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         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Wednesday, May 16, 2012, Vol. 16, No. 135

                            Headlines

AEROFLEX INCORPORATED: Moody's Affirms 'B1' CFR; Outlook Stable
ALERE INC: Moody's Says Potential Recall Credit Negative
ALION SCIENCE: Incurs $10.2 Million Net Loss in First Quarter
ALLIED DEFENSE: Has $44.03 Million Net Assets in Liquidation
AMERICAN AIRLINES: To Consider Merger Among Restructuring Options

AMERICAN AIRLINES: Unions Oppose Sec. 1113 Bid to Reject CBAs
AMERICAN AIRLINES: U.S. Trustee Forms Retiree Committee
AMERICAN AIRLINES: Court Sets July 16 as Claims Bar Date
ANTS SOFTWARE: Russell Ivy Appointed as Director
APPLETON PAPERS: Files Form 10-Q, Incurs $64.5MM Net Loss in Q1

AVANTAIR INC: Incurs $1.1 Million Net Loss in March 31 Quarter
B-VV2 LLC: Voluntary Chapter 11 Case Summary
BENEDICT COLLEGE: Moody's Affirms 'B3' Rating on Revenue Bonds
BHAGAT PARKASH: Case Summary & 10 Largest Unsecured Creditors
BILLMYPARENTS INC: Incurs $3.2 Million Net loss in March 31 Qtr.

BIOFUEL ENERGY: Incurs $11.1 Million Net Loss in First Quarter
BOEGER LAND: Case Summary & 12 Largest Unsecured Creditors
CAGLE'S INC: Koch Foods Buys Business for $69.5-Mil. Minimum
CATASYS INC: Deregisters 7.7 Million Common Shares
CDC CORP: Wants Automatic Stay on Evolution SV Suit

COMPOSITE TECHNOLOGY: Plan Exclusivity Period Extended to June 6
CONSOLIDATED COMMS: Moody's Rates $350MM Sr. Note Offering 'B3'
CONTOUR MED: Case Summary & 20 Largest Unsecured Creditors
CUMULUS MEDIA: Seven Directors Elected at Annual Meeting
DIALOGIC INC: Incurs $14.1 Million Net Loss in First Quarter

EASTMAN KODAK: Court Sets July 17 as Claims Bar Date
EASTMAN KODAK: Altek Corp. Named to Creditors Committee
EASTMAN KODAK: U.S. Trustee Forms 7-Member Retirees Committee
EASTMAN KODAK: Wins Approval to Prosecute Suit vs. Shutterfly
EURAMAX INTERNATIONAL: Incurs $8.1 Million Net Loss in Q1

FALCONBRIDGE ENTERPRISES: Case Summary & 5 Largest Unsec Creditors
FLINT ENERGY: Moody's Hikes Sr. Unsecured Notes Rating From 'B2'
FLORENCE HOSPITAL: Voluntary Chapter 11 Case Summary
FRANKLIN CREDIT: Incurs $17.1 Million Net Loss in First Quarter
FSJ LLC: Case Summary & 12 Largest Unsecured Creditors

GATEWAY HOTEL: Has Continued Cash Collateral Access Until May 31
HARLAND CLARKE: Moody's Assigns 'B1' Senior Secured Note Rating
HAWKER BEECHCRAFT: Akin Gump to Represent Creditors' Committee
HOMELAND SECURITY: Incurs $119,000 Net Loss in First Quarter
HOMELAND SECURITY: YA Global Forbearance Extended to June 29

HOUGHTON LAKE: Case Summary & 17 Largest Unsecured Creditors
HUDBAY MINERALS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
INFUSYSTEM HOLDINGS: Ryan Morris Discloses 7.4% Equity Stake
INTERLEUKIN GENETICS: Incurs $1.4MM Net Loss in First Quarter
INTERNATIONAL TEXTILE: Incurs $22.5 Million Net Loss in Q1

IRVINE SENSORS: Incurs $11.3 Million Net Loss in April 1 Quarter
ISTAR FINANCIAL: Closes Sale of $275 Million 9% Senior Notes
KAISER ALUMINUM: Moody's Rates Sr. Notes 'Ba3'; Outlook Stable
KAKALIA HOSPITALITY: Case Summary & 17 Largest Unsecured Creditors
KODIAK OIL: Moody's Rates $100MM Senior Unsecured Notes 'Caa1'

LEVI STRAUSS: Closes Private Placement of $385MM Senior Notes
LIGHTSQUARED INC: Lender Group Wants Credit Bid Rights
LIGHTSQUARED INC: Wants to Use Lenders' Cash Collateral
LIGHTSQUARED INC: Seeks Extension of Schedules Filing Deadline
LODGENET INTERACTIVE: Douglas Bradbury Named Board Chairman

LYNWOOD HALL: Chapter 12 Estates Not Taxable Entities
MARCO POLO: Committee's Investigation Period Expires Until May 17
MOLYCORP INC: Moody's Assigns 'B3' CFR/PDR; Outlook Stable
MSR RESORT: Hilton Beats Paulson on Ditching Management Deals
NEBRASKA BOOK: M. Oppegard Retires; B. Major Succeeds as CEO

NEENAH PAPER: Bond Redemption No Impact on Moody's 'Ba3' Rating
NEW GUINEA GOLD: Provides Default Status Update
NEW SPECTRUM: Case Summary & Largest Unsecured Creditor
NEWPAGE CORP: Lawyers from Dewey Move to Proskauer Rose
NYTEX ENERGY: Disposes of New Francis for $62.5 Million

OPTIMUMBANK HOLDINGS: Incurs $582,000 Net Loss in First Quarter
OPTIMUMBANK HOLDINGS: Closes Sale of Add'l 4.1MM Common Shares
OSI RESTAURANT: Reports $61.9 Million Net Income in First Quarter
OTTILIO PROPERTIES: Voluntary Chapter 11 Case Summary
PACER MANAGEMENT: U.S. Trustee Appoints 3-Member Creditors' Panel

PACER MANAGEMENT: Files Amended List of Largest Unsec. Creditors
PACER MANAGEMENT: Proposes to Pay Trade Vendors & Contractors
PACER MANAGEMENT: Will Have Patient Care Ombudsman
PACER MANAGEMENT: Gets Court Okay to Hire DelCotto Law Group
PACER MANAGEMENT: Wants to Hire FK Perkins as Accountant

PACIFIC 18: Case Summary & 14 Largest Unsecured Creditors
PARADISE HOSPITALITY: Has Control of Case Until Aug. 21
PENN TREATY: Court Denies Petitions to Liquidate 2 LTCI Companies
PFI HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors
PINNACLE AIRLINES: Amends One Loan, Faces Objection to Second

PINNACLE AIRLINES: Pabrai Investment NO Longer Owns Shares
PJ FINANCE: Gaia and Starwood Capital Invest $22.5 Million
PLY GEM HOLDINGS: Incurs $25.6 Million Net Loss in First Quarter
QR ENERGY: Moody's Assigns 'B2' CFR, Rates $300MM Sr Notes 'Caa1'
QUALITY DISTRIBUTION: Inks Consulting Pacts with Rodne & Bice

REAL ESTATE ASSOCIATES: Incurs $213,000 Net Loss in Q1
REDDY ICE: Judge Denies Official Equity Committee
REDDY ICE: Wants Settlement With Purchasers Class Approved
REDDY ICE: Has $44.3 Million Net Loss in First Quarter
REDDY ICE: Court OKs Rejection of Macquarie Capital Agreement

REDDY ICE: Gets Final OK to Incur $70MM Loan from Macquarie Bank
RESIDENTIAL CAPITAL: Meeting to Form Creditors' Panel Today
RESIDENTIAL CAPITAL: Fitch Lowers IDR to 'D' on Bankruptcy Filing
RESIDENTIAL CAPITAL: Talcott Asks RMBS Clients to Accept Deal
RESIDENTIAL CAPITAL: 17 RMBS Holders Settle for $8.7-Bil. Claim

RESIDENTIAL CAPITAL: Sale to Make Nationstar Top Non-Bank Servicer
ROTECH HEALTHCARE: Delays Q1 Form 10-Q Due to Programming Error
RYLAND GROUP: Offering $200 of 1.625% Convertible Senior Notes
SAAB CARS: Ally Financial OK'd to Sell Motor Vehicle Inventory
SALEM, NJ: Moody's Assigns 'Ba3' Underlying Ratings to $3MM Bonds

SCOTTS MIRACLE-GRO: Moody's Affirms Ba2 CFR/PDR; Outlook Stable
SEALY CORP: Amends $100MM Credit Facility with JPMorgan, et al.
SHERIDAN GROUP: Incurs $166,000 Net Loss in First Quarter
SMF ENERGY: Section 341(a) Meeting Scheduled for May 23
SMF ENERGY: U.S. Trustee Forms 3-Member Creditors Committee

SMF ENERGY: Has OK to Hire Genovese Joblove & Battista as Counsel
SOLAR TRUST: Assets up for Auction on June 21
SOLYNDRA LLC: Says Ch. 7 Looms Without $3MM Extra DIP Financing
SOUTH BAY: Case Summary & 20 Largest Unsecured Creditors
SOUTHTOWNE APARTMENTS: Case Summary & Creditors List

STEREOTAXIS INC: Closes $18.5MM Private Placement Financings
STERLING SHOES: Provides Default Status Update
SUBURBAN BOWL: Case Summary & 6 Largest Unsecured Creditors
SUFFOLK REGIONAL: Chapter 9 Case Summary
THINGS REMEMBERED: Moody's Assigns 'B2' CFR; Outlook Stable

THOR INDUSTRIES: U.S. Trustee Fails to Appoint Creditors' Panel
THOR INDUSTRIES: Taps Souther & Newhouse as Accountant
TITAN PHARMACEUTICALS: Incurs $5.2MM Net Loss in First Quarter
TOUSA INC: Has Continued Access to Cash Collateral Until Oct. 31
TRAVELPORT HOLDINGS: Incurs $12 Million Net Loss in 1st Quarter

TRIAD GUARANTY: Incurs $37.7 Million Net Loss in First Quarter
TRONOX INC: Trial Against Kerr-McGee Begins
UNITED MARITIME: Moody's Says Dry Bulk Terminal Sale Credit Pos.
UNIVERSITY GENERAL: Swings to $489,000 Net Income in Q1
US XPRESS: Credit Amendment No Impact on Moody's 'B3' CFR

USEC INC: Gets Continued Listing Standards Notice From NYSE
WAVE SYSTEMS: Incurs $8.3 Million Net Loss in First Quarter
WENATCHEE, WASH: Moody's Lowers Unlimited Tax G.O. Rating to 'B2'

* Supreme Court Rules Farmers Must Pay Bankruptcy Tax
* 11th Circuit Permits Subordinate Mortgage Strip Off
* Chapter 7 Trustees Not Paid when Filing Fee Waived

* Moody's Says Mid-Tier Mattress Brands Lag High-End Peers
* Moody's Says Ba-Rated Healthcare Firms Likely to Pay Dividends
* Moody's Says SIFI Designation Still Unclear for Asset Managers

* Cassel Salpeter & Co. Names Philip Cassel Associate

* Upcoming Meetings, Conferences and Seminars

                            *********

AEROFLEX INCORPORATED: Moody's Affirms 'B1' CFR; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service affirmed Aeroflex Incorporated's
Corporate Family Rating and Senior Secured Credit Facility rating
at B1 and lowered the Speculative Grade Liquidity Rating (SGL) to
SGL-3 from SGL-2. This follows Aeroflex's announcement that it is
seeking an amendment to the Maximum Total Leverage Ratio covenant
levels governing its credit facility. The rating outlook is
stable.

The requested amendment is motivated by lower-than-expected demand
for Aeroflex's wireless handset emulation products used to test
mobile devices based on 4G next-generation technologies using the
Long Term Evolution (LTE) protocol. LTE network deployment has
been slower than the industry's initial estimates because mobile
service providers have not spent aggressively to build-out their
4G/LTE networks. Aeroflex is also experiencing a greater-than-
expected delay in certain government programs that are now likely
to be stretched out over a multi-year period. This will result in
EBITDA that is expected to be lower than originally planned,
making the leverage covenant levels tighter than envisioned when
the covenants were initially set.

Nevertheless, the continuing growth in data traffic is straining
wireless networks, prompting some providers to make the
significant investment in LTE network infrastructure. Moody's
believes that the resulting availability of LTE network coverage
will encourage handset makers to produce LTE-based handsets in
large quantities, which should increase demand for Aeroflex's
handset testing equipment over the next few years. This should
provide for a recovery in EBITDA and free cash flow, reducing
leverage to levels more appropriate for the B1 rating category.
Moody's expects leverage to be rise to about 5.5x debt to EBITDA
(Moody's adjusted) by fiscal 2012 (June fiscal year end) and then
decline to under 5x by fiscal 2013.

The following ratings were affirmed (LGD assessments revised):

Corporate Family Rating at B1

Probability of Default Rating at B2

Senior Secured Credit Facility at B1 (LGD3-34%)

The following rating was downgraded:

Speculative Grade Liquidity, lowered to SGL-3 from SGL-2

Ratings Rationale

The B1 Corporate Family Rating (CFR) reflects Aeroflex's
relatively high financial leverage given the company's exposure to
the volatile wireless and networking markets and to government
policy-dependent aerospace and defense electronics end markets.
The rating also reflects Aeroflex's modest scale and its limited
asset protection provided by its small base of tangible assets.

The rating also reflects Aeroflex's strong negotiating leverage as
the primary supplier to customers in certain niche markets, backed
by its strong intellectual property portfolio (such as its
radiation hardened technologies) and its diversified revenue base
with no specific defense platform exposure. Aeroflex's products
are generally mission-critical and have high switching costs,
limiting competitive threats. Moreover, these business
characteristics, combined with the fabless operating model, allow
Aeroflex to produce high and relatively stable gross margins in
excess of 50% and consistent positive free cash flow.

The stable outlook reflects Moody's expectation that Aeroflex will
not use the added covenant level cushion to engage in acquisitions
or to provide returns to the equityholders, but will instead
adhere to its stated intention to aggressively reduce debt.
Moody's expects that through a combination of debt paydown and
EBITDA growth that Aeroflex will reduce debt to EBITDA (Moody's
adjusted) to under 5x over the next year.

Ratings could be downgraded if Moody's believes that Aeroflex's
competitive position is eroding or the company's negotiating
leverage is weakening, resulting in a revenue growth trailing the
industry average and a sustained contraction in gross and
operating margins. The ratings could also be downgraded if
Aeroflex were to pursue shareholder-friendly financial policies or
a generally more aggressive acquisition profile or if Aeroflex did
not make steady progress on reducing debt to EBITDA (Moody's
adjusted) to under 5x by fiscal 2013.

Aeroflex's ratings could be upgraded if credit metrics materially
improve, the company grows organically faster than the market
through successful product development, and diversifies into other
markets such that Moody's believes that Aeroflex will maintain
debt to EBITDA (Moody's adjusted) under 3x on a sustained basis.

The principal methodology used in rating Aeroflex was the Global
Semiconductor Industry Methodology published in November 2009.
Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
in June 2009.

Aeroflex, based in Plainview, New York, is a fabless specialty
provider of microelectronics and test and measurement products to
the aerospace, defense, wireless, broadband, and medical markets.


ALERE INC: Moody's Says Potential Recall Credit Negative
--------------------------------------------------------
Medical device maker Alere, Inc. said on May 10 that the FDA had
raised certain issues regarding labeling and quality control
release method for certain of its Triage products. This
announcement is credit negative as it may result in a possible
product recall. Alere also announced that it received a subpoena
from the Department of Health and Human Services ("DHHS") seeking
documents related to quality control testing and performance
characteristics of these products. The announcement does not
currently affect Alere's B1 Corporate Family Rating, SGL-1
Speculative Grade Liquidity Rating, or stable outlook because the
scope or duration of any possible product shortages or adverse
regulatory actions by the FDA or DHHS remains uncertain at this
time.

The principal methodologies used in this rating were Global
Medical Products & Device Industry published in October 2009, and
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.

Alere, Inc., headquartered in Waltham, Massachusetts, operates in
health management, and professional and consumer diagnostics. The
health management business includes disease management, maternity
management, and wellness. Diagnostic products focus on infectious
disease, cardiology, oncology, diabetes, drugs of abuse and
women's health. Reported revenues for the twelve months ended
March 31, 2012 were approximately $2.5 billion.


ALION SCIENCE: Incurs $10.2 Million Net Loss in First Quarter
-------------------------------------------------------------
Alion Science and Technology Corporation filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $10.24 million on $197.11 million of
contract revenue for the three months ended March 31, 2012,
compared with a net loss of $9.66 million on $202.55 million of
contract revenue for the same period a year ago.

The Company also reported a net loss of $23.05 million on $387
million of contract revenue for the six months ended March 31,
2012, compared with a net loss of $20.79 million on $403.31
million of contract revenue for the same period during the prior
year.

The Company reported a net loss of $44.38 million for the year
ended Sept. 30, 2011, compared with a net loss of $15.23 million
during the prior year.

The Company's balance sheet at March 31, 2012, showed $632.08
million in total assets, $760.36 million in total liabilities,
$114.80 million in redeemable common stock, $20.78 million in
common stock warrants, and a $263.74 million accumulated deficit.

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

                        http://is.gd/zZJ4tC

                        About Alion Science

Alion Science and Technology Corporation, based in McLean,
Virginia, is an employee-owned company that provides scientific
research, development, and engineering services related to
national defense, homeland security, and energy and environmental
analysis.  Particular areas of expertise include communications,
wireless technology, netcentric warfare, modeling and simulation,
chemical and biological warfare, program management.

                            *     *     *

Alion carries 'Caa3' corporate family and probability of default
Ratings, with stable outlook, from Moody's.  Alion carries a 'B-'
corporate credit rating, with stable outlook, from Standard &
Poor's.  Moody's said in March 2010, "The Caa1 corporate family
rating would balance the continued high leverage against a
promising business backlog that could sustain the good 2009
revenue growth rate, though credit challenges would remain
pronounced."

As reported by the TCR on Sept. 8, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on McLean, Va.-based
Alion Science and Technology Corp. to 'CCC+' from 'B-'.  The
rating outlook is negative.

"The downgrade of Alion is a result of the company's recent
operational weakness," said Standard & Poor's credit analyst
Alfred Bonfantini, "and the prospect of further pressure on
revenues, which stem from the continuing resolution on the 2011
Federal government budget that wasn't settled until April 2011,
the subsequent specter of a U.S. government default during the
debt ceiling debate, and the ongoing uncertainty over future
budget cuts and levels."


ALLIED DEFENSE: Has $44.03 Million Net Assets in Liquidation
------------------------------------------------------------
The Allied Defense Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
$46.70 million in total assets, $2.67 million in total liabilities
and $44.03 million in net assets in liquidation.

The Company said it expects to use all of its net assets to
complete its Plan of Dissolution, which includes settling existing
claims against the Company, including current liabilities and
accrued expenses, and making cash liquidating distributions to the
Company's shareholders.

As of March 31, 2012, cash and cash equivalents increased by
approximately $12 million and short-term investments decreased by
the same amount from Dec. 31, 2011.  The shift between these asset
categories is the result of temporarily investing in institutional
money market funds which at that time provided a higher yield than
municipal bonds and certificates of deposit.

               Plan of Dissolution and Liquidation

On June 24, 2010, the Company signed a definitive purchase and
sale agreement with Chemring Group PLC pursuant to which Chemring
agreed to acquire substantially all of the assets of the Company
for $59.6 million in cash and the assumption of certain
liabilities.  On Sept. 1, 2010, the Company completed the asset
sale to Chemring contemplated by the Agreement.  Chemring acquired
all of the capital stock of Mecar for $45.8 million in cash, and
separately Chemring acquired substantially all of the assets of
Mecar USA for $13.8 million in cash and the assumption by Chemring
of certain specified liabilities of Mecar USA.

In conjunction with the Agreement, the Board of Directors of the
Company unanimously approved the dissolution of the Company
pursuant to a Plan of Complete Liquidation and Dissolution.  The
Company's stockholders approved the Plan of Dissolution on
Sept. 30, 2010.  The Company filed a Certificate of Dissolution
with the Delaware Secretary of State on Aug. 31, 2011.

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

                       http://is.gd/GUwWM0

                  About The Allied Defense Group

Vienna, Va.-based The Allied Defense Group, Inc. (OTCQB: ADGI)
-- http://www.allieddefensegroup.com/-- is a multinational
defense business focused on the manufacture and sale of ammunition
and ammunition related products for use by the U.S. and foreign
governments.  Allied's business is conducted by its two wholly
owned subsidiaries: Mecar S.A. and Mecar USA, Inc.  Mecar is
located in Nivelles, Belgium and Mecar USA is located in Marshall,
Texas.

The Company received a subpoena from the U.S. Department of
Justice on Jan. 19, 2010, requesting that the Company produce
documents relating to its dealings with foreign governments.  The
Company said it is unlikely that any distributions to stockholders
will be made until the matters relating to the DOJ subpoena have
been resolved.


AMERICAN AIRLINES: To Consider Merger Among Restructuring Options
-----------------------------------------------------------------
Jeffrey McCracken and Mary Schlangenstein of Bloomberg News,
citing people familiar with the matter, reported that AMR Corp.
will explore options that include a proposed sale under an the
agreement with the Official Committee of Unsecured Creditors.

In an announcement Friday, AMR said it has entered into an
agreement with the Creditors' Committee to complete joint
actions, including developing "potential consolidation
scenarios."  AMR clarified that the agreement is not an indication
that the company intends to pursue a transaction of any kind.

Bloomberg stated that the creditors' panel insisted on the accord
so that AMR's review of its options would include studying a
merger with US Airways Group, Inc., which has confirmed to be
proceeding with a takeover bid, said one of the people, who
declined to be named because of the private nature of the
discussions.

The people said the process would begin this summer, before AMR
and American Airlines' exclusive right to file a reorganization
plan expires in September, Bloomberg relayed.

AMR's recent announcement marks a shift from AMR Chief Executive
Officer Tom Horton's original goal for the company to exit
bankruptcy as an independent, stand-alone company before
considering a merger, Bloomberg noted.  Recently, that approach
has been under pressure after US Airways hired advisers, won
union support and began courting AMR's creditors, the report
said.

Beverly K. Goulet, AMR's Chief Restructuring Officer, Vice
President - Corporate Development and Treasurer, said, "The
purpose of this collaborative joint agreement with the Committee
is to reinforce and assure what we have stated before: what's
best for our company, our people and our financial stakeholders
will be determined by the facts in a disciplined manner and
process.  And this includes whether American will choose to
pursue any combination down the road."

"To be clear, American has committed to work in collaboration
with the Committee to develop only potential consolidation
scenarios and this agreement does not in any way suggest that a
transaction of any kind or with any particular party will be
pursued," Ms. Goulet reiterated AMR's position in the statement.

The joint collaborative agreement will assess "strategic
alternatives which the company's stand-alone business plan will
be vetted, counsel to the Creditors' Committee, John W. Butler,
Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago,
Illinois, said in a statement to Bloomberg.

"We are very pleased that the AMR management team and Board of
Directors have committed to a process to explore consolidation
scenarios that will enhance value for its stakeholders.  The
Unsecured Creditors Committee should be recognized for its
efforts and we look forward to working with the Committee in
the process going forward," according to US Airways' public
statement.

In the statement, US Airways maintained that a combination is in
the best interests of employees, customers and the communities of
both companies, as well as AMR's creditors and US Airways'
investors.  "We look forward to engaging in the AMR process to
demonstrate the significant advantages of our plan to maximize
value for all constituents."

                AMR Reveals Standalone Plan Details

Days before its announcement to consider potential consolidation
options, AMR outlined plans to expand its domestic flight by mid-
2014 and boost its international business as a stand-alone
company, Doug Cameron and Jack Nicas of The Wall Street Journal
reported.

The Journal said AMR is trying to convince creditors of the
viability of its standalone restructuring plan vis-a-vis a
potential takeover bid from US Airways.  The company has also
addressed criticism of its business plan, according to a letter
to AMR staff obtained by the Journal.

AMR is emulating United Continental Holdings Inc. and Delta Air
Lines by increasing international flights, which are typically
subject to less competition than domestic flights, the Journal
said.  Specifically, AMR aims to boost international routes to
44% of total capacity by 2017 compared to today's level of 38%,
still lower than levels at United and Delta but higher than that
at US Airways, the report noted.

The Journal said AMR's strategy contrasts with most rivals that
have restructured in bankruptcy protection and reduced flights,
though the company said its expanded service it would be focused
in the "back half" of a business plan running through 2017.  The
carrier also expects domestic capacity to remain flat until mid-
2014, mirroring efforts at other large airlines to generate
pricing power, the Journal said.

AMR's business plan that calls for a 20% increase in capacity
from its five U.S. hubs: New York, Los Angeles, Chicago, Miami
and Dallas-Fort Worth, drew criticism from industry analysts and
some insiders, the Journal noted.  The analysts commented that
the move is an expansion of a business strategy that has helped
the company lose billions of dollars over the past several years,
the report added.

                      About American Airlines

AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.

AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.

American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights.  The
combined network fleet numbers more than 900 aircraft.

The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011.  AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.

The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.

Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors.  Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel.  Rothschild
Inc., is the financial advisor.   Garden City Group Inc. is the
claims and notice agent.

Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings.  Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.

Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).


AMERICAN AIRLINES: Unions Oppose Sec. 1113 Bid to Reject CBAs
-------------------------------------------------------------
The Allied Pilots Association, the Transport Workers Union of
America and the Association of Professional Flight Attendants
submitted to Judge Sean H. Lane of the U.S. Bankruptcy Court for
the Southern District of New York memorandum opposing AMR Corp.
and American Airlines, Inc.'s request to reject collective
bargaining agreements pursuant to Section 1113 of the Bankruptcy
Code.

The unions insist that the modifications are not "necessary
modifications . . . that are necessary to permit reorganization"
of American as required by Section 1113(b)(1)(A).

The unions also filed briefs in response to the bench brief
presented by the Debtors on April 26, 2012, and in accordance
with the Court's suggestion.

A. APA

"The issue in this case is not whether American needs some
contract modifications and some reductions in labor costs to be
more competitive and emerge from bankruptcy," Filiberto Agusti,
Esq., at Steptoe & Johnson LLP, in Washington, DC., counsel to
the APA, tells the Court.

Mr. Agusti asserts that the pilots have not opposed changes; on
the contrary, the APA has proposed two alternative visions that
would enable American to restructure successfully, namely:

(1) the union has offered concessions in nearly every aspect of
   the parties' most recent agreement that, collectively, would
   save the Company $271 million per year -- over $10 million
   more per year than American has stated it needs to be
   competitive with its network airline peers; and

(2) the union has proposed a consolidation plan between American
   and US Airways that would allow American to address the
   fundamental, structural obstacles it faces in competing with
   the larger network carriers while requiring the pilots to
   sacrifice only $240 million per year -- $130 million per year
   less than what American demands as a standalone.

Nonetheless, American has refused to engage with the APA on
either of its alternative visions for how the Company can
successfully reorganize, Mr. Agusti avers.  Instead, the Company
"has stuck steadfastly to its non-negotiable demand for $370
million in annual concessions from the pilots, a figure rooted in
the hopes of achieving unprecedented profit levels through the
continuation of the Company's failed limp-along 'cornerstone'
strategy," he contends.

Against this backdrop, "The real issue before the Court is the
particular set of contract modifications demanded by the Company
-- which they have labeled their 'Section 1113 Term Sheet" and
that particular Restructuring Business Plan that drives the
Company's concession demands," Mr. Agusti maintains.

Contrary to the Debtors' assertion at the hearing, Mr. Agusti
clarifies that the APA does not contend that the Court should
"ignore" bargaining that took place between American Airlines and
its unions prior to the hearing.  Rather, the APA's position is
that the plan language of Section 1113 required the Company to
satisfy certain statutory requirements "before filing its March
27 application" to reject the collective bargaining agreements;
and to "continue meeting those statutory criteria, while
fulfilling certain additional requirements," between the March 27
filing date and the commencement of the hearing on April 23, he
emphasizes.

In an accompanying letter, the APA informed the Court that it has
redacted, or filed under seal information designated as
confidential information by the Debtors, as required by the
scheduling stipulation.  Although the APA does not object to the
majority of those designations as confidential information, the
union believes that some designated material does not qualify as
confidential information within the meaning of the applicable
protective orders.  The APA says it will meet and confer with the
Debtors to resolve those objections.

A full-text copy of the APA Memorandum is available for free
at http://bankrupt.com/misc/AmAir_APACBAMemo.pdf

B. APFA

APFA's counsel, Robert S. Clayman, Esq., at Guerrieri, Clayman,
Bartos & Parcelli, P.C., in Washington, D.C., outlines certain
facts that the Court should consider in resolving the Section
1113 disputes as to the union:

* Only American and its paid advisors support the current plan
  to emerge from bankruptcy as a stand-alone airline.  Wall
  Street analysts are virtually unanimous in their criticism and
  neither they nor the Official Committee of Unsecured Creditors
  endorse the business plan.

* The Company settled on the current stand-alone business plan
  without assessing the possibility of a merger or other
  transaction.  However, American announced recently that it
  would consider consolidation as an alternative to the
  stand-alone plan in conjunction with Creditors' Committee.

* Consolidation is not a theoretical exercise as US Airways has
  been pursuing a merger with American and has signed agreements
  with American's unions which would apply in the event the two
  carriers merge.

* After realizing that its stand-alone business plan was $1.25
  billion short of reaching an inordinately high EBITDAR target,
  American decided that employee concessions would fill that
  gap.

* American prepared its proposals to APFA and the other unions
  without considering whether the existing collective bargaining
  agreements are market competitive.  The Flight Attendants'
  contract will reach market rates within the next year.  If the
  Company imposes $230 million annually in changes, as it has
  proposed, the Flight Attendants' contract would fall 30%
  behind the market.

* For all other stakeholders -- suppliers, vendors, aircraft
  lessors, and even the employees of American Eagle -- the
  Debtors demand for concessions is based on market rates.

* The Company's Section 1113 proposal would cause the
  involuntary furlough of over 2000 Flight Attendants, cut
  Flight Attendants' take-home pay by an average of 16.9% (which
  is already 30% below their 2003 wages in real dollars), and
  make health benefits unaffordable for many Flight Attendants.

* On March 26, 2012 when the Company filed its Section 1113
  application, AMR had approximately $4.8 billion in cash.  The
  Company has not needed and is not expected to need debtor-in-
  possession financing during the bankruptcy.  Also, the Debtors
  will not determine whether exit financing, if any, is required
  until much closer to emergence from bankruptcy.

"Based on these and other related facts, American cannot satisfy
the standards or requirements of Section 1113.  Denial of the
motion would compel the Company to replace its current proposal
with one that conforms to the dictates of the statute," Mr.
Clayman asserts.  Should that occur, the likelihood of a
consensual agreement with APFA and, in turn, a successful
reorganization would be greatly enhanced, he says.

A full-text copy of the APFA Memorandum is available for free at:

         http://bankrupt.com/AmAir_APFACBAMemo.pdf

C. TWU

"The imposition of draconian modifications to the TWU CBAs that
will result in the loss of nearly 9,000 TWU jobs and a sub-
standard collective bargaining agreement is so excessive as to be
unconscionable," counsel to the union, Sharon K. Levine, Esq., at
Lowenstein Sandler PC stresses.  Of the purported $1.25 billion in
annual cost savings that American seeks to realize, $390 million
will be imposed on the TWU workforce through a combination of
measures that would decimate the workforce and, for those
fortunate enough to remain employed, significantly reduce
healthcare and other benefits and drive overall compensation
levels to the lowest in the industry, she avers.

"American seeks these excessive concessions without need as it
failed to first fully explore all of its restructuring options,
including consolidation or merger," Ms. Levine complains.  She
also argues that the Debtors' proposed financial targets are
premised on a faulty stand-alone business plan model that ignores
the consolidation that has taken place in the industry over the
past decade.  Indeed, the Debtors' contention that it is
necessary to obtain $1.25 billion in labor cost savings to
establish a profitable, competitive, and sustainable business is
not supported by the evidence, she points out.

Even assuming that $390 million in cost savings from the TWU are
somehow necessary, the modifications proposed by American are not
necessary to achieve that goal, Ms. Levine contends.  Viable
alternatives exist that could achieve sustainable cost savings in
the range sought by the Company without terminating nearly 9,000
members of the TWU workforce, she says.  But the Company rejected
these proposals.  "This effectively means that the Company is
seeking concessions with a value far greater than $390 million,"
she maintains.

In other matters, the proposal which should be considered for the
purpose of the Sec. 1113 trial is the last proposal made by the
Debtors prior to filing the motion to reject under Section 1113
(c), the TWU said.  In the case of the TWU, those would be the
proposals made on March 22, 2012 and which are described in all
of the Debtors' pleadings.

A TWU spokesman said information on AMR's offer has been sent in
early May with voting set to begin thereafter, Reuters reported.

A full-text copy of the TWU Memorandum is available for free at:

          http://bankrupt.com/AmAir_TWUCBAMemo.pdf

In a statement, the Creditors' Committee says, "The Debtors'
judgment to pursue Section 1113 relief is sound, and abrogation
of the CBAs is necessary to the Debtors' successful
reorganization on the current timetable so that the Debtors can
validate the assumptions in their stand-alone business plan.,
move forward to expeditiously compare that plan to available
strategic alternatives, and complete consensual agreements with
respect to whatever agreements remain outstanding at the time of
the Court's judgment."  Still, the Creditors' Committee remains
hopeful that the Debtors and each of the APA, APFA and TWU can
consensually resolve all of the attendant issues in the Section
1113 Motion.

                          *     *     *

AMR Labor Relations Chief Jeff Brundage said the concessions the
company asked of its unions before its bankruptcy filing would
not have "allowed us to be a viable enterprise," according to
Reuters.

Mr. Brundage, who testified in support of AMR's proposal to
reject CBAs, told the Court in April, that the company tried to
"limp along" by negotiating burdensome short-term labor deals
before deciding to file for bankruptcy, Reuters relayed.

The Company's goals shifted after it filed for Chapter 11
protection amidst criticism from labor unions that AMR demands
concessions since filing for bankruptcy have been unfairly steep,
Reuters disclosed, citing Mr. Brundage.

Mr. Brundage noted that before the bankruptcy, AMR's aim was to
keep its unions from striking and to avoid bankruptcy, the report
said.  Now in bankruptcy, "AMR is trying to hash out union
contracts that will allow it to become viable and profitable in
the long-term," Mr. Brundage continued, according to the report.

Mr. Brundage insisted that the pre-bankruptcy offers would not
have allowed the company to avoid bankruptcy, Reuters wrote.
Still, the labor relations chief is hopeful, "We hoped if we
could get a little tailwind, rather than headwind, we could
capitalized on it," Reuters relayed.

In addition to the disputes concerning the rejection of the CBAs,
AMR unions have expressed support for a potential merger with US
Airways.  To which AMR replied that an interest from US Airways
will not deter it from pursuing a standalone restructuring plan,
Reuters added.

Still, the airline says it hopes to reach consensual deals with
its workers, Reuters noted.

The unions are scheduled to present their case before the Court
as the Section 1113 trial continues, The Wall Street Journal
reported.  Judge Lane is expected to issue a ruling in June.

                      About American Airlines

AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.

AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.

American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights.  The
combined network fleet numbers more than 900 aircraft.

The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011.  AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.

The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.

Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors.  Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel.  Rothschild
Inc., is the financial advisor.   Garden City Group Inc. is the
claims and notice agent.

Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings.  Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.

Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).


AMERICAN AIRLINES: U.S. Trustee Forms Retiree Committee
-------------------------------------------------------
The U.S. Trustee for Region 2 named an official committee of
retiree, which consists of retired non-union members appointed
pursuant to Section 1114(d) and retired non-union members
appointed pursuant to Section 1114(c).

The individual members are:

  * Laura Glading for the Association of Professional Flight
    Attendants;

  * Robert Gless for the Transport Workers Union of America; and

  * James Sovich for the Allied Pilots Association.

Charles Marlett and Rita Keeple are the non-union retirees named
to the Retiree Committee.

                      About American Airlines

AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.

AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.

American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights.  The
combined network fleet numbers more than 900 aircraft.

The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011.  AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.

The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.

Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors.  Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel.  Rothschild
Inc., is the financial advisor.   Garden City Group Inc. is the
claims and notice agent.

Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings.  Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.

Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).


AMERICAN AIRLINES: Court Sets July 16 as Claims Bar Date
--------------------------------------------------------
Judge Sean Lane established July 16, 2012, as the deadline by
which a person or entity must file a proof of claim with respect
to a prepetition claim against AMR Corp. and its affiliates.

Judge Lane also fixed July 16 as the deadline for Governmental
Units to file a Proof of Claim in respect of a prepetition claim
against any of the Debtors.

Subsequent to the filing of the Bar Date Motion on March 30, the
Debtors extended the proposed bar dates from June 29 to July 16.

Under the Bar Date Order, the persons or entities required not to
file a proof of claim on or before the applicable bar date,
include any present or former employee of the Debtors, including,
without limitation, Employees whose employment is subject to the
terms of a collective bargaining agreement and labor unions
representing the Employees, solely with respect to any
prepetition Claim based on the payment of wages, salaries,
employee medical benefits, or other benefits authorized to be
paid pursuant to the Wages Order.  However, if the Debtors have
provided notice to such Employees and CBA Parties that the
Debtors do not intend to pay such a Claim, Employees and CBA
Parties must file a Proof of Claim by the later of (i) the
General Bar Date and (ii) 30 days following the date of such
notice, or be forever barred from doing so, and such deadline
will be contained in any notice provided to the Employees and the
CBA Parties.

Notwithstanding that provision, employees or their labor unions
must submit Proofs of Claim relating to grievances prior to the
General Bar Date to the extent the grounds for such grievances
arose or occurred prior to the Petition Date; provided, however,
that labor unions may submit a Proof of Claim itemizing such
grievances on behalf of their respective members to the extent
authorized to do so under applicable law. Nothing in this
provision will limit or preclude the Debtors from contesting an
Employee's or a CBA Party's Claim.

Judge Lane overruled a shareholder's objection to the Bar Date
Motion.  In letters to the Court, H.G. Plog complained that the
Bar Date Motion unnecessarily prejudices AMR's stockholders'
possible future involvement in the Debtors' Chapter 11 cases.

                      About American Airlines

AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.

AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.

American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights.  The
combined network fleet numbers more than 900 aircraft.

