/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120627.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 27, 2012, Vol. 16, No. 177 Headlines 3610 GULF: Case Summary & 3 Largest Unsecured Creditors 4181 LLC: Case Summary & 13 Largest Unsecured Creditors 4KIDS ENTERTAINMENT: To Sell Assets in $15 Million Joint Deal ADAMS PRODUCE: Court Approves Burr & Forman as Attorneys ADAMS PRODUCE: Formation of Unsecured Committee Not Feasible ADAMS PRODUCE: Files Schedules of Assets and Liabilities ADAMS PRODUCE: PNC Wants to Exercise Rights Under Loan Agreement AFA FOODS: Georgia, California Plants Sold for $11.6 Million AMERICAN APPAREL: Reports $49.7MM Preliminary Net Sales in May AMERICAN ARCHITECTURAL: Hiring Maschmeyer Karalis as Counsel AMERICAN ARCHITECTURAL: Taps Douglas Ziegler as Accountants AMERICAN ARCHITECTURAL: Can Use Cash Collateral Thru July 22 AMERICAN ARCHITECTURAL: Schedules Filing Extended to July 13 AMERICAN ARCHITECTURAL: Sec. 341 Creditors' Meeting on July 18 APPLIED MINERALS: Nat Krishnamurti Named Chief Financial Officer ARCAPITA BANK: Files 5-Week Budget Thru Aug. 4 ARCAPITA BANK: Questions Committee's Need for 2 Fin'l Advisors ARCAPITA BANK: Creditor Proposes Protocol for Securities Trading ATP OIL: Three Directors Elected at Annual Meeting ATP OIL: Expands Liquidity Position by $35 Million BERNARD L. MADOFF: Trustee Has Victory in U.S. Supreme Court BIOZONE PHARMACEUTICALS: Sells $200,000 Promissory Notes BLUE RIDGE: Case Summary & 20 Largest Unsecured Creditors CAPITOL BANCORP: Amended Bylaws Restrict Transfer of Stock CELL THERAPEUTICS: Craig Philips to Resign as President CHARLES STREET AME: Eric Green Appointed to Mediate CHURCH STREET: Changes Name to CS DIP Following Sale to Lenders CINRAM INT'L: Files for Bankruptcy in Canada & US to Sell Biz CLAIRVEST GROUP: Reaches Court Settlement on $10MM Loan COMMUNITY HOME FIN'L: Creditors Want to Prohibit Cash Use COMMUNITY HOME FIN'L: Seeks to Employ Derek Henderson as Counsel COMPETITIVE TECHNOLOGIES: Peter Brennan Elected Board Chairman CORDILLERA GOLF: Club Files for Chapter 11 Reorganization CPI CORP: Incurs $4.6 Million Net Loss in Fiscal First Quarter CPI CORP: Hires Andrew Rolfe as Chief Restructuring Officer CROWN MEDIA: Moody's Raises Speculative-Grade Liquidity Rating CRYOPORT INC: R. Stefanovich Replaces S. Wasserman as PEO DALLAS ROADSTER: Can Hire Quilling as Expert for Fee Dispute DVS SHOE: Sequential Brands Buys Biz for $8.55 Million EAST FREEMONT: Case Summary & 20 Largest Unsecured Creditors EATON MOERY: OK'd to Renew Secured Debt to First National Bank EMMIS COMMUNICATIONS: Moody's Raises CFR to 'B3'; Outlook Stable FILENE'S BASEMENT: Syms, Creditors Schedule Fight Over Plans FIRST STREET: Can Hire Michael Brooks as Litigation Counsel FREDERICK'S OF HOLLYWOOD: M. Tokarz Has 36.3% Stake at May 23 GENERAL AUTO: Court OKs Apex Real as Leasing Agent GEOEYE INC: Moody's Lowers Corporate Family Rating to 'B2' GLC LIMITED: Ex-Football Coach Agrees to Settlement GOLDEN TEMPLE: Plan Filing Deadline Temporarily Moved to July 19 GOLDEN TEMPLE: Bankruptcy Court Approves Myers as Receiver GRANITE DELLS: Needs $20MM Add'l Funding for Plan Implementation GUIDED THERAPEUTICS: Has Exchange Offer for Outstanding Warrants GUN LAKE: Moody's Confirms 'B3' Corp. Family Rating HALCON RESOURCES: Moody's Assigns 'B2' CFR; Outlook Stable HALE MOKU: Court Converts Bankruptcy Case to Chapter 7 HALE MOKU: Hires Ervin Cohen & Jessup as New Counsel HALLWOOD ENERGY: Hunton to Face $50MM Suit in Federal Court HARBORSIDE 17: Sec. 341 Creditors' Meeting on July 26 HD SUPPLY: Widens Net Loss to $360 Million in April 29 Quarter HERCULES OFFSHORE: Files Fleet Status Report as of June 20 HOSPITAL DAMAS: Chapter 11 Plan of Reorganization Confirmed HOUGHTON MIFFLIN: Emerges From Chapter 11 Bankruptcy HUDSON VALLEY: Moody's Downgrades BFSR to 'D+'; Outlook Stable IMEDICOR INC: Incurs $641,000 Net Loss in March 31 Quarter JASMINE AT ORLANDO: Hiring Berger Singerman as Bankruptcy Counsel JASMINE AT ORLANDO: Schedules & Statement Due June 29 JASMINE AT ORLANDO: Files List of 20 Largest Unsecured Creditors KENNETH IRA STARR: 'Jacob The Jeweler' Files $12M Suit Vs. Adviser KENNETH SCHACTER: Rare Poster to Be Auctioned Off KV PHARMACEUTICAL: Has $20 Million SPA with Commerce Court KV PHARMACEUTICAL: 2012 Annual Meeting Scheduled for Sept. 13 LEE BRICK: Sec. 341 Creditors' Meeting Set for July 24 LEHMAN BROTHERS: Wins OK of Settlement With Japan Loans LEHMAN BROTHERS: Wins Approval of BTSX Settlement LEHMAN BROTHERS: eClerx Settlement Agreement Approved LEHMAN BROTHERS: $2.5-Bil. in Claims Traded Hands in April LIFEPOINT HOSPITAL: Fitch Affirms 'BB' Issuer Default Rating LONG ISLAND: Involuntary Chapter 11 Case Summary METHOD ART: Court Approves Stipulations on Cash Collateral Use MORGANS HOTEL: Partners with Hivernage Collection in Morocco MSR RESORT: Hearing on Hilton Dispute Slated for June 29 MUNSON KINGDOM: Case Summary & 20 Largest Unsecured Creditors NATIONAL NOTE OF UTAH: SEC Halts $100 Million Ponzi Scheme NAVISTAR INT'L: Fitch Cuts Rating on LT IDRs to 'BB-'; Neg. Watch NAVISTAR INT'L: Incurred $162-Mil. Net Loss in Fiscal Q2 NEDAK ETHANOL: AgCountry Credit Demands Payment of $24.7-Mil. NEW ENGLAND BUILDING: Committee Retains Bernstein Shur as Counsel NEW ENGLAND BUILDING: Butts Commercial Approved as Brokers NEW ENGLAND BUILDING: Court OKs EMA Partners as Fin'l Advisor NEW ENGLAND BUILDING: Court Approves Albin Randall as Accountants NEW MEXICO HOSPITAL: Fitch Cuts Rating on $6MM Revenue Bonds to B NORTEL NETWORKS: UK Pension Regulators Can't Appeal NORTHCORE TECHNOLOGIES: Launches ArtSmarts.com Site NORTHSTAR AEROSPACE: U.S. Trustee Unable to Appoint Committee NORTHSTAR AEROSPACE: Sec. 341 Creditors' Meeting on July 18 NORTHSTAR AEROSPACE: Hiring Harris Williams as Investment Banker NORTHSTAR AEROSPACE: Employs Logan & Co as Administrative Agent OILSANDS QUEST: Negotiations With Bidders Ongoing PET RESORTS: Files for Chapter 11 Bankruptcy Protection PETTERS COMPANY: Andrew Moran Substitutes Zachary Crain as Counsel PHILADELPHIA ORCHESTRA: Files Disclosure Statement on Amended Plan PINNACLE AIRLINES: Hearing on NSB Aviation Hiring Set for Today PINNACLE AIRLINES: Agrees on Protective Order With Unions PT ARPENI: OK With Gramercy Funds Suit on Exchange Offer RG STEEL: Environmentalists Want Stay Exception RITZ CAMERA: Wins Interim Approval to $20MM DIP Financing ROOMSTORE INC: Delays Fiscal 2012 Form 10-K Due to Bankruptcy RTW PROPERTIES: Aug. 10 Hearing on Continued Cash Collateral Use RUBICON FINANCIAL: Horizon Issues Shares After Deal Cancelled SEMINOLE TRIBE: Fitch Raises Rating on $528-Mil. Bonds to 'BB+' SLS CAPITAL: Luxembourg Firm Files in US Amid Missing Funds SOLYNDRA LLC: Court OKs Sept. 29 Loan Termination Date Extension SONIC AUTOMOTIVE: Moody's Affirms B1 CFR, Rates $200MM Notes B3 SOUTH MOUNTAIN: Voluntary Chapter 11 Case Summary SOUTHEAST HOUSING: Moody's Cuts Rating on Revenue Bonds to 'Ba1' SPRINT NEXTEL: Virgin Mobile Selling Contract-Less iPhone SPRINT NEXTEL: Dodge & Cox Holds 10.3% of Series 1 Common Shares TRAINOR GLASS: Has Access to Cash Collateral Until July 11 TRAINOR GLASS: Hires William Black as Local North Carolina Counsel TRONOX INC: Expert Says Firm Was Bankrupt at Time of IPO VCR I: Voluntary Chapter 11 Case Summary VHGI HOLDINGS: Scott Haire Resigns as Board Chairman and CFO VITRO SAB: Bondholders Opposing Expedited Circuit Appeal VNSD INC: Case Summary & 14 Largest Unsecured Creditors WASHINGTON MUTUAL: JPMorgan Wins Interim OK for $4M Settlement WHITE ELEPHANT TRADING: SEC Sues Over Astrology-Based Ponzi Scheme WSG RIVERVIEW: Case Summary & 8 Largest Unsecured Creditors ZALE CORP: Incurs $4.5 Million Net Loss in April 30 Quarter * State SFAs Respond to Decline in Single Family Bond Issuance * US Manufacturers' Cash Piles Decline as Acquisitions Ramp Up * Upcoming Meetings, Conferences and Seminars ********* 3610 GULF: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 3610 Gulf of Mexico LLC 1115 51st Street West Bradenton, FL 34209 Bankruptcy Case No.: 12-09558 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Sacha Ross, Esq. GRIMES GOEBEL GRIMES HAWKINS, et al 1023 Manatee Avenue West Bradenton, FL 34205 Tel: (941) 748-0151 Fax: (941) 748-0158 E-mail: sross@grimesgoebel.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-09558.pdf The petition was signed by George DeSear, member. 4181 LLC: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 4181 LLC 1910 Ginori Court Henderson, NV 89014 Bankruptcy Case No.: 12-17401 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Matthew L. Johnson, Esq. MATTHEW L. JOHNSON & ASSOCIATES, P.C. 8831 W. Sahara Ave. Las Vegas, NV 89117 Tel: (702) 471-0065 Fax: (702) 471-0075 E-mail: shari@mjohnsonlaw.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 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-17401.pdf The petition was signed by Robert Glennon, managing member. 4KIDS ENTERTAINMENT: To Sell Assets in $15 Million Joint Deal ------------------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that 4Kids Entertainment Inc. won approval to sell its Yu-Gi-Oh! business and CW television-network assets in a $15 million joint deal with two companies that were originally dueling at auction. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. Hahn & Hessen LLP serves as counsel to the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions LLC is the information agent for the Committee. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by Kyle C. Bisceglie, Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. In January 2012, the bankruptcy judge ruled in favor of 4Kids, deciding that the Yu-Gi-Oh! property license agreement between the Debtor and the licensor was not effectively terminated prior to the bankruptcy filing. Following the ruling, 4Kids entered into a settlement where it would receive $8 million to end the dispute over its valuable Yu-Gi-Oh! Property. ADAMS PRODUCE: Court Approves Burr & Forman as Attorneys -------------------------------------------------------- The Bankruptcy Court authorized Adams Produce Company, LLC, et al., to employ Burr & Forman LLP as their counsel, on an interim basis. Burr & Forman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. About Adams Produce Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town in Birmingham, Alabama. Privately held Adams Produce is a distributor of fresh fruits and vegetables to restaurants, government and hospitality establishments across the Southeastern United States. With over 400 employees, Adams Produce services the states of Alabama, Arkansas, Florida, Georgia, Mississippi, and Tennessee. The company was founded by Edwin Calvin Adams in 1903. Adams Produce estimated assets and debts of $10 million to $50 million in its Chapter 11 filing. A debtor-affiliate, Adams Clinton Business Park, LLC, estimated up to $10 million in assets and liabilities. The Debtors owe PNC Bank, National Association, $750,000 under a term loan, $1.35 million under a real estate loan, and $3.4 million under a revolver. The Debtors are also indebted $2 million under promissory notes. Adams owes $4.4 million in accounts payable to trade and other creditors, and $10.2 million to agricultural commodity suppliers. The Debtors have tapped Burr & Forman as attorneys; CRG Partners Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue, Jr. as chief restructuring officer; and Donlin Recano & Company Inc. as the claims and notice agent. ADAMS PRODUCE: Formation of Unsecured Committee Not Feasible ------------------------------------------------------------ The United States Bankruptcy Administrator for Northern District of Alabama notified the Chapter 11 clerk of court that it is not feasible to form a committee of unsecured creditors in the bankruptcy case of Adams Produce Company, LLC, et al., in view of the fact that an insufficient number of unsecured creditors were willing to serve. About Adams Produce Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town in Birmingham, Alabama. Privately held Adams Produce is a distributor of fresh fruits and vegetables to restaurants, government and hospitality establishments across the Southeastern United States. With over 400 employees, Adams Produce services the states of Alabama, Arkansas, Florida, Georgia, Mississippi, and Tennessee. The company was founded by Edwin Calvin Adams in 1903. Adams Produce estimated assets and debts of $10 million to $50 million in its Chapter 11 filing. A debtor-affiliate, Adams Clinton Business Park, LLC, estimated up to $10 million in assets and liabilities. The Debtors owe PNC Bank, National Association, $750,000 under a term loan, $1.35 million under a real estate loan, and $3.4 million under