affiliates operate the fifth largest servicing business and the
tenth largest mortgage origination business in the United States.

ResCap is the mortgage subsidiary of non-debtor Ally Financial.
Ally Financial, formerly GMAC Inc. -- http://www.ally.com/-- is
one of the world's largest automotive financial services
companies.  The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products.  Ally operates as a bank-
holding company.

GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake.  Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.

Ally 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.


RESIDENTIAL CAPITAL: Case Summary & 50 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Residential Capital, LLC
        1177 Avenue of the Americas
        New York, NY 10036

Bankruptcy Case No.: 12-12020

Debtor-affiliates that filed separate Chapter 11 petitions:

        Debtor                                   Case No.
        ------                                   --------
        ditech, LLC                              12-12021
        DOA Holding Properties, LLC              12-12022
        DOA Properties IX (Lots-Other), LLC      12-12023
        EPRE LLC                                 12-12024
        Equity Investment I, LLC                 12-12025
        ETS of Virginia, Inc.                    12-12026
        ETS of Washington, Inc.                  12-12027
        Executive Trustee Services, LLC          12-12028
        GMAC Model Home Finance I, LLC           12-12030
        GMAC Mortgage USA Corporation            12-12031
        GMAC Mortgage, LLC                       12-12032
        GMAC Residential Holding Company, LLC    12-12033
        GMAC RH Settlement Services, LLC         12-12034
        GMACM Borrower LLC                       12-12035
        GMACM REO LLC                            12-12036
        GMACR Mortgage Products, LLC             12-12037
        GMAC-RFC Holding Company, LLC            12-12029
        HFN REO Sub II, LLC                      12-12038
        Home Connects Lending Services, LLC      12-12039
        Homecomings Financial Real Estate
        Holdings, LLC                            12-12040
        Homecomings Financial, LLC               12-12042
        Ladue Associates, Inc.                   12-12043
        Passive Asset Transactions, LLC          12-12044
        PATI A, LLC                              12-12045
        PATI B, LLC                              12-12046
        PATI Real Estate Holdings, LLC           12-12047
        RAHI A, LLC                              12-12048
        RAHI B, LLC                              12-12049
        RAHI Real Estate Holdings, LLC           12-12050
        RCSFJV2004, LLC                          12-12051
        Residential Accredit Loans, Inc.         12-12052
        Residential Asset Mortgage Products,
        Inc.                                     12-12053
        Residential Asset Securities Corporation 12-12054
        Residential Capital, LLC                 12-12020
        Residential Consumer Services of Ohio,
        LLC                                      12-12056
        Residential Consumer Services of Texas,
        LLC                                      12-12057
        Residential Consumer Services, LLC       12-12058
        Residential Funding Company, LLC         12-12019
        Residential Funding Mortgage Exchange, LLC 12-12059
        Residential Funding Mortgage Securities
        I, Inc.                                  12-12060
        Residential Funding Mortgage Securities
        II, Inc.                                 12-12061
        Residential Funding Real Estate
        Holdings, LLC                            12-12062
        Residential Mortgage Real Estate
        Holdings, LLC                            12-12063
        Residential Services of Alabama, LLC     12-12055
        RFC Asset Holdings II, LLC               12-12065
        RFC Asset Management, LLC                12-12066
        RFC Borrower LLC                         12-12069
        RFC Construction Funding, LLC            12-12069
        RFC REO LLC                              12-12070
        RFC SFJV-2002, LLC                       12-12071
        RFC-GSAP Servicer Advance, LLC           12-12064

Type of Business: Residential Capital, LLC is one of the largest
                  originators, sellers and servicers of
                  residential mortgage loans in the U.S. ResCap
                  is a wholly owned subsidiary of Ally Financial
                  Inc. ResCap conducts certain of its mortgage
                  operations through GMAC Mortgage, a wholly
                  owned subsidiary that is not affiliated with
                  General Motors. ResCap is an approved Fannie
                  Mae and Freddie Mac servicer and approved issuer
                  for Ginnie Mae.

Chapter 11 Petition Date: May 14, 2012

Court: U.S. Bankruptcy Court
       Southern District of New York

Judge: Hon. Martin Glenn

Debtors'
Counsel:     Larren M. Nashelsky, Esq.
             Gary S. Lee, Esq.
             Lorenzo Marinuzzi, Esq.
             MORRISON & FOERSTER LLP
             1290 Avenue of the Americas
             New York, NY 10104
             Tel: (212) 468-8000
             Fax: (212) 468-7900
             E-mail: lnashelsky@mofo.com
                     glee@mofo.com
                     lmarinuzzi@mofo.com

Debtors'
Financial
Advisor:     FTI CONSULTING INC.

Debtors'
Investment
Banker:      CENTERVIEW PARTNERS LLC
             Samuel M. Greene
             Marc Puntus
             31 West 52nd Street
             52nd street, 22nd Floor,
             New York, New York 10019
             E-mail: sgreene@centerviewpartners.com
                     mpuntus@centerviewpartners.com

Debtors'
Conflicts
Counsel:     CURTIS, MALLET-PREVOST, COLT & MOSLE LLP

Debtors'
Public
Relations
Consultants: RUBENSTEIN ASSOCIATES, INC.

Debtors'
Claims and
Noticing
Agent:       KURTZMAN CARSON CONSULTANTS LLP
             2335 Alaska Ave
             El Segundo, CA 90245
             Tel: (888) 251-2914

Total Assets: $15,675,571,000 as of March 31, 2012

Total Debts:  $15,276,228,000 as of March 31, 2012

The petition was signed by James Whitlinger, chief financial
officer.

Consolidated List of 50 Largest Unsecured Creditors:

        Entity                   Nature of Claim      Claim Amount
        ------                   ---------------      ------------
Deutsche Bank Trust Company      8.500% Senior        $473,416,000
Americas                         Unsecured Notes
C/O Kelvin Vargas                due April 2013
25 De Forest Ave
Summit, NJ 07901
Phone: (201) 593-2456
E-mail: kelvin.vargas@db.com

Deutsche Bank Trust Company      750,000,000 Euros    $127,671,000
Americas                         Aggregate
C/O Kelvin Vargas                Principal Amount
25 De Forest Ave                 of 7.125%
Summit, NJ 07901                 Notes due May 2012
Phone: (201) 593-2456
E-mail: kelvin.vargas@db.com

Deutsche Bank Trust Company      8.875% Senior        $112,227,000
Americas                         Unsecured Notes
C/O Kelvin Vargas                due June 2015
25 De Forest Ave
Summit, NJ 07901
Phone: (201) 593-2456
E-mail: kelvin.vargas@db.com

Deutsche Bank Trust Company      GBP400,000,000       $103,743,000
Americas                         Aggregate
C/O Kelvin Vargas                Principal Amount
25 De Forest Ave                 of 9.875%
Summit, NJ 07901                 Notes due July 2014
Phone: (201) 593-2456
E-mail: kelvin.vargas@db.com

Deutsche Bank Trust Company      8.500% Senior         $79,879,000
Americas                         Unsecured Notes
C/O Kelvin Vargas                due June 2012
25 De Forest Ave
Summit, NJ 07901
Phone: (201) 593-2456
E-mail: kelvin.vargas@db.com

Deutsche Bank Trust Company      GBP400,000,000        $59,379,200
Americas                         Aggregate
C/O Kelvin Vargas                Principal Amount
25 De Forest Ave                 of 8.375%
Summit, NJ 07901                 Notes due May 2013
Phone: (201) 593-2456
E-mail: kelvin.vargas@db.com

BNY Mellon                       Contingent Claim-      Unknown
C/O Dechert LLP                  Securitization
1095 Avenue of the Americas
New York, NY 10036
Phone: (212) 698-3621
Fax: (212) 698-3599
E-mail: hector.gonzalez@dechert.com

US Bank                          Contingent Claim-      Unknown
C/O Seward & Kissel LLP          Securitization
One Battery Park Plaza
New York, NY 10004
Phone: (212) 574-1391
Fax: (212) 480-8421
E-mail: das@sewkis.com

Deutsche Bank AG, New York      Contingent Claim-      Unknown
C/O Joe Salama                  Securitization
60 Wall Street
New York, NY 10005-2836
Phone: (212) 250-9536
Fax: (866) 785-1127
E-mail: joe.salama@db.com