The Company reported a net loss of $884 million on
$18.02 billion of total operating revenues for the nine months
ended Sept. 30, 2011.  AMR recorded a net loss of $471 million in
the year 2010, a net loss of $1.5 billion in 2009, and a net loss
of $2.1 billion in 2008.

The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.

Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors.  Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel.  Rothschild
Inc., is the financial advisor.   Garden City Group Inc. is the
claims and notice agent.

Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings.  Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.

Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).


ANTS SOFTWARE: Russell Ivy Appointed as Director
------------------------------------------------
Russell Stover Ivy, 45, was appointed a director of Ants Software
Inc. and named as the Company's Secretary, at the pleasure of the
Company's Board of Directors.

Mr. Ivy has been a Principal of the Ivy Companies since January
1996.  Mr. Ivy has been Employed by or a Consultant to small and
medium sized companies for over 30 years primarily focusing on
strategic planning, financial modeling, accessing capital markets,
and or facilitating mergers/acquisitions to the Software, IT,
Emerging Technology and Oil & Gas Markets among other executive
assignments.  Mr. Ivy served as Chairman of the Board, Chief
Executive Officer and President of AvStar Aviation Group, Inc.,
from April 2009 to August 2010 until its merger with Twin Air
Calypso Airways of Ft. Lauderdale Florida and remains on the Board
of Directors.  Mr. Ivy consults with the publicly traded company
TexCom, Inc., an Environmental Services Provider to the Oil & Gas
Industry, providing strategic growth solutions to the disposal of
Oil Field related waste and also in their capital,
merger/acquisition needs amongst others.  Currently, Mr. Ivy also
consults with several major IT Product and Services companies
assisting in market positioning, growth and strategic
merger/acquisitions.  He served as one of the founding partners of
Municipal Intelligent Group, Inc.  Municipal Intelligence Group,
Inc., is a Texas-based corporation made up of asset recovery,
technology and revenue experts brought together to assist
governmental units at every level with best of breed revenue
solutions.  Mr. Ivy received a Bachelor's degree in International
Economics from Texas Tech University in 1991.

                        About Ants Software

ANTs Software inc (OTC BB: ANTS) -- http://www.ants.com/-- has
developed a software solution, ACS, to help customers reduce IT
costs by consolidating hardware and software infrastructure and
eliminating cost inefficiencies.  ACS is an innovative middleware
solution that accelerates database consolidation between database
vendors, enabling application portability.

ANTs has not filed financial statements with the Securities and
Exchange Commission since May 2011, when it disclosed that it had
a net loss of $27.01 million in three months ended March 31, 2011,
compared with a net loss of $20.7 million in the same period in
2010.

The Company's balance sheet at March 31, 2011, showed
$27.2 million in total assets, $52.3 million in total liabilities,
and a stockholders' deficit of $25.1 million.

As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New
York, expressed substantial doubt about ANTs software's ability to
continue as a going concern, following the Company's 2010 results.
The independent auditors noted that the Company has incurred
significant recurring operating losses, decreasing liquidity, and
negative cash flows from operations.

The Company reported a net loss of $42.4 million for 2010,
following a net loss of $23.3 million in 2009.


APPLETON PAPERS: Files Form 10-Q, Incurs $64.5MM Net Loss in Q1
---------------------------------------------------------------
Appleton Papers Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $64.69 million on $219.63 million of net sales for the three
months ended April 1, 2012, compared with a net loss of $5.19
million on $218.01 million of net sales for the three months ended
April 3, 2011.

The Company reported a net loss of $2.11 million for the year
ended Dec. 31, 2011, compared with a net loss of $31.66 million
for the year ended Jan. 1, 2011.

Appleton's balance sheet at April 1, 2012, showed $609.83 million
in total assts, $864.04 million in total liabilities and a $254.21
million in total deficit.

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

                        http://is.gd/BvZgBS

                       About Appleton Papers

Appleton, Wisconsin-based Appleton Papers Inc. --
http://www.appletonideas.com/-- produces carbonless, thermal,
security and performance packaging products.  Appleton has
manufacturing operations in Wisconsin, Ohio, Pennsylvania, and
Massachusetts, employs approximately 2,200 people and is 100%
employee-owned.  Appleton Papers is a 100%-owned subsidiary of
Paperweight Development Corp.

                          *     *     *

Appleton Papers carries a 'B' corporate credit rating, with stable
outlook, from Standard & Poor's.  IT has a 'B2/LD' probability of
default rating from Moody's.


AVANTAIR INC: Incurs $1.1 Million Net Loss in March 31 Quarter
--------------------------------------------------------------
Avantair, Inc., 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 $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 revenue for the same
period during the prior year.

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 a year ago.

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.

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

                        http://is.gd/wGMoIZ

                        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.


B-VV2 LLC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: B-VV2, LLC
        3455 Cliff Shadows Parkway, Suite 220
        Las Vegas, NV 89129

Bankruptcy Case No.: 12-15648

Chapter 11 Petition Date: May 10, 2012

Court: United States Bankruptcy Court
       District of Nevada (Las Vegas)

Judge: Mike K. Nakagawa

Debtor's Counsel: Michael R. Hogue, Esq.
                  BOGATZ & ASSOCIATES P.C.
                  3455 Cliff Shadows Pkwy, Suite 110
                  Las Vegas, NV 89129
                  Tel: (702) 776-7005
                  Fax: (702) 776-7900
                  E-mail: mhogue@isbnv.com

Scheduled Assets: $4,201,500

Scheduled Liabilities: $2,730,000

The Debtor did not file a list of its largest unsecured creditors
together with its petition.

The petition was signed by Thomas J. DeVore, COO of LEHM, LLC,
Debtor's manager.

Affiliates that previously filed separate Chapter 11 petitions:

                                                 Petition
   Debtor                              Case No.     Date
   ------                              --------     ----
A-SWDE1, LLC                           09-34216   12/29/09
B-NGAE3, LLC                           11-29000   12/12/11
B-NWI2, LLC                            11-16584   04/29/11
B-PVL2, LLC                            10-16648   04/16/10
B-PWR, LLC                             12-13827   03/30/12
C-FSG425, LLC                          11-16560   04/29/11
C-FSG426, LLC                          12-14831   04/25/12
C-FSG427, LLC                          11-16568   04/29/11
C-FSG428, LLC                          11-16571   04/29/11
C-NGA312, LLC                          11-18976   06/08/11
C-NGA313, LLC                          11-18977   06/08/11
C-NGA314, LLC                          12-14834   04/25/12
C-NGA315, LLC                          12-14836   04/25/12
C-NGA317, LLC                          11-18982   06/08/11
C-NGA318, LLC                          11-18984   06/08/11
C-NW360, LLC                           11-18989   06/08/11
C-PV323, LLC                           11-21036   07/13/11
C-PV330, LLC                           11-21038   07/13/11
C-PV332, LLC                           11-21058   07/13/11
C-SWDE348, LLC                         11-13942   03/21/11
C-SWDE393, LLC                         11-21059   07/13/11
C-SWDE394, LLC                         11-21063   07/13/11


BENEDICT COLLEGE: Moody's Affirms 'B3' Rating on Revenue Bonds
--------------------------------------------------------------
Moody's Investors Service has affirmed the underlying B3 rating on
the Revenue Bonds of Benedict College. The rating outlook is
stable.

Summary Rating Rationale

The B3 rating and stable outlook reflects the college's recent
record of revenue growth, careful cash flow forecasting and record
of support from federal government and donors. The rating also
incorporates the limited liquid and unrestricted resources of the
college combined with limited revenue diversity and high student
dependence on federal financial aid programs.

CHALLENGES

* Complex debt structure and high debt burden relative to
operations with debt to operating revenue of 1.12 times and debt
service to operating revenue of 14.2% in FY 2011, well above
Moody's FY 2010 median of 5.2% for all private universities.

* Extremely limited liquidity monthly liquidity of $1.6 million
representing 10 days cash on hand.

* With a higher than typical federal student loan cohort default
rate the college could experience remedial action by the U.S.
Department of Education. Benedict serves a high portion of low
income and first generation college students with more than 85% of
students eligible for Pell Grants. In FY 2009 its official 2-year
student loan cohort default rate was 23.9%. Beginning in 2014
colleges will be measured on the number of defaulting students
within the first three years of repayment, up from the current two
year period. This mandate will likely increase the likelihood that
Benedict will need special relief to avoid cohort default rate
sanctions.

* Growing capital needs for residential campus and limited
sources of funding to make long term investments.

STRENGTHS

* Recent trend of increasing enrollment and student derived fees
for the college. Net tuition revenue increased 4.6% in FY 2011 to
$11,505.

* Healthy revenue growth and closely managed expenses have led to
strong operating cash flow performance with average debt service
coverage of 1.5 times.

* Ongoing donor support with three-year average gift revenue of
$1.7 million per year. Revenues have also been assisted by federal
grant support, such as the $$4.2 million received in fiscal 2011
under US Department of Education Title III Programs focused on
colleges that serve low-income students.

Outlook

Moody's stable outlook reflects the college's likely ability to
cover debt service from operations through relatively stable
revenues and careful expense containment. It also reflects Moody's
expectation of the continued rapid retirement of debt with $3.5
million of principal payments in FY 2012 and $4.4 million in FY
2013. Moody's outlook assumes ongoing ability to receive federal
financial aid and other sponsored awards.

WHAT COULD MAKE THE RATING GO UP

Ongoing improvement in debt service coverage combined with
consistent growth in liquid financial resources and reduction in
debt.

WHAT COULD MAKE THE RATING GO DOWN

Weakened liquidity profile or difficulty achieving coverage of
debt service from operations. Any potential disruption in the
ability to participate in federal financial aid programs could
create downward rating pressure.

METHODOLOGY

The principal methodology used in this rating was U.S. Not-for-
Profit Private and Public Higher Education published in August
2011.


BHAGAT PARKASH: Case Summary & 10 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Bhagat Parkash, LLC
        aka Bhagat Prakesh LLC
        dba American Inn
        2209 County Drive
        Petersburg, VA 23803

Bankruptcy Case No.: 12-32902

Chapter 11 Petition Date: May 10, 2012

Court: United States Bankruptcy Court
       Eastern District of Virginia (Richmond)

Judge: Kevin R. Huennekens

Debtor's Counsel: Roy M. Terry, Jr.
                  SANDS ANDERSON PC
                  1111 East Main Street, 24th Floor
                  P.O. Box 1998
                  Richmond, VA 23218-1998
                  Tel: (804) 648-1636
                  Fax: (804) 783-7291
                  E-mail: rterry@sandsanderson.com

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the Company's list of its 10 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vaeb12-32902.pdf

The petition was signed by Maninder Anand, member.


BILLMYPARENTS INC: Incurs $3.2 Million Net loss in March 31 Qtr.
----------------------------------------------------------------
BillMyParents, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
and comprehensive loss of $3.16 million on $282,339 of revenue for
the three months ended March 31, 2012, compared with a net loss
and comprehensive loss of $2.47 million on $6,096 of revenue for
the same period during the prior year.

The Company reported a net loss and comprehensive loss of
$7.41 million on $517,515 of revenue for the six months ended
March 31, 2012, compared with a net loss and comprehensive loss of
$3.84 million on $6,754 of revenue for the same period a year ago.

The Company reported a net loss of $14.2 million for the fiscal
year ended Sept. 30, 2011, compared with a net loss of
$6.9 million for the fiscal year ended Sept. 30, 2010.

The Company's balance sheet at March 31, 2012, showed
$1.19 million in total assets, $1.18 million in total liabilities,
all current, and $6,797 in total stockholders' equity.

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

                         http://is.gd/nQME15

                         About BillMyParents

San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards
with special features aimed at young people and their parents.
BMP is designed to enable parents and young people to collaborate
toward the goal of responsible spending.

For Fiscal 2011, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern.  BDO USA, LLP, in La Jolla, California, noted that
the Company has incurred net losses since inception and has an
accumulated deficit and stockholders' deficiency at Sept. 30,
2011.


BIOFUEL ENERGY: Incurs $11.1 Million Net Loss in First Quarter
--------------------------------------------------------------
Biofuel Energy Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $11.09 million on $139.41 million of net sales for the three
months ended March 31, 2012, compared with a net loss of $9.05
million on $158 million of net sales for the same period a year
ago.

The Company reported a net loss of $10.36 million in 2011,
compared with a net loss of $25.22 million during the prior year.
The Company's balance sheet at March 31, 2012, showed $286.61
million in total assets, $197.36 million in total liabilities and
a $89.25 million in total equity.

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

                        http://is.gd/0rgTZa

                       About Biofuel Energy

Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) --
http://www.bfenergy.com/-- aims to become a leading ethanol
producer in the United States by acquiring, developing, owning and
operating ethanol production facilities.  It currently has two
115 million gallons per year ethanol plants in the Midwestern corn
belt.

                         Bankruptcy Warning

According to the Form 10-K for the year ended Dec. 31 2011,
commodity margins have narrowed since the end of 2011 and, should
current commodity margins continue for an extended period of time,
the Company may not generate sufficient cash flow from operations
to both service its debt and operate the Company's plants.  The
Company is required to make, under the terms of its Senior Debt
Facility, quarterly principal payments in a minimum amount of
$3,150,000, plus accrued interest.  The Company cannot predict
when or if crush spreads will fluctuate again or if the current
commodity margins will improve or worsen.  If crush spreads were
to remain at current levels for an extended period of time, the
Company may expend all of its sources of liquidity, in which event
the Company would not be able to pay principal and interest on its
debt.  Any inability to pay principal and interest on the
Company's debt would lead to an event of default under its Senior
Debt Facility, which, in the absence of forbearance, debt service
abeyance or other accommodations from the Company's lenders, could
require the Company to seek relief through a filing under the U.S.
Bankruptcy Code.


BOEGER LAND: Case Summary & 12 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Boeger Land Company
        891 Hazel Street
        Gridley, CA 95948

Bankruptcy Case No.: 12-29106

Chapter 11 Petition Date: May 10, 2012

Court: United States Bankruptcy Court
       Eastern District of California (Sacramento)

Judge: Christopher M. Klein

Debtor's Counsel: Stephen M. Reynolds, Esq.
                  LUNDGREN & REYNOLDS, LLP
                  424 2nd Street, Suite A
                  Davis, CA 95616
                  Tel: (530) 297-5030
                  Fax: (530) 297-5077
                  E-mail: sreynolds@lr-law.net

Scheduled Assets: $3,080,205

Scheduled Liabilities: $1,927,362

A copy of the Company's list of its 12 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/caeb12-29106.pdf

The petition was signed by Matthew Boeger, partner.


CAGLE'S INC: Koch Foods Buys Business for $69.5-Mil. Minimum
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Cagle's Inc. was authorized by the bankruptcy
court on May 11 to sell its assets for not less than $69.5 million
to an affiliate of Koch Foods Inc.  As the result of an auction on
May 10 with a bidder in competition with Koch, the price rose
about $12 million, court records show.  Koch is buying the
business for $49.7 million plus the value of inventory and
accounts receivable less accounts payable to be assumed.  Any
purchase price in excess of $69.5 million will be paid with a one-
year note bearing interest at 8 percent. The first payment on the
note will be due in February.

                           About Cagle's

Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.

Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203).  Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel.  FTI Consulting, Inc., serves
as the Debtors' financial advisors.  Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.

In its schedules, Cagle's Inc. disclosed $82.0 million in assets
and $55.3 million in liabilities as of the Petition Date.

The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.

No trustee or examiner has been appointed in the Debtors'
bankruptcy cases.


CATASYS INC: Deregisters 7.7 Million Common Shares
--------------------------------------------------
Catasys, Inc., filed with the Securities and Exchange Commission
a registration statement on Form S-1, as amended several times, to
register the offer and sale of 11,000,000 shares of common stock,
par value $0.0001 per share, of the Company, and warrants to
purchase 11,000,000 shares of common stock on a delayed or
continuous basis through Jan. 1, 2012.  The Registration Statement
was declared effective by the Commission on Dec. 1, 2011.  The
Company sold an aggregate of 3,249,998 shares of its common stock
and warrants to purchase 3,249,998 shares of its common stock
pursuant to the Registration Statement.

The Company filed a Post-Effective Amendment No. 1 to Form S-1 on
Form S-3 to (i) deregister certain securities, (ii) convert the
Form S-1 into a registration statement on Form S-3, and (iii)
register only the exercise of the warrants already issued
consisting of 3,249,998 shares of common stock issuable upon
exercise of the warrants.  No further offering will be made
pursuant to this Post-Effective Amendment.

Accordingly, the Company wants the Commission to remove from
registration a total of 7,750,002 its shares of common stock and
warrants to purchase 7,750,002 shares of its common stock that
remain unsold under the Form S-1.

A copy of the filing is available for free at:

                        http://is.gd/dMfZJb

                       About Hythiam, Inc.

Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.

The Company reported a net loss of $8.12 million in 2011, compared
with a net loss of $19.99 million in 2010.

The Company's balance sheet at Dec. 31, 2011, showed $3.58 million
in total assets, $8.07 million in total liabilities and a $4.49
million total stockholders' deficit.

For 2011, Rose, Snyder & Jacobs LLP, in Encino, California,
expressed substantial doubt about the Company's ability to
continue as a going concern.  The independent auditors noted that
the Company has incurred significant operating losses and negative
cash flows from operations during the year ended Dec. 31, 2011.

                         Bankruptcy Warning

As of March 28, 2012, the Company had a balance of approximately
$95,000 cash on hand.  The Company had working capital deficit of
approximately $2.2 million at Dec. 31, 2011, and has continued to
deplete its cash position subsequent to Dec. 31, 2011.  The
Company has incurred significant net losses and negative operating
cash flows since its inception.  The Company could continue to
incur negative cash flows and net losses for the next twelve
months.

The Company's current cash burn rate is approximately $450,000 per
month, excluding non-current accrued liability payments.  The
Company expects its current cash resources to cover expenses into
April 2012, however delays in cash collections, revenue, or
unforeseen expenditures could impact this estimate.  The Company
will need to immediately obtain additional capital and there is no
assurance that additional capital can be raised in an amount which
is sufficient for the Company or on terms favorable to its
stockholders, if at all.  If the Company does not immediately
obtain additional capital, there is a significant doubt as to
whether it can continue to operate as a going concern and the
Company will need to curtail or cease operations or seek
bankruptcy relief.


CDC CORP: Wants Automatic Stay on Evolution SV Suit
---------------------------------------------------
BankruptcyData.com reports that CDC Corp. filed with the U.S.
Bankruptcy Court a complaint against Evolution SPV seeking to
enforce the automatic stay and enjoin the prosecution of certain
claims outside of the jurisdiction of Bankruptcy Court.  On
May 11, 2012, Evolution SPV filed a suit seeking $15 million in
damages.

CDC asserts, "The Debtor, the Committee or other parties in
interest may well have claims against some of the same defendants
in the New York Action, which are covered claims under the
Debtor's officers' and directors' liability policies."

The Debtor, according to the report, requests that the Court enter
an order and judgment declaring that the automatic stay operates
to prohibit the defendants from prosecuting the New York Action.
The Debtor requests that the Court enter an order enforcing the
automatic stay and directing the Defendants to cease all efforts
to prosecute the New York Action.

                         About CDC Corp.

Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS).  CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing.  The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.

CDC Corp., doing business as Chinadotcom, filed a Chapter 11
petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel.  Moelis & Company LLC
serves as its financial advisor and investment banker.  Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer.  The Debtor estimated assets and debts at US$100 million
to US$500 million as of the Chapter 11 filing.

The Official Committee of Equity Security Holders of CDC Corp. is
represented by Troutman Sanders.  The Committee tapped Morgan
Joseph TriArtisan LLC as its financial advisor.

The stock of CDC Software Corp. was sold for $249.8 million to an
affiliate of Vista Equity Holdings.

The Debtor's Plan provides that in addition to paying creditors in
full and distributing the excess to shareholders, the plan would
allow filing lawsuits against insiders who CDC claims were behind
the motion to dismiss.  China.com filed a competing reorganization
plan.  CDC interprets the plan as giving releases of claims that
CDC's plan would prosecute instead.


COMPOSITE TECHNOLOGY: Plan Exclusivity Period Extended to June 6
----------------------------------------------------------------
Composite Technology Corporation and its affiliates obtained from
the U.S. Bankruptcy Court for the Central District of California
an extension of their exclusive periods to file a Chapter 11 plan
and solicit acceptances of that plan until June 6, 2012, and
August 6, 2012, respectively.

This is the third plan exclusivity extension sought by the
Debtors.  The Debtors told the Court they will use the additional
time to negotiate terms of consensual plans with Partners for
Growth II, LP, the Debtors' senior secured creditor, and the
creditors' committee and other constituents in their cases.

                    About Composite Technology

Headquartered in Irvine, California, Composite Technology
Corporation (CTC) -- http://www.compositetechcorp.com/-- is a
publicly traded company that owns all of the common stock of CTC
Cable Corporation and Stribog, Inc.  CTC Cable manufactured and
marketed innovative energy efficient renewable energy products for
the electrical utility industry.  Stribog operated a wind turbine
products business that was sold to Daewoo Shipbuilding and Marine
Engineering ("DSME") on Sept. 4, 2009, for $32.2 million in cash.
CTC Renewables is a dormant company.

Composite Technology filed for Chapter 11 bankruptcy (Bankr. C.D.
Calif. Case No. 11-15058) on April 10, 2011, with Judge Mark S.
Wallace presiding over the case.  The Debtor's bankruptcy case was
reassigned to Judge Scott C. Clarkson on April 13, 2011.  BCC
Advisory Services LLC, BCC Ho1dco LLC's FINRA registered
Broker/Dealer, serves as investment banker to provide exclusive
equity financing services and debt financing services.  Composite
Technology disclosed $5,855,670 in assets and $12,395,916 in
liabilities as of the Chapter 11 filing.

CTC Cable Corporation also filed for Chapter 11 (Bankr. C.D.
Calif. Case No. 11-15059) on April 10, 2011.  Stribog, Inc.
(Bankr. C.D. Calif. Case No. 11-15065) filed for Chapter 11
protection on April 11, 2011.  CTC Renewables Corp., a dormant
company (Bankr. C.D. Calif. Case No. 11-15130) filed for Chapter
11 on April 12, 2011.

The cases are jointly administered, with Composite Technology as
the lead case.  Garrick A. Hollander, Esq., Paul J. Couchot, Esq.,
and Richard H. Golubow, Esq., at Winthrop Couchot PC, in Newport
Beach, Calif.; and Sean A. Okeefe, at Okeefe & Associates Law
Corporation, in Newport Beach, Calif., serve as the Debtors'
bankruptcy counsel.

Peter C. Anderson, the U.S. Trustee for Region 16, appointed five
members to the official committee of unsecured creditors in the
Debtor's cases.  Katherine C. Piper, Esq., at Steptoe & Johnson
LLP, in Los Angeles, Calif., represents the Committee.


CONSOLIDATED COMMS: Moody's Rates $350MM Sr. Note Offering 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the proposed
$350 million senior unsecured note offering for Consolidated
Communications Finance Co. (Finance Co) and affirmed the existing
B1 Corporate Family Rating (CFR). The facility rating of the
existing senior secured Term Loan and revolver have been upgraded
to Ba3 from B1 to reflect the addition of $350 million of debt
that is subordinated to the secured bank debt in the capital
structure. The Probability of Default (PDR) rating was also
upgraded to B1 from B2 due to the addition of unsecured debt. The
acquisition of SureWest Communications will be funded from the
proceeds of the note offering, cash on the balance sheet, and
additional equity issuance. The pending acquisition is anticipated
to close in the third quarter of 2012 and is expected to increase
the percentage of revenue earned from broadband services, offset
access line loses, reduce exposure to USF and other subsidy
payments, and offer additional cost saving opportunities. Free
cash flow is expected to decline due to the higher levels of
capital expenditures going forward. The outlook remains stable.

In connection with the ratings Moody's moved the CFR, PDR and SGL
from Consolidated Communications Holdings, Inc. (previously
assigned a B1 and B2 respectively) to Consolidated Communications
Inc (Consolidated). Likewise, upon close of the acquisition the
new notes will be assumed by Consolidated Communications Inc. and
the ratings will be moved to that entity.

A summary of the company's rating actions are listed below:

Issuer: Consolidated Communications Finance Co.

   New $350 million Sr. Unsecured Notes due 2020, Assigned B3
   (LGD5, 86%)

Issuer: Consolidated Communications, Inc.

   Corporate Family Rating, Assigned B1 (withdrew B1 CFR at
   Consolidated Communications Holdings, Inc.)

   Probability of Default Rating, Assigned B1 (withdrew B2 PDR at
   Consolidated Communications Holdings, Inc.)

   $50 million Sr. Secured Revolving Credit Facility, Upgraded to
   Ba3 (LGD3, 32%) from B1 (LGD3, 32%)

   $408 million Sr. Secured Term Loan B, Upgraded to Ba3 (LGD3,
   32%) from B1 (LGD3, 32%)

   $469.8 million Sr. Secured Term Loan B, Upgraded to Ba3 (LGD3,
   32%) from B1 (LGD3, 32%)

   Speculative Grade Liquidity Rating, Assigned SGL-2 (withdrew
   SGL-2 at Consolidated Communications Holdings, Inc.

   Outlook, Stable

Issuer: Consolidated Communications Holdings, Inc.

   Corporate Family Rating, Withdrawn (previously rated B1)

   Probability of Default Rating, Withdrawn (previously rated B2)

   Speculative Grade Liquidity Rating, Withdrawn
   (previously SGL-2)

   Outlook, Withdrawn

Rating Rationale

Consolidated's B1 CFR rating incorporates expectations for
leverage to remain high pro-forma for the acquisition of SureWest
Communications at 4.8x (including Moody's standard adjustments).
The rating also reflects continued access line losses from its
legacy telecommunications segment that traditionally carry high
margins, intense competition from cable, wireline, and wireless
operators, and its aggressive financial policy of paying out free
cash flow as dividends. Its high dividend payment policy limits
free cash flow available for debt repayment. The decline in its
legacy access lines will necessitate a continued focus on cost
savings in order to maintain EBITDA margins. Consolidated will
continue to be susceptible to changes in USF payments even after
the SureWest acquisition that could impact earnings given the high
margins of this revenue stream.

The rating is supported by EBITDA margins in the mid 40% range,
good free cash flow (prior to dividend payments and capex),
diversified operations in five different regions, improved scale
pro-forma for the acquisition of SureWest and the increased
exposure to broadband services as well as an advanced fiber
network that have more stable revenue prospects. Enhanced VOIP,
IPTV, and broadband services also offer the potential to sell
double or triple play packages that has the potential to reduce
churn rates and diversify its revenue stream away from traditional
access lines. However, these services have lower margins and
subject the company to potentially higher TV programming expenses
compared to larger competitors and expose Consolidated to
potential new internet based TV offerings.

Moody's continues to characterize Consolidated's liquidity as
good, as reflected by its SGL-2 speculative grade liquidity
rating. Meaningful internal liquidity sources, an unused $50
million revolver, and the absence of near term maturities support
the company's liquidity profile. Higher capex spend is expected to
weaken free cash flow levels as is the high dividend payout ratio,
however.

Moody's rates the first lien bank debt Ba3, one notch higher that
the corporate family rating. The first lien facility consists of
an undrawn $50 million revolving credit facility due June 2016 and
an $877.8 million term loan (which includes a $469.8 million Term
Loan B-1 due December 2014 and a $408 million Term Loan B-2 due
December 2017). First lien lenders benefit from a pledge of stock
and security in assets of all subsidiaries, with the exception of
the regulated subsidiary that holds the ILEC assets of
Consolidated in Illinois. However, lenders do have a pledge of the
stock of the excluded subsidiary. The $350 million Senior note is
rated B3 given its subordinated position in the capital structure
with material amounts of senior secured debt ahead of the notes.

The stable outlook incorporates expectations for relatively flat
revenues, continued modestly positive free cash flow (after
dividends), a stable leverage profile, and EBITDA margins above
40%.

Upward rating pressure could ensue if there was a deleveraging
transaction followed by a greater commitment to debt reduction and
a stabilization in revenue that reduced leverage below 3.5x
(including Moody's standard adjustments) on a sustained basis.

An acceleration in revenue decline or EBITDA margins prompted by
increased pressure on its core business line or a leveraging
transaction that increased leverage above 5.25x (including Moody's
standard adjustments) would put downward pressure on the ratings.

The principal methodology used in rating Consolidated
Communications Inc. was the Global Telecommunications Industry
Methodology published in December 2010 and Moody's Loss Given
Default Industry Methodology published in June 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009 (and/or) the Government-Related Issuers
methodology published in July 2010.

Consolidated Communications Holdings, Inc. provides communications
services, including local and long distance telephone, high-speed
Internet access and television, to residential and business
customers in Illinois, Texas and Pennsylvania. The company
maintains headquarters in Mattoon, IL, and its annual revenue is
approximately $374 million as of 12/31/11. Consolidated entered
into an agreement to acquire SureWest Communications in February
2012.


CONTOUR MED: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Contour Med, Inc.
        2821 Kavanaugh
        Little Rock, AR 72205

Bankruptcy Case No.: 12-12790

Chapter 11 Petition Date: May 10, 2012

Court: U.S. Bankruptcy Court
       Eastern District of Arkansas (Little Rock)

Debtor's Counsel: Scott T. Vaughn, Esq.
                  HILBURN LAW FIRM
                  P.O. Box 5551
                  North Little Rock, AR 72119
                  Tel: (501) 372-0110
                  Fax: (501) 372-2028
                  E-mail: gpauschert@hilburnlawfirm.com

Estimated Assets: $100,001 to $500,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/areb12-12790.pdf

The petition was signed by Barry M. Corkern, interim CEO.


CUMULUS MEDIA: Seven Directors Elected at Annual Meeting
--------------------------------------------------------
The 2012 annual meeting of stockholders of Cumulus Media Inc. was
held on May 8, 2012.  Each of Lewis W. Dickey, Jr., Ralph B.
Everett, Jeffrey A. Marcus, Arthur J. Reimers, Eric P. Robison,
Robert H. Sheridan, III, and David M. Tolley were elected to serve
as directors of the Company until the next annual meeting of
stockholders and until their successors are elected and qualified.
In addition, the appointment of PricewaterhouseCoopers LLP as the
Company's independent registered public accounting firm for 2012
was ratified.

                        About Cumulus Media

Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets.  In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.

Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) after struggling to pay off debts that topped
$97 million as of June 30, 2011.  Holdings estimated debts between
$50 million and $100 million but said assets are worth less than
$50 million.  AR Broadcasting are Missouri and Texas radio
stations.

The Company's balance sheet at March 31, 2012, showed
$3.93 billion in total assets, $3.54 billion in total liabilities,
$115.81 million in total redeemable preferred stock, and $274.35
million in total stockholders' equity.

                         Bankruptcy Warning

The Company said in its annual report for the year ended Dec. 31,
2011, that the lenders under the 2011 Credit Facilities have taken
security interests in substantially all of the Company's
consolidated assets, and the Company has pledged the stock of
certain of its subsidiaries to secure the debt under the 2011
Credit Facilities.  If the lenders accelerate the repayment of
borrowings, the Company may be forced to liquidate certain assets
to repay all or part of such borrowings, and the Company cannot
assure that sufficient assets will remain after it has paid all of
the borrowings under those 2011 Credit Facilities.  If the Company
was unable to repay those amounts, the lenders could proceed
against the collateral granted to them to secure that indebtedness
and the Company could be forced into bankruptcy or liquidation.

                           *     *     *

Standard & Poor's Ratings Services in October 2011 affirmed is 'B'
corporate credit rating on Cumulus Media.

"The ratings reflect continued economic weakness and higher post-
acquisition leverage than we initially expected," said Standard &
Poor's credit analyst Jeanne Shoesmith. "They also reflect the
combined company's sizable presence in both large and midsize
markets throughout the U.S."


DIALOGIC INC: Incurs $14.1 Million Net Loss in First Quarter
------------------------------------------------------------
Dialogic Inc. reported a net loss of $14.08 million on $41.10
million of total revenues for the three months ended March 31,
2012, compared with a net loss of $21.27 million on $44.86 million
of total revenue for the same period during the prior year.

The Company reported a net loss of $54.81 million in 2011,
compared with a net loss of $46.71 million in 2010.

The Company's balance sheet at March 31, 2012, showed $155.66
million in total assets, $184.54 million in total liabilities and
a $28.88 million total stockholders' deficit.

"As we review our non-GAAP financial results for the first quarter
of 2012 as compared to the first quarter of 2011, we are pleased
to report improvements in gross margin consistent with the growing
importance of our Next-Gen portfolio and significant streamlining
of operating expenses consistent with positioning the company for
improved financial performance," said Nick Jensen, Dialogic
Chairman and Chief Executive Officer.  "For the second quarter of
2012, we expect revenue to increase and non-GAAP operating
expenses to decrease as compared to the first quarter.  In
addition, we reaffirm that we expect to achieve positive cash flow
for the fiscal year."

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

                        http://is.gd/BZ9Q0j

                           About Dialogic

Milpitas, Calif.-based Dialogic Inc. provides communications
platforms and technology that enable developers and service
providers to build and deploy innovative applications without
concern for the complexities of the communication medium or
network.

                         Bankruptcy Warning

The Company said in its 2011 annual report that in the event of an
acceleration of the Company's obligations under the Term Loan
Agreement or Revolving Credit Agreement and its failure to pay the
amounts that would then become due, the Revolving Credit Lender or
Term Lenders could seek to foreclose on the Company's assets.  As
a result of this, or if the Company's stockholders do not approve
the Private Placement and the Notes become due and payable, the
Company would likely need to seek protection under the provisions
of the U.S. Bankruptcy Code or the Company's affiliates might be
required to seek protection under the provisions of applicable
bankruptcy codes.  In that event, the Company could seek to
reorganize its business, or the Company or a trustee appointed by
the court could be required to liquidate the Company's assets.


EASTMAN KODAK: Court Sets July 17 as Claims Bar Date
----------------------------------------------------
At the behest of Eastman Kodak Co., Judge Allan Gropper of the
U.S. Bankruptcy Court for the Southern District of New York
established a deadline for creditors to file proofs of claim.

In a decision handed May 10, Judge Gropper established July 17,
2012, at 5:00 p.m. (Prevailing Eastern Time), as the deadline for
creditors, including governmental units, to file their pre-
bankruptcy claims against Eastman Kodak and its affiliated
debtors.

The bankruptcy judge also authorized the company to implement a
process governing the filing of proofs of claim.

Under the process, the proofs of claim must substantially conform
to Eastman Kodak's proposed claim form or to the Official
Bankruptcy Form 10.  The proofs of claim will be deemed filed
only when received by Kurtzman Carson Consultants LLC, the
company's noticing and claims agent, or the Clerk of the U.S.
Bankruptcy Court on or before the deadline.

The original claim form should be sent by first-class mail, hand
delivery or overnight courier to:

  Eastman Kodak Claims Processing Center
  c/o Kurtzman Carson Consultants LLC
  2335 Alaska Avenue
  El Segundo, CA 90245

Creditors may also submit the claim forms by hand delivery to:

  Clerk of the United States Bankruptcy Court
  One Bowling Green, Room 534
  New York, New York 10004

Any creditor that asserts a claim, which stems from the rejection
of an executory contract or unexpired lease may file a proof of
claim by the later of July 17 or within 30 days following
issuance of the bankruptcy court's order approving the rejection.

In case Eastman Kodak or its affiliated debtors supplement or
amend their schedules of assets and liabilities, or determine
that a creditor needs to file a proof of claim, the affected
creditor will be notified and will be required to file a proof of
claim by the later of July 17 or within 30 days after service of
the notice.

Any creditor that has already filed a claim with Kurtzman or with
the Clerk of the U.S. Bankruptcy Court in a form substantially
similar to the proposed form is not required to file a proof of
claim.

Any holder of a claim that has been allowed by order of the
bankruptcy court, or has been paid in full by Eastman Kodak or
any of its affiliated debtors is not also required to file a
proof of claim.

Any holder of a claim which is listed in the schedules is not
also required, provided that the claim is not scheduled as
"disputed," "contingent" or "unliquidated," and the creditor does
not disagree with the amount, nature and priority of the claim as
stated in the schedules.

A copy of the court order containing details of the procedures is
available without charge at:

  http://bankrupt.com/misc/Kodak_OrderBarDate.pdf

Eastman Kodak will serve a notice to all known creditors and other
concerned parties, including the U.S. Trustee and attorneys for
the Official Committee of Unsecured Creditors, at least 35 days
before the July 17 deadline.

The company will also have the notice published in the national
edition of The New York Times and the Rochester Democrat &
Chronicle at least 28 days prior to the deadline.

Any creditor who is required, but fails, to file a proof of claim
by the July 17 deadline will not be treated as a creditor for
purposes of voting on any restructuring plan.  The creditor will
not also be permitted to participate in any distribution on
account of his claim.

                        About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011.  The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.   Kurtzman Carson Consultants LLC is the
claims agent.  A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.

The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).


EASTMAN KODAK: Altek Corp. Named to Creditors Committee
-------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Altek
Corporation to the official committee of unsecured creditors in
the Chapter 11 cases of Eastman Kodak Co. and its affiliated
debtors.  Altek replaced Primax Electronics Ltd., which was
appointed early this year by the U.S. Trustee.

As of May 4, 2012, the members of the Creditors' Committee are:

    (1) Pension Benefit Guaranty Corporation
        1200 K Street, N.W.
        Washington, DC 20005-4026
        Tel: (202) 326-4070 ext 3810
        Fax: (202) 380-2074
        Attn: Dana Cann

    (2) KPP Trustees Limited
        c/o Secretary to the Trustees of the Kodak Pension Plan
        Aon Hewitt, Abbey View, St. Albans
        AL1 2QU United Kingdom
        Tel: 44 1727 88 82 00
        Attn: Ben Harris

    (3) U.S. Bank National Association
        60 Livingston Avenue
        St. Paul, MN 55107
        Tel: (651) 495-3959
        Fax: (651) 495-8100
        Attn: Timothy Sandell

    (4) Sony Pictures Entertainment Inc.
        10202 West Washington Blvd
        Culver City, CA 90232
        Tel: (310) 244-6890
        Fax: (310) 244-2169
        Attn: John Fukunaga

    (5) Strategic Procurement Group
        PO Box 1107
        36 Harbor Park Drive
        Port Washington, NY 11050
        Tel: (516) 479-3723
        Fax: (516) 626-5141
        Attn: Donna Kay

    (6) Walmart Stores, Inc.
        1301 SE 10th Street
        Bentonville, AR 72716-0185
        Tel: (479) 204-2574
        Fax: (888) 715-4184
        Attn: Christopher Nanos

    (7) Altek Corporation
        No. 12 Li Hsin Rd.
        Science Based Industrial Park
        Hsin-Chu, 300, Taiwan (R.O.C.)
        Tel: 886-3-578-4567
        Fax: 886-3-578-1155
        Attn: Jason Lin

                        About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011.  The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.   Kurtzman Carson Consultants LLC is the
claims agent.  A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.