a revolver. The Debtors are also indebted $2 million under promissory notes. Adams owes $4.4 million in accounts payable to trade and other creditors, and $10.2 million to agricultural commodity suppliers. The Debtors have tapped Burr & Forman as attorneys; CRG Partners Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue, Jr. as chief restructuring officer; and Donlin Recano & Company Inc. as the claims and notice agent. ADAMS PRODUCE: Files Schedules of Assets and Liabilities -------------------------------------------------------- Adams Produce Company, LLC, filed with the Bankruptcy Court its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $19,545,473 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,574,011 E. Creditors Holding Unsecured Priority Claims $1,172,723 F. Creditors Holding Unsecured Non-priority Claims $32,822,304 ----------- ----------- TOTAL $19,545,473 $41,569,039 A copy of the Schedules is available for free at: http://bankrupt.com/misc/ADAMS_Sal.pdf About Adams Produce Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town in Birmingham, Alabama. Privately held Adams Produce is a distributor of fresh fruits and vegetables to restaurants, government and hospitality establishments across the Southeastern United States. With over 400 employees, Adams Produce services the states of Alabama, Arkansas, Florida, Georgia, Mississippi, and Tennessee. The company was founded by Edwin Calvin Adams in 1903. Adams Produce estimated assets and debts of $10 million to $50 million in its Chapter 11 filing. A debtor-affiliate, Adams Clinton Business Park, LLC, estimated up to $10 million in assets and liabilities. The Debtors owe PNC Bank, National Association, $750,000 under a term loan, $1.35 million under a real estate loan, and $3.4 million under a revolver. The Debtors are also indebted $2 million under promissory notes. Adams owes $4.4 million in accounts payable to trade and other creditors, and $10.2 million to agricultural commodity suppliers. The Debtors have tapped Burr & Forman as attorneys; CRG Partners Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue, Jr. as chief restructuring officer; and Donlin Recano & Company Inc. as the claims and notice agent. ADAMS PRODUCE: PNC Wants to Exercise Rights Under Loan Agreement ---------------------------------------------------------------- PNC Bank, National Association, asks the Court to modify and terminate the automatic stay to permit the exercise of rights and remedies under loan and related documents and applicable non- bankruptcy law with respect to PNC's collateral. "Relief from the automatic stay is appropriate under section 362(d)(2) of the Bankruptcy Code because the Debtors' estates have no equity in the Pre-Petition Collateral, and the Pre-Petition Collateral is not necessary for an effective reorganization," says Jayna Partain Lamar, Esq., at Maynard, Cooper & Gale, P.C., attorney for PNC. In addition, Ms. Lamar notes, the Debtors do not have any means of providing PNC with adequate protection of its interest in the Pre-Petition Collateral. Prior to the Petition Date, PNC entered into (i) a Revolving Credit, Term Loan and Security Agreement dated Sept. 29, 2010, as amended. As of the Petition Date, the principal amount of the obligations owing to PNC pursuant to the Pre-Petition Financing Documents was approximately $5.6 million. PNC asserts a valid, perfected, enforceable and non-avoidable first priority security interest and lien on all cash on hand (estimated at $6.7 million as of June 7), accounts and inventory. Ms. Lamar maintains that because there is no way for the Debtors to provide adequate protection to PNC, the Debtors must be prohibited from using the Pre-Petition Collateral, including any cash collateral, pursuant to Section 363 of the Bankruptcy Code without PNC's consent. In addition, to the extent that any proceeds of the Pre-Petition Collateral exist or come into the possession or control of the Debtors, PNC requests that any cash collateral be remitted to it, and that the Debtors surrender possession of the Pre-Petition Collateral. PNC also asks the Court to enter an order prohibiting the Debtors from using its cash collateral without its consent. A hearing on this matter will be held on July 9, 2012, at 11:00 a.m. About Adams Produce Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town in Birmingham, Alabama. Privately held Adams Produce is a distributor of fresh fruits and vegetables to restaurants, government and hospitality establishments across the Southeastern United States. With over 400 employees, Adams Produce services the states of Alabama, Arkansas, Florida, Georgia, Mississippi, and Tennessee. The company was founded by Edwin Calvin Adams in 1903. Adams Produce estimated assets and debts of $10 million to $50 million in its Chapter 11 filing. A debtor-affiliate, Adams Clinton Business Park, LLC, estimated up to $10 million in assets and liabilities. The Debtors owe PNC Bank, National Association, $750,000 under a term loan, $1.35 million under a real estate loan, and $3.4 million under a revolver. The Debtors are also indebted $2 million under promissory notes. Adams owes $4.4 million in accounts payable to trade and other creditors, and $10.2 million to agricultural commodity suppliers. The Debtors have tapped Burr & Forman as attorneys; CRG Partners Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue, Jr. as chief restructuring officer; and Donlin Recano & Company Inc. as the claims and notice agent. AFA FOODS: Georgia, California Plants Sold for $11.6 Million ------------------------------------------------------------ Peg Brickley at Dow Jones' DBR Small Cap reports that two of the five meat-processing plants AFA Foods Inc. has put on the auction block are selling for a combined $11.6 million in deals approved Tuesday by U.S. Bankruptcy Court Judge Mary Walrath. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AMERICAN APPAREL: Reports $49.7MM Preliminary Net Sales in May -------------------------------------------------------------- American Apparel, Inc., announced preliminary sales for the month ended May 31, 2012. The Company is also providing comparable store sales for all months during 2011 in response to certain equity analyst requests. The Company reported that for the month ended May 31, 2012, total preliminary net sales increased 17% to $49.7 million when compared to the month ended May 31, 2011. Between the same periods, comparable store sales on a preliminary basis increased an estimated 17% and wholesale net sales increased an estimated 24%. A copy of the Form 8-K is available for free at: http://is.gd/wjfOjE About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at March 31, 2012, showed $331.38 million in total assets, $288.97 million in total liabilities and $42.41 million in total stockholders' equity. AMERICAN ARCHITECTURAL: Hiring Maschmeyer Karalis as Counsel ------------------------------------------------------------ American Architectural Inc. and Advanced Acquisitions LLC seek Bankruptcy Court permission to employ Maschmeyer Karalis P.C. as their general bankruptcy counsel. Aris J. Karalis, Esq., disclosed that his firm received funds totaling $141,593 in three installments from the Debtors within the 90-day period prior to the petition date. The funds serve as retainer for the firm. Mr. Karalis attests that his firm does not hold or represent any interest adverse to the Debtors or their creditors, and is a disinterested person within the meaning of Sec. 101(14) of the Bankruptcy Code. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of our noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI estimated $10 million to $50 million in both assets and debts. Advanced Acquisitions estimated $1 million to $10 million in both assets and debts. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: Taps Douglas Ziegler as Accountants ----------------------------------------------------------- American Architectural Inc. and Advanced Acquisitions LLC seek filed papers in Bankruptcy Court seeking to employ Douglas Ziegler LLC as accountants. During the 90-day period prior to the petition date, the firm received $25,125 for payment on invoices, and $9,625 as retainer. Douglas D. Ziegler III, CPA, attests that his firm does not hold any interest materially adverse to the Debtors' estates. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of our noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI estimated $10 million to $50 million in both assets and debts. Advanced Acquisitions estimated $1 million to $10 million in both assets and debts. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: Can Use Cash Collateral Thru July 22 ------------------------------------------------------------ American Architectural Inc. and Advanced Acquisitions LLC won authority to use cash collateral through July 22, 2012, and pay expenses related to the operation of their businesses including, all payroll obligations. The Payroll Obligations were due and payable June 21. To the extent of any diminution in value of its prepetition cash collateral, the Court granted Univest Bank and Trust Company valid, binding, enforceable and perfected postpetition replacement liens on each of the Debtor's assets but limited to only those types and descriptions of collateral in which Univest holds a prepetition lien or security interest. The Replacement Liens will have the same priority and validity as Univest's prepetition security interests and liens. The Interim Order, the Court said, is without prejudice to the rights of the Debtors' creditors, any trustee appointed, or other parties in interest, to contest the validity, extent or priority of any rights granted to Univest Bank by any prepetition loan agreement or any security interest arising out of or related to any prepetition loan agreement. The Court will hold a further hearing July 22 to consider whether the Debtors' use of Cash Collateral can be extended beyond that date. American Architectural, as of the petition date, owed Univest $5,328,968 under a revolving line of credit, an equipment line of credit, a second revolving line of credit, and a term note. American Architectural also has a number of purchase money credit facilities due to TD Bank, PNC Bank and Ford Credit that are secured by vehicles owned by the Debtor. It also has other unliquidated debts of $4,289,828 due numerous trade creditors, as well as accrued payroll tax obligations of $2,368,961. Advanced Acquisitions, as of the Petition Date, has an $828,577 loan due to Univest; another loan due to Univest of $1,233,404; a $499,834 loan from the Pennsylvania Industrial Development Authority; and a $117,926 loan from the Bucks County Economic Development Authority. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of our noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI estimated $10 million to $50 million in both assets and debts. Advanced Acquisitions estimated $1 million to $10 million in both assets and debts. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: Schedules Filing Extended to July 13 ------------------------------------------------------------ At the behest of American Architectural, Inc., and Advanced Acquisitions, LLC, the Court extended their time to file schedules of assets and liabilities, statements of financial affairs and other documents, including a list of equity security holders and statement of corp. ownership by July 13, 2012. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of our noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI estimated $10 million to $50 million in both assets and debts. Advanced Acquisitions estimated $1 million to $10 million in both assets and debts. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: Sec. 341 Creditors' Meeting on July 18 -------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of American Architectural, Inc., and Advanced Acquisitions, LLC, on July 18, 2012, at 2:00 p.m. at 833 Chestnut Street, Suite 501, Philadelphia. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of our noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI estimated $10 million to $50 million in both assets and debts. Advanced Acquisitions estimated $1 million to $10 million in both assets and debts. The petitions were signed by John Melching, president and CEO. APPLIED MINERALS: Nat Krishnamurti Named Chief Financial Officer ---------------------------------------------------------------- Applied Minerals, Inc., appointed Nat Krishnamurti as the Company's Chief Financial Officer. Mr. Krishnamurti replaces the Company's Interim Chief Financial Officer, Chris Carney, who will assume the role of Vice President for Business Development and Corporate Strategy. Mr. Krishnamurti is a CPA with nearly two decades of experience as a financial management and audit professional. He was previously employed by inVentiv Health, Inc., a provider of clinical, communications and commercial services to the global pharmaceutical, life sciences and biotechnology industries. inVentiv was a publicly-traded company until acquired by Thomas H. Lee Partners, LP in August 2010. During his 11-year tenure at inVentiv, Mr. Krishnamurti served as VP - Accounting and Reporting, Chief Accounting Officer, VP - Corporate Finance, and Director - Treasury, Consolidations and Financial Reporting. Prior to inVentiv, Mr. Krishnamurti worked as a senior auditor for firms such as PriceWaterhouseCoopers, LLP, and Feldman Sherb Erhlich & Co., PC. While at PriceWaterhouseCoopers, LLP, he focused on consumer and industrial products' clients, which included mining companies. Mr. Krishnamurti received a B.S. in Accounting from CUNY - Brooklyn College and an MBA from Long Island University. According to Andre Zeitoun, President and Chief Executive Officer of Applied Minerals, Inc., "The appointment of Nat Krishnamurti as our Chief Financial Officer is a significant and necessary addition to our management team at a time when we are accelerating our commercial activities. His in-depth financial management, auditing and SEC-reporting experience will provide the Company the skillset needed as we continue to gain traction as the leading provider of advanced halloysite clay solutions." Mr. Zeitoun continued, "I am grateful for the job Chris Carney has done as our Interim Chief Financial Officer since February 2009. At the onset of his appointment, Chris was tasked with both ensuring the Company's compliance with SEC reporting requirements and creating a financial management system that would provide his eventual successor with the infrastructure needed to accommodate the Company's expected growth. He achieved these goals and will now utilize his thorough understanding of both the scientific benefits of halloysite clay and its commercial applications to become more closely involved in the business development activities of our Company." The principal terms of the agreement with Mr. Krishnamurti are: (i) Start date: May 29, 2012; (ii) annual salary: $180,000; (iii) option grant: 300,000 options, 10-year term, strike price (closing price on May 29, 2012), the options vesting monthly over a 3-year period. (If he is terminated for cause of terminates resigns without good reason, he loses his vested options. If he is terminated without cause or resigns with good reason, his options vest through the end of the year in which he is employed. If there is a change of control, his unvested options vest immediately. About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. The Company reported a net loss attributable to the Company of $7.48 million in 2011, a net loss attributable to the Company of $4.76 million in 2010, and a net loss attributable to the Company of $6.76 million in 2009. The Company's balance sheet at March 31, 2012, showed $10.68 million in total assets, $5.24 million in total liabiilties and $5.44 million in total stockholders' equity. Going Concern The Company has incurred material recurring losses from operations. At March 31, 2012, the Company had a total accumulated deficit of approximately $43,084,500. For the three months ended March 31, 2012, and 2011, the Company sustained net losses from exploration stage before discontinued operations of approximately $4,056,700 and $1,695,100, respectively. The Company said that these factors indicate that it may be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is contingent upon its ability to generate revenue and cash flow to meet its obligations on a timely basis and management's ability to raise financing or dispose of certain non-core assets as required. If successful, this will mitigate the factors that raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning At Dec. 31, 2011, and 2010, the Company had accumulated deficits of $39,183,632 and $31,543,411, respectively, in addition to limited cash and unprofitable operations. For the year ended Dec. 31, 2011, and 2010, the Company sustained net losses before discontinued operations of $7,476,864 and $4,891,525, respectively. As of March 15, 2012, the Company has not commercialized the Dragon Mine and has had to rely on cash flow generated from the sale of stock and convertible debt to fund its operations. If the Company is unable to fund its operations through the commercialization of the Dragon Mine, the sale of equity or debt or a combination of both, it may have to file bankruptcy. ARCAPITA BANK: Files 5-Week Budget Thru Aug. 4 ---------------------------------------------- Arcapita Bank B.S.C.(c) and its affiliated chapter 11 debtors file proposed budget for the period from the July 1 through Aug. 4, 2012. Arcapita projects net cash flow, on a consolidated basis, of negative $21,534,000 during the five-week period. The bank expects disbursements of $12,435,000, exceeding projected cash receipts of $912,000. Arcapita said it would end the period with a $62,367,000 balance. Arcapita also separately filed an operating report for the month of May. Arcapita posted a net loss of $14,878,020 for May. Arcapita had total income of $90,824 and total expenses of $7,154,210. At the end of May, it had total assets of $4,220,390,677 against total liabilities of $3,244,515,539. Meanwhile, Standard Chartered Bank has lodged a fourth limited objection and reservation of rights to Arcapita's request to continue using the Debtors' existing cash management system. Standard Chartered is the Debtors' sole secured creditor and the beneficiary of an express trust under its Equitable Mortgages with certain of the Debtors and Cayman Islands law. Standard Chartered and the Debtors have not resolved the issues set forth in Standard Chartered's previous objections, including the Debtors' attempted use of property required to be held in an express trust for the sole benefit of Standard Chartered. Standard Chartered objects to the extent the form of order and interim budget are not acceptable to Standard Chartered. It reserves its rights to make additional objections at the hearing and reserves its rights to object to the entry of any further interim orders or a final order that would permit disbursements of funds from the subsidiary guarantors and their non-Debtor subsidiaries to AIHL or Arcapita Bank for the benefit of structurally subordinated unsecured creditors. Standard Chartered is represented in the case by: Michael J. Sage, Esq. Brian E. Greer, Esq. Nicole B. Herther-Spiro, Esq. 1095 Avenue of the Americas DECHERT LLP New York, NY 10036-6797 Telephone: (212) 698-3500 Facsimile: (212) 698-3599 E-mail: michael.sage@dechert.com brian.greer@dechert.com nicole.herther-spiro@dechert.com About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCAPITA BANK: Questions Committee's Need for 2 Fin'l Advisors -------------------------------------------------------------- Arcapita Bank B.S.C.(c) and certain of its affiliated debtors object to the request of the Official Committee of Unsecured Creditors to retain FTI Consulting, Inc. as financial advisor; and Houlihan Lokey Capital, Inc., as financial advisor and investment banker, arguing that there is substantial overlap in the services that FTI and Houlihan will perform for the Committee. Although the Committee represents that Houlihan and FTI have and will continue to coordinate closely to avoid duplication of services, the Debtors said the Committee's assurances provide insufficient comfort given the overlap in the scope of services. The Debtors recounted that the Committee had opposed the Debtors' own request to employ KPMG LLP as valuation advisor, saying the retention of multiple financial advisors "raises the spectre of duplication and inefficiency," and accordingly such applications must "be subjected to careful scrutiny and considered not only independently but collectively as well." The Debtors said they agree with the Committee that the estates have limited resources that should be directed towards supporting the value of their assets and businesses for all stakeholders. Yet, the Committee fails to apply the same level of scrutiny to its own professionals as it demands for the Debtors' professionals. The Debtors also object to the proposed indemnification provisions in the Houlihan Application, which the Debtors find are more favorable than those allowed to the Debtors' own professionals. While the Houlihan Application states that it is not entitled to indemnification in the event that there is a judicial determination of bad faith, gross negligence, or willful misconduct, the Engagement Letter is not accordingly limited. The Debtors also dispute the proposed "Deferred Fee" payable to Houlihan. The Debtors said the Committee will have an additional burden to prove that Houlihan is indeed entitled to a Deferred Fee. Given that the Committee has advocated for the vigilant policing of the Debtors' cash, the Debtors expect the Committee to demonstrate the propriety of any Deferred Fee and that Houlihan was a primary contributor to the confirmation of any chapter 11 plan of reorganization or liquidation. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCAPITA BANK: Creditor Proposes Protocol for Securities Trading ---------------------------------------------------------------- VR Global Partners LP, which has been appointed to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Arcapita Bank B.S.C.(c) and its affiliated debtors, will appear before the Bankruptcy Court on June 29, at 2:30 p.m. to seek permission to continue trading in the Debtors' securities upon the establishment of an ethical wall and information blocking procedures. VR Global said it holds so-called "Covered Claims" or claims against the Debtors, including (i) "Securities" as defined in Section 2(a)(1) of the Securities Act of 1933 (including stocks, notes, bonds, debentures, participation in, or derivatives based upon or relating to, any of the Debtors' debt obligations or equity interests) and (ii) bank debt. VR Global said it is engaged in the trading of securities or claims for others or for its own account as a regular part of its business. VR Global wants the Court to declare it will not violate its fiduciary duties as a member of the Committee by trading in the Covered Claims during the pendency of the Debtors' Chapter 11 cases, provided that it establishes, effectively implements, and adheres to the information blocking policies and procedures that are approved by the Office of the United States Trustee. The term "Screening Wall" refers to a procedure established by an institution to isolate its trading activities from its activities as a member of an official committee of unsecured creditors in a chapter 11 case. A Screening Wall includes, among other things, features as the employment of different personnel to perform certain functions, physical separation of the office and file space, procedures for locking committee related files, separate telephone and facsimile lines for certain functions, and special procedures for the delivery and posting of telephones messages. The procedures will prevent VR Global's trading personnel from use or misuse of non-public information obtained by its personnel engaged in Committee related activities, and also will preclude Committee Personnel from receiving inappropriate information regarding its trading in the Covered Claims in advance of those trades. Although members of the Committee owe fiduciary duties to the creditors of these estates, VR Global said it also has fiduciary duties to maximize returns to its clients through trading securities. Thus, if it is barred from trading the Covered Claims during the pendency of these bankruptcy cases because of its duties to other creditors, it may risk the loss of a beneficial investment opportunity for itself and/or its clients and, moreover, may breach its fiduciary duty to its clients. In-House Counsel for VR Global Partners is: Peter L. Clateman, Esq. VR GLOBAL PARTNERS, LP 400 Madison Avenue 15th Fl. New York, New York 10017 Telephone: (646) 571 1870 Facsimile: (646) 571-1879 E-mail: pclateman@vr-capital.com About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ATP OIL: Three Directors Elected at Annual Meeting -------------------------------------------------- ATP Oil & Gas Corporation held its 2012 annual meeting of shareholders on June 1, 2012. Three directors were elected at the Annual Meeting, namely: Burt A. Adams, Arthur H. Dilly and Brent M. Longnecker. The appointment of PriceWaterhouseCoopers LLP as independent auditors of the Company for fiscal year ending Dec. 31, 2012, was ratified. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. The Company's balance sheet at March 31, 2012, showed $3.63 billion in total assets, $3.48 billion in total liabilities, $115.81 million in redeemable noncontrolling interest, $71.18 million in 8% convertible perpetual preferred stock, and a $34.44 million total shareholders' deficit. * * * As reported by the TCR on May 9, 2012, Moody's Investors Service affirmed ATP's Caa2 Corporate Family Rating. The Caa2 Corporate Family Rating reflects ATP's small production and cash flow base, low drilling risk diversification, high proportion of proved undeveloped reserves and short PD (proved developed) reserve life, extremely high leverage and chronic liquidity challenges. ATP OIL: Expands Liquidity Position by $35 Million -------------------------------------------------- ATP Oil & Gas Corporation has closed a private placement consisting of a $35 million unsecured convertible note and a warrant to purchase shares of ATP common stock to a single institutional investor. The note accrues interest at the rate of 8.0% per annum and matures Dec. 20, 2013. Principal and interest are payable in four quarterly installments. ATP has the option to pay the installments in cash, shares of the company's common stock or a combination. The note is convertible at the option of the holder, in whole or in part, at any time into shares of ATP's common stock at an initial conversion price of $4.46 per share. If ATP elects to pay installments of principal and interest in shares of common stock then the conversion price will be the lesser of (i) the initial conversion price and (ii) 87% of the market price of the common stock on such installment payment date. In connection with the transaction, the purchaser also received a warrant exercisable for up to 3,923,767 shares of ATP's common stock at an initial exercise price of $6.69 per share. If, on the eighteen-month anniversary of the closing date the exercise price of the warrant is greater than the then current market price of the common stock, then, subject to certain conditions, the exercise price will be reset to the market price on that date. The warrant has a term of 5.5 years and may be exercised by the holder in whole or in part at any time after the six-month anniversary of the date of issuance. ATP intends to use the gross proceeds from the transaction of $35.0 million for working capital. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. The Company's balance sheet at March 31, 2012, showed $3.63 billion in total assets, $3.48 billion in total liabilities, $115.81 million in redeemable noncontrolling interest, $71.18 million in 8% convertible perpetual preferred stock, and a $34.44 million total shareholders' deficit. * * * As reported by the TCR on May 9, 2012, Moody's Investors Service affirmed ATP's Caa2 Corporate Family Rating. The Caa2 Corporate Family Rating reflects ATP's small production and cash flow base, low drilling risk diversification, high proportion of proved undeveloped reserves and short PD (proved developed) reserve life, extremely high leverage and chronic liquidity challenges. BERNARD L. MADOFF: Trustee Has Victory in U.S. Supreme Court ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Supreme Court ruled that customers of Bernard L. Madoff Investment Securities LLC aren't entitled to claims for fictitious profits in their accounts. The report recounts that in August the U.S. Court of Appeals in Manhattan upheld the bankruptcy court and decided that customers only have claims for the amount of cash invested with Madoff less the amount of cash taken out. The appeals court didn't permit customers to have customer claims for profits that existed only in the imagination of Bernie Madoff. Several customers sought permission for a further appeal to the U.S. Supreme Court. According to the report, the high court on June 25 declined to allow an appeal, after the U.S. Solicitor General filed a brief in late May saying the appeals court ruling was "correct." According to Mr. Rochelle, Monday's ruling means that so-called net winners who managed to take more out of their Madoff accounts than they invested won't have valid customer claims in the liquidation. Similarly, customers who weren't net winners won't have claims for profits they didn't take out. Net winners and customers with claims for profits won't have those claims unless customer claims are fully paid and the Securities Investor Protection Corp. is reimbursed for money it laid out. Madoff trustee Irving Picard, Bloomberg relates, issued a statement saying the Supreme Court's action will enable him to make a second distribution in the "near future." Mr. Picard didn't say how much would be distributed or exactly when. Mr. Picard said he will be able to increase the upcoming distribution if customers' don't ask the Supreme Court by July 16 for permission to appeal from a ruling by the appeals court on April 17 dismissing an appeal from a ruling by a U.S. district judge approving the forfeiture of $7.2 billion by the estate of the late Jeffry M. Picower. The attempted appeals to the Supreme Court include Ryan v. Picard, 11-969, U.S. Supreme Court. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BIOZONE PHARMACEUTICALS: Sells $200,000 Promissory Notes -------------------------------------------------------- BioZone Pharmaceuticals, Inc., sold $200,000 of 10% promissory notes to accredited investors on June 13, 2012. The principal amount of the Notes is payable in cash on the date that is the earlier of receipt by the Company of $500,000 or more from any source or three months from the issuance date. The Notes bear interest at the rate of 10% per annum. The Company may prepay any outstanding amounts owing under the Notes, in whole or in part, at any time prior to the Maturity Date. About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the website isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company does not have sufficient cash balances to meet working capital and capital expenditure needs for the next twelve months. In addition, as of Dec. 31, 2011, the Company has a shareholder deficiency and negative working capital of $4.37 million. The continuation of the Company as a going concern is dependent on, among other things, the Company's ability to obtain necessary financing to repay debt that is in default and to meet future operating and capital requirements. Biozone reported a net loss of $5.45 million in 2011, compared with a net loss of $319,813 in 2010. The Company's balance sheet at March 31, 2012, showed $8 million in total assets, $13.76 million in total liabilities and a $5.76 million total shareholders' deficiency. BLUE RIDGE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Blue Ridge Sand & Gravel, Inc. 700 Blue Ridge Road Winfield, AL 35594 Bankruptcy Case No.: 12-71283 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court Northern District of Alabama (Tuscaloosa) Debtor's Counsel: Jamie Alisa Wilson, Esq. BENTON & CENTENO, LLP 2019 Third Avenue North Birmingham, AL 35203 Tel: (205) 278-8000 Fax: (205) 278-8008 E-mail: jwilson@bcattys.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/alnb12-71283.pdf The petition was signed by Bob R. Estes, president. CAPITOL BANCORP: Amended Bylaws Restrict Transfer of Stock ---------------------------------------------------------- In an effort to further implement a resolution of Capitol Bancorp Ltd.'s Executive Committee of the Board of Directors adopted on July 19, 2011, in connection with the adoption of the Corporation's Tax Benefit Preservation Plan and the implementation of other measures protective of certain of the Corporation's tax attributes, on June 6, 2012, the Board of Directors ratified an amendment to the Corporation's Amended and Restated Bylaws, which amendment imposes certain restrictions on the transfer of Capitol's common stock in order to protect certain tax attributes of the Corporation. During the Restriction Period, unless approved by the Board in accordance with the procedures set forth in the Bylaw provision, any attempted transfer of the Corporation's Common Stock will be prohibited and void ab initio to the extent that, as a result of such transfer, either (i) any person or group of persons will become a "five-percent shareholder" of the Corporation or (ii) the ownership interest in the Corporation of any five-percent shareholder will be increased. The period during which the transfer restrictions apply will commence on June 6, 2012, and will generally remain in effect, absent the repeal of certain provisions of the Internal Revenue Code, until the earlier of (a) 45 days after the second anniversary of June 6, 2012, and (b) the date that the Board determines that (1) an "ownership change", as defined under the Internal Revenue Code, would not result in a substantial limitation on the ability of Capitol to use otherwise available tax attributes, or (2) no significant value attributable to those tax attributes would be preserved by continuing the transfer restrictions. A copy of the amendment is available for free at: http://is.gd/WSbYhy Banks Reorganization On June 1, 2012, Capitol effected a reorganization of several of its affiliate banks through a contribution agreement effective as of June 1, 2012, by and among Capitol, Michigan Commerce Bancorp Limited, a Michigan corporation and wholly owned subsidiary of the Corporation and other subsidiaries of the Corporation. Pursuant to the Contribution Agreement, the Corporation and the Subsidiaries contributed (i) all of the equity interests in each of Bank of Las Vegas, Sunrise Bank of Albuquerque and Indiana Community Bank and (ii) over 99% of the equity interests in Sunrise Bank of Arizona to MCBL in exchange for additional shares of MCBL. Capitol will retain its other banking subsidiaries, and the Subsidiary Banks do not represent substantially all of its assets. Prior to the transactions effected by the Contribution Agreement, the sole asset of MCBL was the common stock of Michigan Commerce Bank. The reason for the Contribution is to create a more attractive structure for MCBL for capital raising purposes. About Capitol Bancorp Limited Capitol Bancorp Limited (NYSE: CBC) -- http://www.capitolbancorp.com/-- is a $5.1 billion national community banking company, with a network of bank operations in 16 states. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Michigan and Phoenix, Arizona. In September 2009, Capitol and its second-tier bank holding companies entered into a written agreement with the Federal Reserve Bank of Chicago under which Capitol has agreed, among other things, to submit to the Reserve Bank a written plan to maintain sufficient capital at Capitol on a consolidated basis and at Michigan Commerce Bank (as a separate legal entity on a stand- alone basis); and a written plan to enhance the consolidated organization's risk management practices, a strategic plan to improve the consolidated organization's operating results and overall condition and a cash flow projection. Certain of Capitol's bank subsidiaries have entered into formal agreements with their applicable regulatory agencies. Those agreements provide for certain restrictions and other guidelines and/or limitations to be followed by the banks. In 2009, Capitol commenced the deferral of interest payments on its various trust-preferred securities, as is permitted under the terms of the securities, to conserve cash and capital resources. The payment of interest may be deferred for periods up to five years. During such deferral periods, Capitol is prohibited from paying dividends on its common stock (subject to certain exceptions) and is further restricted by Capitol's written agreement with the Federal Reserve Bank of Chicago. Accrued interest payable on such securities approximated $18.1 million at June 30, 2010. The Company reported a net loss of $51.92 million in 2011, a net loss of $254.36 million in 2010, and a net loss of $264.54 million in 2009. The Company's balance sheet at March 31, 2012, showed $2.05 billion in total assets, $2.17 billion in total liabilities, and a $121.25 million total deficit. As of March 31, 2012, there are several significant adverse aspects of Capitol's consolidated financial position and results of operations which include, but are not limited to: * An equity deficit approximating $121.3 million; * Regulatory capital classification on a consolidated basis as less than "adequately-capitalized" and related negative amounts and ratios; * Numerous banking subsidiaries with regulatory capital classification as "undercapitalized" or "significantly- undercapitalized"; * Certain banking subsidiaries