Federal Housing Finance Agency   Contingent Claim-      Unknown
C/O Alfred Pollard               Securitization
400 Seventh Street, SW
Phone: (202) 649-3804
E-mail: GeneralCounsel@FHFA.org


MBIA, Inc.                       Contingent Claim-      Unknown
C/O Cadwalader, Wickersham       Litigation
& Taft
One World Financial Center
New York, NY 10281
Phone ) 504-6373
Fax: (212) 504-6666
E-mail: gregory.petrick@cwt.com

Ambac Assurance Corp             Contingent Claim-      Unknown
C/O Patterson Belknap Webb &     Litigation
Tyler
1133 Avenue of the Americas
New York, NY 10036
Phone: (212) 336-2140
Fax: (212) 336-2094
E-mail: prforlenza@pbwt.com

Financial Guaranty Insurance Co.  Contingent Claim-      Unknown
C/O Jones Day                     Litigation
222 East 41st Street
New York, NY 10017-6702
Phone: (212) 326-7844
Fax: (212) 755-7306
E-mail: cball@jonesday.com

Assured Guaranty Corp.            Contingent Claim-      Unknown
C/O Margaret Yanney               Litigation
31 West 52nd Street
New York, NY 10019
Phone: (212) 857-0581
Fax: (212) 893-2792
E-mail: myanney@assuredguaranty.com

Thrivent Financial for Lutherans  Contingent Claim-      Unknown
C/O Teresa J. Rasmussen           Securities
625 Fourth Avenue S.
Minneapolis, MN 55415-1624
Phone: (800) 847-4836

West Virginia Investment         Contingent Claim-      Unknown
Management Board                 Securities
C/O Craig Slaughter
500 Virginia Street East,
Suite 200
Phone: (304) 345-2672

Allstate Insurance               Contingent Claim-      Unknown
C/O Quinn Emanuel Urquhart       Securities
& Sullivan
865 S. Figueroa Street,
10th Floor
Phone: (213) 443-3000
E-mail: danbrockett@quinnemanuel.com

Western & Southern               Contingent Claim-      Unknown
C/O Wollmuth Maher & Deutsch     Securities
LLP
500 Fifth Avenue
New York, NY 10110
Phone: (212) 382-3300
E-mail: dwollmuth@wmd-law.com

The Union Central Life           Contingent Claim-      Unknown
Insurance Company                Securities
C/O Robbins Geller Rudman &
Dowd LLP
655 West Broadway, Suite 1900
Phone: (619) 231-1058
Fax: (519) 231-7423
E-mail: stevep@rgrdlaw.com

Cambridge Place Investment       Contingent Claim-      Unknown
Management Inc.                  Securities
C/O Donnelly, Conroy & Gelhaar
LLP
1 Beacon Street, 33rd Floor
Phone: (617) 720-2880
Fax: (617) 720-3553
E-mail: msd@dcglaw.com

Sealink Funding Limited          Contingent Claim-      Unknown
C/O Labaton Sucharow LLP         Securities
140 Broadway
Phone: (212) 907-0869
Fax: (212) 883-7069
E-mail: jbernstein@labaton.com

Stichting Pensioenfonds ABP      Contingent Claim-      Unknown
C/O Grant & Eisenhofer           Securities
123 S. Justison Street
Phone: (302) 622-7040
Fax: (302) 622-7100
E-mail: gjarvis@gelaw.com

Huntington Bancshares Inc.       Contingent Claim-      Unknown
C/O Grant & Eisenhofer           Securities
123 S. Justison Street
Phone: (302) 622-7040
Fax: (302) 622-7100
E-mail: gjarvis@gelaw.com

Federal Home Loan Bank of        Contingent Claim-      Unknown
Chicago                          Securities
C/O Keller Rohrback LLP
1201 Third Avenue, Suite 3200
Phone: (206) 623-1900
Fax: (206) 623-3384
E-mail: dloeser@kellerrohrback.com

Federal Home Loan Bank of         Contingent Claim-      Unknown
Boston                            Securities
C/O Keller Rohrback LLP
1201 Third Avenue, Suite 3200
Phone: (206) 623-1900
Fax: (206) 623-3384
E-mail: dloeser@kellerrohrback.com

Federal Home Loan Bank of         Contingent Claim-      Unknown
Indianapolis                      Securities
C/O Keller Rohrback LLP
1201 Third Avenue, Suite 3200
Phone: (206) 623-1900
Fax: (206) 623-3384
E-mail: dloeser@kellerrohrback.com

Massachusetts Mutual Life         Contingent Claim-      Unknown
Insurance Company                 Securities
C/O Bernadette Harrigan
1295 State Street
Phone: (413) 788-8411
Fax: (413) 226-4268

National Credit Union             Contingent Claim-      Unknown
Administration Board              Securities
C/O Susman Godfrey LLP
1901 Avenue of the Stars,
Suite 950
Phone: (310) 789-3100
Fax: (310) 789-3150
E-mail: mseltzer@susmangodfrey.com

The Charles Schwab Corporation    Contingent Claim-      Unknown
C/O Grais & Ellsworth LLP         Securities
70 East 55th Street
New York, NY 10022
Phone: (212) 755-0100
Fax: (212) 755-0052

New Jersey Carpenters Health      Contingent Claim-      Unknown
Fund                              Securities
C/O Cohen Milstein Sellers
& Toll PLLC
150 East 52nd Street,
Thirtieth Floor
New York, NY 10022
Phone: (212) 838-7797
Fax: (212) 838-7745
E-mail: jlaitman@cohenmilstein.com

New Jersey Carpenters Vacation    Contingent Claim-      Unknown
Fund                              Securities
C/O Cohen Milstein Sellers
& Toll PLLC
150 East 52nd Street,
Thirtieth Floor
New York, NY 10022
Phone: (212) 838-7797
Fax: (212) 838-7745
E-mail: jlaitman@cohenmilstein.com

Boilermaker Blacksmith National   Contingent Claim-      Unknown
Pension Trust                     Securities
C/O Cohen Milstein Sellers
& Toll PLLC
150 East 52nd Street,
Thirtieth Floor
New York, NY 10022
Phone: (212) 838-7797
Fax: (212) 838-7745
E-mail: jlaitman@cohenmilstein.com

Police and Fire Retirement        Contingent Claim-      Unknown
System of the City of Detroit     Securities
C/O Zwerling, Schachter & Zwerling
41 Madison Avenue
New York, NY 10010
Phone: (212) 223-3900
Fax: (212) 371-5969
E-mail: rzwerling@zsz.com

Orange County Employees            Contingent Claim-      Unknown
Retirement System                  Securities
C/O Cohen Milstein Sellers
& Toll PLLC
150 East 52nd Street, Thirtieth Floor
New York, NY 10022
Phone: (212) 838-7797
Fax: (212) 838-7745
E-mail: jlaitman@cohenmilstein.com

Midwest Operating Engineers        Contingent Claim-      Unknown
Pension Trust Fund                 Securities
C/O Cohen Milstein Sellers &
Toll PLLC
150 East 52nd Street, Thirtieth Floor
New York, NY 10022
Phone: (212) 838-7797
Fax: (212) 838-7745
E-mail: jlaitman@cohenmilstein.com

Iowa Public Employees Retirement   Contingent Claim-      Unknown
System                             Securities
C/O Cohen Milstein Sellers
& Toll PLLC
150 East 52nd Street,
Thirtieth Floor
New York, NY 10022
Phone: (212) 838-7797
Fax: (212) 838-7745
E-mail: jlaitman@cohenmilstein.com

Brian Kessler, et al               Contingent             Unknown
C/O Walters Bender Strohbehn       Litigation
& Vaughan, P.C.
2500 City Center Square,
1100 Main, Suite 2500

Donna Moore                        Contingent             Unknown
C/O Kessler Topaz Meltzer          Litigation
& Check, LLP
280 King of Prussia Road
Radnor, PA 19087
Phone: (610) 822.0242
Fax: (610) 667.7056
E-mail: eciolko@ktmc.com

Steven And Ruth Mitchell           Settled            $14,500,000
C/O Walters Bender Stroehbehn      Litigation
& Vaughan, P.C
2500 City Center Square,
1100 Main Street
Kansas City, MO 64105
Phone: (816) 421-6620
Fax: (816) 421-4747
E-mail: awalter@wbsvlaw.com

Indecomm Global Services           General              $675,000
200 Middlesex Essex Turnpike       Trade
Suite 102                          Payable
Iselin, NJ 08830
Phone: (732) 404-0081 Ext. 208
E-mail: Rajan@indecomm.net