The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).


EASTMAN KODAK: U.S. Trustee Forms 7-Member Retirees Committee
-------------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed on
May 3, 2012, seven members to the official committee of retired
employees in the Chapter 11 cases of Eastman Kodak Co. and its
affiliated debtors:

    (1) William G. Strickland
        240 N. Plum Street
        Pinebluff, North Carolina 28373

    (2) Norman H. Beck
        7088 High Saddle Court
        Liberty Township, Ohio 45011

    (3) Jeannine Vogel
        11210 Ponderosa Trail
        Windsor, Colorado 80550

    (4) David Beck
        165 Parkwood Avenue
        Rochester, New York 14620

    (5) Robert Volpe
        987 East Avenue
        Apartment No. 1
        Rochester, New York 14607

    (6) Calvin A. Graziano
        28 Brickston Drive
        Pittsford, New York 14534

    (7) Andrew L. Sperr
        261 Straub Road
        Rochester, New York 14626

Of the retiree committee members, Mr. Volpe is president of Kodak
retiree group, EKRA Ltd.  Messrs. Beck and Strickland are among
an independent group of retirees that retained legal counsel to
fight Eastman Kodak when it proposed doing away with the Medicare
Advantage plan it provides retirees.  The company subsequently
withdrew that proposal, Democrat and Chronicle reported.

The members of the committee were appointed pursuant to Sections
1114(d) of the Bankruptcy Code.  They will represent retired
Kodak employees not covered by a collective bargaining agreement.

The retirees committee will be subject to an initial monthly fee
cap of $50,000.  The fee cap would increase to $100,000 per month
after Eastman Kodak serves the committee a notice of its proposal
to modify or terminate the medical benefits; and $175,000 per
month upon receipt of a written proposal from the company.

                        About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011.  The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.   Kurtzman Carson Consultants LLC is the
claims agent.  A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.

The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).


EASTMAN KODAK: Wins Approval to Prosecute Suit vs. Shutterfly
-------------------------------------------------------------
Eastman Kodak Co. sought and obtained a court order allowing the
company to prosecute its patent-infringement lawsuit against
Shutterfly Inc. and Tiny Prints Inc.

The move came after Shutterfly filed court papers with the U.S.
District Court for the District of Delaware to halt the entire
case, arguing that its own patent-infringement lawsuit filed in
the same court was stayed by the company's bankruptcy filing.

Eastman Kodak's lawyer said the online photo album company
"improperly" sought to use the automatic stay as a shield against
Eastman Kodak's claims.

"The Shutterfly defendants' objective is clear -- to use the
bankruptcy automatic stay to prevent Kodak from pursuing its
patent infringement claims," said Andrew Dietderich, Esq., at
Sullivan & Cromwell LLP, in New York.

The automatic stay is an injunction that halts actions by
creditors against a company in bankruptcy protection.

Eastman Kodak said it did not file a notice of bankruptcy in the
Delaware lawsuit because it intends to continue prosecuting the
lawsuit despite bankruptcy.  The company further said the lawsuit
is designed to bring in more than $100 million for infringement
of six patents.

Shutterfly previously opposed Eastman Kodak's request, saying it
was unfair for only one lawsuit to go ahead.  The company wanted
both patent-infringement lawsuits to remain halted.

                        About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011.  The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.   Kurtzman Carson Consultants LLC is the
claims agent.  A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.

The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).


EURAMAX INTERNATIONAL: Incurs $8.1 Million Net Loss in Q1
---------------------------------------------------------
Euramax Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $8.12 million on $198.68 million of net sales for the
three months ended March 30, 2012, compared with a net loss of
$8.33 million on $210.37 million of net sales for the three months
ended April 1, 2011.

The Company reported a net loss of $62.71 million in 2011, a net
loss of $38.54 million in 2010, and a net loss of $85.62 million
in 2009.

The Company's balance sheet at March 30, 2012, showed $643.91
million in total assets, $703.52 million in total liabilities and
a $59.61 million total shareholders' deficit.

President and CEO Mitchell B. Lewis commented, "Finding bright
spots in the markets we serve was difficult during the first
quarter.  Our volume continues to be impacted by the economic
malaise in Europe and only modest recovery in our U.S. Commercial
and Residential markets.  We remain optimistic for near term
improvement in U.S. markets to soften the impact of continuing
challenges in Europe."

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

                        http://is.gd/3KseDu

                           About Euramax

Based in Norcross, Georgia, Euramax International, Inc., is a
leading international producer of aluminum, steel, vinyl and
fiberglass products for original equipment manufacturers,
distributors, contractors and home centers in North America and
Western Europe. The Company was acquired for $1 billion in 2005 by
management and Goldman Sachs Capital Partners.

Euramax Int'l has subsidiaries in Canada (Euramax Canada, Inc.),
United Kingdom (Ellbee Limited and Euramax Coated Products
Limited), and The Netherlands (Euramax Coated Products B.V.), and
France (Euramax Industries S.A.).

                            *     *     *

As reported by the Troubled Company Reporter on April 24, 2009,
Moody's Investors Service downgraded Euramax International's
corporate family rating and probability of default rating to Ca
from Caa1.  Euramax was acquired for $1 billion in 2005 by
management and Goldman Sachs Capital Partners.  A "large portion
of the purchase price was financed with debt," according to S&P.

As reported by the TCR on July 30, 2009, Standard & Poor's Ratings
Services raised its ratings on Norcross, Georgia-based Euramax
International Inc., including the long-term corporate credit
rating, to 'B-' from 'D'.

"The ratings upgrade reflects the company's highly leveraged,
although somewhat improved, financial risk profile following a
recent out-of-court restructuring," said Standard & Poor's credit
analyst Dan Picciotto.  "As a result of the restructuring,
Euramax's second-lien debtholders received equity and about half
of its new $513 million of first-lien debt is pay-in-kind,
providing some cash flow benefit," he continued.


FALCONBRIDGE ENTERPRISES: Case Summary & 5 Largest Unsec Creditors
------------------------------------------------------------------
Debtor: Falconbridge Enterprises Arizona V. LLC
        8271 East Gelding Drive
        Scottsdale, AZ 85260

Bankruptcy Case No.: 12-10492

Chapter 11 Petition Date: May 11, 2012

Court: United States Bankruptcy Court
       District of Arizona (Phoenix)

Judge: Charles G. Case II

Debtor's Counsel: E. Scott Dosek, Esq.
                  HINSHAW & CULBERTSON LLP
                  3200 N Central Ave #800
                  Phoenix, AZ 85012
                  Tel: (602) 383-6011
                  Fax: (602) 631-4404
                  E-mail: sdosek@hinshawlaw.com

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the list of five largest unsecured creditors is
available for free at http://bankrupt.com/misc/azb12-10492.pdf

The petition was signed by Gary Falconbridge, sole member.


FLINT ENERGY: Moody's Hikes Sr. Unsecured Notes Rating From 'B2'
----------------------------------------------------------------
Moody's Investors Service upgraded Flint Energy Services Ltd.'s
senior unsecured rating to Baa3 from B2. The upgrade reflects that
URS Corporation (Baa3 stable) has completed the acquisition of
Flint and has guaranteed Flint's C$175 million senior unsecured
notes. Concurrently, Moody's withdrew Flint's B1 corporate family
and probability of default ratings and its SGL-2 speculative grade
liquidity rating. Flint's rating outlook is now stable. This
concludes the review for upgrade initiated on February 21, 2012
when Flint agreed to be acquired by URS.

Ratings Rationale

The upgrade of Flint's senior unsecured rating to the same level
as URS reflects the credit support provided by the URS parent and
subsidiary guarantees of Flint's rated public debt. Moody's
believes the guarantees' provisions and language allow for the
substitution of Flint's credit profile with that of URS. The
guarantee language calls for the unconditional and irrevocable
obligation to pay or perform on a full and timely basis
obligations under the indentures governing the Flint debt.

URS' Baa3 rating benefits from its high proportion of relatively
stable operations & maintenance revenue from its various US
Federal government contracts. As well, it has limited fixed price
construction risk, diverse end market exposure, a strong market
position and a significant order backlog. These attributes provide
stability to the company's expected cash flows and counter the
volatility of its Power, Oil & Gas and Industrial sectors. While
there may be some future revenue pressures as US Federal and State
governments seek to reduce their budget deficits, the near-
essential services that URS provides to these customers mitigate
this risk. As well the near term outlook for URS' private sector
businesses is generally favorable, which should enable URS' annual
operating income to grow in the mid-single digits over the next
couple of years. Pro-forma for the acquisition of Flint, URS'
leverage of 3.6x (up from 2.3x before the acquisition) is
meaningfully higher than Moody's tolerance for similarly rated
engineering and construction companies. However Moody's believes
the company has the cash flow generation ability and management
willingness to reduce this metric below 3x by mid-late 2013.

The principal methodology used in rating Flint Energy Services
Ltd. was the Global Construction Industry Methodology published in
November 2010.

Flint Energy Services Ltd. is a Calgary, Alberta-based provider of
products, services and maintenance to the oil and gas industry.
Headquartered in San Francisco, California, URS Corporation is a
leading engineering and construction firm and a major Federal
government contractor. Pro forma combined revenue exceeds $11
billion.


FLORENCE HOSPITAL: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Florence Hospital, LLC
        dba Florence Community Healthcare
        450 West Adamsville Road
        Florence, AZ 85132

Bankruptcy Case No.: 12-10437

Chapter 11 Petition Date: May 11, 2012

Court: United States Bankruptcy Court
       District of Arizona (Tucson)

Judge: James M. Marlar

Debtor's Counsel: James F. Kahn, Esq.
                  JAMES F. KAHN, P.C.
                  301 E. Bethany Home Rd., #C-195
                  Phoenix, AZ 85012
                  Tel: (602) 266-1717
                  Fax: (602) 266-2484
                  E-mail: james.kahn@azbar.org

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

The Debtor did not file a list of its largest unsecured creditors
together with its petition.

The petition was signed by Edward McEachern, authorized agent of
Debtor.

Affiliate that filed separate Chapter 11 petition:

                                                 Petition
   Debtor                              Case No.     Date
   ------                              --------     ----
Healthcare Of Florence, LLC            12-08547   04/27/12


FRANKLIN CREDIT: Incurs $17.1 Million Net Loss in First Quarter
---------------------------------------------------------------
Franklin Credit Holding Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss attributed to common stockholders of
$17.10 million on $2.75 million of total revenues for the three
months ended March 31, 2012, compared with net income attributed
to common stockholders of $14.34 million on $34.98 million of
total revenues for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed
$29.02 million in total assets, $874.02 million in total
liabilities, and a $845 million total stockholders' deficit.

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

                       http://is.gd/QU3WfU

                   About Franklin Credit Holding

Franklin Credit Holding Corporation (OTC BB: FCMC)
-- http://www.franklincredit.com/-- is a specialty consumer
finance company primarily engaged in the servicing and resolution
of performing, reperforming and nonperforming residential mortgage
loans, including specialized loan recovery servicing, and in the
analysis, pricing, due diligence and acquisition of residential
mortgage portfolios for third parties.  The Company's executive,
administrative and operations offices are located in Jersey City,
N.J.

Marcum LLP, in New York, noted in its report on the Company's 2011
financial results that the Company's recurring losses from
operations and stockholders' deficit raise substantial doubt about
its ability to continue as a going concern.

                       To File For Bankruptcy

Subject to the final approval of The Huntington National Bank, the
Bank agreed as part of certain implementing agreements regarding a
transaction in September 2010 to a spinoff of the ownership of
Franklin Credit Management Corporation.  Within the next several
weeks simultaneously with or shortly after the commencement of a
potential bankruptcy case, the Company anticipates beginning the
process of spinning off FCMC through the filing of a voluntary
petition for bankruptcy relief and pre-packaged plan of
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
U.S. Bankruptcy Court for the District of New Jersey, subject to
having first obtained the consent of the only eligible voting
creditor, the Bank, which the Company anticipates receiving and
otherwise satisfying the requirements of the U.S. Bankruptcy Code.

Neither FCMC nor any other subsidiaries of FCHC intend to file for
bankruptcy.  It is anticipated that following the Bankruptcy
Filing, FCHC will continue to operate in the ordinary course of
business as a "debtor-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the U.S. Bankruptcy Code and the orders of the Bankruptcy
Court.  FCHC will not request the appointment of a case trustee or
examiner.  Vendors of FCHC will be paid for goods furnished and
services provided in the ordinary course of business during the
pendency of the bankruptcy.  FCHC has incurred and the Company
anticipates will continue to incur significant costs, primarily
professional fees, associated with the Bankruptcy Filing.
Following a successful consummation of the Plan of Reorganization,
a liquidation of FCHC is not immediately contemplated.


FSJ LLC: Case Summary & 12 Largest Unsecured Creditors
------------------------------------------------------
Debtor: FSJ, LLC
        501 Madison Avenue, Suite 604
        New York, NY 10022

Bankruptcy Case No.: 12-22403

Chapter 11 Petition Date: May 11, 2012

Court: United States Bankruptcy Court
       District of New Jersey (Newark)

Debtor's Counsel: Richard D. Trenk, Esq.
                  TRENK, DIPASQUALE, DELLA FERA & SODONO, P.C.
                  347 Mt. Pleasant Avenue, Suite 300
                  West Orange, NJ 07052
                  Tel: (973) 243-8600
                  E-mail: rtrenk@trenklawfirm.com

Scheduled Assets: $2,501,000

Scheduled Liabilities: $2,631,319

A copy of the Company's list of its 12 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/njb12-22403.pdf

The petition was signed by Tim Goldburt, managing member.

Affiliate that filed separate Chapter 11 petition:

                                                 Petition
   Debtor                              Case No.     Date
   ------                              --------     ----
FSJ Imports, LLC                       12-22402   05/11/12


GATEWAY HOTEL: Has Continued Cash Collateral Access Until May 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona signed a
fifth stipulated order authorizing Gateway Hotel, LLC's continued
use of the cash collateral until May 31, 2012.

The Debtor related that on May 3, 2011, the Court signed the final
order authorizing the Debtor's use of cash collateral until, among
other things July 30, 2011.  The final order also provided that,
and to the extent the Debtor had not otherwise breached any of the
provisions of the final order, the Debtor could seek approval from
the Bankruptcy Court for the continued use of cash collateral with
an express reservation of all rights of 2010-1 SFG Venture LLC, as
successor in interest to Specialty Finance Group LLC with respect
thereto.

A full-text copy of the order and budget is available for free at
http://bankrupt.com/misc/GATEWAYHOTEL_cashcoll_stipulatedorder.pdf

                        About Gateway Hotel

Phoenix, Arizona-based Gateway Hotel, LLC -- aka Hilton Garden Inn
and Hilton Garden Inn Phoenix Airport North -- is primarily
engaged in the hotel and restaurant business.  It filed for
Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-
08302) on March 29, 2011.  Robert J. Miller, Esq., Bryce A.
Suzuki, Esq., Kyle S. Hirsch, Esq., at Bryan Cave LLP, serve as
the Debtor's bankruptcy counsel.  The Debtor estimated its assets
and debts at $10 million to $50 million.

Affiliate Windsor Commercial Construction, LLC, filed a separate
Chapter 11 petition (Bankr. D. Ariz. Case No. 09-25724) on
Oct. 13, 2009.


HARLAND CLARKE: Moody's Assigns 'B1' Senior Secured Note Rating
---------------------------------------------------------------
Moody's Investors Service assigned a B1 (LGD-3, 39%) rating to
Harland Clarke Holdings Corp.'s proposed Senior Secured Note. The
new Senior Secured Note is expected to fulfill a requirement for
the previously announced Amend and Extend offer where $693 million
(after the repayment) of the term loan will be extended to 2017.
The amend and extend offer will increase debt amortization
payments on the extended term loan to 10% annually (instead of 1%
for the non extended term loan), extend $973 million of its
existing term loan beyond its current 2014 maturity date, and lead
to higher interest expenses. The remaining portion of the existing
Term Loan B facility and $100 million Revolver will be unchanged
along with the company's floating rate notes due 2015 ($204
million outstanding) and 9.5% senior notes also due 2015 ($271
million outstanding). Harland's Corporate Family Rating (CFR) and
Probability of Default Rating (PDR) were also unchanged at B2 and
the Speculative Grade Liquidity Rating (SGL) remains SGL-2. The
outlook also remains Stable.

A summary of the company's ratings actions are listed below:

Issuer: Harland Clarke Holdings Corp.

  Corporate Family Rating, Unchanged B2

  Probability of Default Rating, Unchanged B2

  $295 million New Senior Secured Note due 2019, Assigned B1
  (LGD-3, 39%)

  $693 million Extended Sr. Secured Term Loan B due 2017,
  Unchanged B1 (LGD-3, 39%)

  $729 million Sr. Secured Term Loan B due 2014, Unchanged B1
  (LGD-3, 39%)

  $100 million Senior Secured Revolver due June 2013, Unchanged
  B1 (LGD-3, 39%)

  Gtd. Floating Rate Senior Notes due 2015 ($204 million
  outstanding), Unchanged Caa1 (LGD-6, 90%)

  9.5% Gtd. Global Notes due 2015 ($271 million outstanding),
  Unchanged Caa1 (LGD-6, 90%)

  Outlook, Remains Stable

Ratings Rationale

Harland Clarke's B2 Corporate Family rating ("CFR") reflects
Moody's ongoing concern that the secular decline in check writing
will continue and potentially accelerate over time. The ratings
also reflect the company's high leverage of 5.2x (including
Moody's standard adjustments), weakness in its Scantron segment
caused by the maturity of its form products, disappointing results
at its recently acquired Global Scholar and Spectrum K12
businesses, and the history of sponsor friendly and related party
transactions. Harland Clarke has a good track record of mitigating
volume declines with customer-focused products and services that
increase average revenue per order and costs savings, but Moody's
remains concerned these efforts will not be sufficient to prevent
top line erosion by reduced check-related revenues. The company
has made several acquisitions over the years to diversify away
from its core check printing business including the Global Scholar
and Spectrum K12 acquisitions in 2011 and 2010 as well as the
March 2012 acquisition of New Faneuil, Inc for $70 million that
was owned by Ronald Perelman which also owns parent company
MacAndrews & Forbes Holdings Inc. The ratings are supported by the
company's good cash flow generation from its portfolio of
businesses, the stability of its Harland Financial Solutions
segment, and the potentially increased debt amortization
requirements as proposed in the amendment that would accelerate
debt repayment.

Liquidity is expected to remain adequate with good free cash flow
despite the higher interest expense and required debt amortization
payments. The revolver is largely undrawn but matures in June 2013
and could potentially be replaced with a new $150 million asset
based revolver.

The B1 ratings and LGD3-39% assessment on the new senior secured
note, the senior secured term loans and $100 million revolver are
one notch above the CFR reflecting the first priority claim on
cash flow and assets of the company provided by the collateral
pledge of all assets. The loss absorption cushion provided by the
$476 million of senior unsecured notes would lead to a lower loss
in default for secured creditors than on the unsecured notes. The
maturity of the proposed extended term loan due 2017 is
accelerated if the senior unsecured notes are not redeemed 90 days
prior to their May 2015 maturities.

Although the new secured notes are pari passu with the existing
secured term loans, the new notes contain important differences.
The new secured notes do not include a springing maturity
provision if the senior unsecured notes are not refinanced 90 days
prior to maturity like the extended secured term loan does. The
restricted payments language is also looser than that contained in
the secured term loan credit agreement and allows for Designated
Asset Sales as defined in the indenture, which is not permitted in
the term loan credit agreement. While the new secured notes would
benefit from the tighter limitations in the term loan credit
agreement as long as the exiting language is in place, they could
lose the benefit of the tighter terms if the term loan is
refinanced with weaker credit terms.

The Caa1 rating and LGD6-90% assessment on the floating and fixed
rate senior unsecured notes due May 2015 is two notches below the
CFR reflecting the effective subordination to the material amount
of secured debt. Moody's believes the senior unsecured notes would
absorb the bulk of the loss in a distress situation.

The stable outlook reflects Moody's expectation that Harland
Clarke will continue to generate good cash flow over the next 12 -
18 months, seek to reinvest cash through acquisitions and
investments, and utilize excess cash to fund required term loan
amortization or potential modest distributions to M&F. Moody's
also expects leverage will decline slightly from current levels.

Ratings are unlikely to be upgraded in the near term until organic
revenue and EBITDA trends turn positive on a consistent basis, the
company demonstrates further diversification away from its
traditional check printing business, and leverage declines below
4.25x on a sustained basis with all near term maturities
addressed.

Ratings could be lowered if results suffer from accelerated
deterioration in price or volume in its check business, a loss of
market share, acquisitions, or distributions to the parent company
that result in debt-to-EBITDA not being sustained comfortably
below 5.75x. Deterioration in liquidity could also lead to a
downgrade.

The principal methodology used in rating Harland Clarke 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.

Harland Clarke Holdings Corp., headquartered in San Antonio, TX,
is a provider of (a) check and check-related products, direct
marketing services and customized business and home office
products to financial services , retail and software providers as
well as consumers and small business (70% of total FY2011
revenue), (b) software and related services to financial
institutions (18% of total revenue) through its Financial
Solutions segment, and (c) data collection, testing products,
scanning equipment and tracking services to educational,
commercial, healthcare and government entities through its
Scantron segment (12% of total revenue). M&F Worldwide Corp.
acquired check and related product provider Clarke American Corp.
in December 2005 for $800 million and subsequently acquired the
John H. Harland Company in May 2007 for $1.4 billion. M&F merged
Clarke American and Harland to form Harland Clarke. Annual
revenues totaled $1.6 billion through December 2011. M&F's
remaining publicly traded shares were acquired by portfolio
company, MacAndrews & Forbes Holdings Inc on December 21, 2011.


HAWKER BEECHCRAFT: Akin Gump to Represent Creditors' Committee
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Hawker
Beechcraft, Inc., has selected the law firm of Akin Gump Strauss
Hauer & Feld LLP as its legal counsel in the case.  The firm's
personnel who will work in the case are:

          Daniel H. Golden, Esq.
          David H. Botter, Esq.
          Alexis Freeman, Esq.
          AKIN GUMP STRAUSS HAUER & FELD LLP
          One Bryant Park
          New York, NY 10036
          Tel: (212) 872-1000
          Fax: (212) 872-1002
          E-mail: dgolden@akingump.com
                  dbotter@akingump.com
                  afreeman@akingump.com

As reported by the Troubled Company Reporter on May 14, 2012,
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed seven
members to serve on the Committee.  The members are Pension
Benefit Guaranty Corporation, Deutsche Bank National Trust
Company, Wilmington Trust, N.A., the International Association of
Machinists & Aerospace Workers, Rockwell Collins, Inc., Pratt &
Whitney Canada Corp., and A.M. Castle & Co.

PBGC said in a statement it will push the company and its
creditors to successfully reorganize without killing its pension
plans.

                    About Hawker Beechcraft

Hawker Beechcraft Inc., a designer and manufacturer of light and
medium-sized jet, turboprop and piston aircraft, filed for Chapter
11 reorganization together with 17 affiliates (Bankr. S.D.N.Y.
Lead Case No. 12-11873) on May 3, 2012, having already negotiated
a plan that eliminates $2.5 billion in debt and $125 million of
annual cash interest expense.

The plan, to be filed by June 30, will give 81.9% of the new stock
to holders of $1.83 billion of secured debt, while 18.9% of the
new shares are for unsecured creditors.  The proposal has support
from 68% of secured creditors and holders of 72.5% of the senior
unsecured notes.

Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp.  The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit.  Other claims
include pensions underfunded by $493 million.

Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal.  Epiq Bankruptcy
Solutions LLC is the claims and notice agent.

The Pension Benefit Guaranty Corp. is represented by Kelley Drye &
Warren LLP.

Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.

Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.

Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company.  The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes.  Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.


HOMELAND SECURITY: Incurs $119,000 Net Loss in First Quarter
------------------------------------------------------------
Homeland Security Capital 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
the Company of $118,858 on $4.88 million of net revenue for the
three months ended March 31, 2012, compared with a net loss
attributable to common stockholders of the Company of $1.11
million on $0 of net revenue for the same period a year ago.

The Company also reported a net loss of $3.98 million on $0 of net
revenue for the year ended June 30, 2011.

The Company's balance sheet at March 31, 2012, showed
$9.92 million in total assets, $12.26 million in total
liabilities, $169,768 in warrants payable, and a $2.51 million
total stockholders' deficit.

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

                        http://is.gd/kwXNJC

                      About Homeland Security

Homeland Security Capital Corporation is an international provider
of specialized technology-based radiological, nuclear,
environmental disaster relief and electronic security solutions to
government and commercial customers.

Following the 2011 results, Coulter & Justus, P.C., in Knoxville,
Tennessee, noted that Related Party Senior Notes Payable totalling
$5.55 million are due and payable.  As of Dec. 31, 2011, the
Company has a net capital deficiency in addition to a working
capital deficiency, which raises substantial doubt about its
ability to continue as a going concern.


HOMELAND SECURITY: YA Global Forbearance Extended to June 29
------------------------------------------------------------
Homeland Security Capital Corporation entered into a First
Amendment to the Amended and Restated Forbearance Agreement, dated
Oct. 26, 2011, entered into by and among YA Global Investments,
L.P., as lender, the Company and certain of its subsidiaries,
pursuant to which the Lender agreed to extend the Forbearance
Period by amending the definition of "Termination Date" to
June 29, 2012.

As amended, the Forbearance Period now ends on the earlier of:

   (i) June 29, 2012; and

  (ii) the occurrence of a "Termination Event," defined in the
       Agreement, as (i) the failure of the Company or any
       Guarantor to perform or comply with any term or condition
       of the Agreement; (b) the determination by the Lender that
       any warranty or representation made by the Company or any
       Guarantor in connection with the Agreement was false or
       misleading; (c) the occurrence of a materially adverse
       change in or to the collateral granted to the Lender under
       the Financing Documents or pursuant to the Agreement, as
       determined by the Lender in its sole and exclusive
       discretion; and (d) the occurrence of any default or Event
       of Default under the Financing Documents.

A copy of the Amendment is available for free at:

                        http://is.gd/vUAapj

                      About Homeland Security

Homeland Security Capital Corporation is an international provider
of specialized technology-based radiological, nuclear,
environmental disaster relief and electronic security solutions to
government and commercial customers.

The Company's balance sheet at March 31, 2012, showed
$9.92 million in total assets, $12.26 million in total
liabilities, $169,768 in warrants payable, and a $2.51 million
total stockholders' deficit.

Following the 2011 results, Coulter & Justus, P.C., in Knoxville,
Tennessee, noted that Related Party Senior Notes Payable totalling
$5.55 million are due and payable.  As of Dec. 31, 2011, the
Company has a net capital deficiency in addition to a working
capital deficiency, which raises substantial doubt about its
ability to continue as a going concern.


HOUGHTON LAKE: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Houghton Lake Hospitality LLC
        dba Comfot Inn
        200 Cloverleaf Lane
        Houghton Lake, MI 48629

Bankruptcy Case No.: 12-21587

Chapter 11 Petition Date: May 11, 2012

Court: U.S. Bankruptcy Court
       Eastern District of Michigan (Bay City)

Judge: Daniel S. Opperman

Debtor's Counsel: Kenneth W. Kable, Esq.
                  BRAUN KENDRICK FINKBEINER P.L.C.
                  4301 Fashion Square Boulevard
                  Saginaw, MI 48603
                  Tel: (989) 498-2100
                  E-mail: kenkab@braunkendrick.com

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the Company's list of its 17 largest unsecured creditors
is available for free at http://bankrupt.com/misc/mieb12-21587.pdf

The petition was signed by Shailesh "Sonny" Shah, manager.

Affiliates that simultaneously filed Chapter 11 petitions:

        Debtor                              Case No.
        ------                              --------
Kakalia Hospitality LLC dba Quality Inn     12-21588
Kakalia Hotel LLC dba Super 8               12-21589


HUDBAY MINERALS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service assigned new ratings to HudBay Minerals
Inc., including a corporate family rating of B2, a probability of
default rating of B2, and a B3 rating to the company's proposed
$400 million of guaranteed senior unsecured notes. At the same
time, Moody's assigned a speculative grade liquidity rating of
SGL-2. The outlook is stable.

Assignments:

  Issuer: HudBay Minerals, Inc.

    Senior Unsecured Regular Bond/Debenture, Assigned a range of
    69 - LGD4 to B3

Reinstatements:

  Issuer: HudBay Minerals, Inc.

     Probability of Default Rating, Reinstated to B2

     Speculative Grade Liquidity Rating, Reinstated to SGL-2

     Corporate Family Rating, Reinstated to B2

Outlook Actions:

  Issuer: HudBay Minerals, Inc.

    Outlook, Changed To Stable From Rating Withdrawn

Ratings Rationale

Hudbay's B2 corporate family rating reflects its limited diversity
and relatively small size, short remaining life of the existing
operating mine, and negative free cash flows expected over the
rating horizon. Moody's recognizes that after the proposed
transaction, the company will have a significant cash balance.
However, the rating considers the operating risks associated with
the mining sector, particularly smaller miners such as Hudbay, as
well as the execution risk surrounding the Constancia project in
Peru and the substantive capital expenditure requirements over the
rating horizon. Moody's also considered the favorable fundamental
backdrop for copper, the relatively low risk jurisdictions that
the company operates in, and the company's current healthy
margins.

The company has an 85 year history of developing, operating, and
reclaiming mines. That said, the company's current operations are
largely dependent on a single mine -- the 777 underground mine in
Manitoba, Canada, as Trout Lake/ Chisel North mine is now at the
end of its life and will not contribute to company's production
beyond early 2012. The 777 underground mine produces copper, zinc,
gold and silver, with copper responsible for about 60% of
revenues. The 777 mine is expected to produce approximately 150
million pounds of copper in 2012, which represents a small
proportion of global copper supply. New Lalor and Reed underground
developments are near the existing operations and are expected to
start contributing to production in 2012 -- that said, the 777
mine will remain the predominant revenue generator over the medium
term. The Fin Flon concentrator and zinc plant in Manitoba also
contribute to cash flows -- approximately 25% of zinc concentrate
expected to be processed at the plant in 2012 will be purchased
from third party, as the company's own production of zinc
declines.

The ratings reflect that although the 777 mine produces somewhat
diversified supply of metals and has a healthy operating cost
profile -- translating into stability of margins and operating
cash flows -- a single operating event at the mine would have
significant negative consequences on the company's financial
profile. At current production levels, the remaining life of the
company's producing reserves is less than 10 years, which makes it
critical for the company to develop new production, such as the
Constancia project in Peru. Short remaining reserve life also
increases the risk of margin compressions due to declining ore
grades, although Moody's expects margins to remain in 10% - 20%
range over the next two years.

The Constancia project, located near Cusco, Peru, is an open pit
copper mine with a long life, low cost profile and expected annual
production, once fully operational, of approximately 220 million
pounds of copper. While Constancia has the potential to
substantially boost the company's reserve and productive capacity,
it is not expected to come in operation until 2014 at the
earliest. In the meantime, total expected capital expenditure
requirement for Constancia is $1.5 billion, which will contribute
to substantial negative free cash flow generation over the rating
horizon.

The company's total capital expenditures over the next two to
three years are expected to be in $2.3 - $2.7 billion range. While
the current cash balance of over $800 million, combined with the
proceeds from $400 million note offering, give the company
substantial near term liquidity position, the company faces a
significant funding gap over the medium term, which is expected to
be financed with additional secured debt, equity offering and/or a
precious metals stream sale. The ratings reflect Moody's
expectation that the additional funding will take a form of up to
$400 million in Constancia project financing, and that equity or
equity-like issuance will account for the rest. A more significant
debt burden would put downward pressure on the ratings. The
ratings reflect Moody's expectation that over the rating horizon,
the liquidity position will decline, outstanding debt balance will
increase, and Debt/ EBITDA, as adjusted, could exceed 5x in 2013.
That said, there is a risk that the leverage would be higher, or
that the company will face liquidity constraints if capital
expenditures escalate. Moody's considers the risk of capital cost
escalation to be significant, considering general trends in the
mining industry and the early stage that the development project
is in.

The company's SGL-2 rating reflects Moody's expectation that over
the next twelve to eighteen months, the company will have good
liquidity, but that liquidity position will contract due to
substantive negative free cash flows. The company is subject to
restrictive covenants under its $300 million revolving secured
credit facility. The covenants do not provide a significant
cushion; however, Moody's expects the company to remain in
compliance over the next twelve months.

The B3 rating on the senior unsecured notes reflects their
subordinated position relative to the secured debt.

The stable outlook reflects Moody's expectation that market
conditions and prices for copper, other base metals and precious
metals over the next twelve to fifteen months will remain
favorable. The outlook also anticipates that the company will
continue to maintain discipline with respect to the use of debt in
its capital structure, will control its total capital costs, and
adjust or slow capital spending should market conditions
deteriorate.

Going forward, the ratings could be lowered if Hudbay experiences
any significant operational difficulties, capital requirements for
Constancia increase significantly, or if their liquidity position
deteriorates. A downgrade would be considered if Debt/ EBITDA, as
adjusted, is expected to exceed 5x on a sustainable basis, or if
peak leverage is significantly higher that 5x. Upward rating
pressure is limited at this time due to the significant capital
expenditures required over the next several years. That said,
ratings could be upgraded once the company expands its productive
capacity and increases diversification with new mines coming
online.

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


INFUSYSTEM HOLDINGS: Ryan Morris Discloses 7.4% Equity Stake
------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Ryan J. Morris and his affiliates disclosed that, as
of May 9, 2012, they beneficially own 1,587,543 shares of common
stock of InfuSystem Holdings, Inc., representing 7.4% of the
shares outstanding.  Mr. Morris is the Executive Chairman of the
Board and a director of the Company.  He is also the managing
member of Meson LLC.  A copy of the filing is available at no
charge at http://is.gd/UCf8XN

                     About InfuSystem Holdings

InfuSystem Holdings, Inc., operates through operating
subsidiaries, including InfuSystem, Inc., and First Biomedical,
Inc.  InfuSystem provides infusion pumps and related services.
InfuSystem provides services to hospitals, oncology practices and
facilities and other alternate site healthcare providers.
Headquartered in Madison Heights, Michigan, InfuSystem delivers
local, field-based customer support, and also operates pump
service and repair Centers of Excellence in Michigan, Kansas,
California, and Ontario, Canada.

The Company reported a net loss of $45.44 million in 2011,
compared with a net loss of $1.85 million in 2010.

The Company's balance sheet at Dec. 31, 2011, showed
$76.26 million in total assets, $36.09 million in total
liabilities, and $40.16 million in total stockholders' equity.

After auditing the Company's 2011 financial statements, Deloitte &
Touche LLP, in Detroit, Michigan, said that the possibility of a
change in the majority representation of the Board and consequent
event of default under the Credit Facility, which would allow the
lenders to cause the debt of $24.0 million to become immediately
due and payable, raises substantial doubt about the Company's
ability to continue as a going concern.


INTERLEUKIN GENETICS: Incurs $1.4MM Net Loss in First Quarter
-------------------------------------------------------------
Interleukin Genetics, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $1.41 million on $677,884 of total revenue for the
three months ended March 31, 2012, compared with a net loss of
$1.25 million on $719,485 of total revenue for the same period
during the prior year.

The Company reported a net loss of $5.0 million for 2011, compared
with a net loss of $6.0 million for 2010.

The Company's balance sheet at March 31, 2012, showed
$1.93 million in total assets, $14.72 million in total
liabilities, and a $12.79 million total stockholders' deficit.

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

                        http://is.gd/A7chr7

                         About Interleukin

Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized
health company that develops unique genetic tests to provide
information to better manage health and specific health risks.

Following the Company's financial results for the year ended
Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts,
expressed substantial doubt about Interleukin Genetics' ability to
continue as a going concern.  The independent auditors noted that
the Company incurred a net loss of $5.02 million during the year
ended Dec. 31, 2011, and, as of that date, the Company's current
liabilities exceeded its current assets by $12.27 million and its
total liabilities exceeded total assets by $11.4 million.


INTERNATIONAL TEXTILE: Incurs $22.5 Million Net Loss in Q1
----------------------------------------------------------
International Textile Group, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $22.47 million on $161.86 million of net
sales for the three months ended March 31, 2012, compared with a
net loss of $11.94 million on $157.98 million of net sales for the
same period during the prior year.

The Company reported a net loss of $69.43 million in 2011,
compared with a net loss of $46.30 million in 2010.

The Company's balance sheet at March31, 2012, showed $432.77
million in total assets, $630.60 million in total liabilities and
a $197.82 million total stockholders' deficit.

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

                        http://is.gd/sAgWrX

                    About International Textile

International Textile Group, Inc., is a global, diversified
textile manufacturer headquartered in Greensboro, North Carolina,
with current operations principally in the United States, China,
Mexico, and Vietnam.  ITG's long-term focus includes the
realization of the benefits of its global expansion, including
reaching full production at ITG facilities in China and Vietnam,
and continuing to seek other strategic growth opportunities.


IRVINE SENSORS: Incurs $11.3 Million Net Loss in April 1 Quarter
----------------------------------------------------------------
ISC8, Inc., formerly known as Irvine Sensors Corporation, filed
with the U.S. Securities and Exchange Commission its quarterly
report on Form 10-Q disclosing a net loss of $11.32 million on
$1.20 million of total revenues for the 13 weeks ended April 1,
2012, compared with a net loss of $7.55 million on $983,000 of
total revenues for the 13 weeks ended April 3, 2011.

The Company reported a net loss of $19.57 million on $2.49 million
of total revenues for the 26 weeks ended April 1, 2012, compared
with a net loss of $18.38 million on $1.94 million of total
revenues for the 26 weeks ended April 3, 2011.

The Company reported a net loss of $15.76 million on
$14.09 million of total revenues for the fiscal year ended Oct. 2,
2011, compared with a net loss of $11.15 million on $11.71 million
of total revenues for the fiscal year ended Oct. 3, 2010.