which are generally subject to formal regulatory agreements have received "prompt corrective action" notifications or directives from the FDIC, which require timely action by bank management and the respective boards of directors to resolve regulatory capital ratios which result in classification as less than "adequately- capitalized" (the basis of a PCAN) or to submit an acceptable capital restoration plan to the FDIC (the basis of a PCAD), and it is likely additional PCANs or PCADs may be issued in the future or the banking subsidiaries may be unable to satisfactorily resolve those notices or directives; * Capitol has sold several of its banking subsidiaries during the past few years and has other divestiture transactions p pending. The proceeds from those divestitures have been redeployed at certain remaining banking subsidiaries which have experienced a significant erosion of capital due to operating losses. While those proceeds have been a significant source of funds for redeployment, the Corporation will need to raise significant other sources of new capital in the future; * The Corporation and substantially all of its banking subsidiaries are operating under various regulatory agreements which place a number of restrictions on them and impose other requirements limiting activities and requiring preservation of capital, improvement in regulatory capital measures, reduction of nonperforming assets and other matters for which the entities have not achieved full compliance. * Elevated levels of nonperforming loans and other nonperforming assets as a percentage of consolidated loans and total assets, respectively; and * Significant losses from continuing operations, resulting primarily from elevated provisions for loan losses and costs associated with foreclosed properties and other real estate owned. Capitol said these considerations raise some level of doubt (potentially substantial doubt) as to its ability to continue as a going concern. CELL THERAPEUTICS: Craig Philips to Resign as President ------------------------------------------------------- Craig W. Philips, the President of Cell Therapeutics, Inc., delivered notice of his intention to resign as President of the Company, effective July 16, 2012. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of $62.36 million in 2011, compared with a net loss attributable to CTI of $82.64 million in 2010. The Company's balance sheet at March 31, 2012, showed $44.15 million in total assets, $18.50 million in total liabilities $13.46 million in common stock purchase warrants, and $12.18 million in total shareholders' equity. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are $47.1 million as of Dec. 31, 2011. The Company's total current liabilities were $17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Company said in the Form 10-K for the year ended Dec. 31, 2011, that if it receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CHARLES STREET AME: Eric Green Appointed to Mediate --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a mediator will try to bring peace between Charles Street African Methodist Episcopal Church of Boston and secured lender OneUnited Bank, where the parties on their own have been litigating nonstop. The report recounts that the church filed a reorganization plan based on a belief it will win a lawsuit in bankruptcy court to subordinate the bank's claim on account of what the church describes as "wrongful conduct and subsequent intransigence." The bank responded by filing a motion to dismiss the Chapter 11 case. The bank is owed about $4 million. According to the report, Eric Green Resolutions LLC from Boston agreed to serve as mediator and not charge for its services. The mediation company was founded by Eric D. Green, who teaches mediation at Boston University School of Law. The report notes that unless the mediator is successful, the church will press ahead with papers filed last week to preclude the bank from voting on the reorganization plan in view of its allegedly inequitable conduct. The church called the bank's motion to dismiss the Chapter 11 case a "deeply unserious pleading." The bank will be filing papers by July 24 explaining why its claim shouldn't be subordinated. About Charles Street Charles Street African Methodist Episcopal Church -- http://www.csrrc.org/-- is located in Roxbury, Massachusetts. The Church is to advocate for the needs of community residents and to strengthen individuals, families, and the community by providing social, educational, economic, and cultural services. The Church filed for Chapter 11 protection (Bankr. D. Mass. Case No. 12-12292) on March 20, 2012, to prevent its lenders, OneUnited Bank, from foreclosing on a $1.1 million loan and auctioning off the church. The Debtor estimated both assets and debts of between $1 million and $10 million. The church is being represented by the Boston firm Ropes & Gray LLP, which is also working for free. CHURCH STREET: Changes Name to CS DIP Following Sale to Lenders --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Church Street Health Management LLC changed its name as a result of the sale of the business to existing first-lien lenders in exchange for $25 million in debt. The new name for the company in Chapter 11 is CS DIP LLC. There were no competing bids when the business went up for auction. About Church Street Church Street Health Management, LLC, a provider of management services for 67 dental practices in 22 states, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville, Tennessee on Feb. 20, 2012. The following day, four affiliates, Small Smiles Holding Company, LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577). As of the Petition Date, the Debtors' assets have book value of $895 million, with debt totaling $303 million. There is about $131.5 million owing on first-lien obligations, plus $25.6 million on a second-lien obligation. There is an additional $152 million on three subordinated debts. The company's finances are structured to comply with Islamic Shariah financing regulations. In the Chapter 11 cases, the Debtors have engaged Waller Lansden Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal Healthcare Industry Group, LLC, as financial and restructuring advisor. Martin McGahan, a managing director at A&M, will serve as chief restructuring officer of Church Street. Morgan Joseph TriArtisan, LLC, is the investment banker. Garden City Group is the claims and notice agent. Garrison Investment Group is providing funding for the Chapter 11 case. The credit agreement will provide the Debtor with up to an aggregate principal amount of $12 million in a revolving credit facility. CINRAM INT'L: Files for Bankruptcy in Canada & US to Sell Biz ------------------------------------------------------------- Cinram International Inc. reached an agreement to sell substantially all of its assets and operations to Najafi Companies for $82.5 million. To implement sale transactions, the Company has filed for reorganization protection under the Companies' Creditors Arrangements Act (Canada) in the Ontario Superior Court. Concurrently with that filing, Cinram's US subsidiaries filed under Chapter 15 of the United States Bankruptcy Code (Bankr. D. Del. Case Nos. 12-11882 to 12-11890). The filings were made to give effect to the sale of the Company's businesses and assets to Najafi Companies and to preserve Cinram's operations and services to its customers while the sale is finalized. $82.5 Million Sale Cinram International is selling the business for $82.5 million to Najafi Cos. LLC from Phoenix. The sale transaction includes these key elements: * Najafi will purchase substantially all the manufacture of pre-recorded multimedia products and the provision of related logistics services, digital media solutions and outsourced vendor management inventory services in North America and substantially all of the European business. * The sale transaction is subject to customary conditions, including receipt of approval under the Investment Canada Act and completion of other regulatory processes, and receipt of any other requisite approvals, in North America and Europe. * Najafi will continue to fulfill Cinram's obligations to its customers and suppliers in respect of any of the acquired assets or business. * The sale transaction is expected to close by early August, 2012, although the transfer of portions of the business may occur later in the year. Assets excluded from the sale transaction include the assets used in Cinram's telecommunications products logistics services and certain real estate assets. The proceeds of the sale transaction, and proceeds generated from the excluded assets, will be used to repay Cinram's senior creditors (and will not be available for distribution to unitholders). The sale transaction has the support of members of the steering committee of lenders under Cinram's senior secured credit facilities, representing 40% of the loans under the first lien facilities. "Cinram is a market leader in its industries with a long track record of best in class performance," said Jahm Najafi, CEO, Najafi Companies. "We look forward to a seamless transition for our customers, and to build on Cinram's significant base of strengths and expertise." Moelis & Company acted as financial advisor to Cinram. Road to Bankruptcy Cinram said in a court filing that following the economic downturn in its primary markets of North America and Europe, which impacted consumers' discretionary spending and adversely affected the industry, Cinram has experienced significant declines in revenue and EBITDA. Over the past several years, Cinram has continued to evaluate its strategic alternatives and to rationalize its operating footprint in order to attempt to balance its ongoing operations and financial challenges with its existing debt levels. In September 2011, Cinram engaged MOelis and Company LLC to assist in the review of strategic alternatives. Despite cost-reduction and recapitalization initiatives and the implementation of a variety of restructuring alternatives, the Cinram Group has been experiencing a number of challenges that have led to its seeking the protections provided by the CCAA. Waivers from lenders were set to expire June 30. Cinram says that without additional funding, it will exhaust available cash resources and will thus be unable to meet its obligations as they come due. As of March 31, 2012, there was $233 million outstanding under a first lien term loan facility, $19 million under a first lien revolving credit facility, $12 million of letter of credit exposure, and $12 million outstanding under a second lien credit agreement. Ontario Proceeding The primary bankruptcy is in Ontario under Canada's Companies' Creditors Arrangement Act. On June 25, 2012, Cinram International Inc., Cinram International Income Fund, CII Trust and subsidiaries obtained an Initial Order under the Companies' Creditors Arrangement Act. The Applicants were granted a stay of proceedings and other relief provided under the CCAA, which was extended to Cinram International Limited Partnership. Pursuant to the Initial Order, FTI Consulting Canada Inc. has been appointed Monitor. See http://cfcanada.fticonsulting.com/cinram/ The Monitor can be reached at: FTI CONSULTING TD Waterhouse Tower 79 Wellington Street West Suite 2010, P.O. Box 104 Toronto, Ontario M5K 1G8 Pamela Luthra E-mail: Cinram@fticonsulting.com Toll Free: 1-855-718-5255 Local: 416-649-8096 Lawyers for Cinram in the CCAA case are: Robert J Chadwick, Esq. Melaney J. Wagner, Esq. Caroline Descours, Esq. GOODSMAN LLP Barristers & Solicitors 333 Bay Street, Suite 3400 Toronto, Canada M5H 2S7 Tel: (416) 979-2211 Fax: (416) 979-1234 Chapter 15 Case Cinram and its affiliates have commenced proceeding under Chapter 15 in Delaware to ensure that they are protection from creditor actions in the U.S. and to assist with the global implementation of the sale. Cinram wants the Delaware court to rule that Canada is home to the "foreign main proceeding." Cinram explains that although it has operations in the United States and certain units are incorporated under the laws of the United States, Ontario, Canada is Cinram's home jurisdiction and the nerve centre of Cinram's management, business and operations. Proceedings in France Cinram's European entities are not part of the Ontario proceeding and it is not intended that any insolvency proceedings will be commenced with respect to Cinram's European entities, except for Cinram Optical Discs S.A.S., which has commenced insolvency proceedings in France. DIP Financing The court restructuring process is not expected to affect Cinram's day-to-day operations. Cinram has access to the funding necessary to maintain its