Alan Gardner                       Settled              $555,000
C/O Williamson & Williams          Litigation
187 Parfitt Way SW, Suite 250
Bainbridge Island, WA 98110
Phone: (206) 441-5444
Fax: (206) 780-5557
E-mail: roblin@williamslaw.com

Tiffany Smith                      Settled              $275,000
C/O Schroeter Goldmark & Bender    Litigation
500 Central Bldg., 810 Third Ave.
Seattle, WA 98104
Phone: (206) 622-8000
Fax: (206) 682-2305
E-mail: info@sgb-law.com

Don E. Diane M. Patterson          Settled              $157,950
                                   Litigation

Wells Fargo & Company              General              $121,000
                                   Trade Payable

Credstar                           General               $99,773
                                   Trade Payable

Emortgage Logic                    General               $87,910
                                   Trade Payable

Aegis Usa Inc.                     General               $72,116
                                   Trade Payable

ISGN Fulfillment Services Inc      General               $65,754
                                   Trade Payable


US Bank                            General               $64,000
                                   Trade Payable

Deborah Pangel and Lee Sachs       Settled               $55,000
                                   Litigation


ROYAL MANOR: 6th Cir. Affirms Order Denying Gordons' Claims
-----------------------------------------------------------
The U.S. Court of Appeals for the Sixth Circuit affirmed a series
of bankruptcy court orders denying claims by two would-be
creditors, Alison and David Gordon.

At the heart of the case is an agreement concerning a $1 million
transaction that Gertrude Gordon undertook on behalf of her
children, Alison and David Gordon.  Gertrude loaned $1 million to
her sister and brother-in-law, Sally and Abraham Schwartz, who
were the majority owners of Dani and Darlington, two interrelated
companies that together owned and operated a nursing home.

An agreement memorialized the transaction. The first line of the
agreement said "Sally and Abraham Schwartz to Gertrude, David,
Alison Gordon."  It provided terms for repayment, including that
the principal investment would be repaid by July 2002.  Sally and
Abraham Schwartz signed the agreement.  The Gordons never received
any payments and did not challenge the default until 2008.  No one
signed the agreement on behalf of Dani or Darlington.

In 2008, Dani and Darlington filed for Chapter 11 bankruptcy.
Alison and David filed a claim for more than $2 million (principal
plus interest) against the bankruptcy estate, invoking the
agreement.  During discovery, the Gordons learned of new documents
related to the $1 million transaction.  They moved to file a new
claim based on the new information, but the bankruptcy court
denied the motion.  The court held a bench trial on the Gordons'
original claim and denied it, too.

The Gordons appealed three orders of the bankruptcy court: (1) the
order denying their original claim, (2) the order denying their
motion to file a new claim, and (3) an order striking the
trustee's exhibit list from the record.  The district court
affirmed all three orders.

The Gordons contend that the July 2000 agreement establishes an
unsecured claim against the Dani/Darlington bankruptcy estate.
The bankruptcy and district courts disagreed, holding that the
agreement created a personal obligation of the Schwartzes, not an
obligation of Dani or Darlington.  That is correct, the Sixth
Circuit said.

The appeal is ALISON GORDON and DAVID GORDON, Appellants, v.
OFFICIAL COMMITTEE OF UNSECURED CREDITORS, Appellee, Nos. 09-4432,
10-4321, 10-4322 (6th Cir.).  A copy of the Sixth Circuit's May 8,
2012 decision is available at http://is.gd/xRx0Kifrom Leagle.com.

Royal Manor Management, Inc., headquartered in Brunswick, Ohio,
filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No.
08-50421) on Feb. 12, 2008.  Judge Marilyn Shea-Stonum presides
over the case.  Mark Schlachet, Esq., serves as Royal Manor's
bankruptcy counsel.  It disclosed $7,357 in assets and $15,066,772
in liabilities.


SAN ANTONIO OPERA: Files in Chapter 7 to Liquidate
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports the San Antonio Opera didn't attempt to reorganize,
instead filed a liquidating Chapter 7 petition (Bankr. W.D. Tex.
Case No. 12-51490) on May 8 in San Antonio.  The opera disclosed
assets of only $1,500 against debt totaling $894,000.


SOLAR TRUST: Gets Court Approval to Auction Assets
--------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Kevin Gross on Friday gave Solar Trust of America LLC the
go-ahead to auction its assets, which include a 1,000-megawatt
solar power project under development in California that would be
the largest of its kind.

At a court hearing in Wilmington, Judge Gross approved bidding
procedures for a June 21 auction, with bids due June 18, according
to Law360.

                         About Solar Trust

Solar Trust of America LLC, Solar Millennium Inc., and nine
affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead
Case No. 12-11136) on April 2, 2012.

Solar Trust is a joint venture created by Solar Millennium AG and
Ferrostaal AG to develop solar projects at locations in California
and Nevada.  Located in the "Solar Sun Belt" of the American
Southwest, the project sites have extremely high solar radiation
levels, and allow the Debtors' projects to harness high levels of
solar power generation.  Projects include the rights to develop
one of the world's largest permitted solar plant facilities with
capacity of 1,000 MW in Blythe, California.  Two other projects
contemplated 500 MW solar power facilities in Desert Center,
California and Amargosa Valley, Nevada.

Although the Debtors have obtained highly valuable transmission
right and permits, each project is only in the developmental phase
and does not generate revenue for the Debtors.  Ferrostaal ceased
providing funding two years ago and SMAG, due to its own
deteriorating financial condition, stopped providing funding after
December 2011.

NextEra Energy Resources LLC has committed to provide a
postpetition secured credit facility and has expressed an interest
in serving as stalking horse purchaser for certain of the Debtors'
assets.

Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as
counsel to the Debtors.  K&L Gates LLP is the special corporate
counsel.

Ridgecrest Solar Power Project, LLC, and two entities filed for
Chapter 11 protection (Bankr. D. Del. Case Nos. 12-11204 to
12-11206) on April 10, 2012.

Ridgecrest Solar, et al., are affiliates of Solar Trust of America
LLC.  STA Development, LLC, one of the debtors that filed for
bankruptcy April 2, 2012, owns 100% of the interests in
Ridgecrest, et al.

Ridgecrest Solar Power estimated up to $50,000 in assets and
debts.  Ridgecrest Solar I, LLC, estimated up to $50,000 in assets
and up to $10 million in liabilities.


SOUTH BAY LUBE: Files for Chapter 11 in Tampa
---------------------------------------------
Sarasota, Florida-based South Bay Lube, Inc., filed a Chapter 11
bankruptcy petition (Bankr. M.D. Fla. Case No. 12-07356) on
May 11, 2012, in Tampa.

South Bay Lube operates 26 Jiffy Lube stores in Florida.  The
Debtor has 210 employees.  The Debtor estimated assets and debts
in excess of $10 million as of the Chapter 11 filing.

GE Capital Commercial, Inc., asserts a secured claim of
$9.2 million.  The Debtor intends to use GE's cash collateral.
The Debtor will seek to use cash of $250,000 per week pending
final approval of the motion.

The Debtor on the petition date also filed emergency motions to
(i) pay prepetition wages and benefits of employees, (ii) pay
salaries and honor existing agreements with officers, and (iii)
maintain its existing bank accounts.

A hearing on the first-day motions is scheduled for May 16, 2012
at 3:00 p.m.  Judge Caryl E. Delano has been assigned to the case.

According to the case docket, the Chapter 11 plan and disclosure
statement are due Sept. 10, 2012.


STEREOTAXIS INC: Files Form 10-Q; Incurs $5.8MM Net Loss in Q1
--------------------------------------------------------------
Stereotaxis, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $5.81 million on $12.28 million of total revenue for the three
months ended March 31, 2012, compared with a net loss of $9.54
million on $10.22 million of total revenue for the same period
during the prior year.

The Company's balance sheet at March 31, 2012, showed $36.79
million in total assets, $60.16 million in total liabilities and a
$23.36 million total stockholders' deficit.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/6ogTt2

                         About Stereotaxis

Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures
and markets the Epoch Solution, which is an advanced remote
robotic navigation system for use in a hospital's interventional
surgical suite, or "interventional lab", that the Company believes
revolutionizes the treatment of arrhythmias and coronary artery
disease by enabling enhanced safety, efficiency and efficacy for
catheter-based, or interventional, procedures.