The Company's balance sheet at April 1, 2012, showed
$12.76 million in total assets, $48.60 million in total
liabilities, and a $35.83 million total stockholders' deficit.

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

                        http://is.gd/0X4WqK

                        About Irvine Sensors

Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation
(OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision
systems company engaged in the development and sale of
miniaturized infrared and electro-optical cameras, image
processors and stacked chip assemblies and sale of higher level
systems incorporating said products.  Irvine Sensors also conducts
research and development related to high density electronics,
miniaturized sensors, optical interconnection technology, high
speed network security, image processing and low-power analog and
mixed-signal integrated circuits for diverse systems applications.


ISTAR FINANCIAL: Closes Sale of $275 Million 9% Senior Notes
------------------------------------------------------------
iStar Financial Inc. completed the sale of $275,000,000 aggregate
principal amount of 9.0% Senior Notes due 2017 at an offering
price of 98.012% pursuant to a purchase agreement, dated May 3,
2012, between the Company and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Barclays Capital Inc. and J.P. Morgan
Securities LLC, as the initial purchasers.  The Notes were issued
pursuant to an indenture, dated May 8, 2012, between the Company
and U.S. Bank National Association, as the trustee.  The Notes are
unsecured, senior obligations of the Company and rank equally in
right of payment with all of the Company's existing and future
unsecured, unsubordinated indebtedness.  The Notes will bear
interest at an annual rate of 9.0% and mature on June 1, 2017.
The Company will pay interest on the Notes on each June 1 and
December 1, commencing on Dec. 1, 2012.

Upon the occurrence of a Change of Control Triggering Event, each
holder of the Notes will have the right to require the Company to
purchase all or a portion of such holder's Notes at a purchase
price equal to 101% of the principal amount thereof, plus accrued
interest.

Furthermore, in connection with the sale of the Notes, the Company
entered into a registration rights agreement, dated as of May 8,
2012, between the Company and the Initial Purchasers, pursuant to
which the Company agreed to consummate an offer to exchange the
Notes for a new issue of its debt securities registered under the
Securities Act of 1933, as amended, with terms substantially
identical to those of the Notes no later than 360 days after the
issuance of the Notes.  If the Company fails to satisfy its
registration obligations under the Registration Rights Agreement,
it will be required to pay additional interest to the holders of
the Notes under certain circumstances.  That additional interest
will accrue in respect of each applicable series of Notes at a
rate of 0.25% per annum over the interest rate otherwise provided
for under the applicable series of Notes.

                       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.

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.

                           *     *     *

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+'.


KAISER ALUMINUM: Moody's Rates Sr. Notes 'Ba3'; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Kaiser Aluminum
Corporation's proposed $200 million senior unsecured notes due
2020. Proceeds from the transaction will be used for general
corporate purposes, which Moody's believes are likely to include
acquisitions and expansion projects. Moody's also assigned a Ba3
Corporate Family Rating ("CFR") and a Ba3 Probability of Default
Rating ("PDR") to Kaiser. In addition, a speculative grade
liquidity rating of SGL-1 was assigned indicating very good
liquidity. The assigned first-time ratings are subject to Moody's
review of final terms and conditions of the transaction which is
expected to close at the end of May 2012. The rating outlook is
stable.

Assignments:

  Issuer: Kaiser Aluminum Corporation

     Corporate Family Rating, Assigned Ba3

     Probability of Default Rating, Assigned Ba3

     $200 million Senior Unsecured Notes due 2020, Assigned Ba3,
     LGD4, 56%

Outlook, Stable

Ratings Rationale

The Ba3 CFR reflects Kaiser's moderate leverage (pro-forma for the
notes issue), the strong market presence of its semi-fabricated
aluminum mill products in the currently favorable commercial
aerospace and automotive sectors, limited exposure to base metal
price volatility, long standing relationships with its biggest
customers, and Moody's expectations for a continued strong
liquidity profile. Over 50% of Kaiser's value added revenues are
derived from the aerospace market segment which is currently in a
cyclical upswing. Currently strong industry fundamentals in its
primary end markets are likely to keep demand high for Kaiser's
high strength and extrusion products, and allow for some margin
expansion.

At the same time, the Ba3 CFR also recognizes Kaiser's modest size
(with roughly $700 million in value added revenues); customer
concentration; reliance on the cyclical aerospace and automotive
segments; the inherent risk associated with its acquisition
focused growth strategy; and the potential for an adverse
financial impact from the conditional cash conversion features of
its convertible notes. Additional acquisitions, if done at
aggressive multiples, could stress the rating.

Kaiser's stable outlook reflects Moody's expectation that the
primary commercial aerospace and automotive end markets the
company serves will continue to show robust fundamentals and
demand requirements. The stable outlook also assumes that the
company's key credits metrics, including debt to EBITDA, EBIT to
interest, and free cash flow to debt, will remain consistent with
the rating, and that the company will prudently use the proceeds
from the notes offering, maintain good liquidity, and utilize
conservative hedging practices primarily for maintaining metal
price neutrality in its core business operations.

At this time, an upgrade is unlikely mainly because of the
company's limited scale and revenue concentration. However, if
Kaiser were to reduce dependence on the aerospace sector, execute
well on its expansion projects, successfully integrate future
acquisitions, and further improve its metrics such that adjusted
leverage is expected to be lower than 2.5x and (CFO-
dividends)/debt greater than 35% on a sustainable basis, Moody's
could consider a positive outlook or a rating upgrade.

However, the company's ratings and/or outlook could be lowered if
metrics deteriorate sustainably (specifically, if debt to EBITDA
increases to greater than 3.5x and EBIT to interest falls below
3x), if aerospace or auto sector fundamentals turn unexpectedly
from any shock to the global economy, if the company makes
acquisitions at aggressive multiples, or if available liquidity
(measured as cash plus revolver availability) drops below $150
million for more than two quarters.

The principal methodology used in rating Kaiser Aluminum
Corporation was the Global Steel Industry Methodology published in
January 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.

Kaiser Aluminum Corporation, based in Foothill Ranch, California,
currently operates 12 fabricating facilities throughout North
America (11 in the US, and 1 in Canada). Kaiser produces value-
added-sheet, plate, extrusions, rod, bar, and tube primarily for
aerospace, automotive, and general engineering market segments.
For the LTM period ended March 31, 2012, it recorded revenues of
$1.3 billion of which value-added-revenues were $683 million.


KAKALIA HOSPITALITY: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Kakalia Hospitality LLC
        dba Quality Inn
        3301 Highland Drive
        Hudsonville, MI 49426

Bankruptcy Case No.: 12-21588

Chapter 11 Petition Date: May 11, 2012

Court: U.S. Bankruptcy Court
       Eastern District of Michigan (Bay City)

Judge: Daniel S. Opperman

Debtor's Counsel: Kenneth W. Kable, Esq.
                  BRAUN KENDRICK FINKBEINER P.L.C.
                  4301 Fashion Square Boulevard
                  Saginaw, MI 48603
                  Tel: (989) 498-2100
                  E-mail: kenkab@braunkendrick.com

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the Company's list of its 17 largest unsecured creditors
is available for free at http://bankrupt.com/misc/mieb12-21588.pdf

The petition was signed by Shailesh "Sonny" Shah, manager.

Affiliates that simultaneously filed Chapter 11 petitions:

        Debtor                              Case No.
        ------                              --------
Houghton Lake Hospitality LLC               12-21587
Kakalia Hospitality LLC dba Quality Inn     12-21588
Kakalia Hotel LLC dba Super 8               12-21589


KODIAK OIL: Moody's Rates $100MM Senior Unsecured Notes 'Caa1'
--------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Kodiak Oil &
Gas Corp.'s (KOG) proposed offering of $100 million senior
unsecured notes due 2019. The B3 Corporate Family Rating (CFR) and
stable outlook are not affected by this action. The notes will be
an add on to the company's 8.125% senior unsecured notes due 2019
and will be part of the same series of debt securities. Proceeds
of the offering will be used to repay outstanding borrowings under
KOG's secured revolving credit facility, for capital expenditures
and general corporate purposes.

Ratings Rationale

"This notes offering will provide the continued funding enabling
Kodiak to move its Williston Basin presence forward as it builds
scale," commented Andrew Brooks, Moody's Vice President. "This
incremental debt will supplement the company's cash from
operations and availability under its revolving credit facility to
provide the liquidity necessary to fund its aggressive growth."

The Caa1 rating on the proposed $100 million of senior notes
reflects both the overall probability of default of Kodiak, to
which Moody's assigns a PDR of B3, and a loss given default (LGD)
of LGD4 (61%). The company has a $225 million secured borrowing
base revolving credit facility ($750 million total commitment),
which was reaffirmed April 1, 2012, under which $140 million is
presently available. Note proceeds will repay amounts currently
outstanding under the revolver. The senior unsecured notes are
subordinate to the senior secured credit facility's potential
priority claim to the company's assets. The size of the potential
senior secured claims relative to the outstanding unsecured notes
results in the senior notes being rated one notch below the B3 CFR
under Moody's Loss Given Default Methodology.

Kodiak's B3 Corporate Family Rating reflects its small but rapidly
expanding scale, the company's limited historical operating
record, its aggressive growth aspirations and high debt leverage,
offset by its attractive land holdings in the prolific Williston
Basin and extensive oil weighting of its reserves and production.
Since the company's 2002 inception in its current format, it has
acquired lease-holdings in the Bakken and Three Forks formations
in the Williston Basin, which at March 31, 2012 approximated
157,000 net leasehold acres, 93% of its total net acreage. In 2011
alone, Kodiak more than doubled its net acreage in the Bakken over
the course of several acquisitions.

As of March 31, 2012, Kodiak's proved reserve base totaled 51.7
million Boe, 89% oil and 37% proved developed (PD). Its
disproportionately large 63% proved undeveloped (PUDs) reserves
are not unusual for a company at this early stage of its
development, but the extent of PUDs will pressure capital spending
going forward. First-quarter 2012 credit metrics are extremely
weak, with debt on production exceeding $60,000 per Boe, and debt
per PD reserves of $35 per Boe. Kodiak's first-quarter 2012
production (net of flaring 56% of its natural gas production)
averaged 10,580 Boe per day (91% crude oil), up over 5.5x compared
with 2011's first-quarter. Production growth, however, lagged
company projections due to well remediation and repairs required
by certain mechanical issues arising during completion procedures
in late 2011 and early 2012. Consequently, Kodiak has revised
downward its projected average daily production rate for 2012 by
approximately 17%, and its 2012 exit rate by 10% to approximately
27,000 Boe per day. Based on currently projected operating
expectations, relative debt leverage would drop to about $40,000
per Boe of average daily production in 2012, a level still
aggressive for its rating. Moreover, achieving the rapid growth
rate envisioned by the company is not without execution risk,
including possible weather-related and infrastructure bottlenecks
the rapidly growing Bakken is well known for.

Moody's stable outlook is based on the expectation that Kodiak
will meet its growth projections, notwithstanding 2012's first
quarter shortfall, improving its leverage metrics by doing so,
while requiring limited incremental use of debt. Moody's
expectation is that Kodiak's heavy weighting to oil will continue
to produce attractive cash margins and that finding and
development (F&D) costs do not excessively inflate from the
historic levels, enabling it to continue generating a leveraged
full-cycle ratio comfortably in excess of 1x. Should Kodiak
successfully execute on its growth objectives and achieve
sustained production approaching 25,000 boe per day while
maintaining a balanced use of debt and equity to finance that
growth, an upgrade could be warranted. Conversely, should there be
any indication that the company is materially failing to meet its
production targets or that doing so would entail a greater use of
debt in the company's capital structure, or should liquidity
concerns arise in the course of pursuing its rapid growth, Kodiak
would likely face a downgrade.

The principal methodology used in rating Kodiak was the Global
Independent Exploration and Production 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.

Kodiak Oil & Gas Corp. is an independent E&P company headquartered
in Denver, Colorado.


LEVI STRAUSS: Closes Private Placement of $385MM Senior Notes
-------------------------------------------------------------
Levi Strauss & Co. closed its private placement of $385.0 million
aggregate principal amount 6 7/8% Senior Notes due 2022.

The company also announced that it has accepted for purchase
approximately $278.2 million (or approximately 79.5%) of its
$350.0 million aggregate principal amount of 8 7/8% Senior Notes
due 2016, which were validly tendered on or prior to the early
tender deadline of 5:00 p.m., New York City time, on May 7, 2012.
The Company and the trustee for the Notes have executed a
supplemental indenture to the indenture governing the Notes that
eliminates or makes less restrictive substantially all of the
restrictive provisions of the indenture.  The tender offer will
remain open to holders until 12:00 midnight, New York City time,
on May 21, 2012, unless extended or earlier terminated by the
company. Holders who tender Notes after 5:00 p.m., New York City
time, on May 7, 2012, and prior to the expiration of the tender
offer will receive $1,003.33 per $1,000 principal amount of Notes.

Meanwhile, on May 8, 2012, the Company entered into an Amendment
to Employment Agreement with Chip Bergh, President and Chief
Executive Officer, to reflect the parties' understanding
concerning the payment of Annual Incentive Compensation for 2011.

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

                       http://is.gd/BeDPEd

                     About Levi Strauss & Co.

Headquartered in San Francisco, California, Levi Strauss & Co. --
http://www.levistrauss.com/-- is one of the world's leading
branded apparel companies.  The Company designs and markets jeans,
casual and dress pants, tops, jackets and related accessories, for
men, women and children under the Levi's(R), Dockers(R) and
Signature by Levi Strauss & Co.(TM).  The Company markets its
products in three geographic regions: Americas, Europe, and Asia
Pacific.

The Company's balance sheet at Feb. 26, 2012, showed $3.21 billion
in total assets, $3.30 billion in total liabilities, $6.20 million
in temporary equity, and a $96.49 million total stockholders'
deficit.

                           *     *     *

In April 2012, Standard & Poor's Ratings Services assigned its
'B+' rating (same as the corporate credit rating) to San
Francisco-based Levi Strauss & Co.'s proposed $350 million senior
unsecured notes due 2022.

"The ratings on Levi Strauss reflect our view that the company's
financial profile continues to be 'aggressive,' particularly since
the company's balance sheet remains highly leveraged and we expect
cash flow protections measures to continue to be weak. In
addition, we continue to consider Levi Strauss' business risk
profile to be 'weak,' given its continuing participation in the
highly competitive denim and casual pants market, which is subject
to fashion risk and still-weak consumer spending, and our
expectation that the company's business focus will remain narrow.
We believe the company benefits from its strong, well-recognized
Levi's brand, long operating history, and distribution channel
diversity (both by retail customer and geography)," S&P said.

In April 2012, Moody's Investors Service affirmed Levi Strauss &
Co ("LS&Co) B1 Corporate Family and Probability of Default
Ratings.  Moody's also assigned a B2 rating to the company's
proposed $350 million senior unsecured notes due 2022 and affirmed
the B2 ratings of the company's other series of unsecured debt.

Levi Strauss' B1 Corporate Family Rating reflects the company's
negative trends in operating margins reflecting inconsistent
execution as well as input cost pressures.  The ratings also
reflect the company's still significant debt burden, which has
been increasing due to the company's continued investment in its
own retail stores and its sizable underfunded pension. Debt/EBITDA
(incorporating Moody's standard analytical adjustments) was 5.1
times for the LTM period ending 2/26/2012.  The rating take into
consideration the company's significant global scale, with
revenues near $5 billion, its operations in over 110 countries and
the ownership of the iconic Levi's trademark.


LIGHTSQUARED INC: Lender Group Wants Credit Bid Rights
------------------------------------------------------
The Ad Hoc Secured Group of LightSquared LP Lenders, which
consists of holders of more than 50.1% of the debt under
LightSquared LP's October 2010 credit facility, lodged a
preliminary objection to the Debtors' request to use cash
collateral of the prepetition secured lenders.

The Ad Hoc Secured Group said it does not object to the Debtors'
proposed use of roughly $15 million of purportedly unencumbered
cash to fund the Debtors? obligations between the Petition Date
and the final hearing on the Cash Collateral Motion.

The group noted that -- if the Court approves the Debtors' request
to continue using existing cash management system on an interim
basis and thereby permits the Debtors? use of the $15 million in
cash -- the Debtors will not need to use cash collateral during
the Interim Period, and the Debtors do not intend to pursue their
request to do so.  If, however, the Court refuses to grant such
permission, the Debtors intend to move forward with their request
for the use of cash collateral during the Interim Period pursuant
to the Cash Collateral Motion.

However, the group said the terms proposed by the Debtors in the
Cash Collateral Motion for the use of the Prepetition LP Secured
Parties? cash collateral are woefully deficient, and do not
adequately protect the interests of the Prepetition LP Secured
Parties, including the Ad Hoc Secured Group.

The group has proposed its own interim cash collateral order to
addresses these deficiencies.  Among other things, the group wants
the Debtors to pay for the group's legal fees and expenses, and
submit periodic financial reports.  The group also wants the right
to credit-bid the amount of the Prepetition Secured Obligations in
connection with any sale of all or substantially all of the
Debtors? assets and property, including, without limitation, any
sale occurring pursuant to section 363 of the Bankruptcy Code or
included as part of any plan of reorganization.

As of the Petition Date, LightSquared LP owed not less than
$1,674,889,467 under the facility.

The ad hoc group has hired White & Case as counsel and Blackstone
Group as advisor.

The ad hoc group also proposes to limit to $75,000 the proceeds of
cash collateral that may be used by any official committee solely
to investigate the validity, priority or enforceability of the
prepetition secured lenders' liens.

The Ad Hoc Secured Group said it has worked in good faith over the
past few months to negotiate a potential out-of-court
restructuring with the Debtors and their principal shareholders.
The Ad Hoc Secured Group remains willing to achieve a consensual
resolution of the chapter 11 cases so long as such resolution
appropriately balances the Debtors? need to use cash collateral
with the rights of the Prepetition LP Lenders and the Prepetition
LP Agent to adequate protection, without transferring the risk of
the Debtors? business and litigation strategy to the Prepetition
LP Secured Parties.

                        About LightSquared

LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.

LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network.  In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries.  In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.

LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.

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.

LightSquared also sought 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.

Judge Shelley C. Chapman presides over the case.  Lawyers at
Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the
Debtors.  Kurtzman Carson Consultants LLC serves as claims and
notice agent.

Counsel to UBS AG as agent under the October 2010 facility is
Melissa S. Alwang, Esq., at Latham & Watkins LLP.

The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring.  The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group; Knighthead Capital Management LLC; and Redwood Capital
Management.  Counsel to the ad hoc secured group is Thomas E.
Lauria, Esq., at White & Case LLP.

Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock.  Harbinger 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., at Weil, Gotshal & Manges LLP.


LIGHTSQUARED INC: Wants to Use Lenders' Cash Collateral
-------------------------------------------------------
LightSquared Inc. and certain of its affiliates seek permission
from the Bankruptcy Court to use cash collateral of their
prepetition secured lenders for (a) working capital and other
general corporate purposes, (b) permitted payment of costs of
administration of the Chapter 11 cases, and (c) payment of
prepetition expenses as approved by the Court, pursuant to a 13-
week cash flow forecast through Aug. 10, 2012.

"[T]he Debtors are at a critical development stage with little
operating revenue.  The Debtors do not generate sufficient
unencumbered cash from operations to cover their operating
expenses and require the use of Cash Collateral of the Prepetition
Secured Parties to meet capital expenditures and other non-
operating cash expenses," LightSquared said in court filings.

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.
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.

The Debtors, with the assistance of their financial advisors,
Moelis & Company LLC, analyzed their cash needs to determine what
is necessary to maintain their operations in chapter 11 and work
towards a successful reorganization.  In undertaking this
analysis, the Debtors and their advisors considered the impact of
the current economic outlook on the Debtors' near-term projected
financial performance.  The Debtors also conferred with
individuals in the Debtors' operational and management teams to
understand key business metrics in both the near and long term.

Absent approval to use Cash Collateral, the Debtors said their
financial analysis and projections make clear that, with a monthly
burn rate of historically roughly $12 million to $15 million --
which does not include large milestone-driven, vendor-type
payments -- the Debtors' current unencumbered cash on hand and
minimal unencumbered cash generated from their operations would be
insufficient to, among other things, engage in ongoing discussions
with the Federal Communications Commission regarding the
deployment of the Debtors' network, maintain business
relationships with their vendors, suppliers and customers,
including public safety agencies, pay their employees and
otherwise finance their operations.

sThe Debtors argued that funding each of the expenditures is
necessary to the Debtors' ability to preserve and maintain their
going-concern values for the benefit of all parties in interest,
and without such funding, the Debtors would be forced to terminate
their business operations and liquidate their assets -- all to the
material detriment of all parties in interest in the Chapter 11
cases, particularly the Prepetition Secured Parties.

LightSquared said it has roughly $15 million of unencumbered cash
that the Debtors also intend to use for operations.

The authorization to use Cash Collateral will terminate upon (a)
entry of an order dismissing any of the Chapter 11 cases of the
Debtors with material assets or converting such Chapter 11 cases
to cases under chapter 7, (b) entry of an order appointing a
chapter 11 trustee in any of the Chapter 11 cases of the Debtors
with material assets that is not stayed following entry, or (c)
entry of an order staying, reversing or vacating, in a manner
materially adverse to the Prepetition Secured Parties and without
prior consent of the Prepetition Secured Parties.

The Debtors said each of the Prepetition Secured Parties is
adequately protected by an equity cushion.  The Debtors said their
advisors will attest at the May 15 interim hearing on their
request that the lenders under the July 2011 facility are
sufficiently protected by an equity cushion of 33% at the low end
and 63% at the high end; and the lenders under the October 2010
facility are also sufficiently protected by an equity cushion of
68% at the low end and 82% at the high end.

The Debtors further noted that they "have only just begun these
Chapter 11 Cases and have done so determined to reorganize and to
preserve the value of their businesses as a going concern.  Thus,
it would be inappropriate at this time to speculate as to the
liquidation value of the Debtors because the Debtors will not be
liquidating.  Instead, the Court should look to the Debtors' going
concern value and find that each of the Prepetition Secured
Parties has a significant equity cushion."

The Debtors also propose to provide the Prepetition Secured
Parties with additional adequate protection, solely to the extent
of any diminution in the value in their interests of the Cash
Collateral.

For avoidance of doubt, the Prepetition Secured Parties will not
have Adequate Protection Liens on any claims or causes of action
under chapter 5 of the Bankruptcy Code or the related proceeds.

The Adequate Protection Liens are subject to a carve-out for (a)
all statutory fees payable to the Clerk of the Court and to the
U.S. Trustee pursuant to 28 U.S.C. Sec. 1930(a); (b) with respect
to the information officer to be appointed by the Ontario Superior
Court of Justice (Commercial List) in Toronto, Ontario, Canada, in
connection with the proceedings commenced pursuant to the
Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c.
C-36, as amended, in the Canadian Court, all fees and expenses
required to be paid to the Information Officer and its counsel in
connection with the Canadian Proceedings, which fees and expenses
may be secured by a charging lien granted by the Canadian Court
over the Debtors' assets in Canada, in the maximum amount of
C$200,000, (c) all reasonable fees and expenses incurred by a
trustee under section 726(b) of the Bankruptcy Code not to exceed
$50,000, and (d) the allowed and unpaid professional fees,
expenses and disbursements incurred on or after the Termination
Date by the Debtors and the Committee for any professionals
retained by final Court order (which order has not been vacated
or stayed, unless the stay has been vacated) by the Debtors and
the Committee under sections 327, 328 or 1103(a) of the Bankruptcy
Code in an aggregate amount not to exceed $6 million plus such
allowed fees, expenses and disbursements incurred prior to the
Termination Date, but which remain unpaid as of the Termination
Date, whether approved by the Court before or after the
Termination Date.

Prior to the occurrence of the Termination Date, the Debtors will
be permitted to pay Allowed Professional Fees.  The amounts paid
will not reduce the Carve-Out.

                        About LightSquared

LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.

LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network.  In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries.  In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.

LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.

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.

LightSquared also sought 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.

Judge Shelley C. Chapman presides over the case.  Lawyers at
Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the
Debtors.  Kurtzman Carson Consultants LLC serves as claims and
notice agent.

Counsel to UBS AG as agent under the October 2010 facility is:

          Melissa S. Alwang, Esq.
          LATHAM & WATKINS LLP
          885 Third Avenue
          New York, NY 10022

The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring.  The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group; Knighthead Capital Management LLC; and Redwood Capital
Management.  Counsel to the ad hoc secured group is:

          Thomas E. Lauria, Esq.
          WHITE & CASE LLP
          1155 Avenue of the Americas
          New York, NY 10036

Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock.  Harbinger 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., at Weil, Gotshal & Manges LLP.


LIGHTSQUARED INC: Seeks Extension of Schedules Filing Deadline
--------------------------------------------------------------
LightSquared Inc. and certain of its affiliates seek a 30-day
extension of time to file their (a) statements of financial
affairs, (b) schedules of assets and liabilities, (c) schedules of
current income and expenditures, (d) schedules of executory
contracts and unexpired leases, and (e) lists of equity security
holders through and including June 27, 2012.

The Debtors have begun compiling the information required to
complete the Schedules and Statements.  Nevertheless, as a
consequence of the complexity of the Debtors' business operations,
coupled with the limited time and resources available, the Debtors
have not yet finished gathering such information.

Given the numerous critical operational matters that the Debtors'
accounting and legal personnel must address in the early days of
the Chapter 11 Cases and the volume of information that must be
reviewed, prepared and included in their Schedules and Statements,
Marc R. Montagner, the Chief Financial Officer and the Interim Co-
Chief Operating Officer of LightSquared Inc., said he does not
anticipate that the Debtors will be able to complete their
Schedules and Statements within the 14 days required by the
Federal Rules of Bankruptcy Procedure.

"I believe that focusing the attention of key accounting and legal
personnel on vital operational and restructuring matters during
the critical first weeks after filing these Chapter 11 Cases,
rather than on preparing their Schedules and Statements, will
facilitate the Debtors' smooth transition into chapter 11.
Accordingly, I believe that obtaining an extension of time to
file the Schedules and Statements will maximize the value of the
Debtors' estates for the benefit of creditors and all parties in
interest," he said.

                        About LightSquared

LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.

LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network.  In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries.  In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.

LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.

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.

LightSquared also sought 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.

Judge Shelley C. Chapman presides over the case.  Lawyers at
Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the
Debtors.  Kurtzman Carson Consultants LLC serves as claims and
notice agent.

Counsel to UBS AG as agent under the October 2010 facility is
Melissa S. Alwang, Esq., at Latham & Watkins LLP.

The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring.  The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group; Knighthead Capital Management LLC; and Redwood Capital
Management.  Counsel to the ad hoc secured group is Thomas E.
Lauria, Esq., at White & Case LLP.

Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock.  Harbinger 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., at Weil, Gotshal & Manges LLP.


LODGENET INTERACTIVE: Douglas Bradbury Named Board Chairman
-----------------------------------------------------------
LodgeNet Interactive Corporation announced that Douglas Bradbury,
an independent director of the Company since 1999, has been
appointed Chairperson of the Board of Directors, succeeding Scott
C. Petersen, who remains as Chief Executive Officer and Board
member.

Mr. Bradbury said "by separating the Chair and the CEO positions,
LodgeNet not only demonstrates its commitment to corporate
governance best practices, but it allows Mr. Petersen to focus
more of his time and effort on the Company's strategic
opportunities.  As Chairperson, I look forward to working closely
with the Board and management on defining strategy and driving
shareholder value."

"LodgeNet is in the process of evaluating various potential
partnerships, alliances, and other options to expand, strengthen,
and grow our business," said Mr. Petersen.  "We believe there are
a number of opportunities open to the Company; and we, with the
assistance of our outside advisors, are highly focused on their
pursuit."

In this regard, LodgeNet also announced the resignation of
independent director Edward L. Shapiro.  Mr. Shapiro, a partner at
PAR Capital Management, joined LodgeNet's Board in 2010.  In
addition to being a significant LodgeNet shareholder, Mr.
Shapiro's firm also makes investments from time to time in various
companies in the media, entertainment, and travel industries.  In
announcing his resignation, Mr. Shapiro informed the Board that
his decision was not based on any disagreements with the company,
and indicated that his intent is to eliminate any potential
conflicts that could arise as a result of his service on the
LodgeNet Board and his firm's other current or future investments.
Mr. Shapiro said, "It has been a pleasure and privilege to serve
on LodgeNet's Board and to help position the company for long-term
success."

Mr. Bradbury stated, "We appreciate Ed's guidance and industry
perspective throughout his tenure on the Board.  Although we will
certainly miss Ed's involvement on the Board, we understand his
decision and believe it to be in the best interest of both PAR
Capital Management and LodgeNet at this time."  There are no
current plans to fill the vacancy created by Mr. Shapiro's
resignation.

                     About LodgeNet Interactive

Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses.  LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States.  The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions.  LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.

The Company reported a net loss of $631,000 in 2011, a net loss of
$11.68 million in 2010, and a net loss of $10.15 million in 2009.

The Company's balance sheet at March 31, 2012, showed
$388.41 million in total assets, $442.16 million in total
liabilities and a $53.75 million total stockholders' deficiency.

                           *     *     *

Lodgenet carries a 'B3' long term corporate family rating and a
'Caa1' probability of default rating, with 'stable' outlook, from
Moody's.  It has 'B' long term foreign and local issuer credit
ratings, with 'stable' outlook, from Standard & Poor's.

"In Moody's opinion, continued cautious investment from LodgeNet's
hotel customers will hamper intermediate term growth in its core
hospitality services business, and over the long term competing
forms of entertainment will pressure this revenue stream as the
company seeks to defend its relevance to both hotel operators and
hotel guests.  The B3 corporate family rating incorporates these
weak growth prospects, mitigated somewhat by the company's
moderately high financial risk profile and demonstrated capacity
to generate positive free cash flow throughout challenging
economic conditions, along with a measure of stability from the
monthly fees it receives from hotels regardless of occupancy,"
Moody's said in October 2010.


LYNWOOD HALL: Chapter 12 Estates Not Taxable Entities
-----------------------------------------------------
The U.S. Supreme Court, in a split decision, held that the federal
income tax liability resulting from a Chapter 12 debtor's
postpetition farm sale is not "incurred by the estate" under
11 U.S.C. Sec. 503(b) and thus is neither collectible nor
dischargeable in the Chapter 12 plan.  The High Court affirmed the
judgment of the Court of Appeals for the Ninth Circuit.

"Chapter 12 estates are not taxable entities.  Petitioners, not
the estate itself, are required to file the tax return and are
liable for the taxes resulting from their postpetition farm sale,"
the High Court held.

Lynwood and Brenda Hall petitioned for bankruptcy under Chapter 12
and sold their farm shortly thereafter.  The Halls initially
proposed a plan of reorganization under which they would pay off
outstanding liabilities with proceeds from the sale.  The Internal
Revenue Service objected, asserting a federal income tax of
$29,000 on the capital gains from the farm sale.

The Halls amended their proposal to treat the income tax as a
general, unsecured claim to be paid to the extent funds were
available, with the unpaid balance discharged.  Again the IRS
objected.  Taxes on income from a postpetition farm sale, the IRS
argued, remain the debtors' independent responsibility because
they are neither collectible nor dischargeable in bankruptcy.  The
Bankruptcy Court sustained the objection.  The court reasoned that
because a Chapter 12 estate is not a separate taxable entity under
the Internal Revenue Code, it cannot "incur" taxes for purposes of
11 U. S. C. Sec. 503(b).

The District Court reversed, expressing doubt that IRC provisions
are relevant to interpreting Sec. 503(b).  Based on its reading of
legislative history, the District Court determined that Congress
intended Sec. 1222(a)(2)(A) to extend to petitioners' postpetition
taxes.

The Court of Appeals for the Ninth Circuit reversed.  The Court of
Appeals held that the Chapter 12 estate does not "incur" the
postpetition federal income taxes for purposes of Sec. 503(b)
because it is not a separate taxable entity under the IRC, and
noted that Congress repeatedly has indicated the relevance of the
IRC's taxable entity provisions to the Bankruptcy Code.  Although
"sympathetic" to the view that the postpetition tax liabilities
should be dischargeable, the Court of Appeals held that "the
operative language simply failed to make its way into the
statute."  The Court of Appeals concluded that because the taxes
do not qualify under Sec. 503(b), they are not priority claims in
the plan eligible for the Sec. 1222(a)(2)(A) exception.

Judge Richard Paez of the Ninth Circuit dissented, siding with a
sister Circuit that had concluded that Congress intended Sec.
1222(a)(2)(A) to extend to such postpetition federal income taxes.

The Supreme Court granted certiorari to resolve the split of
authority.

The case is LYNWOOD D. HALL, ET UX., PETITIONERS, v. UNITED
STATES, No. 10-875 (U.S.).  A copy of the U.S. Supreme Court's
decision dated May 14, 2012, is available at http://is.gd/diJwv6
from Leagle.com.  Justice Sonia Sotomayor delivered the opinion of
the Court.

Justice Stephen Breyer, with whom Justice Anthony Kennedy, Justice
Ruth Bader Ginsburg, and Justice Elena Kagan join, dissented.
Justice Breyer pointed out Chapter 12 of the Bankruptcy Code helps
family farmers in economic difficulty reorganize their debts
without losing their farms.  Consistent with the chapter's
purposes, Congress amended 11 U.S.C. Sec. 1222(a) of the Code to
enable the debtor to treat certain capital gains tax claims as
ordinary unsecured claims.  "The Court's holding prevents the
Amendment from carrying out this basic objective.  I would read
the statute differently, interpreting it in a way that, in my
view, both is consistent with its language and allows the
Amendment better to achieve its purposes," Justice Breyer.


MARCO POLO: Committee's Investigation Period Expires Until May 17
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a fifth stipulation extending until until May 17, 2012,
the investigation period and the outside date of the Official
Committee of Unsecured Creditors in the Chapter 11 cases of Marco
Polo Seatrade B.V., et al.

The stipulation was entered among the Committee and the Royal Bank
of Scotland PLC, as prepetition and postpetition lender to the
Debtors.

The Debtors relate that on Nov. 4, 2011, the Court entered the
final order (i) authorizing the Debtors to obtain postpetition
financing, (ii) granting adequate protection, and (iii) granting
related relief.  Among other things, the final DIP order provided
the Committee an initial 60 day investigation period from Oct. 3,
until Dec. 2, 2011, which may be extended pursuant to the terms of
the final DIP order.  Without limitation, the final DIP order
provides that "the DIP Lender, RBS and the Committee may agree in
writing to an extension of the investigation period, which
agreement will be effective hereunder without the requirement of a
further order of the Court."

Notwithstanding the extension of the investigation period and of
the outside date and the stipulation, all other provisions of the
final DIP order remain in full force and effect.

For the avoidance of doubt, as set forth in the final DIP order,
the Outside Date of May 17, may not be further extended absent
the written agreement of RBS, the DIP Lender and the Committee.

                         About Marco Polo

Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing commercial
and technical vessel management services to third parties.
Founded in 2005, the Company mainly operates under the name of
Seaarland Shipping Management and maintains corporate headquarters
in Amsterdam, the Netherlands.  The primary assets consist of six
tankers that are regularly employed in international trade, and
call upon ports worldwide.

Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011.  The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.

Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo.  Falm and Poule
didn't file bankruptcy petitions.

The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29.  The arrest of the
vessel was authorized by the U.K. Admiralty Court.  Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29.  The Chapter 11 filing precluded the seizure of the
two other vessels.  The company started a lawsuit against the two
creditors in January 2012.

The cases are before Judge James M. Peck.  Evan D. Flaschen, Esq.,
Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell
& Giuliani LLP, in New York, serve as the Debtors' bankruptcy
counsel.  Kurtzman Carson Consultants LLC serves as notice and
claims agent.

The petition noted that the Debtors' assets and debts are both
more than US$100 million and less than US$500 million.

Tracy Hope Davis, the United States Trustee for Region 2,
appointed three members to serve on the Official Committee of
Unsecured Creditors.  The Committee has retained Blank Rome LLP as
its attorney.

Creditor Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.

Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J.
Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New
York, represents secured creditor and post-petition lender The
Royal bank of Scotland plc.


MOLYCORP INC: Moody's Assigns 'B3' CFR/PDR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned new ratings to Molycorp Inc.,
including a corporate family rating of B3, a probability of
default rating of B3, and a B2 rating to the company's proposed
$650 million of guaranteed senior secured notes. At the same time,
Moody's assigned a speculative grade liquidity rating of SGL-3.
The outlook is stable.

Assignments:

  Issuer: Molycorp, Inc.

     Probability of Default Rating, Assigned B3

     Speculative Grade Liquidity Rating, Assigned SGL-3

     Corporate Family Rating, Assigned B3

     Senior Secured Regular Bond/Debenture, Assigned a range of
     41 - LGD3 to B2

Outlook Actions:

  Issuer: Molycorp, Inc.

    Outlook, Changed To Stable From Rating Withdrawn

Ratings Rationale

The proceeds of the issuance, in conjunction with combined company
cash balances and $423 million common equity issuance, will be
used to consummate the acquisition of Neo Material Technologies
(Neo) for the total purchase price of $1.5 billion.

Molycorp's B3 corporate family rating, pro-forma for business
combination with Neo, reflects its modest size and diversity,
inherent volatility of the combined company's margins, good
resource base and benefits from integration, substantive
development plans and limited liquidity.

The ratings reflect the combined company's concentration in the
production of rare earth oxides (REO), rare metals and related
products. That said, the ratings acknowledge that Neo acquisition
allows the company to expand its operations into more value-added
products, such as magnet powders and rare earths and zirconium
based engineering materials. Although Moody's acknowledges that
Molycorp is the largest REO producer in the Western hemisphere and
owns one of the world's largest, most developed rare earths
projects outside of China, one of the key rating drivers is that
China produces 97% of the world's rare earths elements and the
country's production and exporting behavior essentially dictates
market pricing.

Prices for REO materials have shown extreme volatility from 2010
until present, largely driven by China's exporting and permitting
regulations. REO prices have run up to their historical highs in
mid-2011 and fell dramatically through the first quarter and
second quarter of 2012. Although the prices appear to be
stabilizing at levels above those of 2010, and while Moody's
believes there is a potential for future price increases based on
REO supply/ demand fundamentals, the ratings reflect the impact of
this pricing volatility on the company's margins. The ratings
acknowledge the relative margin stability at Neo's Magnequench
division, increased margin potential as the combined entity
diversifies into more value-added products, as well the benefits
that might be achieved from integrating Molycorp's and Neo's
operations. That said, historical margin volatility shown by
Molycorp and Neo Performance Materials are key rating drivers. The
ratings also consider uncertainties in volume growth that will be
achieved by Molycorp subsequent to the completion of Project
Phoenix expansion.