operations and the operations will continue without disruption during this period. Cinram will operate its business in the ordinary course, including continuing to pay its suppliers for all goods and services through the course of the court restructuring process. The Ontario Court has entered an order authorizing Cinram to obtain and borrow under a credit facility from JP Morgan Chase Bank N.A., as administrative agent, and lender and certain other lenders. The loans will finance Cinrma's workin capital requirements and other general corporate purposes and expenditures. The order provides that borrowing under the facility will not exceed $15 million. Retention Payments Cinram says it has developed a key employee retention program with the principal purpose of providing an incentive for eligible employees, including eligible officers, to remain with the Cinram Group despite the financial difficulties that the Cinram Group is currently facing. The KERP includes retention payments to certain existing employees, including certain officers, employed at Canadian and U.S. entities that are critical to the preservation of Cinram's enterprise value as well as payments to Cinram's CEO and the CFO in connection with a sale transaction or capital transaction In connection with the transition of Cinram Distribution's Aurora facility to its Nashville facility, Cinram entered into retention agreements with five key employees critical for the orderly closure of the Aurora facility and transition of its distribution business to the Nashville facility, pursuant to which each Aurora Employee is eligible to obtain a specified retention payment. About Cinram International With headquarters in Toronto, Ontario, Canada, Cinram International Inc. is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. The balance sheet at the end of 2011, showed total assets of $452.7 million and liabilities of $527.8 million, including $148.8 million in accounts payable. JPMorgan Chase Bank NA is agent for first-lien lenders. CLAIRVEST GROUP: Reaches Court Settlement on $10MM Loan ------------------------------------------------------- Subsequent to quarter end, Clairvest Group Inc reached a court- approved settlement with certain parties with respect to a $10 million loan advanced in two tranches of $5 million in each of December 2005 and May 2006. On July 21, 2006, Clairvest had announced that the loan amount may not be recovered. The loan, which was made from Clairvest's treasury funds, was in default and the collateral arrangements for the loan were mishandled. The loan was written off and Clairvest recorded a realized loss in its financial statements for the year ended March 31, 2007. Clairvest took legal action against several parties to recover the funds and has reached a settlement with certain of these parties resulting in a settlement by these parties to Clairvest of approximately $7.75 million, or approximately 77.5% of the original loan value without taking into account litigation and other costs incurred in the recovery process, substantially all of which have been incurred and recorded as charges against income as of March 31, 2012. The funds recovered will be recorded into income when received. Clairvest continues to seek additional recoveries against parties that are not part of this settlement. About Clairvest Clairvest Group Inc. is a private equity management firm which invests its own capital, and that of third parties through the Clairvest Equity Partners limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments. COMMUNITY HOME FIN'L: Creditors Want to Prohibit Cash Use --------------------------------------------------------- Edwards Family Partnership LP (EFP) and Beher Holdings Trust (BHT), secured creditors of Community Home Financial Services Inc. (CHFS), ask the Bankruptcy Court to prohibit the use of cash collateral, and require the Debtor to segregate funds related to the various joint ventures by and among EFP, BHT and the Debtor. EFP and BHT also ask the Court to prohibit the Debtor from using any funds related to the joint ventures and requiring payment to the funds collected to EFP and BHT. Jim F. Spencer, Jr., Esq., at Watkins & Eager PLLC, tells the Court that EFP and BHT have invested tens of millions of dollars in thousands of mortgage loans managed by CHFS. The transactions are structured two ways: 1) by BHT/EFP lending money to CHFS enabling CHFS to purchase mortgage loan portfolios upon which CHFS granted BHT/EFP a perfected security interest; and 2) by BHT/EFP directly purchasing mortgage loan portfolios under joint venture agreements with CHFS. In both scenarios, CHFS serviced the mortgages and collected the monthly payments from mortgagor borrowers. Under the loan documents and the joint venture agreements, CHFS was required to forward the mortgage proceeds to BHT/EFP; however, CHFS has failed to do so. Specifically, since January 2011, CHFS has withheld millions of dollars from BHT and EFP which necessitated BHT and EFP filing an emergency motion to appoint a receiver for CHFS. After two days of trial before United States District Judge Carlton Reeves, at which Butch Dickson, the principal of CHFS, testified that he had taken millions of dollars in loan payments from both the loan transaction and the joint ventures and diverted the payments for other purposes, CHFS filed the Chapter 11 case. Over $1,000,000 a month is being collected by CHFS on the two transactions. This money is either BHT/EFP's cash collateral, which CHFS may not use without this Court's permission, or funds that belong to BHT/EFP under the joint venture agreements. CHFS has demonstrated that its management cannot be trusted to properly manage and account for the money. All of these funds must be locked down immediately to prevent further loss to BHT/EFP. Edwards Family Partnership and Beher Family Trust is represented by: Jim F. Spencer, Jr., Esq. WATKINS & EAGER PLLC Post Office Box 650 Jackson, Miss. 39205-0650 Tel: (601) 965-1900 Fax: (601) 965-1901 E-mail: jspencer@watkinseager.com About Community Home Financial Services Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor estimated assets and debts of $10 million to $50 million. Judge Edward Ellington presides over the case. The Debtor is represented by Jonathan Bissette, Esq., at Wells Marble & Hurst, PLLC, in Ridgeland, Mississippi. COMMUNITY HOME FIN'L: Seeks to Employ Derek Henderson as Counsel ---------------------------------------------------------------- Community Home Financial Services, Inc., asks the Bankruptcy Court for authority to retain Derek A. Henderson, Esq., as attorney and legal counsel. Mr. Henderson is to be compensated at the rate of $275 per hour plus costs. Derek A. Henderson, Esq., assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Community Home Financial Services Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor estimated assets and debts of $10 million to $50 million. Judge Edward Ellington presides over the case. The Debtor is represented by Jonathan Bissette, Esq., at Wells Marble & Hurst, PLLC, in Ridgeland, Mississippi. COMPETITIVE TECHNOLOGIES: Peter Brennan Elected Board Chairman -------------------------------------------------------------- Competitive Technologies, Inc., held its annual meeting of Directors on May 24, 2012. At the meeting, the Board of Directors unanimously elected Peter Brennan as Chairman of the Board of Directors. Rustin Howard opted not to stand for reelection as Chairman due to increased personal business responsibilities that he felt would unfairly impact his ability to perform the duties of Chairman of the Board. Also at the meeting, the Board of Directors reelected Johnnie D. Johnson as CEO and CFO of the Company. Peter Brennan, Richard D. Hornidge, Jr., Rustin Howard, Robert G. Moussa and Stan K. Yarbro, Ph.D., were reelected as the directors of the Company. At the meeting, the stockholders voted to amend Article FOURTH of the Certificate of Incorporation filed with the Office of the Secretary of State of Delaware to read as follows: "FOURTH. The total number of shares of stock of all classes of stock which the Corporation shall have authority to issue is 40,035,920 shares, of which 35,920 shares, with a par value of $25.00 each, are to be Preferred Stock, and 40,000,000 shares, with a par value of $.01 each, are to be common stock." The shareholders voted for the ratification of Mayer Hoffman McCann CPAs as the Company's independent registered public accounting firm. About Competitive Technologies Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX: CTTC) -- http://www.competitivetech.net/-- was established in 1968. The Company provides distribution, patent and technology transfer, sales and licensing services focused on the needs of its customers and matching those requirements with commercially viable product or technology solutions. Sales of the Company's Calmare(R) pain therapy medical device continue to be the major source of revenue for the Company. After auditing the 2011 results, Mayer Hoffman McCann CPAs, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred operating losses since fiscal year 2006. The Company reported a net loss of $3.59 million in 2011. The Company reported a net loss of $2.40 million on $163,993 of product sales for the five months ended Dec. 31, 2010. The Company's balance sheet at March 31, 2012, showed $4.66 million in total assets, $6.82 million in total liabilities, all current, and a $2.15 million total shareholders' deficit. CORDILLERA GOLF: Club Files for Chapter 11 Reorganization --------------------------------------------------------- Cordillera Golf Club, LLC has filed for protection under Chapter 11 of the bankruptcy code (Bankr. D. Del. Case No. 12-11893) on Tuesday. The filing is a means to reorganize the business, financially and strategically so that ownership may operate the enterprise sensibly and responsibly on an ongoing basis and return the Clubs to profitability. "We had hoped to avoid filing Chapter 11, but we were unsuccessful in reaching a mutually acceptable agreement with certain stakeholders in the community," said David Wilhelm, Chairman of the Club at Cordillera. "The process will allow the Club to operate its ongoing business while it resolves the outstanding conflicts and prepares a plan of reorganization to emerge a healthier company." Alfred H. Siegel, who served as trustee of the IndyMac estate and Chief Restructuring Officer of Circuit City, will serve as the Chief Restructuring Officer (CRO), a court-approved position, for the CGC reorganization. Siegel currently works for Crowe Horwath, LLP. "The intention of the filing is to stabilize the finances and to enable a solution with the organization's adversaries," said Christopher Celentino, Partner and Western Regional Co-chair of the Bankruptcy and Reorganizations Practice Group with Foley & Lardner LLP. "If we do not reach a settlement, we will pursue the litigation." Judge Christopher Sontchi will convene a hearing on the first day motions on June 29, 2012. It is expected that an interim financing will occur around June 29, 2012 and by July 15, 2012 it will be fully financed. Until that time, daily operations at CGC will continue uninterrupted during the Chapter 11 proceeding. Letters with that message were sent out today to employees, homeowners, property owners, club members, vendors and guests. Omni Management Group LLC is the claims and notice agent. "We have prepared a website and are providing an 800 number to allow our club members, property and home owners and all stakeholders to be informed of proceedings. The website is www.omnimgt.com/cordilleragolfclub and the number is 800.873.4214," said Mr. Wilhelm. "CGC is committed to answering any specific questions as quickly as possible when submitted through the website or on the 800 line." The Club at Cordillera is one of the largest exclusive golf communities in North America, covering 12 square miles in the heart of Colorado's Vail Valley, 120 miles west of Denver. The Club consists of three distinct 18-hole golf courses, designed respectively by Jack Nicklaus, Hale Irwin, and Tom Fazio, and a short course designed by Dave Pelz. Attorneys for the Debtor are: FOLEY & LARDNER LLP 402 West Broadway, Suite 2100 San Diego, CA 92101-3542 Tel: (619) 234-6655 - and - YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 CPI CORP: Incurs $4.6 Million Net Loss in Fiscal First Quarter -------------------------------------------------------------- CPI Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $4.64 million on $70.31 million of net sales for the 12 weeks ended April 28, 2012, compared with net income attributable to the Company of $747,000 on $88.63 million of net sales for the