For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis,
Missouri, expressed substantial doubt about Stereotaxis' ability
to continue as a going concern.  The independent auditors noted
that the Company has incurred recurring operating losses and has a
working capital deficiency.

The Company reported a net loss of $32.0 million for 2011,
compared with a net loss of $19.9 million for 2010.


STONECREST FIN'L: Perpetual Care Trust Fund Not Estate's Asset
--------------------------------------------------------------
Chief Bankruptcy Judge Douglas O. Tice, Jr., denied, without
prejudice, the request of Roy M. Terry, Jr., the chapter 7 trustee
of Stonecrest Financial, Inc., for an order determining the scope
of administrative costs and determining whether the income and
corpus of a perpetual care trust fund may be used to pay those
administrative costs.  The Court also denied the trustee's request
to use the perpetual care trust fund to pay claims filed in the
Debtor's Chapter 7 bankruptcy case.

The Court held the perpetual care trust fund is not an asset of
the estate and agrees with the argument of Bay Trust Company, the
trustee of the perpetual care trust fund, that a separate
adversary proceeding is required if the Chapter 7 trustee seeks
turnover of funds.

Stonecrest Financial, Inc., d/b/a Meadow-Brooke Memorial Gardens,
whose principal asset was real property located in King George,
Virginia, upon which a cemetery was operated, filed a voluntary
chapter 11 petition (Bankr. E.D. Va. Case No. 10-36955) on Oct. 6,
2010.  However, upon the motion of the United States Trustee, the
case was converted to chapter 7 on Oct. 19, 2010, and Roy M.
Terry, Jr., was appointed Chapter 7 trustee.

Pursuant to his appointment, he sought and was granted authority
to operate the Debtor's cemetery business on a limited basis for a
limited time.  The chapter 7 trustee incurred costs and expenses
related to the administration, maintenance and operation of
debtor's business.  On Dec. 9, 2010, the court entered an order
granting relief from the automatic stay to Ruth J. Herrink, the
cemetery's former owner, to allow her to foreclose on the real
property upon which the cemetery is located.

Virginia law requires that all cemeteries, with certain limited
exceptions, maintain a perpetual care trust fund funded by a
deposit of ten percent of the funds received from the sale of
graves and above-ground crypts.  Such a perpetual care fund is in
existence for the cemetery operated by the debtor.

The chapter 7 trustee asserts that the corpus of the trust is
approximately $124,000 and that the amount he proposes to
distribute to pay administrative claims of the estate is
approximately $50,000.  Claims filed in the case, less Ms.
Herrink's secured claim, total $15, 720.

A copy of the Court's May 10, 2012 Memorandum Opinion and Order is
available at http://is.gd/p3wx4zfrom Leagle.com.


SUFFOLK REGIONAL: Files for Ch. 9 Again After Law Passed
--------------------------------------------------------
Suffolk Regional Off-Track Betting Corporation filed a Chapter 9
petition (Bankr. E.D.N.Y. Case No. 12-73029) on May 11, 2012, in
Central Islip, New York.

Suffolk OTB is one of five separately governed off-track betting
corporations in the State of New York. Headquartered in Hauppauge,
Suffolk OTB operates six regular branches throughout the County of
Suffolk.  Suffolk OTB opened its first branch in April 1975, five
years after the New York Legislature authorized the creation of
the first OTB in New York City.  In addition to its regular
branches, Suffolk OTB has 19 Qwik Bet (machine betting) locations,
a tele-theater and a telephone account wagering operation.

Suffolk OTB is a public benefit corporation that offers off-track
pari-mutuel wagering on thoroughbred and harness horse races held
at race tracks located in the State and certain race tracks
located outside of the State.

As of May 1, 2012, Suffolk OTB employed in the aggregate 215
employees, of whom 159 are members of two unions.  Of the union
members, 137 branch cashiers and attendant custodians are
represented by Local 237 of the International Brotherhood of
Teamsters and 22 branch managers are represented by UFCW Local
312.

On March 18, 2011, Suffolk OTB filed a voluntary petition for
relief under chapter 9 (Case No. 11-42250-CEC).  The case was
dismissed in December 2011 following an objection by Churchill
Downs Incorporated.  The Debtor appealed the order although in May
2012 the parties agreed to voluntarily dismiss the appeal.

While the appeal was pending, the New York Legislature amended the
Racing Law to specifically authorize Suffolk OTB to be a debtor
under chapter 9.

Accordingly, the Suffolk OTB filed a new Chapter 9 petition to
implement a debt-adjustment plan that includes attempting to
resolve claims, executing cost-cutting measures and reducing
expenses.

                      Deteriorating Condition

Jeffrey A. Casale, president of Suffolk OTB, explains, "The
financial condition of Suffolk OTB, as well as the State's five
regional OTBs, has substantially deteriorated over the last five
years.  This decline was caused mainly by the failing economy,
competition with other gambling entities and waning interest in
the horse racing industry.  Moreover, the mandatory statutory
distributions that the OTBs are required to make pursuant to the
Racing Law have increased, thereby preventing Suffolk OTB from
retaining sufficient capital to reinvest in its business.
Furthermore, Suffolk OTB faces greater operating costs,
particularly increases in the cost of pension plans and post-
employment benefits including retiree health care.  Cash flow
problems are also contributing to Suffolk OTB's financial
distress.  Suffolk OTB has debts substantially greater than its
current ability to repay and is currently not paying its debts as
they come due."

For years Suffolk OTB has sought amendment of the legislative
distribution scheme.

During its previous Chapter 9 case, Suffolk OTB sought to effect a
plan that contemplated that Suffolk OTB's debts would be adjusted
by an extension of time to pay prepetition claims of certain
racing claimants and a distribution of cash to certain
governmental claimants and holders of general unsecured claims in
full satisfaction and in exchange for their claims. Unfortunately,
Churchill's objection to the Chapter 9 Petition prevented Suffolk
OTB from confirming the plan.

                         Chapter 9 Case

Now that the eligibility issue raised in the Churchill's objection
and on appeal has been resolved by the amendment to the Racing
Law, Suffolk OTB has an opportunity to readjust its debt and
implement a new business plan in connection with this Chapter 9
case.

Mr. Casale relates that Suffolk and Nassau OTB management has met
on several occasions to explore expansion of joint ventures and
shared services, including internet wagering platforms,
purchasing, and legal services. While no agreements have been
reached between the regions, discussions are continuing.  In
addition, Suffolk is exploring the potential for other joint
venture opportunities with other regional OTBs and one other
industry participant in the State.

Discussions are ongoing with Suffolk OTB's secured creditor, New
York Commercial Bank, in an effort to secure partial funding for
Suffolk OTB's plans (based on equity in Suffolk OTB's real estate
holdings).

Suffolk OTB adds that it has also been regularly reducing
operating expenses and implementing cost cost-cutting measures in
an effort to improve profitability as set forth in the Gazes
Declaration. Suffolk will continue to make cuts in operating
expenses, restructure costs, decrease staffing, eliminate and/or
modify certain benefits, reject burdensome or onerous executory
contracts and leases and negotiate more favorable terms and modify
other contracts and leases.

Suffolk OTB says that as aggressively as it is cutting its bottom
line, it is equally committed to growing its future business.
That future veers away from bricks and mortar and towards Qwik
Bets, internet wagering and other remote wagering mechanisms.
Suffolk OTB will also drive growth by improving the Suffolk OTB
experience for existing customers.  In addition, Suffolk OTB will
seek to generate revenue from other sources such as the
installation of cell towers on owned real estate properties.

Suffolk OTB says it will continue to advocate for changes to the
statutory payment structure governing all OTB's revenue
distributions, although it is not anticipating any immediate
changes being enacted by the New York Legislature.
Notwithstanding, the New York Legislature has recently amended the
Racing Law and removed the restriction placed on "capital
acquisition funds" such that Suffolk OTB will now be able to
access these funds for operational purposes.


THERMOENERGY CORP: Security Investors Holds 8.4% Equity Stake
-------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Security Investors, LLC, disclosed that, as
of Jan. 31, 2012, it beneficially owns 24,441,140 shares of common
stock of ThermoEnergy Corporation representing 8.46% of the shares
outstanding.  A copy of the filing is available for free at:

                        http://is.gd/J7ymjl

                   About ThermoEnergy Corporation

Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.