The ratings acknowledge that Molycorp is the largest REO producer
in the Western hemisphere and owns one of the world's largest,
most developed rare earths projects outside of China, with
expected mine life at current production levels of 30 years. The
ratings consider that access to raw materials produced at the
Mountain Pass facility will potentially benefit Neo, which has
previously had to rely entirely on outside suppliers, primarily in
China, and experienced volatility in raw material costs as REO
prices fluctuated. The ratings further acknowledge that access to
Neo's technological know-how and processes stand to benefit
Molycorp as it aims to diversify and grow in more value-added
products. That said, the ratings acknowledge risks and
uncertainties inherent in the integration process.

The ratings consider substantive capital expenditure plans related
to project Phoenix, which aims to give the company ability to
produce at its Mountain Pass facility up to approximately 40,000
mt of REO by mid-2013. Substantive negative free cash flow
generation over the next twelve to eighteen months, coupled with
modest liquidity position, constrains the ratings.

The SGL-3 speculative grade liquidity rating reflects Moody's
expectation that, pro forma for the transaction, Molycorp will
have limited liquidity, considering its substantive expansion
plans. Pro-forma for the transaction, the company had $410 million
in cash as of March 31, 2012, and Moody's expects these levels to
decline as the company expends funds on Project Phoenix. At the
projected capital expenditure levels, Moody's anticipates that the
company may have to delay some expenditures, and/ or secure
additional financing. Lack of access to a sizeable committed
credit facility, such as a revolver, constrains the ratings.

The B2 rating on senior secured notes, one notch above the CFR,
reflects their position in the capital structure above all
unsecured debt, as the notes are expected to be secured by
substantially all assets of the company and its subsidiaries. The
B2 rating on senior secured notes also reflects the potential for
some additional secured debt.

Stable outlook reflects Moody's expectation that REO prices have
stabilized over the near term, and positive supply/ demand
fundamentals for the REO market going forward.

The ratings could be downgraded if REO prices fall substantially,
the company's margins deteriorate, the company experiences
significant operational disruptions, or if there are significant
liquidity concerns. Specifically, ratings could come under
pressure if Debt/ EBITDA, as adjusted, were to exceed 6x.

The ratings could be upgraded if the company demonstrates ability
to sustain positive free cash flow and Debt/ EBITDA is expected to
be sustained below 4.5x.

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


MSR RESORT: Hilton Beats Paulson on Ditching Management Deals
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the five resorts that Paulson & Co. and Winthrop
Realty Trust foreclosed early last year may be stuck with having
Hilton Worldwide Inc. manage three of the properties, as the
result of a May 11 opinion by U.S. Bankruptcy Judge Sean H. Lane
in New York bankruptcy court.

The report recounts that the resorts wanted to file a
reorganization plan where Hilton would be ousted as manager at the
properties in Phoenix, Maui and LaQuinta, California.  In a
lawsuit begun in December, the resorts alleged that Hilton never
disclosed it had agreements where the resorts' owners pledged not
to end the management contracts.  If the non-disturbance
agreements are enforceable, the nonbankrupt owners of the resorts
may be precluded as a practical matter from ending the contracts.

According to the report, Judge Lane held a trial in March and
ruled in favor of Hilton in a 24-page opinion. He rejected the
resorts' argument that the non-disturbance agreements were waived
because they weren't disclosed.  The suit centered around so-
called estoppel certificates where Hilton allegedly failed to list
the non-disturbance agreements as still being in effect. It was
"unreasonable" for the resorts to rely on so-called estoppel
certificates issued four years earlier in a transaction between
different parties, Judge Lane said.  Judge Lane also concluded
that "appropriate due diligence" would have alerted the resorts'
owners to the possible existence of the non-disturbance
agreements.

                         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.


NEBRASKA BOOK: M. Oppegard Retires; B. Major Succeeds as CEO
------------------------------------------------------------
NBC Acquisition Corp. and its subsidiaries, including Nebraska
Book Company disclosed retirement of the Company's Chief Executive
Officer, Mark Oppegard.  The Company also announced that Barry
Major, the current President and Chief Operating Officer, will
become the new CEO.  Steven Clemente, a current Senior Vice
President at the Company, has been named to fill Major's previous
position as President and Chief Operating Officer.

Oppegard will continue to serve as Executive Vice President until
the transition of the new CEO and COO are complete. The transition
is expected to take several months.

"The last 42 years with Nebraska Book Company have been remarkable
and rewarding.  I am proud to have been a part of the Company's
growth and evolution into the leader in the college bookstore
market," said Oppegard.  "I have been honored to serve such a
strong company and build the relationships I have; it's been an
experience that will stay with me always."

Oppegard began his career with Nebraska Book Company in 1970 as a
part-time student employee.  Over the past 42 years, he has served
as a Textbook Representative, College Store Manager, VP of College
Stores and President.  Oppegard was named CEO in 1998.

"Barry Major and I have been working on a succession plan for some
time; I feel confident in the plan we have developed and expect a
smooth transition," Oppegard stated.  "I leave Nebraska Book
Company in extremely capable hands and look forward to seeing
where the Company will go in the future.  I know it will be
great."

Major, who will take over as the Company's CEO, has 13 years
experience in the college bookstore market.  Major began his
career with NBC in 1999, when he was hired as the Company's COO.

Clemente, who will take over as the Company's President and COO
with Major's promotion to CEO, joined the Company in early 2010 as
a SVP of the College Store Division's Neebo brand.  Clemente has
focused heavily on expanding the Neebo business, growing market
share and developing a campaign to broaden the traditional
bookstore offerings.

"I have had the honor of working with Mark Oppegard for 13 years
and we have built a strong company and a strong employee base,"
Major said.  "I am looking forward to our emergence from Chapter
11 and the exciting new direction NBC is heading. We are the
leader in the market and we plan to stay there - this is a vision
I share with the entire executive team.  Steve Clemente brings
talent, youth and a keen eye for marketing and brand management -
that's a winning combination and I'm excited to see where it takes
us."

On June 27, 2012, the Company filed for Chapter 11 protection in
the U.S. Bankruptcy Court for the District of Delaware.

                      About Nebraska Book

Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States.  Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011.  Hon. Peter J. Walsh presides over
the case.  Lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel.  The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC.  As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.

JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP.  J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.

An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick.  An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.

The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.

Nebraska Book has been unable to confirm a pre-packaged Chapter 11
plan that would have swapped some of the existing debt for new
debt, cash and the new stock, due to an inability to secure
$250 million in exit financing.


NEENAH PAPER: Bond Redemption No Impact on Moody's 'Ba3' Rating
---------------------------------------------------------------
Neenah Paper, Inc.'s (Ba3 stable) bond redemption is credit
positive, but does not impact the company's ratings or outlook.

Neenah Paper, Inc. produces premium, performance-based papers and
specialty products. The Fine Paper business segment accounts for
slightly less than half of consolidated sales and produces premium
writing, text, cover, and specialty papers used in corporate
annual reports, corporate identity packages, invitations, personal
stationery, and high-end packaging. The Technical Products
business segment manufactures automotive filters, saturated and
coated base papers, and a variety of non-woven wall coverings.
Based in Alpharetta, Georgia, the company has operations in the US
and Germany, and reported consolidated net sales of $696 million
for the twelve months ended December 31, 2011.


NEW GUINEA GOLD: Provides Default Status Update
-----------------------------------------------
New Guinea Gold Corporation is providing this bi-weekly Default
Status Report in accordance with National Policy 12-203 - Cease
Trade Orders for Continuous Disclosure Defaults.  On April 24,
2012, the Company announced that, for the reasons disclosed in the
Default Notice, there would be a delay in the filing of its
audited financial statements for the year ended Dec. 31, 2011 and
its related Management's Discussion and Analysis and Chief
Executive Officer and Chief Financial Officer certifications for
the year ended Dec. 31, 2011 beyond the 120 day period prescribed
for the filing of such documents.

As a result of this delay in filing, on May 1, 2012, the British
Columbia Securities Commission, the principal regulator of the
Company, issued a management cease trade order, which imposed
restrictions on all trading in securities of the Company by the
Chief Executive Officer and the Chief Financial Officer of the
Company until the Company files the Required Filings and the BCSC
makes an order revoking the MCTO.  All other parties are permitted
to freely trade the Company's securities.

The Company's auditors are completing the audit of the Company's
financial statements for the year ended Dec. 31, 2011 and the
Company continues to expect to file the Required Filings on or
before May 30, 2012.  Until the Required Filings are filed, the
Company intends to continue to satisfy the provisions of the
Alternative Information Guidelines specified in Section 4.4 of NP
12-203 by issuing bi-weekly Default Status Reports, each of which
will be issued in the form of a news release.  NGG intends to
file, if required, its next Default Status Report by May 28, 2012.

Pursuant to the requirements of the AIG, the Company reports that,
since the issuance of the Default Notice and subsequent Default
Status Report on May 1, 2012, there has not been any material
change to the information provided therein, nor has there been any
failure by the Company in fulfilling its stated intentions with
respect to satisfying the AIG.  In addition, there has not been
any specified default by the Company under NP 12-203 other than
the delay in filing the Required Filings, and there is no other
material information concerning the affairs of the Company that
has not been generally disclosed.


NEW SPECTRUM: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------
Debtor: New Spectrum Heights Inc.
        6774 Church St
        Highland, CA 92346

Bankruptcy Case No.: 12-21649

Chapter 11 Petition Date: May 11, 2012

Court: United States Bankruptcy Court
       Central District of California (Riverside)

Judge: Deborah J. Saltzman

Debtor's Counsel: Richard G. Simon, Esq.
                  505 N Arrowhead Ave #506
                  San Bernardino, CA 92401-1222
                  Tel: (909) 884-1215

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $100,001 to $500,000

The Company's list of 20 largest unsecured creditors has only one
entry:

Entity                   Nature of Claim        Claim Amount
------                   ---------------        ------------
City of Victorville       Trash Service          $1,108
P.O. Box 5001
Victorville, CA 92392

The petition was signed by Tom Thanopolous, president.


NEWPAGE CORP: Lawyers from Dewey Move to Proskauer Rose
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the slow-motion dissolution of the law firm Dewey &
LeBoeuf LLP required changing some of the scheduling in the
reorganization of a Dewey client, NewPage Corp.

According to the report, there was to have been a hearing on May
17 where the bankruptcy judge would decide whether the official
committee representing unsecured creditors could sue the lenders,
challenging the validity of their security interests.  As counsel
for NewPage, Dewey was opposing the committee's request for
permission to sue, saying unsecured creditors are "hopelessly out
of the money."  With Dewey's non-lawyer staff being fired and the
lawyers looking for a new home, the courtroom contest over suing
the lenders was postponed until June 22.

The report discloses that the lawyers for NewPage and the
committee filed papers in bankruptcy court referring to the
"period of extraordinary difficulties that continues to worsen" at
Dewey.  The filing said that the Dewey lawyers "must relocate to
another firm" in "short order."

On May 14, the lawyers from Dewey filed papers in bankruptcy court
saying they moved to the firm Proskauer Rose LLP and that
Proskauer would become one of NewPage's law firms.

                        About NewPage Group

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

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

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

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

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

The Official Committee of Unsecured Creditors selected Paul
Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt
& Taylor, LLP to act as its Delaware and conflicts counsel.

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

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


NYTEX ENERGY: Disposes of New Francis for $62.5 Million
-------------------------------------------------------
NYTEX FDF Acquisition, Inc., a wholly-owned subsidiary of NYTEX
Energy Holdings, Inc., together with New Francis Oaks, LLC, a
wholly-owned subsidiary of NYTEX Acquisition, entered into an
Agreement and Plan of Merger with an unaffiliated third party, FDF
Resources Holdings LLC, on May 4, 2012.  Pursuant to the terms of
the Merger Agreement, New Francis Oaks merged with and into the
Purchaser, and the Purchaser continued as the surviving entity
after the merger.  New Francis Oaks owns 100% of the outstanding
shares of Francis Drilling Fluids, Ltd., and, as a result of the
Disposition, the Company no longer owns FDF.

The total consideration for the Merger paid by the Purchaser on
the Closing Date was $62,500,000.

A copy of the Agreement and Plan of Merger is available for free
at http://is.gd/euxEKv

In connection with the transactions contemplated by the Merger
Agreement, the Purchaser and NYTEX Acquisition entered into the
Escrow Agreement, dated as of May 4, 2012, with The Bank of New
York Mellon Trust Company, N.A., as Escrow Agent.  A copy of the
Escrow Agreement is available for free at http://is.gd/bTblre

In connection with the consummation of the Merger, the Company and
its wholly-owned subsidiary, NYTEX Petroleum, Inc., entered into
an Omnibus Agreement, as of May 4, 2012, among: (i) NYTEX
Holdings; (ii) WayPoint Capital Partners, LLC, and WayPoint; and
(iii) NYTEX Acquisition, New Francis Oaks, FDF and FDF-Cessna 210
N6542U, Inc.  The Omnibus Agreement became effective upon the
consummation of the Merger.

Pursuant to the Omnibus Agreement, upon the consummation of the
Merger:

     (i) the Management Agreement was terminated;

    (ii) the Waypoint Entities paid $150,000 to the Company out of
         the Put Payment Amount due and payable to WayPoint;

   (iii) the Company was paid $812,500 from the Merger Proceeds,
         which sum represented accrued management fees due and
         payable to NYTEX Energy from FDF under the Management
         Agreement; and

    (iv) NYTEX Energy was paid $110,279 from the Merger Proceeds,
         which sum represented reimbursement by FDF of certain
         expenses previously incurred by the Company in respect of
         certain accounting services performed for FDF by Whitley
         Penn, and which reimbursement was due and payable to the
         Company from FDF under the Management Agreement.

A copy of the Omnibus Agreement is available for free at:

                        http://is.gd/WK8abT

In connection with the consummation of the Merger, the Company and
NYTEX Petroleum entered into a Settlement Agreement, as of May 4,
2012, among (i) NYTEX Holdings; (ii) WCP and WayPoint; (iii) NYTEX
Acquisition, New Francis Oaks, FDF and FDF-Cessna; and (iv)
Michael G. Francis and Bryan Francis.  The Settlement Agreement
became effective upon the consummation of the Merger.  A copy of
the Settlement Agreement is available at:

                        http://is.gd/grne3G
In connection with the Merger, Michael Francis, the President of
NYTEX Acquisition, and Jude N. Gregory, the Chief Financial
Officer, Vice President, Treasurer and Secretary of NYTEX
Acquisition, tendered their resignations as officers of NYTEX
Acquisition, effective as of the Closing Date, and, as a result,
are no longer deemed to be named executive officers of the
Company.

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

                       http://is.gd/FA7lTF

                        About Nytex Energy

Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an
energy holding company with operations centralized in two
subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX
Petroleum, Inc. ("NYTEX Petroleum").  FDF is a 35 year old full-
service provider of drilling, completion and specialized fluids
and specialty additives; technical and environmental support
services; industrial cleaning services; equipment rentals; and
transportation, handling and storage of fluids and dry products
for the oil and gas industry.  NYTEX Petroleum, Inc., is an
exploration and production company focusing on early stage
development of minor oil and gas resource plays within the United
States.

For 2011, Whitley Penn LLP, in Dallas, Texas, expressed
substantial doubt about Nytex Energy's ability to continue as a
going concern.  The independent auditors noted that the Company is
not in compliance with certain loan covenants related to two debt
agreements.

The Company's balance sheet at Dec. 31, 2011, showed
$81.94 million in total assets, $66.71 million in total
liabilities, and stockholders' equity of $15.23 million.


OPTIMUMBANK HOLDINGS: Incurs $582,000 Net Loss in First Quarter
---------------------------------------------------------------
OptimumBank Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $582,000 on $1.31 million of total interest income for
the three months ended March 31, 2012, compared with a net loss of
$1.15 million on $1.83 million of total interest income for the
same period during the prior year.

The Company reported a net loss of $3.74 million in 2011, compared
with a net loss of $8.45 million in 2010.

The Company's balance sheet at March 31, 2012, showed $152.93
million in total assets, $144.76 million in total liabilities and
$8.17 million in total stockholders' equity.

                  Regulatory Enforcement Actions

On April 16, 2010, the Bank consented to the issuance of a Consent
Order by the Federal Deposit Insurance Corporation and the State
of Florida Office of Financial.  The Consent Order covers areas of
the Bank's operations that warrant improvement and imposes various
requirements and restrictions designed to address these areas,
including the requirement to maintain certain minimum capital
ratios.  Management believes that the Bank is currently in
substantial compliance with all the requirements of the Consent
Order except for the following requirements:

   * Scheduled reductions by Oct. 31, 2011, and April 30, 2012, of
     60% and 75%, respectively, of loans classified as substandard
     and doubtful in the 2009 FDIC Examination;

   * Retention of a qualified chief executive officer and chief
     lending officer; and

   * Development of a plan to reduce Bank's concentration in
     commercial real estate loans acceptable to the supervisory
     authorities.

The Bank has implemented comprehensive policies and plans to
address all of the requirements of the Consent Order and has
incorporated recommendations from the FDIC and OFR into these
policies and plans.

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

                        http://is.gd/JPETyB

                    About OptimumBank Holdings

Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a
is a one-bank holding company and owns 100% of OptimumBank, a
state (Florida)-chartered commercial bank.  The Bank offers a
variety of community banking services to individual and corporate
customers through its three banking offices located in Broward
County, Florida.  The Bank's wholly-owned subsidiaries are OB Real
Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real
Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC,
all of which were formed in 2009.  OB Real Estate Management, LLC,
is primarily engaged in managing foreclosed real estate.  OB Real
Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB
Real Estate Holdings 1695, LLC, hold and dispose of foreclosed
real estate.


OPTIMUMBANK HOLDINGS: Closes Sale of Add'l 4.1MM Common Shares
--------------------------------------------------------------
In 2011, OptimumBank Holdings, Inc., undertook a common stock
offering in a private placement to individual accredited investors
of 37,500,000 shares of common stock, $.01 par value, at a price
of $.40 per share.  The shares were offered on behalf of the
Company by its officers and directors, none of whom received any
compensation in connection with the offering of the shares.
During the fourth quarter of 2011, the Company sold a total of
approximately 21.6 million shares in the Private Offering.  The
Company received net proceeds of approximately $8.6 million.

The Company extended the Private Offering through April 2, 2012.
On March 30, 2012, the Company closed the sale of an additional
4,072,000 shares in the Private Offering, and received $1,629,000
in net proceeds.  On April 2, 2012, the Company closed the sale of
an additional 62,500 shares.  Approximately 988,000 shares were
sold to five earlier investors in the Private Offering, including
500,000 shares to a Company director.  The Company also sold
3,147,000 additional shares to 14 accredited investors who had
been provided with the Private Offering materials prior to the
initial closing of the Private Offering in October 2011, but who
had not previously invested.  Approximately $1.4 million of the
net proceeds of the Private Offering was invested in OptimumBank
as additional capital.  The shares sold in the Private Placement
were not registered under the Securities Act of 1933, in reliance
on the exemption provided by Rule 506 of Regulation D promulgated
thereunder.

               Non-Employee Director Share Issuances

On March 30, 2012, the Company issued an aggregate of 3,789 shares
of common stock to the Company's non-employee directors under the
Company's 2011 Equity Incentive Plan and the Company's Non-
Employee Director Compensation Plan for attendance fees at Company
board meetings during the first quarter of 2012.  Under the
Director Compensation Plan, which became effective on Jan. 1,
2012, fees for attendance at board and committee meetings are
payable 75% in shares of Common Stock and 25% in cash on a
quarterly basis.  The shares were issued at the price of $3.52,
the fair market value of the shares on the date of issuance.  The
issuance of the shares was exempt from registration pursuant to
Section 4(2) of the Securities Act.

                     About OptimumBank Holdings

Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a
is a one-bank holding company and owns 100% of OptimumBank, a
state (Florida)-chartered commercial bank.  The Bank offers a
variety of community banking services to individual and corporate
customers through its three banking offices located in Broward
County, Florida.  The Bank's wholly-owned subsidiaries are OB Real
Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real
Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC,
all of which were formed in 2009.  OB Real Estate Management, LLC,
is primarily engaged in managing foreclosed real estate.  OB Real
Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB
Real Estate Holdings 1695, LLC, hold and dispose of foreclosed
real estate.

The Company reported a net loss of $3.74 million in 2011, compared
with a net loss of $8.45 million in 2010.

The Company's balance sheet at March 31, 2012, showed $152.93
million in total assets, $144.76 million in total liabilities and
$8.17 million in total stockholders' equity.

                  Regulatory Enforcement Actions

On April 16, 2010, the Bank consented to the issuance of a Consent
Order by the Federal Deposit Insurance Corporation and the State
of Florida Office of Financial.  The Consent Order covers areas of
the Bank's operations that warrant improvement and imposes various
requirements and restrictions designed to address these areas,
including the requirement to maintain certain minimum capital
ratios.  Management believes that the Bank is currently in
substantial compliance with all the requirements of the Consent
Order except for the following requirements:

   * Scheduled reductions by Oct. 31, 2011, and April 30, 2012, of
     60% and 75%, respectively, of loans classified as substandard
     and doubtful in the 2009 FDIC Examination;

   * Retention of a qualified chief executive officer and chief
     lending officer; and

   * Development of a plan to reduce Bank's concentration in
     commercial real estate loans acceptable to the supervisory
     authorities.

The Bank has implemented comprehensive policies and plans to
address all of the requirements of the Consent Order and has
incorporated recommendations from the FDIC and OFR into these
policies and plans.


OSI RESTAURANT: Reports $61.9 Million Net Income in First Quarter
-----------------------------------------------------------------
OSI Restaurant Partners, LLC, filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $61.90 million on $1.05 billion of total revenues
for the three months ended March 31, 2012, compared with net
income of $50.11 million on $1 billion of total revenues for the
same period during the prior year.

The Company reported net income of $27.84 million on $3.62 billion
of total revenues for the year ended Dec. 31, 2010, compared with
a net loss of $54.40 million on $3.60 billion of total revenues
during the prior year.

The Company's balance sheet at March 31, 2012, showed $2.49
billion in total assets, $2.43 billion in total liabilities and
$58.54 million in total equity.

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

                         http://is.gd/bup8tj

                         About OSI Restaurant

OSI Restaurant Partners, Inc., is the #3 operator of casual-dining
spots (behind Darden Restaurants and Brinker International), with
more than 1,400 locations in the U.S. and 20 other countries.  Its
flagship Outback Steakhouse chain boasts more than 950 locations
that serve steak, chicken, and seafood in Australian-themed
surroundings.  OSI also operates the Carrabba's Italian Grill
chain, with about 240 locations.  Other concepts include Bonefish
Grill, Fleming's Prime Steakhouse, and Cheeseburger In Paradise.
Most of the restaurants are company owned.  A group led by
Chairman Chris Sullivan took the company private in 2007.

                           *     *     *

As reported by the TCR on April 19, 2012, Standard & Poor's
Ratings Services raised the corporate credit rating on casual
dining operator OSI Restaurant Partners LLC to 'B' from 'B-'.

"The ratings on Tampa, Fla.-based OSI Restaurant Partners LLC
reflect Standard & Poor's expectations that recent brand
revitalization initiatives and cost savings from productivity
improvements will contribute to further strengthening of credit
measures in 2012, despite commodity cost pressure and weak
consumer spending," said Standard & Poor's credit analyst Ana Lai.


OTTILIO PROPERTIES: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Ottilio Properties, LLC
        555 Preakness Avenue
        Totowa, NJ 07512

Bankruptcy Case No.: 12-22318

Chapter 11 Petition Date: May 11, 2012

Court: U.S. Bankruptcy Court
       District of New Jersey (Newark)

Judge: Morris Stern

About the Debtor: 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.

Debtor's Counsel: Kenneth J. Rosellini, Esq.
                  OTTILIO BUILDING
                  555 Preakness Avenue, Level Two Four East
                  Totowa, NJ 07512
                  Tel: (973) 998-8375
                  Fax: (973) 998-8376
                  E-mail: kennethrosellini@gmail.com

Estimated Assets: $10,000,001 to $50,000,000

Estimated Debts: $1,000,001 to $10,000,000

The Company did not file a list of creditors together with its
petition.

The petition was signed by Anthony V. Ottilio, managing member.


PACER MANAGEMENT: U.S. Trustee Appoints 3-Member Creditors' Panel
-----------------------------------------------------------------
Samuel K. Crocker, the United States Trustee for Region 8,
pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Pacer Management of Kentucky, LLC, and
Pacer Health Management Corporation.

The Creditors Committee members are:

     1. Kentucky Health Administrators, Inc.
        Attn: Sherry McKinney
        140 S. Central Ave.
        Somerset, KY 42501
        Tel: 606-875-7949
        E-mail: sherry@kyhealthadmin.com

     2. Cumberland Isotopes
        Attn: Jefferson L. Davis
        103 Ballard Dr.
        Corbin, KY 40701
        Tel: 606-864-3329
        Fax: 606-864-1398
        E-mail: cumberlandisotopes@windstream.net

     3. Dr. Gabrielle F. Morris
        Attn: Sandra J. Reeves, Esq.
        P.O. Box 1341
        Corbin, KY 40702
        Tel: 606-528-4376
        Fax: 606-528-4438
        E-mail: reeveslawoffice@gmail.

The U.S. Trustee convened a meeting of creditors on April 3, 2012.
Last day to oppose dischargeability is June 25, 2012.

                      About Pacer Management

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.


PACER MANAGEMENT: Files Amended List of Largest Unsec. Creditors
----------------------------------------------------------------
Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky amended the list of 20 largest unsecured
creditors, disclosing:

        Entity                     Nature of Claim    Claim Amount
        ------                     ---------------    ------------
General Electric Capital           Leased Medical         $111,886
Corporation                        Equipment
PO Box 414 W-490
Milwaukee, WI 53201

Internal Revenue Service           FICA, FUTA,            $691,157
P.O. Box 7346                      income taxes
Philadelphia, PA 19101-7346

Knox County, Kentucky              All assets, pursuant    Unknown
c/o Douglas L.                     to restraining      (13,636,800
McSwain/Kevin G. Henry             order in Knox          secured)
Sturgill, Turner, Barker &         Circuit Court
Moloney, PLLC                      Case No. 12-CI-135
333 W. Vine St, Ste 1400
Lexington, KY 40507


Knox Hospital Corp dba             All assets, pursuant    Unknown
Knox Co Hospital                   to restraining      (13,636,800
c/o Douglas L.                     order in Knox          secured)
McSwain/Kevin G. Henry             Circuit Court
Sturgill, Turner, Barker &         Case No. 12-CI-135
Moloney, PLLC
333 W. Vine St, Ste 1400
Lexington, KY 40507

WellCare                           Bridge loans            150,000
8735 Henderson Rd REN1
Tampa, FL 33634

                      About Pacer Management

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.


PACER MANAGEMENT: Proposes to Pay Trade Vendors & Contractors
-------------------------------------------------------------
Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky ask the U.S. Bankruptcy Court for
permission to pay their prepetition critical vendors, service
providers, and independent contractors.  Specifically, the Debtors
seek authority to pay or resolve the claims of Critical Vendors
and Contractors totaling $348,905.  They said the Critical Vendors
and Contractors are essential to keeping the Debtors operating and
to their ability to provide health care services.

The Debtors propose to make any payments which may be authorized
by the Court from cash collateral within the constraints of the
approved budget.

At least one Critical Vendor provides support and maintenance for
software and hardware information systems at the Hospital.  This
vendor is a Critical Vendor because the Hospital's information
system is vital to the Debtors' operations and orderly treatment
of patients.  The Debtors submit that the potential time, expense,
and harm the Debtor would incur in procuring a replacement support
firm greatly exceeds the prepetition amount owed to such Critical
Vendor.

Many of the Critical Vendors offer very favorable pricing to the
Debtors and the Hospital, at rates much lower than the market, due
to the Debtors' participation in Health Trust Purchasing, a
contracted purchasing group arrangement.

The Debtors noted that HTP is one of the best purchasing groups in
the nation, and the long-term cost savings for the Hospital and
the estates associated with the Debtors' participation in HTP
vastly exceeds any immediate cost incurred by the Debtors to
preserve access to such favorable pricing.

The Debtors' Critical Vendors also include (i) the only servicers
of Hospital equipment (in most cases because such Critical Vendors
manufacture and/or sell the equipment); or (ii) the exclusive
providers of replacement parts and equipment for Hospital
equipment (again, in most cases because such Critical Vendors
manufacture and/or sell such equipment).

Other Critical Vendors are required clearinghouses for Medicaid
billing.  According to the Debtors, changing clearinghouses would
require as much as a two-week delay in billing and, therefore,
receiving payments.  As they are already cash-strapped, a two-week
delay in receiving payments could be a death knell, the Debtors
said.

One Critical Vendor is one of the only providers of blood in the
area.

                      About Pacer Management

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.

                          About Pacer Management

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.


PACER MANAGEMENT: Will Have Patient Care Ombudsman
--------------------------------------------------
The Bankruptcy Court authorized the appointment of a patient care
ombudsman in the Chapter 11 cases of Pacer Management of Kentucky,
LLC, and Pacer Health Management Corporation of Kentucky.  The
Debtors have said they do not contest the appointment of a patient
care ombudsman.

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.


PACER MANAGEMENT: Gets Court Okay to Hire DelCotto Law Group
------------------------------------------------------------
Pacer Management of Kentucky, LLC, Cumberland-Pacer, LLC, and
Pacer Health Management Corporation of Kentucky obtained
permission from the U.S. Bankruptcy Court for the Eastern District
of Kentucky to employ DelCotto Law Group PLLC as their general
bankruptcy counsel effective as of March 27, 2012.

As reported by the Troubled Company Reporter on April 4, 2012, the
firm received a retainer from a third party of $75,000 for
services and expenses rendered prepetition (including filing fees)
and holds the remaining balance of $46,332 in escrow.  DLG wants
court approval of a lien in its favor against the pre-petition
funds in its escrow account to secure payment of fees and expenses
approved in the case.  The firm has conditioned its engagement
upon the Court's approval of an initial carve-out of $40,000,
followed by monthly carve-outs of $25,000 from post-petition loan
proceeds.  The firm sought approval of their employment on behalf
of the Debtors in order to protect their right to payment from the
Retainer and the carve-out payments deposited in the firm's escrow
account.  The firm specifically requested that final approval of
its right to be paid from escrowed funds be enforceable and
payable regardless of whether or not the firm's employment is
ultimately approved.

                       About Pacer Management

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.


PACER MANAGEMENT: Wants to Hire FK Perkins as Accountant
--------------------------------------------------------
Pacer Management of Kentucky, LLC, et al., ask for permission from
the U.S. Bankruptcy Court for the Eastern District of Kentucky to
employ FK Perkins & Company, PLLC, as their accountants for the
limited purpose of preparing tax returns and communicating with
taxing authorities, effective as of April 16, 2012.

The Debtors seek to retain and employ the firm as their
accountants during the tenure of the Debtor's Chapter 11 case to
provide limited accounting services, specifically, the completion
of the tax returns identified as missing by the Internal Revenue
Service, any corresponding state or local tax returns, and to
communicate with taxing authorities on behalf of the Debtors.

The prior owners of PHM failed to file corporate tax returns for
the years of 2007, 2008, and 2009.  This has required the current
owners to retrieve or develop the information necessary to prepare
the returns, and has also precluded them from filing returns for
subsequent tax years.  While the Debtors have been in
communication with the taxing authorities regarding the unfiled
returns and previously employed the Firm to assist with the
returns, they remain unfiled.  The Debtors have previously
employed the Firm not only to assist with the preparation of tax
returns, but also for general financial advice regarding the
hospital operations.

On April 12, 2012, the Internal Revenue Service issued a letter to
PHM and PM requesting that an explanation for the failure to file
or the filing of the missing tax returns be completed within 14
days.  The Debtors need the services of the Firm to respond to the
IRS letters and complete the returns.

The firm was first retained by the Debtors in 2007, and since
then, the firm has been providing the Debtors with high-quality
accounting services.

The firm will bill the Debtor $175 per hour for its services.

F. Kyle Perkins, C.P.A., the owner of FK Perkins, attests to the
Court that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.

                       About Pacer Management

Pacer Management of Kentucky, LLC, and Pacer Health Management
Corporation of Kentucky filed voluntary Chapter 11 petitions
(Bankr. E.D. Ky. Case Nos. 12-60410 and 12-60411) on March 27,
2012.  Cumberland-Pacer, LLC also filed for Chapter 11 (Bankr.
E.D. Ky. Case No. 12-60412) also filed a separate petition on the
same day.  Pacer Management estimated up to $50 million in assets
and debts.

The Debtors lease the assets and real property to operate the
hospital from Knox County, Kentucky and Knox Hospital Corporation.
According to court filings, the lessors in 2009 filed suit against
Pacer Health and others in the Knox Circuit Court alleging a
breach of the Lease Agreement but the suit was later resolved.
Under the deal, CP was substituted as lessee.

CP is a Kentucky limited liability company established by Dr.
Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock
of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock
of Pacer Health and 60% of the stock of Pacer Management.  CP,
which previously owned 40% of the stock of Pacer Management,
became the sole owner of Pacer Management following the
transaction.

In October 2011, the county notified CP it was in default under
the lease agreement.  The parties negotiated numerous extensions
of time to cure the alleged defaults, most recently until 12:01
a.m. on March 29, 2012.  Prior to expiration of the most recent
extension, the Lessors again filed suit in the Knox Circuit Court
on March 20, 2012 seeking to have the Lease Agreement terminated
and requesting entry of a restraining order against CP, PHM and
PM, among others.

On March 20, 2012, the Knox Circuit Court issued a restraining
order which precluded the Debtors from spending hospital funds
other than for ordinary operating expenses, among other things.

A March 22, 2012 report by The Associated Press said that county
officials and the hospital board have agreed to terminate the
facility's lease with the Debtors.  The group then agreed to sign
with another management company that will keep the hospital open
and prepare it to be sold, according to the report.

The Debtors filed for Chapter 11 protection to retain control of
the Hospital.  The Debtors said they seek to continue operating
the Hospital pursuant to the terms of the Lease Agreement and
preserve their option to purchase the Hospital.

Judge Joseph M. Scott, Jr. presides over the case.  Lawyers at
DelCotto Law Group PLLC, serve as the Debtors' counsel.  Craig
Morgan, the Debtors' CEO, has been appointed by the Court as the
individual responsible for performing the duties of the Company as
a Debtor in possession.  Mr. Morgan signed the bankruptcy
petitions.

Knox County, Kentucky, and the Knox County Hospital Board are
represented by Sturgill, Turner, Barker & Maloney, PLLC.  Dr.
Satyabrata Chatterjee, one of the DIP lenders, is represented by
Dinsmore & Shohl, LLP.  Dr. Ashwini Anand has teamed up with Dr.
Chatterjee to provide the DIP loan.


PACIFIC 18: Case Summary & 14 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Pacific 18 LLC
        P.O. Box 531
        Lynbrook, NY 11563

Bankruptcy Case No.: 12-22220

Chapter 11 Petition Date: May 10, 2012

Court: United States Bankruptcy Court
       District of New Jersey (Newark)

Judge: Morris Stern

Debtor's Counsel: Daniel M. Eliades, Esq.
                  FORMAN HOLT ELIADES RAVIN & YOUNGMAN LLC
                  80 Route 4 East
                  Paramus, NJ 07652
                  Tel: (201) 845-1000
                  E-mail: deliades@formanlaw.com

Estimated Assets: $0 to $50,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the Company's list of its 14 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/njb12-22220.pdf

The petition was signed by Terrific Pacific LLC, managing member.


PARADISE HOSPITALITY: Has Control of Case Until Aug. 21
-------------------------------------------------------
Paradise Hospitality, Inc. obtained from the U.S. Bankruptcy Court
an extension of its exclusive periods to file a Chapter 11 plan
and solicit acceptances of that plan until June 22, 2012, and Aug.
21, 2012, respectively.

Based in Fullerton, California, Paradise Hospitality, Inc., owns a
hotel located in Toledo, Ohio and a retail shopping center in El
Dorado, Arkansas.  The Debtor manages and operates the Hotel.
Haydn Cutler company currently manages the Retail Center.  The
Company filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case
No. 11-24847) on Oct. 26, 2011, about three weeks after it lost
the right to use the Crowne Plaza for its hotel.  For now, the
hotel has been renamed Plaza Hotel Downtown Toledo.

Judge Erithe A. Smith presides over the case.  Sam S. Oh, Esq., at
Lim, Ruger & Kim, LLP, serves as the Debtor's counsel.  The Debtor
disclosed $15,628,687 in assets and $21,430,333 in liabilities as
of the Chapter 11 filing.  The petition was signed by the Debtor's
president, Dae In Kim, a Korean businessman who lives in southern
California.


PENN TREATY: Court Denies Petitions to Liquidate 2 LTCI Companies
-----------------------------------------------------------------
Penn Treaty American Corporation announced that in an
unprecedented decision of significant national consequence, the
Commonwealth Court of Pennsylvania has disallowed efforts by the
Pennsylvania Insurance Department to liquidate two long-term care
insurance companies domiciled in Pennsylvania.

In the Court's 164-page Memorandum Opinion and Order of May 3,
2012, issued after a 30-day trial and review of more than 1,000
pages of post-trial briefing and thousands of pages of trial
exhibits, Judge Mary Hannah Leavitt denied the PID's petitions to
liquidate Penn Treaty Network America Insurance Company and its
subsidiary American Network Insurance Company.  Headquartered in
Allentown, Pennsylvania, the Companies are subsidiaries of PTAC of
Frisco, Texas.  The Companies' policyholders reside in 49 states
and the District of Columbia.

Describing the case as presenting "a serious indictment of the
existing system of rate regulation of long-term care insurance"
and holding that the Commissioner of the PID has "not undertaken a
meaningful effort to rehabilitate the Companies and, to the
contrary, has acted to frustrate rehabilitation," the Court
ordered that the PID "shall develop a plan of rehabilitation of
the Companies, in consultation with the Intervenors [Eugene J.
Woznicki and PTAC], and shall submit a plan no later than ninety
(90) days following the date of this Order."

The Court's ruling is the first time a petition to liquidate an
insurance company has been defeated in Pennsylvania.  Nationwide,
those petitions filed by state insurance departments are routinely
granted.