same period during the prior year. The Company's balance sheet at April 28, 2012, showed $90.37 million in total assets, $153.68 million in total liabilities and a $63.31 million total stockholders' deficit. On June 6, 2012, the Company entered into a Second Amendment to its existing Credit Agreement. "We appreciate the support and the spirit of partnership our lenders have shown us throughout this process," said James Abel, Interim Chief Executive Officer and President. "Yesterday's action removes a significant uncertainty from our business." Since late in fiscal 2011, the Company has been in active discussions with its lenders to obtain a short-term financial covenant compliance waiver to cure the existing defaults under its Credit Agreement. On May 23, 2012, the Company entered into a forbearance agreement with its lenders that, among other items, suspended the lenders rights and remedies under the Credit Agreement through July 21, 2012. The second amendment to the Credit Agreement, waived the existing defaults and terminated the forbearance period. In connection with the Second Amendment, the Company granted the lenders warrants to purchase an aggregate amount equal to 19 and 9/10ths percent (19.9%) of the common stock of the Company. These warrants have an exercise price of $0.40. In connection with the Second Amendment, and to alleviate near- term liquidity concerns, the Company entered into amendments to its host agreements with Walmart and Sears. These amendments allow the Company to delay certain near-term fees and lease payments until December 2012, at which time the Company will pay the delayed amounts due plus accrued interest. Additionally, the revision to the host agreement with Sears arranges for the Company to issue Sears 200,000 shares of common stock. A copy of the Form 10-Q is available for free at: http://is.gd/ADJEqP About CPI Corp. Headquartered in St. Louis, Missouri, CPI Corp. provides portrait photography services at more than 2,500 locations in the United States, Canada, Mexico and Puerto Rico and offers on location wedding photography and videography services through an extensive network of contract photographers and videographers. CPI's digital format allows its studios and on location business to offer unique posing options, creative photography selections, a wide variety of sizes and an unparalleled assortment of enhancements to customize each portrait - all for an affordable price. The Company reported a net loss of $56.86 million for the fiscal year ended Feb. 4, 2012, compared with net income of $11.90 million for the fiscal year ended Feb. 5, 2011. KPMG LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the period ended Feb. 4, 2012, noting that the Company has suffered a significant loss from operations, is not in compliance with the financial covenants under its credit agreement, and has a net capital deficiency, all of which raise substantial doubt about its ability to continue as a going concern. CPI CORP: Hires Andrew Rolfe as Chief Restructuring Officer ----------------------------------------------------------- CPI Corp. appointed Andrew Rolfe of The Keystone Group as the Company's Chief Restructuring Officer. As the Company's Chief Restructuring Officer, Mr. Rolfe will have all of the normal and customary duties, powers and responsibilities that are possessed by such an officer including, without limitation, reporting directly to the Chief Executive Officer of the Company. The role of Chief Restructuring Officer was formed pursuant to the Second Amendment to the Company's Credit Agreement effective as of June 6, 2012, with Bank of America, N.A. and the lenders parties thereto. Mr. Rolfe will have decision making authority for any and all restructuring actions that are necessary to improve the Company's opportunity to meet the targets set forth in the Second Amendment to the Credit Agreement. About CPI Corp Headquartered in St. Louis, Missouri, CPI Corp. provides portrait photography services at more than 2,500 locations in the United States, Canada, Mexico and Puerto Rico and offers on location wedding photography and videography services through an extensive network of contract photographers and videographers. CPI's digital format allows its studios and on location business to offer unique posing options, creative photography selections, a wide variety of sizes and an unparalleled assortment of enhancements to customize each portrait - all for an affordable price. The Company reported a net loss of $56.86 million for the fiscal year ended Feb. 4, 2012, compared with net income of $11.90 million for the fiscal year ended Feb. 5, 2011. The Company's balance sheet at Feb. 4, 2012, showed $94.53 million in total assets, $153.34 million in total liabilities and a $58.81 million total stockholders' deficit. KPMG LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the period ended Feb. 4, 2012, noting that the Company has suffered a significant loss from operations, is not in compliance with the financial covenants under its credit agreement, and has a net capital deficiency, all of which raise substantial doubt about its ability to continue as a going concern. CROWN MEDIA: Moody's Raises Speculative-Grade Liquidity Rating -------------------------------------------------------------- Moody's Investors Service upgraded Crown Media Holdings, Inc.'s speculative-grade liquidity rating to SGL-2 from SGL-3. The upgrade reflects the prepayment of required amortization through the July 2018 maturity of the term loan and considerable cushion built within its financial maintenance covenants due to growth in advertising revenue and EBITDA. Moody's anticipates Crown Media will continue to generate modest free cash flow and the company gains additional liquidity flexibility with the prepayment that satisfies all required debt maturities (aside from the excess cash flow sweep and roughly $1 million of annual capital lease payments) prior to the term loan maturity. Crown Media's B2 Corporate Family Rating (CFR) and stable rating outlook are not affected. Moody's updated Crown Media's loss given default assessments to reflect the current debt mix. Upgrades: Issuer: Crown Media Holdings, Inc. Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 LGD Updates: Senior Secured Bank Credit Facility (Term Loan), Changed to LGD2 - 14% from LGD2 - 15% (no change to Ba2 rating) Senior Unsecured Regular Bond/Debenture, Changed to LGD4 - 69% from LGD4 - 61% (no change to B3 rating) Ratings Rationale Crown Media's B2 CFR reflects the company's small size and niche market position among cable network operators, concentration in two Hallmark-branded channels, reliance on licensed third party content for a majority of its programming, and high leverage. The company generates a much higher percentage of its revenue from cyclical advertising (77% LTM 3/31/12) as compared to other cable network operators. The decline in audience ratings at the Hallmark Channel since 2007 is a credit concern. A portion of this deterioration is attributable to the shift of some programming to the Hallmark Movie Channel, which was launched in 2004 and became Nielsen-rated in April 2010. However, Moody's also believes meaningful reliance on syndicated reruns of programming that have been off network for a number of years contributes to the ratings performance and results in a relatively high median-aged audience that is less attractive to advertisers. Crown Media is favorably positioned within the B2 CFR based on its recent strong growth performance, and debt and leverage reduction since the June 2011 refinancing. However, the niche market position, risk from a more uncertain economic environment on Crown Media's advertising-heavy model, and the company's expected ramp up in programming investment to support its first foray into prime-time scripted shows as well as other programming initiatives currently limit rating upside. Crown Media's SGL-2 speculative-grade liquidity rating reflects good coverage of cash obligations from existing cash ($12 million as of 3/31/12), roughly $20 million of projected free cash flow over the next 12 months, and a sizable cushion under the credit facility covenants. As a result of Crown Media's $18 million term loan prepayment in the first quarter of 2012, the company has no required debt maturities (aside from the excess cash flow sweep and roughly $1 million of annual capital lease payments) prior to the July 2018 maturity of the term loan. Moody's believes Crown Media's cash and projected free cash flow are sufficient to fund the roughly $5 million of remaining payments due through December 1, 2013 related to the RHEID litigation. Programming payments are Crown Media's primary cash outflow and Moody's believes the company would moderate its programming spending to preserve positive free cash flow if the advertising market were to weaken meaningfully. Crown Media has a more than 40% EBITDA cushion within its financial maintenance covenants. Moody's expects the EBITDA cushion to remain above 30%, providing Crown Media flexibility to manage within the covenants should the advertising market contract. The stable rating outlook reflects Moody's view that the U.S. economy will continue to grow modestly, but also that economic uncertainty is increasing and this could negatively affect Crown Media given its advertising-dependent model. Moody's anticipates Crown Media's commercial arrangements and relationship with majority owner Hallmark Cards, Inc. (Hallmark; not rated by Moody's) will not change materially, and that Crown Media will continue to reinvest in programming. Moody's projects Crown Media to generate modest free cash flow, steadily reduce debt to increase financial flexibility, and maintain a good liquidity position. Crown Media's ratings could be downgraded if the terms of its commercial arrangements or relationship with Hallmark were to change meaningfully, debt-to-EBITDA leverage exceeds 6.25x, or free cash flow-to-debt is below 2%. In addition, a deterioration in Crown Media's liquidity position including a decline in cash flow generation or the margin of compliance with covenants could also lead to a downgrade. An upgrade could occur if the company reinvests in programming to stabilize/improve viewership ratings, generates profitable revenue growth, reduces debt, sustains debt-to-EBITDA below 5x, and sustains free cash flow-to-debt above 6%. The company would also need to maintain a good liquidity position. More explicit credit support from Hallmark could also result in an upgrade if Moody's viewed Hallmark as having the capacity and willingness to favorably affect Crown Media's financial position. The principal methodology used in rating Crown Media was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Crown Media, headquartered in Studio City, CA is a media distribution company with revenue of $334 million for the last twelve months-ended March 31, 2012. The company supplies television programming to cable, direct broadcast satellite and telecommunications service providers throughout the United States via the Hallmark Channel and the Hallmark Movie Channel. Privately-held Hallmark is Crown Media's 90% shareholder. CRYOPORT INC: R. Stefanovich Replaces S. Wasserman as PEO --------------------------------------------------------- Stephen E. Wasserman resigned as the principal executive officer of CryoPort, Inc., effective June 15, 2012. Mr. Wasserman will remain the Chairman of the Board of Directors of the Company. Also effective June 15, 2012, the Company appointed Mr. Robert S. Stefanovich, who is the Company's current Chief Financial Officer, to replace Mr. Wasserman as the Company's principal executive officer. The position of principal executive officer is still intended to be temporary until a new Chief Executive Officer is appointed. As noted in the Company's Current Report on Form 8-K filed on April 6, 2012, the Board of Directors has formed an Office of the Chief Executive comprised of independent directors who have jointly assumed day-to-day management responsibilities of the Company on an interim basis, while the board searches for a successor Chief Executive Officer. About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. KMJ Corbin & Company LLP expressed substantial doubt about CryoPort's ability to continue as a going concern, following the Company's fiscal 2009 results. The firm noted that the Company has incurred recurring losses and negative cash flows from operations since inception. The Company reported a net loss of $6.16 million on $378,700 of net revenues for the nine months ended Dec. 31, 2011, compared with a net loss of $4.29 million on $375,400 of net revenues for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $4.22 