As reported by the TCR on April 7, 2011, Kemp & Company, a
Professional Association, in Little Rock, Arkansas, expressed
substantial doubt about the Company's ability to continue as a
going concern.  The independent auditors noted that the Company
has incurred net losses since inception and will require
substantial capital to continue commercialization of the
Company's technologies and to fund the Companies liabilities.

The Company reported a net loss of $12.87 million on $5.58 million
of revenue in 2011, compared with a net loss of $9.85 million on
$2.87 million of revenue in 2010.

The Company's balance sheet at Dec. 31, 2011, showed $8.78 million
in total assets, $13.27 million in total liabilities and a
$4.49 million total stockholders' deficiency.


UNIGENE LABORATORIES: Files Form 10-Q, Incurs $6MM Loss in Q1
-------------------------------------------------------------
Unigene Laboratories, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $6.01 million on $1.75 million of total revenue for
the three months ended March 31, 2012, compared with a net loss of
$6.64 million on $2.12 million of total revenue for the same
period during the previous year.

The Company's balance sheet at March 31, 2012, showed $14.07
million in total assets, $74.83 million in total liabilities and a
$60.75 million total stockholders' deficit.

A copy of the Form 10-Q is available for free at:

                        http://is.gd/LKTT8H

                          About Unigene

Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.

Unigene reported a net loss of $17.92 million in 2011, a net loss
of $27.86 million in 2010, and a net loss of $13.38 million in
2009.

Grant Thornton LLP, in New York, 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 has incurred a net loss of $17,900,000 during the year
ended Dec. 31, 2011, and, as of that date, has an accumulated
deficit of approximately $189,000,000 and the Company's total
liabilities exceeded total assets by $55,138,000.


VERENIUM CORP: Reports $30.1 Million Net Income in Q1
-----------------------------------------------------
Verenium Corporation reported net income attributed to the Company
of $30.12 million on $17.22 million of total revenue for the three
months ended March 31, 2012, compared with net income attributed
to the Company of $3.81 million on $13.39 million of total revenue
for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed $94.12
million in total assets, $53.81 million in total liabilities and
$40.31 million in stockholders' equity.

"The first quarter was a turning point for Verenium.  Beyond the
repayment of our outstanding debt, we also initiated discussions
with a wide array of companies who recognize the value of our
technology, and signed agreements with both Tate & Lyle and DSM
that validate our unique capabilities," said James Levine,
President and Chief Executive Officer at Verenium.  "We now have
the flexibility to direct our full attention on growing the
business with a focus on increasing sales from our current product
portfolio, advancing the multiple products in our pipeline, and
completing new partnerships to accelerate our entry into new end
markets."

A copy of the press release is available for free at:

                        http://is.gd/KvnbNL

                    About Verenium Corporation

Cambridge, Mass.-based Verenium Corporation (NASDAQ: VRNM) --
http://www.verenium.com/-- is a pioneer in the development and
commercialization of high-performance enzymes for use in
industrial processes.  Verenium currently sells enzymes developed
using its R&D capabilities to industrial customers globally for
use in markets including biofuels, animal health and oil seed
processing.

The Company reported net income of $5.12 million in 2011 compared
with a net loss of $5.35 million in 2010.

                           Going Concern

The Company had a loss from operations of $6.5 million for year
ended Dec. 31, 2011, and had an accumulated deficit of $600.8
million as of Dec. 31, 2011.  The holders of the 2007 Notes have
the right to require the Company to purchase the 2007 Notes for a
total cash amount equal to $34.9 million on April 2, 2012, plus
accrued and unpaid interest to that date.  The Company expects the
holders of the 2007 Notes to exercise this right and, based on the
Company's current cash resources and 2012 operating plan, the
Company's existing cash resources will not be sufficient to meet
the cash requirements to fund the Company's required repurchase of
the 2007 Notes, planned operating expenses, capital expenditures
and working capital requirements without additional sources of
cash.

If the Company is unable to fund the repurchase of the 2007 Notes
when required or otherwise raise additional capital, the Company
will need to defer, reduce or eliminate significant planned
expenditures, restructure or significantly curtail the Company?s
operations, sell some or all its assets, file for bankruptcy or
cease operations.

To the extent the Company restructures rather than repurchases all
or any portion of the 2007 Notes, the Company may issue common
shares or other convertible debt for the 2007 Notes that are
restructured, which would result in substantial dilution to the
Company's equityholders.  There can be no assurance that the
Company will be able to obtain any sources of financing on
acceptable terms, or at all.

These factors raise substantial doubt about the Company's ability
to continue as a going concern.


VITAMINSPICE INC: Says Jehu Hand's New Suit is Frivolous
--------------------------------------------------------
VitaminSpice, Inc. will aggressively defend and address via the
legal system its former counsel Jehu Hand and his conspirators.
This latest lawsuit is the 7th in a string of serial filings that
have been made by Jehu Hand and his shell companies.

VTMS will not tolerate the outrageous allegations by Jehu Hand and
his followers.  Jehu Hand knows that he has filed this lawsuit in
the wrong Jurisdiction as evidenced by a previous court ruling
from yet another lawsuit previously filed by Jehu Hand and his
conspirators dated March 18, 2011.  The ruling, by Judicial
Officer, David Chaffee, states unequivocally by the Superior Court
for the State of California that there is no jurisdiction for a
Lawsuit.  The current filing is frivolous and the court has
already ruled that Mr. Hand (through his shell companies and alter
egos) has no Jurisdiction over VTMS.

VTMS uncovered a "pump and dump" scheme that was controlled by
Jehu Hand and his conspirators.  Documentation from Penson
Financial (Dallas, TX) demonstrates that over $1.2 million dollars
was taken by Jehu Hand and his conspirators.  Spartan Securities
demonstrate and document Jehu Hand's apparent criminal intentions
and outright forgery.

In a meeting in Irvine, CA, Jehu Hand allegedly attempted to bribe
Edward Bukstel, CEO of VTMS, with money to allow Jehu Hand and his
associates to continue their "pump and dump" scheme.  Bukstel said
no to any of the bribes offered by Jehu Hand.  The result is a
series of meritless and frivolous Lawsuits by Jehu Hand and his
shell companies that have dead or non-existent shareholders, or
are alter egos of Jehu Hand.

The Federal Bankruptcy Court for the Eastern District of
Pennsylvania has ordered a hearing for Attorney Fees and other
damages.  VTMS estimates the actual and compensatory damages to be
over $3 million against Jehu Hand, Ray Suprenard (Florida),
Jeremiah Hand (North Carolina), and John Robison (Orange County),
et al.

VTMS will take all necessary actions to address the ridiculous
tactics of Jehu Hand.

                        About VitaminSpice

VitaminSpice makes vitamin- and antioxidant-infused spices as food
and dietary supplements.

Five creditors filed an involuntary Chapter 11 petition (Bankr.
E.D. Pa. Case No. 16200) against Wayne, Pennsylvania-based
VitaminSpice aka Qualsec on Aug. 5, 2011.  The creditors, owed
roughly $414,000 in the aggregate, are: John Robison in
Philadelphia, Pennsylvania; IBT South Florida, LLC, in Fort
Lauderdale, Florida; Learned J. Hand in Chapel Hill, North
Carolina; and Jehu Hand in Dana Point, California; and Esthetics
World in Cheyenne, Wyoming.  Judge Magdeline D. Coleman presides
over the case.  Peter Edward Sheridan, Esq. --
sheridan.pete@gmail.com -- in Philadelphia, Pennsylvania,
represents the petitioning creditors.

In April 2012,  the bankruptcy judge dismissed the involuntary
case at the behest of the Debtor.   Judge Magdeline D. Coleman in
Philadelphia said the creditors failed to prove the company was
generally not paying its debts as they mature.
The company filed a motion to dismiss the petition, saying it was
filed in bad faith to stop lawsuits where the VitaminSpice was
targeting Mr. Hand or his companies.

VITRO SAB: Vulture Funds Ordered to Pay Legal Fees
--------------------------------------------------
Vitro S.A.B. de C.V. disclosed that the Federal Unitary Second
Court for the Fourth Circuit in Monterrey, Nuevo Leon, as Appeals
Court, has affirmed a lower Federal court's dismissal of the
eighteen involuntary bankruptcy lawsuits filed against Vitro and
seventeen of its subsidiaries by dissident bondholders in December
2010.