The Companies issued LTCI policies that cover certain long-term
health care costs of policyholders nationwide, helping pay for
custodial or skilled care in a nursing home, an assisted living
facility, or a person's home.  LTCI policyholders are guaranteed
the right to renew policies irrespective of their age or health as
long as the policyholder pays premiums.  The policies permit
future premium rate increases if actuarially supported for the
entire policy form.  Premium rates ordinarily cannot be increased
without the approval of the insurance department of the state in
which the policyholder resides.  Over the years, many of those
states' insurance departments, including Pennsylvania's, have
denied or not fully approved the actuarially justified rate
increases to which the Companies are entitled.  The Companies'
policies issued before 2002 are referred to as OldCo policies.
The OldCo policies are underpriced based on the current market for
long-term care policies, but, as the Court recognized, they were
reasonably priced when issued based upon available information.
While the policies issued after 2002 do not need premium rate
increases at this time, the OldCo policies do require rate
increases.  In the absence of receipt by the Companies of these
justified premium rate increases, actuarial projections suggest
that there will be insufficient funds to meet the Companies'
future obligations.

The Companies' Boards of Directors consented to rehabilitations of
the Companies shortly before entry of the Orders placing the
Companies in rehabilitation in early 2009.  Since then, the PID
has been responsible for pursuing rehabilitations of the
Companies.  In late 2009, the PID sought Orders by which the
rehabilitations would be terminated and the Companies would be
liquidated.  The Companies' Boards authorized their Chairman,
Eugene J. Woznicki, to intervene to defend against the petitions
to liquidate.  Mr. Woznicki and the Companies' ultimate parent
company, PTAC, were permitted to intervene to defend against the
petitions to liquidate, and they vigorously contested the PID's
efforts.

The ruling shed critical light on the practices of certain
insurance regulators that have denied, delayed, or limited lawful
and actuarially justified premium rate increases for political
reasons at the expense of policyholders in other states where
regulators have approved the same premium rate increase requests
in a straightforward manner.  As part of its decision, the Court
ordered the Commissioner of the PID to prepare in consultation
with the Intervenors a plan of rehabilitation that "must address
and eliminate the inadequate and unfairly discriminatory premium
rates" for the Companies' policies that require premium rate
increases.

Intervenor Gene Woznicki, Chairman of the Boards of Directors of
the Companies and PTAC who has some 25 years' experience with LTCI
issues, welcomed the Court's ruling: "As we have said all along,
we believe that the Companies can be properly rehabilitated with a
sincere and collaborative effort by the Rehabilitator and the
Intervenors that includes pursuit of appropriate premium rate
increases and other options, all to the benefit of the Companies
and their policyholders.  The Court's ruling should serve as an
impetus for a turnaround of the Companies as well as the LTC
insurance industry, one that has been plagued by the consequences
of failure of insurance departments to approve the premium rate
increases needed from some policyholders so that all
policyholders' claims may be paid. Judge Leavitt complimented the
parties on their diligence, careful thoroughness, and a
commendable level of civility during these proceedings.  I look
forward to bringing those qualities to the table in working with
Insurance Commissioner Consedine and his team to forge
rehabilitation approaches that will put the Companies back on the
track to solvency and beyond."

According to the American Association for Long-Term Care
Insurance, more than ten million Americans have purchased LTCI
policies.  But many companies have recently decided to no longer
sell LTCI policies because of their inability to obtain
actuarially justified premium rate increases from state insurance
departments.

The Companies' former CEO and current Director William W. Hunt Jr.
served as a consultant to the Intervenors and was closely involved
in analysis of trial strategy as well as rehabilitation options,
as was the Companies' Director Sean T. Mullen.  Messrs. Woznicki
and Hunt attended the entire trial and managed the Intervenors?
defense.  They look forward to collaborating with the PID to
fashion a rehabilitation approach that will benefit the Companies
and their policyholders and prevent the Companies from being
liquidated, a "remedy of last resort" to which the Court ruled the
PID is not entitled.

The Intervenors were represented and advised by the Philadelphia
office of Ballard Spahr LLP, by lead trial counsel and head of the
firm's Insurance Practice Group Douglas Y. Christian, litigators
Damian L. DiNicola and Benjamin M. Schmidt, Business and Finance
partner Justin P. Klein, and Senior Paralegal/Trial Support
Specialist Keith A. Garland, Sr.

A copy of the Court's Memorandum Opinion and Order in Michael F.
Consedine, Insurance Commissioner of the Commonwealth of
Pennsylvania v. Penn Treaty Network American Insurance Company,
Nos. 4 and 5 M.D. 2009 (Pa. Cmwlth. May 3, 2012) is available at
http://www.penntreatyamerican.com/investornews.asp. Questions may
be directed to Eugene J. Woznicki at (469) 287-7044 or (469) 438-
9742.

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

                       http://is.gd/Wz2w69

                    About Penn Treaty American

Penn Treaty American Corporation -- https://www.penntreaty.com/ --
through its wholly owned direct and indirect subsidiaries, Penn
Treaty Network America Insurance Company, American Network
Insurance Company, American Independent Network Insurance Company
of New York, Network Insurance Senior Health Division and Senior
Financial Consultants Company, is engaged in the underwriting,
marketing and sale of individual and group accident and health
insurance products, principally covering long term nursing home
and home health care.

On October 2, 2009, the Insurance Commissioner of the Commonwealth
of Pennsylvania filed in the Commonwealth Court of Pennsylvania
Petitions for Liquidation for PTNA and American Network Insurance
Company.  PTNA is a direct insurance company subsidiary of Penn
Treaty American Corporation, and ANIC is a subsidiary of PTNA.


PFI HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: PFI Hospitality, Inc.
        dba The 1929 Hotel Seville
        MAC Development, Inc.
        294 Holiday Island Drive
        Eureka Springs, AR 72631

Bankruptcy Case No.: 12-71888

Chapter 11 Petition Date: May 10, 2012

Court: U.S. Bankruptcy Court
       Western District of Arkansas (Harrison)

Debtor's Counsel: Stanley V. Bond, Esq.
                  BOND LAW OFFICE
                  P.O. Box 1893
                  Fayetteville, AR 72701-1893
                  Tel: (479) 444-0255
                  Fax: (479) 444-7141
                  E-mail: attybond@me.com

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at
http://bankrupt.com/misc/arwb12-71888.pdf

The petition was signed by Jack Moyer, president.


PINNACLE AIRLINES: Amends One Loan, Faces Objection to Second
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Pinnacle Airlines Corp. drew no opposition and was
given permission last week by the bankruptcy judge to increase the
interest rate on a pre-bankruptcy $34 million term loan from CIT
Bank in return for a default waiver.

According to the report, the United Steelworkers filed papers
giving notice that the union will object at a hearing May 14 for
approval of $74.3 million in financing from Delta Air Lines Inc.
The union contends the loan is tantamount to committing Pinnacle
to a reorganization plan.  The union in particular objects to how
the Delta loan would require Pinnacle to file papers by late June
for rejection of union contracts unless there is agreement with
the workers before then.  The union also complains that the loan
would compel the court to approve a long-term agreement to fly
regional jets for Delta under terms that are unprofitable under
existing union contracts.  The steelworkers' union represents
2,600 Pinnacle workers.

From the Delta loan, $44 million would be used to repay an
existing secured debt to the airline.

                      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.


PINNACLE AIRLINES: Pabrai Investment NO Longer Owns Shares
----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, The Pabrai Investment Fund and its affiliates
disclosed that, as of April 30, 2012, they do not beneficially own
any shares of common stock of Pinnacle Airlines Corp.  A copy of
the filing is available for free at http://is.gd/bZkHFE

                      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, and Imperial Capital, LLC as its
financial advisors.


PJ FINANCE: Gaia and Starwood Capital Invest $22.5 Million
----------------------------------------------------------
Gaia Real Estate and a controlled affiliate of Starwood Capital
Group have agreed to invest $22.5 million of new equity to acquire
and recapitalize PJ Finance Company, which filed for Chapter 11
bankruptcy protection in March 2011 and reemerged as a going
concern on May 11, 2012.

PJ Finance Company's assets include a multifamily portfolio
consisting of over 9,500 multifamily units located in major
metropolitan areas throughout the high-growth Sunbelt region. More
than 45% of units are located in Dallas, TX, with additional
concentrations in Phoenix, AZ (19%), Atlanta, GA (8%), Houston, TX
(8%), and Fort Lauderdale, FL (7%), Corpus Christi, TX (6%),
Nashville, TN (5%), and Orlando, FL (3%).

The portfolio was originally acquired in 2001 and recapitalized
with more than $540 million of securitized debt financing in 2006,
at a valuation of $580 million.  During the downturn the portfolio
struggled under its heavy debt load and occupancy suffered as
capital was unavailable to turnover units for new tenants.  At one
point, more than 1,700 units were taken offline and occupancy
troughed at 72% in markets that enjoyed substantially (90%+) lower
vacancies.

In March 2011, PJ Finance Company filed for Chapter 11 bankruptcy
protection.  As part of the recapitalization agreement, the debt
has been restructured into three tiers; 1st Tier in the amount of
$423 million, 2nd Tier in the amount of $52 million, and 3rd Tier
in the amount of $28 million.  Interest only shall be payable on
the 1st Tier during the term of the loan, with no interest payable
on the 2nd and 3rd Tier.  The loan matures in 2020. While in
Chapter 11, $14 million was re-invested into the portfolio, and
current occupancy has dramatically improved to more than 90% as
nearly 1,000 units were brought back online.

"We are excited to partner with Gaia to unlock all the substantial
upside potential in these attractive assets," said Chris Graham,
Managing Director of Starwood Capital Group.  "We believe the
structure of this investment is quite unique, and allows us to
maximize the value of the portfolio with very little downside
risk."

Gaia and Starwood will invest their capital as part of the
restructuring to recapitalize the company and continue the
stabilization of the portfolio.  The new equity will earn a 16%
preferred return and all principal and interest will be senior to
the loan's principal.  The capital will be used primarily for
deferred maintenance, capital improvements and renovation work.

Over the next eight years, Starwood and Gaia plan to implement a
$45 million capital improvement plan.  Gaia and Starwood have
engaged Pinnacle Company, one of the largest property management
companies in the United States to manage the portfolio and assist
in executing the improvement plan.

                       About Gaia Real Estate

Gaia Real Estate -- http://www.gaiare.com/-- founded in 2009, is
a Real Estate investment, property management and brokerage
Company with headquarters in New York City and additional offices
in New Jersey, Texas and Israel. Gaia pursues a range of real
estate investments with a focus on residential and commercial
properties.  The group currently has 70 employees.

                       Starwood Capital Group

Starwood Capital Group -- http://www.starwoodcapital.com/--
is a private, U.S.-based investment firm with a core focus on
global real estate.  Since the group's inception in 1991, the firm
has raised over $14 billion of equity capital and, through its
various funds, has invested $12 billion representing over $32
billion in assets.  Starwood Capital Group currently has over $19
billion of assets under management. Starwood Capital Group
maintains offices in Greenwich, Atlanta, San Francisco,
Washington, D.C. and Los Angeles, and affiliated offices in
London, Luxembourg, Paris, Mumbai and Sao Paulo. Starwood Capital
Group has invested in nearly every class of real estate on a
global basis, including office, retail, residential, senior
housing, golf, hotels, resorts and industrial assets. Starwood
Capital Group and its affiliates have successfully executed an
investment strategy that includes building enterprises around core
real estate portfolios in both the private and public markets.


PLY GEM HOLDINGS: Incurs $25.6 Million Net Loss in First Quarter
----------------------------------------------------------------
Ply Gem Holdings, Inc., reported a net loss of $25.64 million on
$239.17 million of net sales for the three months ended March 31,
2012, compared with a net loss of $70.89 million on $200.10
million of net sales for the same period a year ago.

The Company had cash and cash equivalents of $20.19 million at
March 31, 2012.

The Company's balance sheet at Dec. 31, 2011, showed $892.91
million in total assets, $1.17 billion in total liabilities and a
$277.32 million total stockholders' deficit.

Gary E. Robinette, President and CEO, said "I am pleased with the
improvement that is reflected in Ply Gem's first quarter financial
performance.  Our first quarter net sales growth of 19.5%
demonstrates our ability to continue to take profitable market
share as well as improved market demand for our products.  We
believe the improvement in first quarter market conditions was due
in part to the favorable weather conditions that existed
throughout most of the United States during the winter months."

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

                        http://is.gd/JM2nEi

                           About Ply Gem

Based in Cary, North Carolina, Ply Gem Holdings Inc. is a
diversified manufacturer of residential and commercial building
products, which are sold primarily in the United States and
Canada, and include a wide variety of products for the residential
and commercial construction, the do-it-yourself and the
professional remodeling and renovation markets.

In May 2010, Standard & Poor's Ratings Services raised its
(unsolicited) corporate credit rating on Ply Gem to 'B-' from
'CCC+'.  "The ratings upgrade reflects our expectation that the
company's credit measures are likely to improve modestly over the
next several quarters to levels that we would consider more in
line with the 'B-' corporate credit rating," said Standard &
Poor's credit analyst Tobias Crabtree.

SGS International carries a 'B1' corporate family rating from
Moody's Investors Service.


QR ENERGY: Moody's Assigns 'B2' CFR, Rates $300MM Sr Notes 'Caa1'
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to QR Energy,
LP's proposed $300 million senior unsecured notes due 2020.
Moody's also assigned a B2 Corporate Family Rating (CFR) and a
SGL-3 Speculative Grade Liquidity (SGL) rating. This is the first
time that Moody's has rated QR Energy, LP. The outlook is stable.

Ratings Rationale

"The B2 CFR is supported by QRE's low risk operational profile
characterized by a liquids concentrated asset base of legacy
onshore reserves with long-lived, production profiles and low
capital reinvestment requirements that provide for predictable
cash flows," commented Michael Somogyi, Moody's Vice President -
Senior Analyst. "The rating is restrained by QRE's limited
historical operating performance and by the structural risks
inherent in the MLP business model which requires continuous cash
distributions and external funding requirements to support
acquisitive growth strategies."

QRE was formed in September 2010 by affiliates of its sponsor,
Quantum Resources Funds (QRF), to acquire, own and exploit oil and
natural gas assets. QRE completed its IPO in December 2010, to
become a publicly traded, independent exploration and production
(E&P) Master Limited Partnership (MLP) with an initial operating
base derived from an asset drop-down from its sponsor. Management
and affiliates of Quantum Energy Partners owns QRE's general
partner and QRF owns 38.8% of limited partner units. QRE completed
(April-2012) asset acquisitions from Prize Petroleum LLC for $230
million to grow its reserve base commensurate to B2 rated peers.
As of May 1, 2012, total estimated proved reserves were 87.9
million barrels of oil equivalent, of which 62% were oil and NGLs
and 72% were classified as proved developed reserves. QRE's asset
base is focused primarily in the Permian, Ark-La-Tex, Mid-
Continent and Gulf Coast regions.

QRE remains best positioned to acquire producing assets from its
sponsor based on structural considerations and leveraging its
strategic relationships that provide QRE with a "right of first
refusal" under certain circumstances on assets sold by Quantum
Resources Funds, as well as "participation rights" alongside
Quantum Resources Funds in acquisitions it may pursue.

The Caa1 senior unsecured note rating reflects both the overall
probability of default of QRE, to which Moody's assigns a PDR of
B2, and a loss given default of LGD5-85%. The size of the senior
secured revolver's priority claim relative to the senior unsecured
notes results in the notes being rated two notches beneath the B2
CFR under Moody's Loss Given Default Methodology.

The SGL-3 indicates adequate liquidity for 2012. As of December
31, 2011, pro forma for the notes offering and the Prize
acquisition, QRE has $17million cash and $380 million of
availability under a $655 million borrowing base credit facility
(subject to covenant headroom). Financial covenants under the
facility are debt / EBITDAX of no more than 4.0x and a current
ratio of at least 1.0x. Moody's expects QRE to remain in
compliance with the covenants, particularly given the low
sustaining capital requirements relative to cash flows and a
robust hedge strategy which further reduce cash flow volatility.
There are no debt maturities until 2017 when the credit facility
matures. Substantially, all of QRE's oil and gas assets are
pledged as security under the facility, which limits the extent to
which asset sales could provide a source of additional liquidity
if needed.

The stable outlook is based on Moody's expectations that QRE
achieves its production forecasts, issues equity as appropriate
and maintains a distribution coverage ratio in line with 1.2x-1.3x
target over-time.

Moody's could upgrade the ratings upon a proven track record of
disciplined growth resulting in average daily production of at
least 20,000 boe/day while maintaining debt / proved developed
reserves of no more than $6.50/boe.

Moody's could downgrade the ratings if leverage is expected to
increase with debt / proved developed reserves sustained above
$11.50/boe, if distribution coverage falls below 1.1x, or if QRE's
operating risk profile deteriorates.

The principal methodology used in rating QR Energy was the Global
Independent Exploration and Production 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.

QR Energy, LP is a publicly-traded, upstream MLP formed by
affiliates of Quantum Resources Funds to acquire and exploit
producing oil and natural gas assets focused primarily in the
Permian, Ark-La-Tex, Mid-Continent and Gulf Coast regions. QR
Energy, LP is headquartered in Houston, Texas.


QUALITY DISTRIBUTION: Inks Consulting Pacts with Rodne & Bice
-------------------------------------------------------------
Quality Carriers, Inc., an indirect, wholly owned subsidiary of
Quality Distribution, Inc., entered into an asset purchase
agreement with Wylie Bice Trucking, LLC, and Wylie C. Bice, the
sole member of Bice Trucking, pursuant to which Quality Carriers
will acquire the operating assets of Bice Trucking for total
consideration of $47,580,000, consisting of $29,400,000 in cash,
$12,780,000 in the form of one or more promissory notes and
$5,400,000 of common stock of the Company, plus deferred earn-out
payments of up to an additional $11,400,000, if certain future
operating and financial performance criteria are satisfied.

In addition, on May 7, 2012, QC Environmental Services, Inc., a
wholly owned subsidiary of the Company, entered into an Asset
Purchase Agreement with RM Resources, LLC, a North Dakota limited
liability company, and each of Wylie C. Bice, Monte Gawryluk and
Dean A. Rodne, the members of RM, pursuant to which QC
Environmental will acquire the operating assets of RM for total
consideration of $31,720,000, consisting of $19,600,000 in cash,
$8,520,000 in the form of one or more promissory notes and
$3,600,000 of common stock of the Company, plus deferred earn-out
payments of up to an additional $7,600,000, if certain future
operating and financial performance criteria are satisfied.

In connection with the transactions contemplated by the Asset
Purchase Agreements, two separate consulting agreements were
executed on May 7, 2012 including (a) that certain consulting
agreement between QC Environmental and Dean A. Rodne and (b) that
certain consulting agreement between Quality Carriers and Wylie C.
Bice.  The Consulting Agreements have substantially similar terms.
Each Consulting Agreement will become effective upon the Closing
of the transactions and has a duration of one year.  Messrs. Bice
and Rodne will each receive an agreed upon consulting fee in
consideration for the services provided.

Also in connection with the transactions contemplated by the Asset
Purchase Agreements, each of the Members entered into separate
non-competition and non-solicitation agreements.  Each of the Non-
Competition Agreements contains substantially the same terms and
restricts the applicable Member and certain of its affiliates
from competing with or soliciting employees from QC Environmental
and Quality Carriers, respectively.  Each of the Non-Competition
Agreements will become effective upon the Closing and continue for
a period of five years following the expiration or termination of
the applicable Consulting Agreement.

                    About Quality Distribution

Quality Distribution, LLC, and its parent holding company, Quality
Distribution, Inc., are headquartered in Tampa, Florida.  The
company is a transporter of bulk liquid and dry bulk chemicals.
The company's 2010 revenues are approximately $686 million.
Apollo Management, L.P., owns roughly 30% of the common stock of
Quality Distribution, Inc.

The Company reported net income of $23.43 million in 2011,
compared with a net loss of $7.40 million in 2010.

The Company's balance sheet at March 31, 2012, showed $330.79
million in total assets, $398.38 million in total liabilities and
a $67.58 million total shareholders' deficit.

                         Bankruptcy Warning

In its Form 10-K for 2011, the Company noted that it had
consolidated indebtedness and capital lease obligations, including
current maturities, of $307.1 million as of Dec. 31, 2011.  The
Company must make regular payments under the New ABL Facility and
its capital leases and semi-annual interest payments under its
2018 Notes.

The New ABL Facility matures August 2016.  However, the maturity
date of the New ABL Facility may be accelerated if the Company
defaults on its obligations.  If the maturity of the New ABL
Facility or such other debt is accelerated, the Company does not
believe that it will have sufficient cash on hand to repay the New
ABL Facility or such other debt or, unless conditions in the
credit markets improve significantly, that the Company will be
able to refinance the New ABL Facility or such other debt on
acceptable terms, or at all.  The failure to repay or refinance
the New ABL Facility or such other debt at maturity will have a
material adverse effect on the Company's business and financial
condition, would cause substantial liquidity problems and may
result in the bankruptcy of the Company or its subsidiaries.  Any
actual or potential bankruptcy or liquidity crisis may materially
harm the Company's relationships with its customers, suppliers and
independent affiliates.


REAL ESTATE ASSOCIATES: Incurs $213,000 Net Loss in Q1
------------------------------------------------------
Real Estate Associates Limited VII filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $213,000 on $0 of revenue for the three
months ended March 31, 2012, compared with a net loss of $205,000
on $0 of revenue for the same period during the prior year.

The Partnership reported a net loss of $861,000 on $0 of revenue
in 2011, compared with net income of $171,000 on $0 of revenue in
2010.

The Partnership's balance sheet at March 31, 2012, showed $1.16
million in total assets, $21.51 million in total liabilities and a
$20.35 million total partners' deficit.

"The Partnership continues to generate recurring operating losses.
In addition, the Partnership is in default on notes payable and
related accrued interest payable that matured between December
1999 and January 2012.  As a result, there is substantial doubt
about the Partnership's ability to continue as a going concern."

For 2011, Ernst & Young LLP, in Greenville, South Carolina,
expressed substantial doubt about the Partnership's ability to
continue as a going concern.  The independent auditors noted that
the Partnership continues to generate recurring operating losses.
In addition, notes payable and related accrued interest totaling
approximately $16,164,000 are in default due to non-payment.

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

                        http://is.gd/3AyU6v

                    About Real Estate Associates

Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983.  On February 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.

The Partnership will be dissolved only upon the expiration of 50
complete calendar years -- December 31, 2033 -- from the date of
the formation of the Partnership or the occurrence of various
other events as specified in the Partnership agreement.  The
principal business of the Partnership is to invest, directly or
indirectly, in other limited partnerships which own or lease and
operate Federal, state and local government-assisted housing
projects.

The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II.  The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.

The Partnership holds limited partnership interests in 11 local
limited partnerships as of both March 31, 2010, and December 31,
2009.  The Partnership also holds a general partner interest in
Real Estate Associates IV, which, in turn, holds limited
partnership interests in nine additional Local Limited
Partnerships; therefore, the Partnership holds interests, either
directly or indirectly through REA IV, in twenty (20) Local
Limited Partnerships.  The general partner of REA IV is NAPICO.
The Local Limited Partnerships own residential low income rental
projects consisting of 1,387 apartment units at both March 31,
2010, and December 31, 2009.  The mortgage loans of these projects
are payable to or insured by various governmental agencies.


REDDY ICE: Judge Denies Official Equity Committee
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although Reddy Ice Holdings Inc. may face opposition
at the confirmation hearing on May 18 for approval of the
prepackaged reorganization plan, it won't come from an official
shareholders' committee.  At an all-day hearing May 11 in Dallas,
the bankruptcy judge denied a request for appointment of an
additional official committee to represent shareholders, according
to a person who attended the hearing.

According to the report, on May 14, the company reported a $44.3
million net loss in the first quarter on revenue of $44.3 million.
The cost of sales in the quarter was $39.4 million.  For the first
quarter, interest expense was $15 million and reorganization costs
were 43.8 million.

                         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.


REDDY ICE: Wants Settlement With Purchasers Class Approved
----------------------------------------------------------
BankruptcyData.com reports that Reddy Ice Holdings Inc. filed with
the U.S. Bankruptcy Court a motion for an order approving a
settlement agreement with the purchasers class action plaintiffs.
Under the settlement, Reddy Ice Holdings will pay the plaintiffs
$750,000 and if certain additional events occur as set forth in
the settlement agreement, the Company will pay an additional
payment $250,000 in exchange for the release of claims. The direct
purchasers have agreed to support and not object to the Debtors'
Plan.

                         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.


REDDY ICE: Has $44.3 Million Net Loss in First Quarter
------------------------------------------------------
Reddy Ice Holdings, Inc., reported that revenues for the first
quarter of 2012 were $44.3 million, compared to $40.8 million in
the same quarter of 2011.  Net loss was $44.3 million in the first
quarter of 2012, compared with a net loss of $39.1 million in the
same period of 2011.  Net loss per share was $1.92 in the first
quarter of 2012 compared to a net loss per share of $1.72 in the
same period of 2011.

Adjusted EBITDA, defined as earnings before interest, taxes,
depreciation and amortization, and the effects of certain other
items was negative $8.9 million in the first quarter of 2012
versus negative $8.7 million in the same period of 2011.

As a result of ongoing restructuring transactions, the Company
recognized $0.6 million of restructuring costs and $3.8 million of
reorganization costs in the first quarter of 2012.  Furthermore,
during the first quarter of 2012 the Company recorded $2.5 million
of expense for costs incurred in connection with refinancing
activities related to debt agreements intended to preserve the
Company's liquidity position that will no longer be consummated.
No such costs were incurred in the first quarter of 2011.

Effective Thursday, Dec. 29, 2011, the Company's stock was quoted
on the OTCBB and OTCQB under the symbol ''RDDY''. As a result of
the Company's bankruptcy filing, on April 12, 2012 the Company's
symbol was changed to "RDDYQ".

A copy of the press release is available for free at
http://is.gd/WsRLqm

                         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.


REDDY ICE: Court OKs Rejection of Macquarie Capital Agreement
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Reddy Ice Holdings, Inc. and Reddy Ice Corporation, to
reject an agreement with Macquarie Capital (USA), Inc., effective
as of the Petition Date.

According to the Debtors, prepetition, Reddy Holdings entered into
an agreement for Macquarie to act as financial advisor to Reddy
Holdings in its effort to acquire the primary assets of Arctic
Glacier Income Fund in an out of court transaction.  As provided
more fully in the Macquarie Agreement, Macquarie agreed to advise
Reddy Holdings on developing an out of court strategy for a
transaction, negotiating the financial terms of a Transaction,
analyzing the consequences of different transactions, identifying
potential capital sources for a transaction, and negotiating
existing revolver and term loan facilities.

Reddy Holdings was unable to enter into an out of court
transaction with Arctic Glacier.

Under the terms of the Macquarie Agreement, Macquarie asserts
contingent claims against Reddy Holdings for various potential
fees.  These include, among others, fees due upon (i) a filing
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
(ii) execution of a definitive agreement to effect a Transaction,
and (iii) consummation of a Transaction.  In the event of a
successful transaction with Arctic Glacier, Reddy Holdings
would be liable to Macquarie for amounts in the millions of
dollars, independent of the value of the transaction and, due to
the "tail" provision contained in the Macquarie agreement,
independent of whether Macquarie actually provides any services in
connection with the transaction.

The Macquarie Agreement also contemplates payments to Macquarie of
(a) fees in excess of a million dollars in the event Reddy
Holdings merely files a notice of a potential Transaction under
antitrust laws, irrespective of whether an agreement regarding the
transaction is reached with Arctic Glacier, and (b) additional
fees in the millions of dollars in the event an agreement in
respect of a transaction is reached, but irrespective of whether
the transaction is consummated.  A successful transaction would
entail still further fees.

As of the Petition Date, Reddy Holdings has not completed a
transaction, nor has it executed any binding agreement for
consummation of a transaction with Arctic Glacier or filed any
notice under the antitrust laws.

The Court also ordered that any claim for rejection damages
relating to the rejection of the Macquarie Agreement will be filed
within 30 days after the entry of the order.

                         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.


REDDY ICE: Gets Final OK to Incur $70MM Loan from Macquarie Bank
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, in a
final order, authorized Reddy Ice Holdings, Inc. and Reddy Ice
Corporation, to:

   -- obtain postpetition financing in the aggregate principal
      amount not to exceed $70,000,000 from Macquarie Bank
      Limited, for itself as a lender, and as administrative agent
      and collateral agent for the lenders, and the other lenders
      from time to time parties to the DIP Facility Agreement; and

   -- use the cash collateral.

The Debtors would use the money to: (A) fund ongoing working
capital and general corporate purposes of the Debtors, (B) repay
in full the Prepetition Revolver Indebtedness, which amounts are
stipulated to be secured by the Prepetition Collateral, (C)
provide the Prepetition Agent, the Prepetition Lenders, the First
Lien Agent, the First Lien Noteholders, the Second Lien Agent, and
the Second Lien Noteholders with the Adequate Protection, (D) pay
certain transaction fees, and other costs and expenses of
administration of the cases, subject to the Approved Budget, and
(E) pay certain fees and expenses owed to the DIP Agent and the
DIP Lenders under the DIP Facility Documents.

As of the Petition Date, the Debtors' indebtedness consist of ,
among other things:

   a. $300,000,000, inclusive of accrued and unpaid interest and
      prepayment premiums, pursuant to the First Lien Note
      Documents; and

   b. $139,000,000, inclusive of accrued and unpaid interest to
      the Second Lien Noteholders.

As adequate protection from diminution in value of the lender's
collateral, the Debtor will grant the DIP Agent replacement liens
in and on all prepetition and postpetition property of Debtors'
estates and  superpriority administrative claims status subject
only certain carve out expenses.

A full-text copy of the terms of the DIP Loan is available for
free at http://bankrupt.com/misc/REDDYICE_dipfinancing_order.pdf

                   Ad Hoc Shareholders Request

The Ad Hoc Shareholder Group requested that the Court: (i) require
any final order on the DIP Financing motion to reserve the rights
of the Official Equity Committee (if appointed) to include the
reasonable fees and expenses of its professionals in any budget,
and to provide the same treatment to its professionals under the
carve-out as the professionals retained by the Official Committee
of Unsecured Creditors, and (ii) grant other necessary and
appropriate relief at law or equity.

The Ad Hoc Shareholder Group is consist of Alan Bernon, Ron Klein,
Harold Ginsburg, Pete Schenkel and Wayne Stoltenberg, each an
equity interest holder and party in interest in the Debtors'
cases.

                         About Reddy Ice

Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice
Corp. manufacture and distribute packaged ice in the United
States.  As of Dec. 31, 2011, the Company had assets totaling
$434 million and total liabilities of $531 million.  The bulk of
the liabilities were total debt outstanding of $471.5 million.

Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12-
32349 and 12-32350) together with a plan of reorganization and
accompanying disclosure statement to complete a previously
announced plan to strengthen its balance sheet and ensure strong
financial footing for the future.  As part of the restructuring,
Reddy Ice seeks to pursue a strategic acquisition of all or
substantially all of the businesses and assets of Arctic Glacier
Income Fund and its subsidiaries, including Arctic Glacier Inc., a
major producer, marketer and distributor of packaged ice in North
America.

Arctic Glacier on Feb. 22, 2012, filed for protection under the
Companies' Creditors Arrangement Act in Canada and Chapter 15 of
the Bankruptcy Code in the United States.  Arctic is seeking sale
or investment proposals from qualified bidders.

Reddy Ice's Plan provides for the restructuring of the Company's
obligations with respect to $300 million of First Lien Notes;
$139.4 million of Second Lien Notes; and $11.7 million of Discount
Notes.  If the Plan is approved, all Second Lien Notes will be
exchanged and will be retired and cancelled and all Discount Notes
will be cancelled.  Reddy Ice said the Plan has the support of a
majority of its lenders and major creditors, led by Centerbridge
Capital Partners II, L.P.  A hearing to approve the Disclosure
Statement and confirm the Plan has been set for May 18, 2012.

Judge Stacey G. Jernigan presides over the case.  Reddy Ice's
financial advisors are Jefferies & Company, Inc. and FTI
Consulting, Inc.  Kurtzman Carson Consultants serves as claims and
notice agent.

Centerbridge Partners is represented by Jonathan S. Zinman, Esq.,
Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup
Sathy, Esq., at Kirkland & Ellis.

Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq.,
and David R. Seligman, Esq., also at Kirkland & Ellis.

The ad hoc group of First Lien and Second Lien Noteholders is
represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton
Rosen & Katz.  Wells Fargo Bank, National Association, serves as
First Lien and Second Lien Agent.


RESIDENTIAL CAPITAL: Meeting to Form Creditors' Panel Today
-----------------------------------------------------------
Tracy Hope Davis, the United States Trustee for Region 2, will
hold an organizational meeting on May 16, 2012, at 10:30 a.m. in
the bankruptcy case of Residential Capital LLC.  The meeting will
be held at:

   Hilton New York
   Third Floor - Trianon Ballroom
   1335 Avenue of the Americas
   New York, NY  10019
   Tel: 212-568-7000

The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.

The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code.  A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.

To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable.  The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization.  The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.

                           About ResCap

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.

The ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and 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.

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.

Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).


RESIDENTIAL CAPITAL: Fitch Lowers IDR to 'D' on Bankruptcy Filing
-----------------------------------------------------------------
Fitch Ratings has downgraded the Long-term Issuer Default Rating
(IDR) of Residential Capital LLC (ResCap) to 'D' from 'C'
following the company's filing of voluntary petition seeking
relief under Chapter 11 of the U.S. Bankruptcy code.  In addition,
Fitch has maintained the Rating Watch Negative on the 'BB-' Long-
term IDR and senior unsecured debt rating of Ally Financial Inc.
and its subsidiaries.

Concurrent with its filing, ResCap announced that it has reached a
settlement agreement with Ally and some of its key creditors on
terms of a pre-arranged Chapter 11 plan. Under the settlement
agreement, Ally has agreed to take certain steps to support ResCap
during the Chapter 11 process, which among other terms include
release of all existing and potential claims between Ally and
ResCap, as well as release of all potential causes for action
against Ally by third parties. This settlement plan is subject to
Bankruptcy court approval.

If Ally is released from existing and potential claims this would
be a positive development, though litigation may continue to be an
overhang as creditors or third parties may challenge such a
release.

To facilitate ResCap's bankruptcy, Ally will be taking a $1.3
billion charge in 2Q12 ($750 million cash contribution to ResCap,
$400 million equity writedown, and $130 million related to
establishment of mortgage repurchase reserve at Ally Bank). Fitch
believes that while this charge is significant, it is manageable
for Ally in the context of its liquidity and the earnings the firm
generates from its auto finance operations.

As of March 31, 2012, Ally had $7.0 billion in liquidity comprised
of cash and marketable securities, with another $12 billion of
committed and unused credit capacity against $11.0 billion in
unsecured debt maturities due in 2012. The North American auto
finance operations have generated approximately $2.0 billion in
pre-tax income for the trailing twelve months ending March 31,
2012. Fitch notes that the above number includes contribution from
Ally's auto finance business in Canada, which along with Ally's
international auto operations are under strategic evaluation to
divest.

In addition, Ally's secured debt exposure of $1.4 billion with
ResCap consisting of $1.0 billion in a secured credit line and
$410 million in a secured letter of credit facility remains
outstanding as of March 31, 2012. Fitch views this as a material
exposure that remains outstanding, but will have recoveries
because they are secured.

Fitch also notes that as a result of Chapter 11 bankruptcy, ResCap
will be deconsolidated from Ally's financial statements. The
deconsolidation will likely lead to a decline in risk weighted
assets for regulatory capital purposes, offsetting some of the
losses incurred by Ally.

In resolving the Rating Watch on Ally, Fitch will focus on the
repayment of the secured debt facility with ResCap, monitor the
court approval process of the proposed settlement agreement with
ResCap and its creditors and assess the overall impact of these
actions on Ally's capital and liquidity position. Fitch will also
continue to monitor Ally's costs and access to funding for its
core auto business.

Fitch downgrades the following ratings:

ResCap

-- Long-term IDR to 'D' from 'C';

-- Short-term IDR to 'D' from 'C';

-- Senior unsecured to 'D' from 'C/RR6';

-- Short-term debt to 'D' from 'C'.

The following ratings remain on Rating Watch Negative:

Ally Financial Inc.

-- Long-term IDR 'BB-';

-- Senior unsecured 'BB-';

-- Viability rating 'bb-';

-- Perpetual preferred securities, series A 'CCC'.

GMAC Capital Trust I

-- Trust preferred securities, series 2 'B-'.

GMAC International Finance B.V.

-- Long-term IDR 'BB-';

-- Senior unsecured 'BB-';

GMAC Bank GmbH

-- Long-term IDR 'BB-';

-- Senior unsecured 'BB-';

Ally Credit Canada Limited

-- Long-term IDR 'BB-';

-- Senior unsecured 'BB-';

GMAC Financial Services NZ Limited

-- Long-term IDR 'BB-';

GMAC Australia LLC

-- Long-term IDR 'BB-'.


RESIDENTIAL CAPITAL: Talcott Asks RMBS Clients to Accept Deal
-------------------------------------------------------------
Financial crisis litigation boutique Talcott Franklin P.C.
recommended that its clients enter into a settlement agreement
with Residential Capital, LLC and its direct and indirect
subsidiaries (ResCap) and Ally Financial Inc. and its direct and
indirect subsidiaries (Ally) as part of ResCap's pre-arranged
bankruptcy filing.  The firm intends to work with its clients to
direct the Trustees of various ResCap-sponsored residential
mortgage backed securities (RMBS) trusts to support the plan of
reorganization.

The firm is famous for its RMBS investor clearing house, which
represents over half of the outstanding issuance of private-label
RMBS.  A sub-set of roughly 30 of the firm's investor clients
signed Non-Disclosure Agreements to participate in the negotiation
of a settlement.  As of late Sunday night, an overwhelming
majority of those clients had determined to sign or had signed the
settlement agreement.  The firm intends to recommend the
settlement agreement to its remaining clients holding ResCap-
sponsored RMBS.

"For investors in ResCap-sponsored RMBS, the alternatives to the
settlement agreement are unattractive," said Paul Snyder, the
mortgage-backed securities trial lawyer who led the ResCap
initiative for Talcott Franklin P.C.  "The plan seeks to preserve
the continuity of cash flow distribution to the RMBS investors. We
intend to support the plan and will now work to instruct the
Trustees on our participating clients' trusts to support the
plan."

The firm's clients are also represented in this matter by James
Gadsden and Leonardo Trivigno of Carter Ledyard & Milburn LLP and
Thomas Sarb and Robert Wolford of Miller, Johnson, Snell &
Cummiskey, P.L.C.

ResCap is represented by Gary Lee, Jamie Levitt, Tony Princi, and
Larren Nashelsky of Morrison & Foerster LLP. Ally is represented
by Rick Cieri, Ray Schrock, Steven Hessler, and Noah Ornstein of
Kirkland & Ellis LLP.

Jerry Phelps, Derek Witte, Sheri Deterling, and Tal Franklin also
participated in the direct negotiations with ResCap and Ally on
behalf of Talcott Franklin P.C.

                           About ResCap

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.

The ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and 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.

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.

Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).


RESIDENTIAL CAPITAL: 17 RMBS Holders Settle for $8.7-Bil. Claim
---------------------------------------------------------------
Seventeen institutional investors (RMBS Holders) represented by
Gibbs & Bruns LLP and Ropes & Gray LLP announced they had achieved
an agreement with Residential Capital LLC and its affiliated
debtors to grant an $8.7 billion allowed claim to 392 residential
mortgage backed securities trusts issued by affiliates of the
Debtors during the period from 2004 to 2008.  The RMBS Holders
hold, or manage investments for holders of, more than $13 billion
in outstanding RMBS securities issued by over 350 of the Covered
Trusts.

The settlement involves the following key terms:

The allowed claim will settle claims related to breaches of
representations and warranties in the origination and
securitization of residential mortgage loans in the Covered
Trusts;

The RMBS Holders will support the Debtors' plan of reorganization,
so long as certain other settlements benefitting the Debtors'
estates are included in such plan;

Where the RMBS Holders have the holdings permitting them to do so,
they will direct the relevant Indenture Trustee for the Covered
Trusts to accept the settlement and compromises set forth in the
Settlement Agreement;

The settlement is subject to review and will not become effective
as to a Covered Trust unless it is accepted by the Indenture
Trustee for that trust. The decision whether to accept the
settlement will be entirely within the relevant trustee's
independent judgment as a prudent person; and,

The settlement must be approved by the Bankruptcy Court.

The Debtors will file a motion to approve the settlement agreement
within days of the Petition Date.  The Debtors believe this
settlement is in the best interests of the Debtors, their estates,
their creditors, and other stakeholders, will avoid all-consuming
litigation, and will assist in the orderly confirmation of a
chapter 11 plan.  Kathy Patrick, lead counsel for the RMBS
Holders, said, "Our clients are pleased that another financial
institution has acknowledged the importance of resolving mortgage
repurchase liabilities.  A resolution of these claims is in the
best interests of the RMBS Trusts and all of their
certificateholders."

RMBS Holders are represented by Kathy Patrick, Robert Madden,
Scott Humphries and David Sheeren of Gibbs & Bruns LLP; Keith
Wofford and Ross Martin of Ropes & Gray LLP

                           About ResCap

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.

The ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and 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.

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.

Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).


RESIDENTIAL CAPITAL: Sale to Make Nationstar Top Non-Bank Servicer
------------------------------------------------------------------
Nationstar Mortgage Holdings Inc. has signed a definitive
agreement to acquire certain residential mortgage servicing assets
and other assets from Residential Capital, LLC and related
entities in connection with ResCap's proposed asset sale pursuant
to a plan under the U.S. Bankruptcy Code.

Nationstar expects the acquired Mortgage Servicing Assets to total
$374 billion, including $201 billion in primary residential
mortgage servicing rights ("MSRs") and $173 billion in
subservicing contracts, as measured by unpaid principal balances
as of Feb. 29, 2012, approximately $1.8 billion of related
servicing advance receivables and certain other complimentary
assets.  The Transaction is expected to close in late 2012,
subject to the conditions and auction process.

Upon closing, the acquisition will make Nationstar the largest
non-bank residential mortgage loan servicer and one of the largest
residential mortgage loan originators in the United States.  With
this transaction, Nationstar anticipates adding more than 2.4
million customers to a customer base of over 1 million, and
growing its total servicing and sub-servicing book to
approximately $550 billion.

"We believe this transaction will cement Nationstar's position as
the nation's pre-eminent non-bank mortgage servicer, and it
reflects a record of servicing performance that has made us a
partner of choice in a transforming industry," said Nationstar CEO
Jay Bray.  "This potential transaction and our pending acquisition
of servicing rights from Aurora represent terrific opportunities
to acquire assets and operations from best-in-class servicers
without the burden of certain legacy liabilities.

"In a performance-based, customer-focused servicing model like
Nationstar's, the talent and experience of our people make the
difference," said Bray.  "We expect that many employees from
Aurora will join our U.S.-based workforce, and we look forward to
working with many exceptional professionals from ResCap as part of
the Nationstar team.  Together, our overriding mission will be
unchanged -- to build on our heritage of providing our customers
with exceptional service and the benefit of Nationstar's extensive
resources to help them achieve and preserve homeownership."

The cash purchase price of the mortgage servicing rights and
subservicing contracts would be approximately $700 million based
on unpaid principal balances as of Feb. 29, 2012.  The cash
purchase price of the related servicing advance receivables would
be approximately $180 million, net of financing, based on advance
balances as of Feb. 29, 2012.  Nationstar expects to enter into
approximately $1.6 billion of advance financing facilities to fund
the balance of the related servicing advance receivables.
Approximately 68% of loans in the total portfolio (by unpaid
principal balance) are owned, insured or guaranteed by Fannie Mae,
Freddie Mac, or Ginnie Mae.

Nationstar will fund up to approximately $450 million of the MSR
purchase price and cash purchase price for advances. Remaining
funding is expected from proceeds of a co-investment by Newcastle
Investment Corp. and other Fortress-affiliated entities, whereby
Nationstar will sell the right to receive approximately 65% of the
excess MSRs after receipt of a fixed basic servicing fee per loan.
Nationstar will retain approximately 35% of the excess MSRs and
all ancillary income associated with servicing the loans.  Under
the terms of the investment, to the extent that any loans in this
portfolio are refinanced by Nationstar, the resulting mortgage
servicing right will be included in the portfolio, subject to
certain limitations.

As contemplated by the Agreement, ResCap has voluntarily filed a
Chapter 11 petition in U.S. Bankruptcy Court and is seeking court
approval to sell its Mortgage Servicing Assets in an auction
process supervised by the court.  Pursuant to the terms of the
Agreement, Nationstar has agreed to serve as the "stalking horse"
bidder for the auction of the Mortgage Servicing Assets.

Nationstar's bid is subject to superior offers solicited as part
of the auction process as well as court and other approvals and
conditions.

Nationstar anticipates that the court will approve in mid-June the
auction procedures and timeline for the sale of the Mortgage
Servicing Assets and that the auction process will last
approximately 90 days, during which time ResCap will solicit
competing bids.  If Nationstar is the successful bidder, then
ResCap will seek court approval to sell the Mortgage Servicing
Assets to Nationstar and the closing of the Transaction would be
expected to occur in late 2012. The auction timing and process is
subject to the court's discretion and may change.

The Agreement contains customary bid procedures and stalking horse
protections, including a $72 million break-up fee and
reimbursement of up to approximately $10 million of transaction-
related expenses to be paid to Nationstar if it is not the
successful bidder in the auction process.

                           About ResCap

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.

The ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and 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.

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.

Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).


ROTECH HEALTHCARE: Delays Q1 Form 10-Q Due to Programming Error
---------------------------------------------------------------
In connection with Rotech Healthcare Inc.'s quarterly close
process and internal review, management identified a programming
error in the Company's automated billing logic dating back to
January 2009.  As a result, and following substantial independent
analysis, the Company self-reported this error and voluntarily
refunded $6.5 million to the appropriate Durable Medical Equipment
Medicare Administrative Contractors.  As a result of this matter
and the completion of related remedial procedures, the Company has
experienced a delay in its normal process for preparing and filing
by the May 10, 2012, deadline the Company's quarterly report on
Form 10-Q for the period ended March 31, 2012. The Company is
working diligently to complete additional post-closing procedures
and review as necessary to complete and file the Company's
quarterly report on Form 10-Q as soon as practicable.

                     About Rotech Healthcare

Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services.  The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.

The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million in
2009.

The Company's balance sheet at Dec. 31, 2011, showed
$277.04 million in total assets, $571.21 million in total
liabilities, $3.01 million in Series A convertible redeemable
preferred stock, and a $297.18 million total stockholders'
deficiency.

                           *     *     *

In October 2010, Standard & Poor's Ratings Services raised its
corporate credit rating on Rotech Healthcare to 'B-' from 'CCC'.
The outlook is positive.

In the March 22, 2011, edition of the TCR, Standard & Poor's
Ratings Services said that it raised its corporate credit rating
to 'B' from 'B-' on Orlando, Fla.-based Rotech Healthcare Inc.,
following the completion of the company's $290 million second-lien
senior secured notes offering.  "The ratings on Rotech Healthcare
Inc. reflect the company's weak business risk profile,
incorporating Rotech's exposure to Medicare reimbursement
reductions for its products and services," said Standard & Poor's
credit analyst Jesse Juliano.  The rating also reflects the
company's highly leveraged financial risk profile.

As previously reported by the TCR on Jan. 13, 2012, Moody's
Investors Service lowered Rotech Healthcare Inc.'s Corporate
Family rating ("CFR") to B3 from B2 as a consequence of
weakening liquidity and worse than expected operating performance
in 2011 alongside only modest expectations for improvement in
2012.  The downgrade to B3 incorporates Moody's concerns regarding
the decline in Rotech's cash balance due to significant working
capital usage during 2011 and lower than expected growth in
EBITDA.


RYLAND GROUP: Offering $200 of 1.625% Convertible Senior Notes
--------------------------------------------------------------
The Ryland Group, Inc., filed with the U.S. Securities and
Exchange Commission a free writing prospectus relating to its
offer to sell $200 million of 1.625% Convertible Senior Notes due
2018.  The Notes will mature on May 15, 2018, unless earlier
converted or repurchased.

Joint Book-Running Managers are Citigroup Global Markets Inc. and
J.P. Morgan Securities LLC.  UBS Securities LLC serves as co-
manager of the offering.

A copy of the FWP is available for free at:

                        http://is.gd/ShbjUC

                        About Ryland Group

Headquartered in Calabasas, California, The Ryland Group, Inc.
(NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's
largest homebuilders and a leading mortgage-finance company.
Since its founding in 1967, Ryland has built more than 285,000
homes and financed more than 240,000 mortgages.  The Company
currently operates in 15 states and 19 homebuilding divisions
across the country and is listed on the New York Stock Exchange
under the symbol "RYL."

The Company reported a net loss of $50.75 million in 2011, a net
loss of $85.14 million in 2010, and a net loss of $162.47 million
in 2009.

The Company's balance sheet at March 31, 2012, showed
$1.54 billion in total assets, $1.06 billion in total liabilities
and $479.91 million in total equity.

                           *     *     *

Ryland Group carries 'B1' corporate family and probability of
default ratings, with stable outlook, from Moody's.  It has 'BB-'
issuer credit ratings, with stable outlook, from Standard &
Poor's.


SAAB CARS: Ally Financial OK'd to Sell Motor Vehicle Inventory
--------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware modified the automatic stay with respect
to Ally Financial Inc., et al.'s collateral consisting of the
motor vehicle inventory and vehicle-related accounts receivable of
SAAB Cars North America, Inc.

In its stay motion, Ally sought immediate possession of both (a)
certain new vehicles owned by Debtor that constitute a substantial
percentage of Debtor's total assets; and (b) the vehicle-related
accounts receivable.

The Court also ordered that prior to implementing the methodology
and procedures for the sales of the motor vehicle inventory, Ally
will consult about the methodology and procedures with the Debtor
and the Official Committee of Unsecured Creditors, but neither the
Debtor's, the Committee's, the Dealer Network's or their
respective counsels' consent is required for Ally to implement the
methodology or procedure or to dispose of any collateral.

The Debtor, in its response to the stay motion, said that Ally's
seizure efforts are premature given the very early stage of the
case.  Alternatively, the Debtor suggested that the parties enter
into a two-part stipulation governing the Debtor collateral.  The
stipulation would require (1) that all vehicles be sold in such a
way that will not flood the market or diminish the ability of
Debtor's United States dealers to sell their existing inventory at
retail prices; and (2) that all proceeds from vehicle sales be
deposited into an escrow account until such time as the Court
provides the parties with disbursement instructions.

In a separate filing, 165 of the vehicle and service franchisees
(the Dealer Network) of Saab Cars North America, Inc., asked that
the Court deny the motion to modify the automatic stay to
repossess approximately 977 vehicles.

According to the Dealer Network, SCNA received no monetary
consideration for the sums owed to Ally by SCNA under the
Guarantee and Security Interest.  The obligation to Ally is an
"upstream" guarantee.  Furthermore, the motion does not cite to a
single case, or contain an appraisal of the vehicles, and
therefore is unsupportable.

                       About Saab Cars N.A.

More than 40 U.S.-based Saab dealerships have signed an
involuntary Chapter 11 bankruptcy petition for Saab Cars North
America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30,
2012.  The petitioners, represented by Wilk Auslander LLP, assert
claims totaling $1.2 million on account of "unpaid warranty and
incentive reimbursement and related obligations" and/or "parts and
warranty reimbursement."  Leonard A. Bellavia, Esq., at Bellavia
Gentile & Associates, in New York, signed the Chapter 11 petition
on behalf of the dealers.

The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg
News.

Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB.  Saab Cars N.A. named in December an
outside administrator, McTevia & Associates, to run the company as
part of a plan to avoid immediate liquidation following its parent
company's bankruptcy filing.

Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.  Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.

In its schedules, Saab Cars disclosed $48,194,482 in total assets
and $124,013,118 in total liabilities.


SALEM, NJ: Moody's Assigns 'Ba3' Underlying Ratings to $3MM Bonds
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to The City of
Salem's (NJ) $3.4 million General Obligation Bonds, 2012.
Concurrently, Moody's has affirmed the Ba3 rating on $12.7 million
of currently outstanding general obligation bonds and the $19.4
million outstanding from the Salem County Improvement Authority's
City-Guaranteed Revenue Bonds (Finlaw State Office Building
Project), Series 2007. At this time, Moody's has changed the
outlook to stable, from negative. The bonds are secured by the
city's general obligation, unlimited tax pledge. Proceeds will be
used to permanently finance bond anticipation notes (BANs) which
mature on June 13, 2012.

Moody's Rating

Issue: General Bonds of 2012 (Series A); Underlying Rating: Ba3;
Enhanced Rating: A1; Sale Amount: $2,400,000; Expected Sale Date:
5/24/12; Rating Description: General Obligation

Issue: General Bonds of 2012 (Series B); Underlying Rating: Ba3;
Enhanced Rating: A1; Sale Amount: $710,000; Expected Sale Date:
5/24/12; Rating Description: General Obligation

Issue: Water and Sewer Bonds of 2012; Underlying Rating: Ba3;
Enhanced Rating: A1; Sale Amount: $290,000; Expected Sale Date:
5/24/12; Rating Description: General Obligation

Summary Ratings Rationale

The A1 enhanced rating on these bonds reflects adequate debt
service coverage provided by qualified revenues (state aid) under
the State of New Jersey's Municipal Qualified Bond Act, which is
intended to provide additional security to these bonds. The Act
requires that a portion of the city's state aid be diverted by the
State Treasurer directly to a trustee to make debt service
payments. Coverage provided by 2011 qualified state aid revenues
exceeds 10 times proposed MQBA debt service.

The Ba3 rating reflects the city's continued financial pressure
stemming from the Finlaw State Office Building Project, on which
the city has guaranteed debt service payments. Also incorporated
in the rating is the city's improving financial position, which
has recently been bolstered with the use of non-recurring
revenues, and limited tax base with high debt burden.

The stable outlook incorporates the city's recent discontinuation
of draws on the debt service reserve fund and management's
projection that future draws on the debt service reserve fund will
be avoided.

STRENGTHS

- Adequate reserve levels

- Satisfactory reserve levels

CHALLENGES

- High direct debt burden coupled with exposure to guaranteed
   debt

- Limited sized tax base with below average wealth levels

- High taxpayer concentration

Outlook

The stable outlook incorporates the city's recent discontinuation
of draws on the debt service reserve fund and management's
projection that future draws on the debt service reserve fund will
be avoided. Although the revenues associated with the 2007 Finlaw
State Building Project debt will continue to be insufficient to
meet expenditures and debt service on the project, the city, SCIA
and the property management company have eliminated draws on the
debt service reserve fund and plan to absorb future subsidies
within the city's budget.

What Could Change the Rating UP:

- Rebuilding the debt service reserve fund to its original size
   of $1.8 million

- Ceasing debt service reserve draws for an extended period

- Significant increases in cash and reserve levels

What Could Change the Rating Down:

- Further draws on the debt service reserve fund

- A decline in lease revenues

- Increased financial operation pressures at the City

- Inability to roll BANs or convert into long term debt

Principal Methodology

The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.


SCOTTS MIRACLE-GRO: Moody's Affirms Ba2 CFR/PDR; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service revised Scotts Miracle-Gro Company's
outlook to stable from positive following higher costs and
moderating credit metrics. All ratings, including the Ba2
Corporate Family Rating, were affirmed.

"While we recognize the benefits of targeted advertising, we
expect operating margins to contract because of increased
advertising expenses and higher raw material costs," said Kevin
Cassidy, Senior Credit Officer at Moody's Investors Service. "This
will preclude Scott's from getting to credit metrics necessary for
an upgrade in the near to mid-term," he added.

The following ratings were affirmed/LGD assessments revised:

Corporate Family Rating at Ba2;

Probability of Default Rating at Ba2;

$200 million senior unsecured notes due January 2018 at B1 (LGD5,
88% from 86%);

$200 million senior unsecured notes due December 2020 at B1 (LGD5,
88% from 86%);

Speculative grade liquidity rating at SGL 2

Rating Rationale

The Ba2 Corporate Family Rating reflects Scott's strong market
position, efficient operational platform, strong customer
relationships and commitment to brand support and product
development. The ratings are constrained by the seasonality of its
earnings and cash flows, weather dependency, exposure to volatile
raw materials prices, and by its highly concentrated customer
base. In addition, Moody's believes that Scott's will likely use
its excess cash flow over the medium term for share repurchases or
targeted acquisitions, and will be reliant on its revolver for
seasonal working capital needs. Nevertheless, Moody's recognizes
the long-term favorable growth trends for lawn and garden products
driven by favorable demographic and macro economic trends. The
rating incorporates Moody's expectation that higher and more
focused marketing expenditures will drive sales growth and that
financial leverage over the longer term will be reduced through
earnings growth.

The stable outlook reflects Moody's view that Scott's lawn and
garden core consumer business will continue to grow close to its
historical trends and that it will maintain a good liquidity
profile. The outlook also reflects Moody's expectation that
Scott's will not materially increase debt in the near term either
for acquisitions or to fund shareholder returns.

The rating could be upgraded if financial leverage (debt/EBITDA)
excluding seasonal working capital borrowings improves slightly
and cash flow credit metrics get much better. Key credit metrics
necessary for an upgrade are: adjusted debt/EBITDA, excluding
seasonal working capital borrowings, sustained around 2.5 times
(currently at a seasonal high of 4.2 times, but 2.7 times at end
of fiscal 2011), EBITA margins maintained around 13% (currently
12.4%) and retained cash flow/net debt consistently around 20%
(currently 10%). For the debt/ EBITDA upgrade threshold to be met,
EBITDA needs to increase by about $45 million from March 31, 2012
levels or debt needs to decrease by around $115 million from
September 2011 levels (March includes seasonal revolver
borrowings).

A downgrade is not likely in the near to mid-term. If leverage
approached 4x other than for seasonal borrowings a downgrade would
be likely. EBITA margins falling below 10% for a prolonged period
could also trigger a downgrade. For the debt/ EBITDA downgrade
threshold to be met, EBITDA needs to decrease by about $145
million from March 31, 2012 levels or debt needs to increase by
around $575 million from September 2011 levels.

Moody's subscribers can find further details in the Scott's
Miracle Gro Credit Opinion published on Moodys.com.

The principal methodology used in rating Scott's Miracle Gro was
Moody's Global Packaged Goods Industry methodology published in
July 2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Located in Marysville, Ohio, Scott's is a manufacturer and
marketer of consumer lawn care and garden products, primarily in
North America and in Europe. Scott's also operates the Scotts Lawn
Service business and sells professional products. Revenue for the
twelve months ending March 31, 2012 approximated $2.9 billion.


SEALY CORP: Amends $100MM Credit Facility with JPMorgan, et al.
---------------------------------------------------------------
Sealy Mattress Company, a wholly-owned subsidiary of Sealy
Corporation, amended its existing senior secured asset-based
revolving credit facility pursuant to a credit agreement among
SMC, the Company, Sealy Mattress Corporation, JPMorgan Chase Bank,
N.A., as administrative agent and collateral agent, General
Electric Capital Corporation, as co-collateral agent, J.P. Morgan
Securities LLC, GE Capital Markets, Inc., and Citigroup Global
Markets, Inc., as joint lead arrangers and joint bookrunners,
Mizuho Corporate Bank, Ltd., as syndication agent, and a syndicate
of financial institutions and institutional lenders.  A copy of
the credit agreement is available for free at http://is.gd/F778EA

The amended ABL Revolver provides for revolving credit financing
of up to $100 million, subject to borrowing base availability,
with a maturity of five years.

The amended ABL Revolver includes borrowing capacity available for
letters of credit and for borrowings on same-day notice, referred
to as swingline loans.  All borrowings under the ABL Revolver will
be subject to the satisfaction of customary conditions, including
absence of a default and accuracy of representations and
warranties.  SMC does not plan to draw on the ABL Revolver
immediately upon closing.  As of the closing date, SMC had $57.1
million of undrawn availability under the ABL Revolver, after
taking into account approximately $17.7 million of letters of
credit and the borrowing base limitations.

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

                        http://is.gd/dpwtsv

                         About Sealy Corp.

Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) --
http://www.sealy.com/-- is the largest bedding manufacturer in
the world with sales of $1.5 billion in fiscal 2008.  The Company
manufactures and markets a broad range of mattresses and
foundations under the Sealy(R), Sealy Posturepedic(R), including
SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns &
Foster(R), and Bassett(R) brands.  Sealy operates 25 plants in
North America, and has the largest market share and highest
consumer awareness of any bedding brand on the continent.  In the
United States, Sealy sells its products to approximately 3,000
customers with more than 7,000 retail outlets.

The Company reported a net loss of $9.88 million for the 12 months
ended Nov. 27, 2011, and a net loss of $13.74 million during the
prior year.  The Company reported a net loss of $15.20 million
for the three months ended Nov. 27, 2011.

The Company's balance sheet at Feb. 26, 2012, showed
$936.26 million in total assets, $999.50 million in total
liabilities, and a $63.24 million total stockholders' deficit.

                          *     *      *

Sealy carries 'B' local and issuer credit ratings, with stable
outlook, from Standard & Poor's.


SHERIDAN GROUP: Incurs $166,000 Net Loss in First Quarter
---------------------------------------------------------
The Sheridan Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $165,680 on $69.94 million of net sales for the three
months ended March 31, 2012, compared with a net loss of $2.36
million on $68.18 million of net sales for the same period a year
ago.

The Company reported a net loss of $8.96 million in 2011, compared
with a net loss of $5.94 million in 2010.

The Company's balance sheet at March 31, 2012, showed $212.36
million in total assets, $183.36 million in total liabilities and
$29 million in total stockholders' equity.

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

                        http://is.gd/oJfcPQ

                     About The Sheridan Group

Hunt Valley, Maryland-based The Sheridan Group, Inc.
-- http://www.sheridan.com/-- is a specialty printer offering a
full range of printing and value-added support services for the
journal, catalog, magazine and book markets.

                           *    *     *

As reported by the TCR on Sept. 16, 2011, Standard & Poor's
Ratings Services lowered its corporate credit rating on Hunt
Valley, Md.-based printing company The Sheridan Group Inc. to
'CCC+' from 'B-'.

"The 'CCC+' corporate credit rating reflects Sheridan's ongoing
thin margin of compliance with its minimum EBITDA covenant," said
Standard & Poor's credit analyst Tulip Lim.  "It also reflects our
expectation of continued difficult operating conditions across the
company's niche printing segments, its vulnerability to prevailing
economic pressures, its high debt leverage, and the secular shift
away from print media."


SMF ENERGY: Section 341(a) Meeting Scheduled for May 23
-------------------------------------------------------
Steven R. Turner, the Assistant U.S. Trustee 21, will convene a
meeting of creditors of SMF Energy Corporation, et al., on May 23,
2012, at 11:00 a.m.  The meeting will be held at 51 SW First Ave
Room 1021, Miami.

The deadline to file a complaint to determine dischargeability of
certain debts is July 23, 2012.

Creditors are requested to file their proofs of claim by Aug. 21,
2012.

This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

                          About SMF Energy

SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012.  The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc.  Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.

On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer to direct the Company's efforts to increase revenues and
reduce expenses required by the decision to change the Company's
pricing structure.

Judge Raymond B. Ray oversees the case.  Lawyers at Genovese
Joblove & Battista, P.A., serve as the Debtors' counsel.  The
petition was signed by Soneet R. Kapila, the CRO.

SMF filed for bankruptcy reorganization when the lender Wells
Fargo Bank.  The bank is owed $11.2 million, including $8 million
on a revolving credit secured by all assets.


SMF ENERGY: U.S. Trustee Forms 3-Member Creditors Committee
-----------------------------------------------------------
Steven R. Turner, the Assistant U.S. Trustee 21, has appointed
three members to the Official Committee of Unsecured Creditors in
the bankruptcy case of SMF Energy Corporation, et al.

The newly elected Committee members are:

     (1) Michael Armstrong, Esq., Senior Counsel
         Chevron Products Company, a Division of
         Chevron U.S.A., Inc.
         6001 Bollinger Canyon Road, Room T2084
         Sam Ramon, CA 94583
         Tel: (925) 842-8747
         E-mail: arms@chevron.com
                 bamron@bastamron.com

     (2) Peter J. Sullivan, President
         PDS Enterprises, LLC d/b/a Sullivan's Advanced
         Fleet Service
         22502 Loop 494
         Kingwood, TX 77339
         Tel: (281) 318-4414
         Fax: (281) 569-2761
         E-mail: pete@carcpr.com

     (3) Ramon Fedorak, Senior Analyst
         Dupont Pension Trust
         One Righter Parkway
         Suite 3200
         Wilmington, DE 19803
         Tel: (302) 477-6049
         Fax: (302) 477-6564
         E-mail: r.fedorak@usa.dupont.com

Chevron Products' Michael Armstrong is the temporary chairperson
of the committee.

                        About SMF Energy

SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012.  The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc.  Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.

On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer to direct the Company's efforts to increase revenues and
reduce expenses required by the decision to change the Company's
pricing structure.

Judge Raymond B. Ray oversees the case.  Lawyers at Genovese
Joblove & Battista, P.A., serve as the Debtors' counsel.  The
petition was signed by Soneet R. Kapila, the CRO.

SMF filed for bankruptcy reorganization when the lender Wells
Fargo Bank.  The bank is owed $11.2 million, including $8 million
on a revolving credit secured by all assets.


SMF ENERGY: Has OK to Hire Genovese Joblove & Battista as Counsel
-----------------------------------------------------------------
SMF Energy Corporation and its debtor-affiliates obtained
authorization from the U.S. Bankruptcy Court for the Southern
District of Florida to employ the law firm of Genovese Joblove &
Battista, P.A., as general bankruptcy counsel.

As reported by the Troubled Company Reporter on April 26, 2012,
the Debtors need GJB's assistance in stabilizing business
operations, negotiating with key creditor constituencies and
addressing issues related to the "first day" hearing and related
orders.  Paul J. Battista, Esq., will lead GJB's legal team.

                        About SMF Energy

SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012.  The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc.  Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.

On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its Chief Restructuring
Officer to direct the Company's efforts to increase revenues and
reduce expenses required by the decision to change the Company's
pricing structure.

Judge Raymond B. Ray oversees the case.  The petition was signed
by Soneet R. Kapila, the CRO.

SMF filed for bankruptcy reorganization when the lender Wells
Fargo Bank.  The bank is owed $11.2 million, including $8 million
on a revolving credit secured by all assets.


SOLAR TRUST: Assets up for Auction on June 21
---------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Solar Millennium Inc. will auction the assets on
June 21 under a schedule the company proposed.  At a hearing last
week, the bankruptcy judge set down a requirement that bids be
submitted initially by June 18.  A hearing to approve the sale
will take place June 27.  The U.S. subsidiary of Germany's Solar
Millennium AG doesn't have a buyer under contract as yet.

                         About Solar Trust

Solar Trust of America LLC, Solar Millennium Inc., and nine
affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead
Case No. 12-11136) on April 2, 2012.

Solar Trust is a joint venture created by Solar Millennium AG and
Ferrostaal AG to develop solar projects at locations in California
and Nevada.  Located in the "Solar Sun Belt" of the American
Southwest, the project sites have extremely high solar radiation
levels, and allow the Debtors' projects to harness high levels of
solar power generation.  Projects include the rights to develop
one of the world's largest permitted solar plant facilities with
capacity of 1,000 MW in Blythe, California.  Two other projects
contemplated 500 MW solar power facilities in Desert Center,
California and Amargosa Valley, Nevada.

Although the Debtors have obtained highly valuable transmission
right and permits, each project is only in the developmental phase
and does not generate revenue for the Debtors.  Ferrostaal ceased
providing funding two years ago and SMAG, due to its own
deteriorating financial condition, stopped providing funding after
December 2011.

NextEra Energy Resources LLC has committed to provide a
postpetition secured credit facility and has expressed an interest
in serving as stalking horse purchaser for certain of the Debtors'
assets.

Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as
counsel to the Debtors.  K&L Gates LLP is the special corporate
counsel.

Ridgecrest Solar Power Project, LLC, and two entities filed for
Chapter 11 protection (Bankr. D. Del. Case Nos. 12-11204 to
12-11206) on April 10, 2012.

Ridgecrest Solar, et al., are affiliates of Solar Trust of America
LLC.  STA Development, LLC, one of the debtors that filed for
bankruptcy April 2, owns 100% of the interests in Ridgecrest, et
al.

Ridgecrest Solar Power estimated up to $50,000 in assets and
debts.  Ridgecrest Solar I, LLC, estimated up to $50,000 in assets
and up to $10 million in liabilities.


SOLYNDRA LLC: Says Ch. 7 Looms Without $3MM Extra DIP Financing
---------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that Solyndra LLC on
Friday asked a Delaware judge to approve $3 million in additional
debtor-in-possession financing and an extension of the loan
facility, saying it will have to convert to Chapter 7 bankruptcy
if the motion is not approved.

Law360 relates that Solyndra's motion seeks approval from U.S.
Bankruptcy Judge Mary F. Walrath to increase the available DIP
funding from $4 million to $7 million and extend the facility's
cut-off date from June 2 to Sept. 29.

                        About Solyndra LLC

Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications.  The Company had 968 full time employees
and 211 temporary employees.  Solyndra has sold more than 500,000
of its panels since 2008 and generated cumulative sales of over
$250 million.

Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011.  Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.

Judge Mary F. Walrath presides over the Debtors' cases.  The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser.  AlixPartners LLP serves as noticing claims and
balloting agent.  Imperial Capital LLC serves as the company's
investment banker and financial adviser.  The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation.  BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.

Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Solyndra LLC.  The Committee has tapped
Blank Rome LLP as counsel.

In October 2011, the Debtors hired Berkeley Research Group, LLC,
and designated R. Todd Neilson as Chief Restructuring Officer.

Solyndra is at least the fourth solar company to seek court
protection from creditors since August 2011.  Other solar firms
are Evergreen Solar and start-up Spectrawatt Inc., both of which
filed in August, and Stirling Energy Systems Inc., which filed for
Chapter 7 bankruptcy late in September.

Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date.  The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.

When they filed for Chapter 11, the Debtors pursued a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors were unable to identify any potential
buyers, an orderly liquidation of the assets for the benefit of
their creditors.

Solyndra did not receive acceptable offers to buy the business as
a going concern.  Two auctions late last year brought in a total
of $8 million.  A three-day auction in February generated another
$3.8 million.


SOUTH BAY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: South Bay Lube, Inc.
        dba Jiffy Lube
        1513 N. Washington Boulevard
        Sarasota, FL 34236

Bankruptcy Case No.: 12-07356

Chapter 11 Petition Date: May 11, 2012

Court: U.S. Bankruptcy Court
       Middle District of Florida (Tampa)

Judge: Caryl E. Delano

About the Debtor: South Bay Lube operates 26 Jiffy Lube stores in
                  Florida.  It has 210 employees.

Debtor's Counsel: Edward J. Peterson, III, Esq.
                  STICHTER, RIEDEL, BLAIN & PROSSER, P.A.
                  110 East Madison Street, Suite 200
                  Tampa, FL 33602
                  Tel: (813) 229- 0144
                  Fax: (813) 229-1811
                  E-mail: epeterson@srbp.com

                         - and ?

                  Stephen R. Leslie, Esq.
                  STICHTER, RIEDEL, BLAIN & PROSSER, P.A.
                  110 East Madison Street, Suite 200
                  Tampa, FL 33602-4700
                  Tel: (813) 229-0144
                  E-mail: sleslie.ecf@srbp.com

Estimated Assets: $10,000,001 to $50,000,000

Estimated Debts: $10,000,001 to $50,000,000

The petition was signed by Jason C. Thomas, vice president.

Debtor's List of Its 20 Largest Unsecured Creditors:

        Entity                     Nature of Claim    Claim Amount
        ------                     ---------------    ------------
Richard Vernal                     Promissory Note        $345,550
249 Nautilus Way
Treasure Island, FL 33706

Dorene Soret                       Promissory Note        $324,103
2971 Waubesa Avenue
Madison, WI 53711

Sopus                              Trade Debt             $272,658
700 Milam
Houston, TX 77002-2806

Orlando Lube Centers, Inc.         Promissory Note        $211,867

American Express                   Credit Card            $145,740
                                   Purchases

Quick Fund Capital, LLC            Promissory Note        $120,990

Regions/Credit Line                Line of Credit          $93,313

SeaBoard                           Trade Debt              $90,633

Automatic Data Processing          Services                $84,000

Amtrust North America, Inc.        Worker's Com. Ins.      $64,494

Service Champ                      Trade Debt              $53,394

Jiffy Lube International           Royalties Lease/        $56,388
                                   POS System

Robert J. Fewell                   Lease, Store            $50,592

Bridgefield                        Worker's Comp. Ins.     $45,500

The Midtown Nikki Group            Lease, Store            $44,828

Mandarin Investments, LLC          Lease, Store            $28,533

First American Financial           Accounting Services     $19,240

BankDirect/Meadowbrook             Insurance               $16,169

SCG Partnership                    Lease, Store            $15,388

Coastal Chemical                   Cleaning Services       $13,451


SOUTHTOWNE APARTMENTS: Case Summary & Creditors List
----------------------------------------------------
Debtor: Southtowne Apartments, LLC
        1465 Sutton Bridge Road
        Rainbow City, AL 35906

Bankruptcy Case No.: 12-40886

Chapter 11 Petition Date: May 10, 2012

Court: U.S. Bankruptcy Court
       Northern District of Alabama (Anniston)

Judge: James J. Robinson

Debtor's Counsel: Harry P. Long, Esq.
                  LAW OFFICES OF HARRY P. LONG, LLC
                  P.O. Box 1468
                  Anniston, AL 36202
                  Tel: (256) 237-3266
                  E-mail: hlonglegal@aol.com

Scheduled Assets: $2,394,050

Scheduled Debts: $1,673,799

A copy of the Company's list of its five largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/alnb12-40886.pdf

The petition was signed by Mark Edwards, member.


STEREOTAXIS INC: Closes $18.5MM Private Placement Financings
------------------------------------------------------------
Stereotaxis, Inc., has completed its previously announced private
offering of common stock and private offering of unsecured,
subordinated, convertible promissory debentures for gross proceeds
of $18.5 million.  Stereotaxis plans to use a portion of the net
proceeds from the common stock offering to repay $7 million of the
revolving Silicon Valley Bank credit facility guaranteed by Alafi
Capital and Sanderling Venture Partners and the balance of the
proceeds of that offering and of the debenture offering for
working capital, and for general corporate purposes.

Upon the closing of the financing transactions, the Company also
announced an amendment to its credit agreement with SVB to extend
its revolving credit facility to March 31, 2013.  The revolving
line of credit was decreased from $20 million to $13 million after
pay down of $7 million of the guaranteed portion, but otherwise
has similar terms and conditions to previous agreements with SVB.

                          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.

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.


STERLING SHOES: Provides Default Status Update
----------------------------------------------
Sterling Shoes Inc. provides its first bi-weekly Default Status
Report under National Policy 12-203 - Cease Trade Orders for
Continuous Disclosure Defaults.  On May 2, 2012, the Company
announced that the filings of its annual financial statements for
the financial year ended Dec. 31, 2011, management discussion and
analysis and related CEO and CFO certifications would not be filed
by the filing deadline.

The Company reports that since its original default announcement
on May 2, 2012, there have not been any material changes to the
information contained therein; nor any failure by the Company to
fulfill its intentions as stated therein with respect to
satisfying the provisions of the alternative information
guidelines, and there are no additional defaults or anticipated
defaults subsequent to such announcement.  Further, there have
been no additional material changes respecting the Company and its
affairs. The Company intends to file, if required, its next
Default Status Report by May 28, 2012.

Sterling Shoes is headquartered in Vancouver, B.C. and is a
leading independent footwear retailer offering a broad selection
of private label and brand name shoes and accessories.  Founded in
1987, Sterling Shoes LP operates over 100 stores across Canada.


SUBURBAN BOWL: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Suburban Bowl, Inc.
        1991 Front Wheel Dr.
        Batavia, OH 45103

Bankruptcy Case No.: 12-12657

Chapter 11 Petition Date: May 10, 2012

Court: United States Bankruptcy Court
       Southern District of Ohio (Cincinnati)

Judge: Jeffery P. Hopkins

Debtor's Counsel: Norman L. Slutsky, Esq.
                  SLUTSKY & SLUTSKY CO. LPA
                  9403 Kenwood Rd, Suite D100
                  Cincinnati, OH 45242
                  Tel: (513) 793-5560
                  E-mail: nslutsky@fuse.net

Scheduled Assets: $1,353,087

Scheduled Liabilities: $1,470,365

A copy of the Company's list of its six largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/ohsb12-12657.pdf

The petition was signed by Kirk Ayler, president.