Moreover, the Appeals Court ruled that, as a result of the
dismissal of the involuntary bankruptcy lawsuits, Vitro and each
of its corresponding seventeen subsidiaries are now entitled to
recover their corresponding legal fees and expenses from the
petitioning dissident bondholders.

In another legal victory for Vitro, the Third Collegiate Court for
Civil Matters for the Fourth Circuit in Monterrey, Nuevo Leon, has
dismissed a constitutional challenge filed by dissident
bondholders against certain provisions of the Mexican Business
Reorganization Act (Ley de Concursos Mercantiles) and the December
2010 ruling admitting Vitro's petition to commence the
reorganization phase of its voluntary prepackaged insolvency
proceeding in Mexico.  The Collegiate Court's dismissal cannot be
challenged further and may negatively impact the dissident
bondholders' chances for success in other pending appeals and
constitutional challenges in Mexico relating to Vitro's now-
completed insolvency proceeding.

Mr. Claudio Del Valle, Vitro's Chief Restructuring Officer stated,
"We are pleased that in both of these rulings, the nature of the
tactics employed by the so-called vulture funds will have
consequences against them.  In particular, the ruling by the
Second Appeals Court orders the vulture funds to reimburse Vitro
and its subsidiaries for their legal fees and expenses in
defending against the involuntary bankruptcy lawsuits, in amounts
to be determined in accordance with the relevant Mexican law."

"As previously reported, notwithstanding these and other efforts
by the highly litigious vulture funds, Vitro has successfully
implemented its recently approved concurso plan in Mexico, and is
awaiting a decision on its request to enforce the concurso plan in
the U.S. following a hearing next month before the U.S. bankruptcy
court in Dallas, Texas.  In the meantime, we will continue to
focus on operational excellence and delivering value for our
customers."

                          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.


VITRO SAB: NY Appeals Court Won't Enforce Mexican Court Ruling
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports Vitro SAB bondholders won a skirmish with the Mexican
glassmaker when a New York state appellate court refused to
enforce a ruling from a court in Mexico.

According to the report, in New York state court, bondholders were
suing Vitro operating subsidiaries that weren't in bankruptcy
anywhere.  Only the Vitro parent, which has no operations, was in
bankruptcy reorganization in Mexico.  The parent's plan purported
to reduce the non-bankrupt subsidiaries' guarantees on the
defaulted bonds.  In state court, the trial judge ruled in favor
of bondholders and held the subsidiaries liable on their
guarantees of the debt.

According to the report, the ruling was upheld by the Appellate
Division, First Department in Manhattan, an intermediate state
appellate court.  The appeals court, in a unanimous opinion,
rejected Vitro's argument that New York courts should uphold the
Mexican court's ruling that reduced the subsidiaries' obligations
on the bonds.  The Appellate Division noted how the subsidiaries
signed broad guarantees agreeing that the debt would be governed
by New York law while waiving "any rights under Mexican laws."

Mr. Rochelle notes that whether the bondholders can once and for
all block enforcement of rulings from Mexico will depend on the
outcome of two separate proceedings in federal courts.

The bondholders argued an appeal early this month in the U.S.
Court of Appeals in New Orleans, where the outcome conceivably
could block enforcement of the Mexican reorganization in the U.S.
A trial is scheduled June 4 in U.S. Bankruptcy Court in Dallas,
where the primary question will be the enforceability of the
Mexican reorganization in the U.S.

The state court appeal is Vitro SAB de CV v. Elliott International
LP, 652146/10, New York Appellate Division, 1st Department
(Manhattan). The suit in bankruptcy court to decided if the
Mexican reorganization will be enforced in the U.S. is Vitro SAB
de CV v. ACP Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S.
Bankruptcy Court, Northern District of Texas (Dallas).  The
bondholders' appeal in the circuit court is Ad Hoc Group of Vitro
Noteholders v. Vitro SAB de CV (In re Vitro SAB de CV), 11-11239,
U.S. Court of Appeals for the Fifth Circuit (New Orleans). The
bondholders' appeal of Chapter 15 recognition in district court is
Ad Hoc Group of Vitro Noteholders v. Vitro SAB de CV (In re Vitro
SAB de CV), 11-02888, U.S. District Court, Northern District of
Texas (Dallas).

                         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.


VITRO SAB: Scores Two Victories Over Bondholders in Mexico
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vitro SAB de CV won two victories over bondholders in
courts in Mexico:

   (i) An appellate court in Monterrey, Mexico, upheld a ruling by
       a lower court that dismissed 18 involuntary bankruptcy
       petitions the bondholders filed against Vitro and
       subsidiaries.  Vitro says that the appellate court is
       requiring the bondholders to reimburse the company for its
       legal expenses.

  (ii) Another court in Mexico denied a challenge the bondholders
       raised to the constitutionality of the Mexico's new
       bankruptcy law.

According to the Mr. Rochelle, in the U.S., the bondholders won a
victory on May 11 when the U.S. bankruptcy judge in Dallas refused
a request by Vitro to delay a pivotal trial on whether the glass
maker's Mexican reorganization will be enforced in the U.S.
Bondholders also won a victory last week when a state appellate
court upheld the liability of Vitro subsidiaries to stand
behind their guarantees on the bonds.

The suit in bankruptcy court to decided if the Mexican
reorganization will be enforced in the U.S. is Vitro SAB de CV
v. ACP Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S.
Bankruptcy Court, Northern District of Texas (Dallas). The
bondholders' appeal in the circuit court is Ad Hoc Group of
Vitro Noteholders v. Vitro SAB de CV (In re Vitro SAB de CV),
11-11239, 5th U.S. Circuit Court of Appeals (New Orleans). The
bondholders' appeal of Chapter 15 recognition in district court
is Ad Hoc Group of Vitro Noteholders v. Vitro SAB de CV (In re
Vitro SAB de CV), 11-02888, U.S. District Court, Northern
District of Texas (Dallas).

                        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.


WESTLAKE CHEMICAL: Moody's Confirms 'Ba3' CFR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service confirmed the Baa3 debt ratings of
Westlake Chemical Corporation and the ratings (Ba3 Corporate
Family Rating) of Georgia Gulf Corporation (GGC) following
Westlake's announcement that it would no longer pursue the
unsolicited offer that it initially made to acquire GGC in
January. The outlook for both companies is stable.

Moody's views the bid for GGC as a unique strategic opportunity
that could have provided significant synergies. However, the
acquisition, if financed entirely with debt, would have weakened
the credit metrics supporting Westlake's investment grade rating.
Furthermore, Westlake's rating does not incorporate the potential
for another transaction of more than $1 billion at the current
time given the high level of capital spending that is anticipated
to fund its future growth.

Ratings Confirmed:

  Issuer: Westlake Chemical Corporation

    Senior Unsecured Regular Bond/Debenture at Baa3

  Issuer: Louisiana Loc Govt Envir Fac & Comm Dev Auth

    Senior Unsecured Revenue Bonds at Baa3

    Senior Unsecured Revenue Bonds at Baa3

  Issuer: Georgia Gulf Corporation

     Probability of Default Rating at Ba3

     Corporate Family Rating at Ba3

     Senior Secured Regular Bond/Debenture at B1

Outlook Actions:

  Issuer: Westlake Chemical Corporation

     Outlook, Changed to Stable from Rating Under Review

  Issuer: Georgia Gulf Corporation

    Outlook, Changed to Stable from Rating Under Review

Ratings assigned:

  Issuer: Georgia Gulf Corporation

   Speculative Grade Liquidity Rating at SGL -- 1

Ratings Rationale

Westlake's Baa3 senior unsecured rating reflects its strong
financial metrics and liquidity profile, disciplined investment
policy, vertical integration, and less commoditized downstream
plastics portfolio (large percentage of LDPE and more specialized
plastics relative to other producers). The ratings are tempered by
its exposure to volatile feedstock and selling prices, the large
capital requirements necessary to build new ethylene or chlor
alkali capacity, limited product diversity, its size relative to
other commodity plastics producers, the regional nature of its
operations, and the limited number and location of its production
facilities. The key ratings drivers are the company's conservative
fiscal policies and the sustainability of the current Gulf Coast
feedstock advantage relative to key export markets (Asia & South
America).

Georgia Gulf's Ba3 Corporate Family Rating (CFR) reflects its
strong financial metrics, the sustainable expansion of the US
export market for PVC and benefit from restructuring programs
initiated during the downturn. The improvement in the U.S. PVC
market should allow the company to maintain healthy margins and
keep PVC and chlor alkali production near capacity over the next
several years. The improvement in the export market for PVC
provides a stark contrast to domestic demand, which remains
depressed relative to levels experienced prior to the financial
crisis.