SUFFOLK REGIONAL: Chapter 9 Case Summary
----------------------------------------
Debtor: Suffolk Regional Off-Track Betting Corporation
        5 Davids Drive
        Hauppauge, NY 11788
        Tel: (631) 853-1000

Bankruptcy Case No.: 12-73029

Chapter 9 Petition Date: May 11, 2012

Court: U.S. Bankruptcy Court
       Eastern District of New York (Central Islip)

About the Debtor: 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.

                  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.

                  Suffolk OTB has filed for Chapter 9 again after
                  the New York Legislature amended the Racing Law
                  to specifically authorize Suffolk OTB to be a
                  debtor under chapter 9.

Debtor's Counsel: Christopher F. Graham, Esq.
                  MCKENNA LONG & ALDRIDGE LLP
                  230 Park Avenue, Suite 1700
                  New York, NY 10169
                  Tel: (212) 905-8300
                  Fax: (212) 922-1819
                  E-mail: cgraham@mckennalong.com

Estimated Assets: $10,000,001 to $50,000,000

Estimated Debts: $10,000,001 to $50,000,000

The petition was signed by Jeffrey A. Casale, president and CEO.


THINGS REMEMBERED: Moody's Assigns 'B2' CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service assigned B2 Corporate Family and
Probability of Default Ratings to Things Remembered, Inc. and
assigned B1 ratings to the company's proposed $117 million senior
secured term loan and $30 million revolving credit facility. The
rating outlook is stable.

Proceeds from the proposed term loan, an unrated subordinated
mezzanine loan, and common equity contributed by Madison Dearborn
Partners, its affiliates and co-investors, will be used to fund
the acquisition of Things Remembered's parent company, TRM
Holdings Corporation.

The assigned ratings are subject to review of final documentation
and closing of the transaction as proposed. This is a first time
rating for Things Remembered.

Ratings assigned:

- Corporate Family Rating (CFR) at B2;

- Probability of Default Rating (PDR) at B2;

- $30 million revolving credit facility due 2017 at B1 (LGD3,
   33%);

- $117 million senior secured term loan due 2018 at B1 (LGD3,
   33%)

The ratings outlook is stable.

Ratings Rationale

Things Remembered's B2 CFR reflects the company's high pro forma
debt levels and weak credit metrics stemming from the proposed
acquisition. Pro forma rent-adjusted debt/EBITDA for the year
ended January 31, 2012 is about 6.0 times. The rating also
reflects the company's small size with pro forma revenue near $315
million, narrow product focus and the discretionary nature of its
products. The rating favorably reflects the company's strong
position in the highly fragmented personalized gift category of
retail, and moderate seasonality due to the variety of gifting
occasions for which its products are purchased. The rating also
reflects the company's solid EBITDA margins, which have grown
significantly since 2008 due to increased focus on higher margined
engraving, move to in-house design and sourcing of its products,
improved store economics and cost controls. Liquidity is expected
to be adequate, supported by the expectation that cash flow and
excess revolver availability will be more than sufficient to cover
cash flow needs over the next twelve months.

The stable rating outlook reflects the expectation that Things
Remembered will materially reduce leverage over the near term
through continued profitable growth and debt reduction. Any
adverse fluctuations in near-term performance could lead to a
negative ratings outlook. The ratings could be downgraded if the
company experiences negative trends in sales, profitability or
credit metrics, or if liquidity were to erode in any way.
Quantitatively, ratings could be downgraded if debt/EBITDA is
sustained above 6.0 times or interest coverage approaches 1.25
times.

Given Things Remembered's small size, the ratings are unlikely to
be upgraded in the near term. Over time, its ratings could be
upgraded if the company demonstrates the willingness and ability
to achieve and maintain debt/EBITDA below 4.5 times and interest
coverage above 2.25 through profitable growth and debt reduction.

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

Things Remembered, Inc., headquartered in Highland Heights, Ohio,
is a leading retailer of personalized and occasion-based gifts.
The company operates about 650 retail stores, kiosks, and outside
key shops located primarily in shopping malls throughout the
United States and Canada. Pro forma net revenue for the fiscal
year ended January 28, 2012 exceeded $315 million.


THOR INDUSTRIES: U.S. Trustee Fails to Appoint Creditors' Panel
---------------------------------------------------------------
Samuel K. Crocker, U.S. Trustee for Region 8, reports that no
committee of unsecured creditors has been formed in the bankruptcy
case of Thor Industries, LLC, because there were an insufficient
number of unsecured creditors interested in forming a committee.

                     About Thor Industries

Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter
11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on
March 30, 2012.  The Debtor disclosed $11.97 million in assets and
$10.0 million in liabilities as of the Chapter 11 filing.  The
Debtor owns the property in Mountain Lake Marina & RV Resort in
Campground Road, Lake City, Tennessee, worth $11 million and
securing an $8.52 million debt.  The Debtor also owns a property
Hickory Bluff Marina, in Camden County, Georgia, worth $875,000
and securing a $375,000 loan.

Judge Marcia Phillips Parsons oversees the case.  The petition was
signed by R. Steven Williams, Sr., chief manager.


THOR INDUSTRIES: Taps Souther & Newhouse as Accountant
------------------------------------------------------
Thor Industries, LLC, asks for permission from the U.S. Bankruptcy
Court for the Eastern District of Tennessee to employ W. Edward
Souther and the firm of Souther & Newhouse, PC, to provide
accounting services.

The Debtor require the assistance of an accountant for general
oversight of financial reporting required for cash collateral
purposes, preparation of monthly operating reports, preparation of
tax returns and internal accounting for Debtor operations.

The Debtor proposes to pay Souther & Newhouse the sum of $90 per
hour for Accountants.

To the best of the best of the Debtor's knowledge, Souther &
Newhouse is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.

                     About Thor Industries

Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter
11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on
March 30, 2012.  The Debtor disclosed $11.97 million in assets and
$10.0 million in liabilities as of the Chapter 11 filing.  The
Debtor owns the property in Mountain Lake Marina & RV Resort in
Campground Road, Lake City, Tennessee, worth $11 million and
securing an $8.52 million debt.  The Debtor also owns a property
Hickory Bluff Marina, in Camden County, Georgia, worth $875,000
and securing a $375,000 loan.

Judge Marcia Phillips Parsons oversees the case.  The petition was
signed by R. Steven Williams, Sr., chief manager.


TITAN PHARMACEUTICALS: Incurs $5.2MM Net Loss in First Quarter
--------------------------------------------------------------
Titan Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss and comprehensive loss of $5.16 million on $1.27 million
of total revenue for the three months ended March 31, 2012,
compared with a net loss and comprehensive loss of $4.51 million
on $948,000 of total revenue for the same period a year ago.

The Company reported a net loss of $15.2 million for 2011,
compared with a net loss of $5.6 million for 2010.

The Company's balance sheet at $7.50 million in total assets,
$31.19 million in total liabilities, and a $23.69 million total
stockholders' deficit.

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

                        http://is.gd/ABZDnD

                    About Titan Pharmaceuticals

South San Francisco, California-based Titan Pharmaceuticals, Inc.,
is a biopharmaceutical company developing proprietary therapeutics
primarily for the treatment of central nervous system disorders.

Following the 2011 results, OUM & Co. LLP, in San Francisco,
California, expressed substantial doubt about Titan
Pharmaceuticals' ability to continue as a going concern.  The
independent auditors noted that the Company's cash resources will
not be sufficient to sustain its operations through 2012 without
additional financing, and that the Company also has suffered
recurring operating losses and negative cash flows from
operations.


TOUSA INC: Has Continued Access to Cash Collateral Until Oct. 31
----------------------------------------------------------------
The Hon. John K. Olson of the U.S. Bankruptcy Court for the
Southern District of Florida authorized, , in an eleventh interim
order, TOUSA, Inc., et al.'s continued use of the cash collateral
of the prepetition first and second lien lenders until Oct. 31,
2012.

A full-text copy of the order and the budget is available for free
at http://bankrupt.com/misc/TOUSAINC_cashcoll_interimorder.pdf

As reported in the Troubled Company Reporter on April 13, 2012,
due to an appeal by the Committee from the terms of the Debtors'
authority to use Cash Collateral, the Debtors, the Prepetition
Lenders and the Creditors' Committee determined, pursuant to the
Tenth Cash Collateral Order, to permit the Debtors to use Cash
Collateral through April 30, 2012, on terms similar to those
included in previous orders authorizing the Debtors to use Cash
Collateral.  Importantly, and consistent with previous iterations
of consensual cash collateral orders, the Tenth Cash Collateral
Order includes a feature that affords any party to seek review and
revision of the terms by the Court in connection with appeals
relating to the Committee Judgment.

Because a decision has not yet been made with respect to the
Committee Appeal, the Debtors, the Prepetition Lenders and the
Creditors' Committee are in discussions regarding the continued
use of Cash Collateral.  The Debtors expect to reach an agreement
with the parties on terms nearly identical to those included in
the Tenth Cash Collateral Order but these terms have not been
finalized yet.

The Debtors will provide additional information regarding the
proposed terms of Cash Collateral use to the Court and other
parties-in-interest by filing a proposed order at the earliest
possible date, but in any event no later than three days before
the hearing on this motion.  To the extent that the parties agree
upon the proposed terms, the proposed order will reflect that
agreement; to the extent that the parties are unable to reach
agreement, the Debtors will seek to use Cash Collateral on terms
proposed by the Debtors, and the Debtors will file a supplement to
the motion seeking interim authorization for Cash Collateral use
notwithstanding objections.

Paul Singerman, Esq., at Berger Singerman LLP, submits that it is
critical that the Debtors maintain access to Cash Collateral to
permit the Debtors to complete implementation of their wind-down
business plan and continue to fund the administrative expenses of
these chapter 11 cases.  In the event the Debtors are unable to
reach an agreement with the Prepetition Lenders regarding
consensual use of Cash Collateral, the Debtors will file a
supplemental motion with the Court seeking authority to use Cash
Collateral over their objection.  To the extent necessary, the
Debtors will demonstrate in their pleadings and at the hearing on
this motion that the interests of the Prepetition Lenders are
adequately protected by the proposed terms of the Debtors'
continued use of Cash Collateral as required under the applicable
provisions of the Bankruptcy Code.

                         About TOUSA Inc.

Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.

The Debtor and its debtor-affiliates filed for separate
Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case
No. 08-10928).  Richard M. Cieri, Esq., M. Natasha Labovitz,
Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in
New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman,
in Miami, Fla., represent the Debtors in their restructuring
efforts.  Lazard Freres & Co. LLC is the Debtors' investment
banker.  Ernst & Young LLP is the Debtors' independent auditor and
tax services provider.  Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.

TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746).  It estimated assets and
debts of $1 million to $10 million in its Chapter 11 petition.

The official committee of unsecured creditors has filed a proposed
chapter 11 liquidating plan for Tousa.  However, the committee
said it would no longer pursue approval of its liquidation plan
because of the pending appeal of its fraudulent transfer case in
the U.S. Court of Appeals for the Eleventh Circuit.  A district
court in February 2011 held that the bankruptcy judge was wrong in
ruling that lenders who were paid off received fraudulent
transfers when Tousa gave liens on subsidiaries' properties to
bail out and refinance a joint venture.  Daniel H. Golden, Esq.,
and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, N.Y., represent the creditors committee.

The Tousa committee filed a Chapter 11 plan in July 2010 based on
an assumption it would win the appeal.


TRAVELPORT HOLDINGS: Incurs $12 Million Net Loss in 1st Quarter
---------------------------------------------------------------
Travelport Limited filed with the U.S. Securities and Exchange
Commission a Form 10-Q disclosing a net loss of $12 million on
$550 million of net revenue for the three months ended March 31,
2012, compared with a net loss of $24 million on $531 million of
net revenue for the same period a year ago.

The Company's balance sheet at March 31, 2012, showed
$3.35 billion in total assets, $4.31 billion in total liabilities,
and a $966 million deficit.

Commenting on developments, Gordon Wilson, President and CEO of
Travelport, said, "This quarter has seen significant enhancements
in our geographical position in the key growth regions of Asia and
Africa, as we continue to execute on our strategy.  Travelport
announced a major partnership with AXESS, the GDS owned by Japan
Airlines, which will run on Travelport technology by late 2013, as
well as the vertical integration of our franchise in Southern
Africa.  Financial performance was solid and in line with our
expectations, and we successfully restructured our near term
debt."

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

                        http://is.gd/tKwFho

                      About Travelport Holdings

Travelport Holdings is the direct parent of Travelport Limited, is
a broad-based business services company and a leading provider of
critical transaction processing solutions to companies operating
in the global travel industry.  With a presence in 160 countries
and approximately 3,500 employees, Travelport is comprised of the
global distribution system (GDS) business, which includes the
Galileo and Worldspan brands and its Airline IT Solutions
business, which hosts mission critical applications and provides
business and data analysis solutions for major airlines.

Travelport also owns approximately 48% of Orbitz Worldwide (NYSE:
OWW), a leading global online travel company.  Travelport is a
private company owned by The Blackstone Group, One Equity
Partners, Technology Crossover Ventures, and Travelport
management.

Travelport Holdings Limited is a holding company with no direct
operations.  Its principal assets are the direct and indirect
equity interests it holds in its subsidiaries, including
Travelport Limited.

                          *     *     *

As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit ratings on travel
services provider Travelport Holdings Limited (Travelport
Holdings) and indirect subsidiary Travelport LLC (Travelport) to
'SD' (selective default) from 'CC'.

The downgrades follow the implementation of a capital
restructuring, which was necessary because of the Travelport
group's high leverage, weak liquidity, and the upcoming maturity
of its $693 million (as of end-June 2011) PIK loan in March 2012.
"According to our criteria, we view this restructuring as a
distressed exchange and tantamount to a default (see 'Rating
Implications Of Exchange Offers And Similar Restructurings,
Update,' published May 12, 2009, on RatingsDirect on the Global
Credit Portal)," S&P related.


TRIAD GUARANTY: Incurs $37.7 Million Net Loss in First Quarter
--------------------------------------------------------------
Triad Guaranty Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $37.72 million on $40.82 milion of revenue for the three months
ended March 31, 2012, compared with a net loss of $4.91 million on
$45.21 million of revenue for the same period a year ago.

The Company reported a net loss of $107.77 million in 2011,
compared with net income of $132.09 million in 2010.

The Company's balance sheet at March 31, 2012, showed $875.69
million in total assets, $1.61 billion in total liabilities and a
$737.77 million deficit in assets.

Ken Jones, President and CEO, said, "During the 2012 first
quarter, we experienced the anticipated positive seasonal impact
of lower first notices of defaults and increased cure rates
normally attributed to income tax refunds and, to a lesser extent,
year-end bonuses.  As a result, primary risk in default declined
by 7.4% sequentially compared to a sequential decline of 4.7% in
the fourth quarter of 2011.  Net losses and loss adjustment
expenses for the first quarter were $67.9 million, down from the
$107.4 million reported in the fourth quarter of 2011 which
reflected an increase in the frequency factors utilized in our
reserve calculation.  Settled claims were $99.4 million during the
2012 first quarter compared to $118.3 million in the 2011 fourth
quarter and $111.9 million in the first quarter of 2011.
Persistency, the key driver of our earned premiums, remained at
elevated levels compared to historical norms as many borrowers are
finding it difficult to sell or refinance their homes."

                           Going Concern

The Company has prepared its financial statements on a going
concern basis under GAAP, which contemplates the realization of
assets and the satisfaction of liabilities and commitments in the
normal course of business.  However, there is substantial doubt as
to the Company's ability to continue as a going concern.  This
uncertainty is based on, among other things, the possible failure
of Triad to comply with the provisions of the Corrective Orders
and the Company's ability to generate enough income over the term
of the remaining run-off to overcome its $737.8 million deficit in
assets at March 31, 2012.

                         Bankruptcy Warning

The positive impact on statutory surplus resulting from the second
Corrective Order has resulted in Triad reporting a policyholders'
surplus in its SAP financial statements of $228.9 million at
March 31, 2012, as opposed to a deficiency in policyholders'
surplus of $770.3 million on the same date had the second
Corrective Order not been implemented.  While the implementation
of the second Corrective Order has deferred the institution of an
involuntary receivership proceeding, no assurance can be given
that the Department will not seek receivership of Triad in the
future and there continues to be substantial doubt about the
Company's ability to continue as a going concern.  The Department
may seek receivership of Triad based on its determination that
Triad will ultimately become insolvent, if Triad fails to comply
with provisions of the Corrective Orders, or for other reasons.
If the Department seeks receivership of Triad, TGI could be
compelled to institute a proceeding seeking relief from creditors
under U.S. bankruptcy laws, or otherwise consider dissolution of
the Company.

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

                        http://is.gd/aA1GIy

                       About Triad Guaranty

Winston-Salem, N.C-based Triad Guaranty Inc. (OTC BB: TGIC)
-- http://www.triadguaranty.com/-- is a holding company that
historically provided private mortgage insurance coverage in the
United States through its wholly-owned subsidiary, Triad Guaranty
Insurance Corporation.  TGIC is a nationwide mortgage insurer
pursuing a run-off of its existing in-force book of business.


TRONOX INC: Trial Against Kerr-McGee Begins
-------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a 33-day trial was set to begin May 15 where
creditors of Tronox Inc. and the U.S. government will attempt to
prove that the former parent Kerr-McGee Corp. should be held
liable for billions of dollars in environmental liabilities.  At
the trial, which could have testimony from 60 witnesses, the
Tronox creditors will attempt to prove that Kerr-McGee accumulated
"massive" environmental and retiree liabilities during its 70
years in business.  To shed actual and contingent debt, Kerr-McGee
first transferred what the complaint calls "clean" businesses into
a new company, leaving behind what would later be known as Tronox.

The report notes that the bankruptcy judge is trying the case
without a jury.  As the result of an opinion last year from the
U.S. Supreme Court in a case called Stern v. Marshall, the
bankruptcy judge may only be able to write recommended findings of
fact and conclusions of law.  A later ruling by U.S. district
judge may be necessary for an enforceable finding of liability
against Kerr-McGee.

The lawsuit is Tronox Inc. v. Anadarko Petroleum Corp. (In
re Tronox Inc.), 09-1198, U.S. Bankruptcy Court, Southern
District of New York (Manhattan).

                         About Tronox Inc.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-
10156) on Jan. 13, 2009, before Hon. Allan L. Gropper.  Richard M.
Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at
Kirkland & Ellis LLP in New York, represented the Debtors.  The
Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel;
Rothschild Inc. as investment bankers; Alvarez & Marsal North
America LLC, as restructuring consultants; and Kurtzman Carson
Consultants served as notice and claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.

Until Sept. 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B.  Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK.  As of Dec. 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.

On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated Nov. 5, 2010.  Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.

On May 8, Judge Allan Gropper entered an opinion blocking Tronox
from suing Anadarko Petroleum Corp. and explaining why Tronox's
fraudulent transfer theories only work against Anadarko's Kerr-
McGee Corp. unit.  Tronox's complaint alleges that Kerr-
McGee accumulated "massive" environmental and retiree liabilities
during its 70 years in business.  The judge noted how the Kerr-
McGee assets were never transferred to Anadarko.  In January,
Gropper ruled that there is no cap on damages that Anadarko might
have to pay.  One method would peg damages at $15.5 billion, he
said.


UNITED MARITIME: Moody's Says Dry Bulk Terminal Sale Credit Pos.
----------------------------------------------------------------
The planned sale of United Maritime Group, LLC's (B2 stable) dry
bulk terminal operations to Bulk Handling USA, Inc., an affiliate
of Oiltanking Holding Americas, Inc. (not rated) is credit
positive for UMG as the net proceeds from the sale of the
company's second of its three subsidiaries in as many months will
strengthen the company's liquidity.

United Maritime Group, LLC, headquartered in Tampa, Florida,
through its wholly-owned operating companies, provides blue water
and brown water, Jones Act dry-bulk shipping services. UMG became
an independent company upon its buyout from TECO Energy, Inc. by a
group of private investors and its management. TECO remains the
largest customer of UMG.


UNIVERSITY GENERAL: Swings to $489,000 Net Income in Q1
-------------------------------------------------------
University General Health System, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income attributable to the Company of $489,438
on $19.08 million of total revenues for the three months ended
March 31, 2012, compared with a net loss attributable to the
Company of $440,000 on $15.45 million of total revenues for the
same period a year ago.

University General reported a net loss of $2.38 million on
$72.51 million of revenues for 2011, compared with a net loss of
$1.71 million on $56.13 million of revenues for 2010.

The Company's balance sheet at March 31, 2012, showed
$113.64 million in total assets, $113.75 million in total
liabilities and a $108,610 total deficit.

The Company had negative working capital of $57.7 million and held
cash and cash equivalents of $424,000 at March 31, 2012.  The
Company said the negative working capital amounts raise
substantial doubt concerning its ability to continue as a going
concern for a reasonable period of time.

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

                        http://is.gd/Cl0mhl

                     About University General

University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operateS one hospital and two ambulatory surgical
centers in the Houston area.  It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.

For the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC,
in Winter Park, Florida, expressed substantial doubt about
University General's ability to continue as a going concern.  The
independent auditors noted that the Company has suffered recurring
losses and negative operating cash flows, and has negative working
capital.


US XPRESS: Credit Amendment No Impact on Moody's 'B3' CFR
---------------------------------------------------------
Moody's Investors Service said that U.S. Xpress Enterprises,
Inc.'s proposed amendment to the company's revolving credit and
term loan facility is a credit positive because it would reset the
leverage ratio covenant through March 31, 2013 and loosen the
fixed charge ratio covenant requirement going forward. Moody's
believes this could alleviate covenant compliance concerns over
the near term. However, there is no impact on the company's B3
corporate family rating and negative outlook, which incorporates
refinancing risk associated with U.S. Xpress' 2013-2014 debt
maturities as well as long-term covenant compliance beyond 2012.

U.S. Xpress Enterprises, Inc., a Nevada Corporation, headquartered
in Chattanooga, Tennessee, provides truckload transportation
services in North America, including line-haul, dedicated and
inter-modal freight services.


USEC INC: Gets Continued Listing Standards Notice From NYSE
-----------------------------------------------------------
USEC Inc. has received a continued listing standards notice from
the New York Stock Exchange (NYSE) because the price of its common
stock has fallen below the NYSE's minimum share price rule.  The
NYSE requires the average closing price of a listed company's
common stock to be at least $1.00 per share over a consecutive 30
trading-day period.

The Company's common stock continues to trade on the NYSE.
Subject to NYSE rules, the Company has six months from receipt of
the notice to regain compliance with the NYSE's price criteria (or
by no later than the Company's next annual meeting of shareholders
if shareholder approval is required, as would be the case to
effectuate a reverse stock split to cure the deficiency).  The
Company is currently in compliance with all other NYSE listing
rules.

USEC can regain compliance at any time during the six-month cure
period if on the last trading day of a calendar month during the
cure period, the company has a closing share price of at least
$1.00 and an average closing share price of at least $1.00 over
the 30 trading-day period ending on the last trading-day of that
month or on the last day of the cure period.  The Company is
evaluating its options to cure the price deficiency, including a
reverse stock split, which would require shareholder approval at
or prior to the Company's next annual meeting of shareholders.

USEC Inc., a global energy company, is a leading supplier of
enriched uranium fuel and nuclear industry related services for
commercial nuclear power plants.


WAVE SYSTEMS: Incurs $8.3 Million Net Loss in First Quarter
-----------------------------------------------------------
Wave Systems Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $8.31 million on $6.98 million of total net revenues for the
three months ended March 31, 2012, compared with a net loss of
$2.25 million on $7.47 million of total net revenues for the same
period during the prior year.

Wave Systems reported a net loss of $10.79 million in 2011, a
net loss of $4.12 million in 2010, and a net loss of $3.34 million
in 2009.

The Company's balance sheet at March 31, 2012, showed $25.57
million in total assets, $18.45 million in total liabilities and
$7.12 million in total stockholders' equity.

The Company said in the quarterly report that due to its current
cash position, its forecasted capital needs over the next twelve
months and beyond, the fact that it will require additional
financing and uncertainty as to whether it will achieve its sales
forecast for its products and services, substantial doubt exists
with respect to its ability to continue as a going concern.

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

                        http://is.gd/luLQiD

                        About Wave Systems

Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) --
http://www.wave.com/-- develops, produces and markets products
for hardware-based digital security, including security
applications and services that are complementary to and work with
the specifications of the Trusted Computing Group, an industry
standards organization comprised of computer and device
manufacturers, software vendors and other computing products
manufacturers.


WENATCHEE, WASH: Moody's Lowers Unlimited Tax G.O. Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the City of Wenatchee,
Washington's unlimited tax general obligation rating to Ba2 from
A3 and its limited tax rating to B2 from Baa2. $2.9 million of
unlimited tax and $6.4 million of limited tax debt is affected. At
this time, Moody's also places the city's ratings under review for
possible further downgrade.

Summary Rating Rationale

The rating actions primarily reflect the city's lack of
willingness to avert an expected June 1, 2012 default under a
contingent loan agreement in which the city made a limited tax
pledge to loan funds for interest payments on $36.6 million of
sales tax and revenue Bond Anticipation Notes (not rated) issued
by the Greater Wenatchee Regional Events Center Public Facilities
District (PFD) and which defaulted in December 2011. Moody's
considers the city's failure to pay interest as a default on an
unrated debt of a rated issuer. The default on unrated debt
constitutes a default on all parity obligations, including the
city's $6.4 million of outstanding limited tax bonds. Post-default
recovery is expected to be less than 100%, although the city plans
to make timely payments on its $6.4 million of outstanding limited
tax bonds. The Ba2 unlimited tax and B2 limited tax ratings also
incorporate diminished long-term financial flexibility from
ongoing PFD operating subsidies and litigation costs.

On May 10, 2012, the City of Wenatchee indicated that despite
budgeting $2.1 million in fiscal 2012 for PFD-related issues,
there are insufficient general fund moneys to advance $967,000 for
a June 1, 2012 interest payment. The city also intends to not fund
a December 1, 2012 payment, planning instead to roll missed
interest payments into a long-term takeout financing expected to
be issued by a third party before year end. The city has not
expressed its intentions to pay interest beyond 2012 if the
refinancing fails to occur this year, adding to the risk that
losses could grow over time and contributing to Moody's decision
to maintain the rating under review for further downgrade.

STRENGTHS

- New 0.2% city-only and 0.1% PFD-wide sales taxes provide long-
   term resources for BAN takeout financing

- Moderately-sized tax base

CHALLENGES

- Unwillingness to make adjustments outside the general fund to
   incorporate loans for interest payments on Greater Wenatchee
   Events Center BANs

- City remains contingently liable for interest on the BANS
   while in default

- Continued financial risk associated with post-default
   litigation

WHAT COULD MAKE THE RATING MOVE UP

- Significant reduction in overall debt burden and general fund
   debt service load

- Increased self-sufficiency/decreased subsidy of troubled
   enterprise operations

- Prolonged growth in property valuations and sales tax receipts

- Reversal of city unwillingness to advance funds resulting in
   timely BAN interest payment on June 1, 2012

WHAT COULD MAKE THE RATING MOVE DOWN

- Deterioration of/increased subsidy of troubled enterprise
   operations

- Inability to align ongoing expenditures with ongoing revenues

- Adverse litigation outcomes

- Weakened liquidity

- Weakened reserve levels

The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.


* Supreme Court Rules Farmers Must Pay Bankruptcy Tax
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Supreme Court, by a 5-4 vote, ruled May 14
that capital gains taxes resulting from sale of property after an
individual family farmer's Chapter 12 bankruptcy filing aren't
discharged as a general unsecured debt.  In the dissenting
opinion, Justice Stephen Breyer said the majority's result is the
"very opposite of what Congress intended" when amending bankruptcy
law in 2005.  The majority opinion was written by Justice Sonia
Sotomayor, joined by Chief Justice John Roberts Jr. and Justices
Antonin Scalia, Clarence Thomas, and Samuel Alito Jr., the
Court's plain-meaning advocates.  Justice Breyer was joined in
dissent by Justices Anthony Kennedy, Ruth Bader Ginsburg, and
Elena Kagan. The case involved interpretation of Section
1222(a)(2)(A) of the U.S. Bankruptcy Code, which provides that a
tax claim resulting from the sale of farm property won't be
treated as a priority claim.   The appeal in the Supreme Court is
Hall v. U.S., 10-875, U.S. Supreme Court. The opinion in the court
of appeals is U.S. v. Hall, 08-17267, 9th U.S. Circuit Court of
Appeals (San Francisco).


* 11th Circuit Permits Subordinate Mortgage Strip Off
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Atlanta ruled on May 11
that bankrupt individuals are entitled to strip off an entirely
unsecured mortgage on a home.  The 11th Circuit joined six other
appeals courts to reach the same conclusion.  The case is McNeal
v. GMAC Mortgage LLC (In re McNeal), 11-11352, U.S. Court of
Appeals for the 11th Circuit (Atlanta).


* Chapter 7 Trustees Not Paid when Filing Fee Waived
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a federal district judge in Wheeling, West Virginia,
ruled on May 8 that a bankruptcy trustee isn't entitled to the
statutory fee in cases where the bankrupt is given a waiver of the
filing fee on the basis of financial hardship.  Filing for Chapter
7 bankruptcy requires paying a $306 filing fee. Trustees appointed
in Chapter 7 cases are entitled to a fee of $60 for each case,
even if there are no assets recovered for creditors.  The
trustee's $60 fee is paid from the filing fee collected from the
bankrupt.  The case is Sheehan v. U.S.A., 11-170, U.S. District
Court, Northern District West Virginia (Wheeling).


* Moody's Says Mid-Tier Mattress Brands Lag High-End Peers
----------------------------------------------------------
Operating performance for Sealy Mattress Company (B2 negative),
Simmons Bedding Company (B2 stable) and Serta (B2 stable) will
continue to lag that of Tempur-Pedic (unrated) and Select Comfort
(unrated), even as consumers increase their spending levels, says
Moody's Investors Service in its new Special Comment "Mid-Tier
Mattress Companies Lag High-End Peers."

"The focus on mid-tier brands by Sealy, Serta and Simmons hurts
their credit quality while Tempur-Pedic and Select Comfort's
higher-priced products increase their margins and performance,"
said Kevin Cassidy, a Moody's Vice President -- Senior Credit
Officer and author of the report.

"Sealy, Serta and Simmons have higher financial leverage, two have
pending debt maturities, and all three sell a larger proportion of
mid-priced mattresses with lower profit margins. In comparison,
Tempur-Pedic and Select Comfort have low financial leverage and
sell higher volumes of relatively expensive, high-margin
mattresses," said Mr. Cassidy.

Elevated resin and steel costs -- raw materials used by mattress
manufacturers -- will also continue to pressure industry earnings,
although Tempur-Pedic's and Select Comfort's emphasis on higher-
priced products will give them more ability to absorb cost
increases than those companies focused on mid-tier mattresses,
says Moody's.

Serta and Simmons will likely merge in 2012, says Moody's,
pointing to Serta's looming November 2013 debt maturity. A
combined Simmons-Serta capital-market transaction could simplify
the refinancing of this obligation before it goes current.


* Moody's Says Ba-Rated Healthcare Firms Likely to Pay Dividends
----------------------------------------------------------------
Moody's expects an increasing number of healthcare companies to
initiate dividend payments to shareholders as investors place
higher value on immediate, stable income amid today's low interest
rate environment, according to the new special comment "Peer
Pressure Will Drive More Healthcare Companies to Pay Dividends."

Moody's says that more rated healthcare and life science companies
have begun paying dividends in the last year than in the previous
five years combined. Moody's expects this trend to continue and
notes possible candidates for new dividend programs include
Laboratory Corporation of America Holdings, Life Technologies
Corp., Celgene Corp., Biogen Idec Inc. and CareFusion Corp.

"Investors dissatisfied with current low interest rates are
increasingly interested in generating immediate income from
dividends, as companies generate cash amid low revenue-growth
prospects," said Jessica Gladstone, a Moody's Vice President -
Senior Analyst and author of the report. "Healthcare companies
will find themselves pressured to initiate or increase dividends
as their peers begin paying out."

While a new dividend program alone does not generally lead to
credit quality deterioration, Moody's says it can signal a shift
in financial policies and may be accompanied by more aggressive
moves such as acquisitions or share buybacks.

Pressure to make dividend payments may also squeeze lower-rated
companies in the industry with greater business risk and cash flow
volatility, says Moody's. Moody's sees companies in the Ba rating
category as more likely candidates to pay dividends as many B1 or
below rated peers will be unable to initiate dividends owing to
insufficient cash or restrictions in bank agreements.


* Moody's Says SIFI Designation Still Unclear for Asset Managers
----------------------------------------------------------------
Asset managers or money market funds that are designated as
systemically important financial institutions, or "SIFIs" may be
subject to new requirements regarding capital and operations, as
well as heightened supervision, says Moody's Investors Service in
its new report. On April 3, 2012, the Financial Stability
Oversight Council (FSOC) issued a final rule and interpretive
guidance under the Dodd-Frank Act outlining the process for
designating systemically important non-bank financial
institutions. But quantitative thresholds are still evolving and
the regulations are still preliminary.

"We expect that designated asset managers or funds would see some
form of regulation affecting the capital requirement, governance
and operations, which would bolster their creditworthiness, but
could put them at a competitive disadvantage to peers," says
Dagmar Silva, a Moody's Vice President -- Senior Analyst and an
author of the report "Systemically Significant Financial
Institution (SIFI) Designation Still Unclear for Asset Managers
and Money Markey Funds."

Some of the largest asset managers and money market funds (MMFs)
are likely to be designated SIFIs, but which ones remain unclear,
says Moody's. It is also not clear what would be the final
requirements imposed on designated asset managers or MMFs.

"What is clear is that asset managers and money market funds
designated as SIFIs will see their expenses go up," says Silva.
"The cost of doing business will increase for entities designated
as SIFIs, which could put them at a disadvantage to midsize
managers that avoid the designation, for whom the playing field
will be more level."

Not only may SIFI-designated firms need to meet new standards
relating to capital, leverage, risk management and credit
exposures, but they also may be required to undergo annual stress
testing by the Federal Reserve.

Looking ahead, asset managers and MMFs that are close to the
threshold for SIFI designation may alter their business strategies
in order to avoid such designation. Merger and acquisition
activity, which has been key to growth in the asset manager and
money funds segments, is likely to fall off, particularly for
large firms that would attempt to reduce the chances of the
designation.

The report also describes the three-stage process by which the
FSOC will determine non-bank SIFIs and includes a list of asset
managers that could meet the quantitative thresholds.


* Cassel Salpeter & Co. Names Philip Cassel Associate
-----------------------------------------------------
Cassel Salpeter & Co. recently hired Philip Cassel to its
professional staff.  Mr. Cassel will serve as an Associate and
will focus on M&A and restructuring assignments.

"Philip's wide range of expertise is particularly useful at a firm
like ours," said James Cassel, the company's chairman and co-
founder.  "His background is exactly what we need to help our
clients handle complex transactions."

Mr. Cassel, a graduate of Massachusetts Institute of Technology,
previously held the positions of Associate at Rialto Capital
Finance Group (a wholly owned subsidiary of public homebuilder
Lennar Corporation) and Analyst at Alvarez & Marsal.  In addition
to his work in restructuring and private equity, Philip has also
assisted with cash flow modeling, budget planning, and court
filings.

"I am looking forward to working with a growing investment banking
firm in Miami, especially one that gives me an opportunity to work
alongside my father," Mr. Cassel added.

                 About Cassel Salpeter & Co., LLC

Cassel Salpeter & Co., LLC -- http://www.casselsalpeter.com/--is
a middle market investment bank focused on providing independent
and objective advice to middle market and emerging growth
companies.  Its investment banking and advisory services include
broad capabilities for both private and public companies: Mergers
and Acquisitions; Restructurings, including 363 Sales and Plans of
Reorganization; Equity and Debt Capital Raises; Fairness and
Solvency Opinions; Valuations; and Financial and Strategic
Advisory.

Headquartered in Miami, Florida, Cassel Salpeter is led by James
Cassel and Scott Salpeter.


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------

Oct. 14, 2011
  AMERICAN BANKRUPTCY INSTITUTE
     NCBJ/ABI Educational Program
        Tampa Convention Center, Tampa, Fla.
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

Oct. __, 2011
  AMERICAN BANKRUPTCY INSTITUTE
     International Insolvency Symposium
        Dublin, Ireland
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

Oct. 25-27, 2011
  TURNAROUND MANAGEMENT ASSOCIATION
     Hilton San Diego Bayfront, San Diego, CA
        Contact: http://www.turnaround.org/

Nov. 28, 2011
  BEARD GROUP, INC.
     18th Annual Distressed Investing Conference
        The Helmsley Park Lane Hotel, New York City
           Contact:             1-240-629-3300

Dec. 1-3, 2011
  AMERICAN BANKRUPTCY INSTITUTE
     23rd Annual Winter Leadership Conference
        La Quinta Resort & Spa, La Quinta, Calif.
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

April 3-5, 2012
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Spring Conference
        Grand Hyatt Atlanta, Atlanta, Ga.
           Contact: http://www.turnaround.org/

Apr. 19-22, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Annual Spring Meeting
        Gaylord National Resort & Convention Center,
        National Harbor, Md.
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

July 14-17, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Southeast Bankruptcy Workshop
        The Ritz-Carlton Amelia Island, Amelia Island, Fla.
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

Aug. 2-4, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Mid-Atlantic Bankruptcy Workshop
        Hyatt Regency Chesapeake Bay, Cambridge, Md.
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

November 1-3, 2012
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Westin Copley Place, Boston, Mass.
           Contact: http://www.turnaround.org/

Nov. 29 - Dec. 2, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Winter Leadership Conference
        JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
           Contact:             1-703-739-0800      ;
http://www.abiworld.org/

April 10-12, 2013
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Spring Conference
        JW Marriott Chicago, Chicago, Ill.
           Contact: http://www.turnaround.org/

October 3-5, 2013
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Marriott Wardman Park, Washington, D.C.
           Contact: http://www.turnaround.org/

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to conferences@bankrupt.com are encouraged.



                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR.  Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts.  The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

The Sunday TCR delivers securitization rating news from the week
then-ending.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                           *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.

Copyright 2012.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail.  Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.


                  *** End of Transmission ***