GGC's strong financial performance is tempered by its narrow
product portfolio, limited operational and geographic diversity
(four commodity facilities on the Gulf Coast), substantial
exposure to the North American housing market, exposure to
volatile petrochemical feedstocks (ethylene, propylene and
benzene) and the seasonality of its building products business.
While credit metrics are stronger than the CFR would imply,
Moody's believes there is some uncertainty over the base level of
profitability in the chlorovinyls segment by 2014. If reported
EBITDA is sustainable in the $300 million range in 2015, then
there would be further upside to the rating. LTM March 31, 2012
financial metrics were 2.9x Debt/EBITDA and Retained Cash
Flow/Debt of 22%.

Moody's assigned a SGL-1 Speculative Grade Liquidity rating to
GGC. Its liquidity is supported by its cash flow from operations,
$39 million of cash balances, and $258 million of availability
under its $300 million ABL revolver.

Westlake Chemical Corporation, headquartered in Houston, TX, is a
producer of commodity petrochemicals (ethylene and styrene),
plastics (polyvinyl chloride and polyethylene), as well as
compounded PVC resins and fabricated PVC products (window and door
profiles, siding, etc.). Revenues were $3.8 billion for the LTM
ended March 31, 2012.

Georgia Gulf Corporation (GGC), headquartered in Atlanta, Georgia,
is a producer of commodity chemicals including chlorovinyls
(chlorine, caustic soda, vinyl chloride monomer, polyvinyl
chloride resins and vinyl compounds), PVC fabricated products
(pipe, siding, window profiles, moldings, etc.), and aromatics
(cumene, phenol and acetone). The company generated
revenues of $3.3 billion for the LTM ended March 31, 2012.


WHITETAIL WOODS: Marine Bank Wins Dismissal of Bankruptcy Case
--------------------------------------------------------------
Bankruptcy Judge Susan V. Kelley dismissed the Chapter 11 case of
Whitetail Woods, LLC, at the behest of Marine Bank n/k/a CIBM
Bank.  The judge noted that the Debtor is using the Chapter 11
case to obtain a stay pending an appeal in state court over a
dispute with the bank, which has sought a receiver for the
Debtor's property.  "This is an inappropriate use of Chapter 11,
and the Debtor's dispute with the Bank should return to the State
Court," Judge Kelley said.

The Debtor owns one uninhabitable partially completed ranch home
and some vacant lots.  The Court noted all of the assets were
transferred to the Debtor by another entity owned by William Fine.

The Debtor's petition states that it is a small business debtor;
this designation later was amended and removed.  The Debtor's
attorney's employment was not approved for over 60 days after the
case was filed because of defects in his application papers.  The
Debtor had not filed an operating report since a late report filed
Jan. 20, 2012.  On April 19, 2012, it filed three monthly
operating reports, each showing that the Debtor is conducting no
business whatsoever and merely is accruing legal and other fees.

A copy of the Court's May 10, 2012 Memorandum Decision is
available at http://is.gd/3o7pQzfrom Leagle.com.

Whitetail Woods, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D.
Wis. Case No. 11-37946) on Dec. 2, 2011, estimating under $1
million in assets and debts.  Joseph W. Seifert, Esq., at Seifert
Law Office, serves as the Debtor's bankruptcy counsel.


Z TRIM HOLDINGS: Sells 744,711 Shares to Brightline for $1.1MM
--------------------------------------------------------------
Z Trim Holdings, Inc., on May 8, 2012, entered into a private
placement subscription agreement with Brightline Ventures I-B,
LLC, pursuant to which the Company sold 744,711 shares of common
stock, for a price of $1.50 per share and received gross proceeds
of $1,117,067.

The Subscription Agreement contains representations and warranties
that the parties made to, and solely for the benefit of, the other
in the context of all of the terms and conditions of the
Subscription Agreement and in the context of the specific
relationship between the parties.  The provisions of the
Subscription Agreement, including the representations and
warranties contained therein, are not for the benefit of any party
other than the parties to that Subscription Agreement, and are not
intended as documents for investors and the public to obtain
factual information about the current state of affairs of the
parties to those documents and their agreements.

The Company expects to use these proceeds from the sale of the
Common Stock, net of transaction expenses, for general corporate
purposes, including working capital.

                            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.


* S&P: Global Default Count Rises Over the Last Six Months
----------------------------------------------------------
Globally, 28 companies (23 public and five confidentially rated)
defaulted in the first quarter of 2012, said an article published
May 11 by Standard & Poor's Global Fixed Income Research, titled
"Global Corporate Quarterly Default Update And Rating
Transitions."

The volume of rated debt affected by defaulters in the first
quarter was $31.7 billion.

Of the 28 defaulted entities, 15 were domiciled in the U.S., two
were in China and Israel, and one each was from Bahrain, Brazil,
Canada, Indonesia, Ireland, Japan, Mexico, Switzerland, and the
U.K.

On a trailing-12-month basis, the global speculative-grade default
rate as of March 2012 was 2.4%, up from 1.7% at the end of
December 2011 and 2.1% as of March 2011.  The default rate --
while historically low -- has been increasing over the last seven
months to more than 2% currently.

"Overall, credit volatility, in our view, has been increasing over
the last six months because the number of downgrades has increased
across all regions," said Diane Vazza, head of Standard & Poor's
Global Fixed Income Research.  The downgrade-to-upgrade ratio rose
to 1.64% in first-quarter 2012 from 1.51% in the previous quarter
and 1.12% in the same period the previous year.  The increase from
the previous quarter is the result of a slight decrease in
upgrades -- to 2.52% from 4.41% -- along with a decrease in
downgrades -- to 4.14% from 6.63%.

By rating category, default activity over the past four quarters
relative to long-term averages indicates a prolonged period of
favorable lending conditions globally.  Even the 'CCC'/'C' rating
category had a default rate over the past four quarters that was
almost four percentage points lower than its long-term average.

"An analysis of the transition rates during the four quarters
ended March 31, 2012, suggests that ratings behavior remains
consistent with long-term trends," said Ms. Vazza.  "This shows a
clear negative correspondence between credit quality and default
probability, in our opinion."


* Junk Default Rates Increase Fractionally in April
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that according to a May 7 report from Moody's Investors
Service, defaults among junk-rated companies inched up in April,
although not enough to presage an upsurge in major corporate
bankruptcies.  The worldwide default rate on junk-rated companies
rose in April to 2.6% from 2.5% in March.  In the U.S., the junk
default rate for April was 3%, compared with 2.9% in March. This
time last year, the comparable U.S. default rate was 2.6%.  By
dollar volume, default rates are even lower. In the U.S., the
default rate on junk debt was unchanged in April at 1.5%. Last
year at this time, the comparable default rate was 1.4%, Moody's
said.

According to Mr. Rochelle, one statistic pointing toward
increasing trouble is Moody's index measuring the percentage of
companies with debt trading at distress levels. The distress index
in April was 17%, up from 6% a year ago. The April distress index
was down from 17.2% in March, Moody's said. Debt is considered
distressed if the yield is 10 percentage points more than
comparable Treasury securities.  Moody's predicts that the junk
default rate will rise to 3.1% by the end of 2012, before
declining to 2.8% by April 2013, still below the average default
rate of 4.8% since 1983.


* Large Bank Stress Testing Guidance Finalized
----------------------------------------------
The Federal Reserve Board, the Office of the Comptroller of the
Currency, and the Federal Deposit Insurance Corporation on Monday
issued final supervisory guidance regarding stress-testing
practices at banking organizations with total consolidated assets
of more than $10 billion.

The guidance highlights the importance of stress testing at
banking organizations as an ongoing risk management practice that
supports a banking organization's forward-looking assessment of
its risks and better equips it to address a range of adverse
outcomes. The recent financial crisis underscored the need for
banking organizations to incorporate stress testing into their
risk management practices, demonstrating that banking
organizations unprepared for particularly adverse events and
circumstances can suffer acute threats to their financial
condition and viability.

This guidance builds upon previously issued supervisory guidance
that discusses the uses and merits of stress testing in specific
areas of risk management. The guidance outlines general principles
for a satisfactory stress testing framework and describes various
stress testing approaches and how stress testing should be used at
various levels within an organization. The guidance also discusses
the importance of stress testing in capital and liquidity planning
and the importance of strong internal governance and controls as
part of an effective stress-testing framework.

The guidance does not implement the stress testing requirements in
the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) or in the Federal Reserve Board's capital plan
rule that apply to certain companies, as those requirements have
been or are being implemented through separate proposals by the
respective agencies. However, the agencies expect that banking
organizations with total consolidated assets of more than $10
billion would follow the principles set forth in the guidance --
as well as other relevant supervisory guidance -- when conducting
stress testing in accordance with the Dodd-Frank Act, the capital
plan rule, and other statutory or regulatory requirements.


* Large Companies With Insolvent Balance Sheets
-----------------------------------------------

                                               Total
                                              Share-      Total
                                  Total     Holders'    Working
                                 Assets       Equity    Capital
  Company           Ticker         ($MM)        ($MM)      ($MM)
  -------           ------       ------     --------    -------
ABSOLUTE SOFTWRE    ABT CN        125.3         (7.2)      10.8
ACCO BRANDS CORP    ABD US      1,116.7        (61.9)     316.8
AMC NETWORKS-A      AMCX US     2,183.9     (1,037.0)     525.8
AMER AXLE & MFG     AXL US      2,328.7       (419.6)     187.0
AMER RESTAUR-LP     ICTPU US       33.5         (4.0)      (6.2)
AMERISTAR CASINO    ASCA US     2,012.0        (90.6)     (33.0)
AMYLIN PHARM INC    AMLN US     1,870.2       (138.7)     125.2
ANOORAQ RESOURCE    ARQ SJ        893.0       (191.0)      24.6
ARRAY BIOPHARMA     ARRY US        82.2       (127.2)     (15.1)
AUTOZONE INC        AZO US      6,056.5     (1,295.5)    (608.2)
BAZAARVOICE INC     BV US          46.8        (15.4)     (18.2)
BOSTON PIZZA R-U    BPF-U CN      146.9       (105.3)      (2.0)
CABLEVISION SY-A    CVC US      7,143.3     (5,560.3)    (240.5)
CAPMARK FINANCIA    CPMK US    20,085.1       (933.1)       -
CARMIKE CINEMAS     CKEC US       422.9         (5.6)     (33.4)
CC MEDIA-A          CCMO US    16,542.0     (7,471.9)   1,556.3
CENTENNIAL COMM     CYCL US     1,480.9       (925.9)     (52.1)
CERES INC           CERE US        33.1        (13.7)      12.0
CHENIERE ENERGY     CQP US      1,737.3       (545.0)      57.7
CHENIERE ENERGY     LNG US      2,915.3       (173.0)       6.5
CHOICE HOTELS       CHH US        447.7        (25.6)      10.2
CIENA CORP          CIEN US     1,918.3        (21.1)     918.6
CINCINNATI BELL     CBB US      2,714.7       (715.2)     (35.4)
CLOROX CO           CLX US      4,290.0       (199.0)    (289.0)
CROWN HOLDINGS I    CCK US      6,868.0       (239.0)     318.0
DEAN FOODS CO       DF US       5,754.4        (98.7)     220.8
DELTA AIR LI        DAL US     43,499.0     (1,396.0)  (4,972.0)
DENNY'S CORP        DENN US       350.5         (9.7)     (25.9)
DIRECTV-A           DTV US     18,423.0     (2,842.0)    (502.0)
DISH NETWORK-A      DISH US    11,470.2       (419.0)     527.3
DISH NETWORK-A      EOT GR     11,470.2       (419.0)     527.3
DOMINO'S PIZZA      DPZ US        480.5     (1,209.7)     129.7
DUN & BRADSTREET    DNB US      1,977.1       (740.2)    (226.6)
FREESCALE SEMICO    FSL US      3,415.0     (4,480.0)   1,432.0
GENCORP INC         GY US         931.2       (189.7)     108.9
GLG PARTNERS INC    GLG US        400.0       (285.6)     156.9
GLG PARTNERS-UTS    GLG/U US      400.0       (285.6)     156.9
GOLD RESERVE INC    GRZ US         78.3        (25.8)      56.9
GOLD RESERVE INC    GRZ CN         78.3        (25.8)      56.9
GRAHAM PACKAGING    GRM US      2,947.5       (520.8)     298.5
HCA HOLDINGS INC    HCA US     26,898.0     (7,014.0)   1,679.0
HUGHES TELEMATIC    HUTC US        94.0       (111.8)     (39.0)
HUGHES TELEMATIC    HUTCU US       94.0       (111.8)     (39.0)
INCYTE CORP         INCY US       329.0       (227.1)     175.2
IPCS INC            IPCS US       559.2        (33.0)      72.1
ISTA PHARMACEUTI    ISTA US       153.1        (49.1)       2.3
JUST ENERGY GROU    JE US       1,644.4       (394.5)    (338.4)
JUST ENERGY GROU    JE CN       1,644.4       (394.5)    (338.4)
LIN TV CORP-CL A    TVL US      1,077.7        (80.9)      56.6
LIZ CLAIBORNE       LIZ US        950.0       (109.0)     124.8
LORILLARD INC       LO US       3,008.0     (1,513.0)   1,079.0
MARRIOTT INTL-A     MAR US      5,910.0       (781.0)  (1,234.0)
MEAD JOHNSON        MJN US      2,766.8       (168.0)     689.6
MERITOR INC         MTOR US     2,553.0       (983.0)     180.0
MERRIMACK PHARMA    MACK US        85.3        (21.7)      39.4
MONEYGRAM INTERN    MGI US      5,175.6       (110.2)     (40.4)
MOODY'S CORP        MCO US      2,876.1       (158.4)     290.4
NATIONAL CINEMED    NCMI US       820.2       (346.8)      68.4
NAVISTAR INTL       NAV US     11,503.0       (190.0)   2,238.0
NEXSTAR BROADC-A    NXST US       595.0       (183.4)      39.6
NPS PHARM INC       NPSP US       214.0        (46.1)     156.0
NYMOX PHARMACEUT    NYMX US         6.4         (5.2)       2.9
OMEROS CORP         OMER US        27.0         (5.6)       7.0
OTELCO INC-IDS      OTT US        317.7        (12.4)      18.6
OTELCO INC-IDS      OTT-U CN      317.7        (12.4)      18.6
PALM INC            PALM US     1,007.2         (6.2)     141.7
PARABEL INC         PABL US        11.2        (81.8)     (83.2)
PDL BIOPHARMA IN    PDLI US       269.5       (204.3)     100.5
PLAYBOY ENTERP-A    PLA/A US      165.8        (54.4)     (16.9)
PLAYBOY ENTERP-B    PLA US        165.8        (54.4)     (16.9)
PRIMEDIA INC        PRM US        208.0        (91.7)       3.6
PROTECTION ONE      PONE US       562.9        (61.8)      (7.6)
QUALITY DISTRIBU    QLTY US       302.4       (106.2)      45.8
REGAL ENTERTAI-A    RGC US      2,341.3       (572.5)       2.8
RENAISSANCE LEA     RLRN US        57.0        (28.2)     (31.4)
RENTECH NITROGEN    RNF US        152.4        (76.1)     (32.3)
REVLON INC-A        REV US      1,157.1       (692.9)     183.3
RSC HOLDINGS INC    RRR US      3,141.0        (38.4)      (1.0)
RURAL/METRO CORP    RURL US       303.7        (92.1)      72.4
SALLY BEAUTY HOL    SBH US      1,792.7       (168.5)     482.3
SINCLAIR BROAD-A    SBGI US     1,571.4       (111.4)      14.1
SINCLAIR BROAD-A    SBTA GR     1,571.4       (111.4)      14.1
SUN COMMUNITIES     SUI US      1,368.0       (100.7)       -
TAUBMAN CENTERS     TCO US      3,336.8       (256.2)       -
THERAVANCE          THRX US       258.8        (87.1)     199.3
UNISYS CORP         UIS US      2,612.2     (1,311.0)     487.3
VECTOR GROUP LTD    VGR US        927.8        (89.0)     194.5
VERISIGN INC        VRSN US     1,856.2        (88.1)     788.9
VERISK ANALYTI-A    VRSK US     1,541.1        (98.5)     104.0
VIRGIN MOBILE-A     VM US         307.4       (244.2)    (138.3)
WEIGHT WATCHERS     WTW US      1,121.6       (409.8)    (279.7)


                            *********

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.


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