million in total assets, $3.60 million in total liabilities, and $620,900 in total stockholders' equity. DALLAS ROADSTER: Can Hire Quilling as Expert for Fee Dispute ------------------------------------------------------------ The Bankruptcy Court authorized Dallas Roadster Ltd. to employ Michael J. Quilling of Quilling, Selander, Lownds, Winslett & Moser, P.C., to provide expert witness services in connection with a pending contested application. On Nov. 16, 2011, Texas Capital Bank, N.A., filed a suit against Dallas Roadster Ltd. in district court which sought the appointment of a receiver. On the same date, an order was entered in the Receivership Action appointing Patrick Michaels of P.E. Michaels Consulting as the receiver. The Receiver has since filed a motion for payment of administrative expenses on Feb. 15, 2012, and the Debtors filed a detailed objection to the Application. The Debtors have selected Mr. Quilling based upon his expertise as a state court appointed receiver in numerous receivership. The Debtors propose to pay Mr. Quilling at the hourly rate of $350. To the best of the Debtors' knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. Michael S. Mitchell, Esq., and Robert T. DeMarco, Esq., at DeMarco-Mitchell, PLLC, serve as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DVS SHOE: Sequential Brands Buys Biz for $8.55 Million ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that DVS Shoe Co. held an auction for the business on June 18 where the winning bid of $8.55 million more than doubled the initial offer of $4 million. The successful buyer is Sequential Brands Group Inc. from Los Angeles. The bankruptcy court approved the sale on June 22 after the price rose at auction. The secured lender Bank of America NA was owed $6.5 million on a claim secured by all assets. When it filed for bankruptcy, the Debtor had a deal to sell its assets for $4 million to DVS Footwear Inc. DVS Shoe intends to complete the sale of assets before the end of June. About DVS Shoe Westminster, California-based DVS Shoe Co., Inc., a designer, manufacturer and marketer of athletic shoes, filed a bare- bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-16209) on May 17, 2012, in Santa Ana. The Debtor estimated assets and debts of $10 million to $50 million. Judge Catherine E. Bauer presides over the case. Robert E. Opera, Esq., at Winthrop Couchot PC, serves as the Debtor's counsel. The petition was signed by Kevin L. Dunlap, chairman of the board. Bank of America N.A., the primary and senior secured creditor of DVS Shoe Co., is owed in excess of $6.5 million under a revolving working capital loan. BofA is represented in the case by Jennifer K. Brooks, Esq., and William B. Freeman, Esq., at Pillsbury Winthrop Shaw Pittman LLP. EAST FREEMONT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: East Freemont II Limited Partnership 380 Linden Street Reno, NV 89502 Bankruptcy Case No.: 12-51453 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Alan R. Smith, Esq. THE LAW OFFICES OF ALAN R. SMITH 505 Ridge St. Reno, NV 89501 Tel: (775) 786-4579 E-mail: mail@asmithlaw.com Scheduled Assets: $7,384,889 Scheduled Liabilities: $14,649,592 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-51453.pdf The petition was signed by Robert F. Nielsen, general partner. EATON MOERY: OK'd to Renew Secured Debt to First National Bank -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Arkansas authorized Eaton Moery Environmental Services, Inc., to renew a secured debt to First National Bank of Wynne. The Debtor related that the bank has requested a Court order authorizing Debtor to renew the note. The Debtor's outstanding secured indebtedness to First National Bank of Wynne is $225,000. The debt is represented by a promissory note in the name of the Debtor and is secured by a Certificate of Deposit in the sum of $100,000 owned by Debtor and bank stock owned by C.B. Moery, Jr., a principal of the Debtor. The note related to a bonding requirement in favor of the State of Arkansas which is required to be in place for the Debtor to continue conducting its waste disposal business. About Eaton Moery Environmental Services Wynne, Arkansas-based Eaton Moery Environmental Services, Inc., dba Delta Environmental Services, Inc., filed for Chapter 11 bankruptcy protection (Bankr. E.D. Ark. Case No. 10-14713) on June 30, 2010. James F. Dowden, P.A., serves as the Debtor's bankruptcy counsel. The Company estimated assets at $10 million to $50 million and liabilities at $1 million to $10 million. EMMIS COMMUNICATIONS: Moody's Raises CFR to 'B3'; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service upgraded Emmis Communications Corporation's Corporate Family Rating (CFR) to B3 from Caa2 and Probability-of-Default Rating (PDR) to B3 from Caa3. Moody's also upgraded ratings on Emmis Operating Company's sr secured 1st lien revolver due 2012 and sr secured 1st lien term loan due 2013 and 2014 each to B2, LGD3 -- 39% from Caa2, LGD3 -- 35%. Moody's also upgraded Emmis' Series A Cumulative Preferred Stock to Caa2, LGD6 -- 99% from Ca, LGD6 -- 98% and affirmed the SGL--3 Speculative Grade Liquidity (SGL) Rating. The upgrades reflect meaningful debt reduction most recently with cash proceeds from the securitization of KissFM's LMA (Local Programming and Marketing Agreement) payment stream resulting in improved credit metrics. These actions conclude Moody's review for upgrade of the company's ratings, initiated on July 14, 2011. The rating outlook was changed to stable from ratings under review. Upgraded: Issuer: Emmis Communications Corporation Corporate Family Rating: Upgraded to B3 from Caa2 Probability of Default Rating: Upgraded to B3 from Caa3 Series A Cumulative Preferred Stock ($47 million outstanding): Upgraded to Caa2, LGD6 -- 99% from Ca, LGD6 -- 98% Affirmed: Speculative Grade Liquidity (SGL) Rating: Affirmed SGL--3 Outlook Actions: Outlook, changed to stable from ratings under review Upgraded: Issuer: Emmis Operating Company Sr secured 1st lien revolver due 2012: Upgraded to B2, LGD3 -- 39% from Caa2, LGD3 -- 35% Sr secured 1st lien term loan due 2013 ($61.6 million outstanding): Upgraded to B2, LGD3 -- 39% from Caa2, LGD3 -- 35% Sr secured 1st lien term loan due 2014 ($77.2 million outstanding): Upgraded to B2, LGD3 -- 39% from Caa2, LGD3 -- 35% Ratings Rationale The B3 Corporate Family Rating (CFR) reflects Emmis' high debt-to- EBITDA leverage estimated at 7.2x for LTM May 31, 2012 including Moody's standard adjustments (5.9x excluding preferred shares) and pro forma for the revolver and term loan repayments with net proceeds from the LMA transaction with ESPN Radio. Leverage ratios have improved significantly compared to 11.8x prior to sale of majority interest in three stations to Merlin Media/GTCR and prior to discounted preferred share redemptions. Looking forward, Moody's expects leverage to improve to roughly 6.8x over the next 12 months (5.5x excluding preferred shares) due largely to EBITDA growth. For the 12 months ended February 2012, revenues for continuing domestic radio operations grew 0.4% versus 0.8% in the company's five measured markets. Looking forward, Moody's expects broadcast revenues will increase in the low single digits through the end of calendar 2012 with heightened political advertising demand contributing to top line growth. Moody's expects reported EBITDA to remain above $28 million over the rating horizon with low to mid-single digit percentage free cash flow-to-debt ratios. Radio operations generate good BCF margins of approximately 30%; however, reported consolidated EBITDA margins of 14% to 15% are below broadcasting peers reflecting the negative impact of much lower margins from Emmis' publishing group. Although the company has been paying down debt, the highly levered capital structure continues to pose refinancing and liquidity risks. "We believe Emmis needs to further reduce leverage to partially offset risks related to the maturing demand for radio advertising, media fragmentation and potential for increased competition within its radio markets. Furthermore, Emmis has geographic concentration risk and relies on Los Angeles for approximately 40% of its domestic radio BCF with another 40% of radio BCF generated by New York and Austin," stated Carl Salas, Moody's Vice President and Senior Analyst. Management states its target reported debt-to- EBITDA leverage is between 3.0x and 4.0x (approximately 4.8x to 5.6x including Moody's standard adjustments and treating the preferred shares as 100% debt), and ratings incorporate Moody's expectation that the company will continue to reduce debt-to- EBITDA ratios consistent with its goal. The stable outlook reflects Moody's expectation that the company will track its operating plan over the rating horizon with debt- to-EBITDA ratios remaining below 7.5x (including Moody's standard adjustments) and with a minimum 3% free cash flow-to-debt ratios. The outlook assumes a refinancing of near term maturities and maintaining adequate liquidity. The outlook does not incorporate cash dividends on the preferred shares nor a near term resolution of the preferred share structure with minority holders. Given the sale of KXOS-FM in Los Angeles for $85.5 million to Grupo Radio Centro is pending FCC approval, Moody's also assumes Emmis continues to operate KXOS-FM as an LMA. Ratings could be downgraded if debt-to-EBITDA ratios are sustained above 7.5x (including Moody's standard adjustments, 6.30x excluding preferred shares) due to underperformance in one or more key markets or due to debt financed acquisitions. Ratings could also be downgraded if liquidity were to deteriorate including reduction in EBITDA cushion to financial covenants. Ratings could be upgraded if debt-to-EBITDA ratios are sustained below 5.5x with free cash flow-to-debt ratios of more than 6%. The company would also need to successfully refinance near term maturities. Recent Events The company has taken a series of steps to reduce debt balances and outstanding preferred shares while positioning itself for a refinancing of near term debt maturities. In April 2012, Emmis entered into a Local Programming and Marketing Agreement (LMA) with ESPN Radio to provide sports programming and to sell advertising on New York's 98.7FM ("Kiss FM"). The LMA ends in 2024 and Emmis securitized the 12-year LMA payment stream for an $82.5 million upfront payment. The company also agreed to sell its intellectual property rights of KissFM, to the pending owners of urban format rival WBLS-FM and WLIB-AM for approximately $10 million. A portion of the combined net proceeds will be used to repay $84 million of secured debt including all outstandings under its revolver. The company amended its credit agreement and Zell note agreement to permit the transactions. In addition, the amendment reduced the minimum EBITDA requirement to $24 million from $25 million and reduced the revolver commitment to $10 million from $20 million. In November 2011, Emmis entered into an agreement with Zell Credit Opportunities Master Fund, L.P. for up to $35 million of unsecured notes due February 2015 with accruing, non-cash interest of 22.95%. Roughly $32 million was funded to purchase 1.9 million shares of its 6.25% Series A Cumulative Preferred Stock at a discount, leaving 0.9 million shares outstanding. In September 2011, Emmis sold a 75% controlling interest in three radio stations to Merlin Media/GTCR generating net cash proceeds of approximately $120 million, after taxes, fees and related expenses. Proceeds were used to prepay term loan balances. There is the potential for additional near term debt reduction as the company has offered its LMA partner, Grupo Radio Centro, a discounted $85.5 million price for KXOS-FM in Los Angeles. Emmis has the right to put the station to Grupo Radio Centro in 2016 for $110 million. Until an agreement is reached, Moody's does not incorporate near term debt reduction from an earlier sale of KXOS- FM in Moody's rating assessment. The principal methodology used in rating Emmis Communications Corporation was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Indianapolis, IN, Emmis Communications Corporation owns or operates 16 FM and two AM radio stations (excluding two FM stations operated by 3rd parties under LMA's) serving New York, Los Angeles, St. Louis, Austin (50.1% controlling interest), Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes seven regional or specialty magazines. Jeffrey Smulyan, Chairman, CEO and President, owns roughly 13% of the economic interest in the company, and controls approximately 64% of voting power through a dual class share structure. Revenue for the twelve months ended February 29, 2012 was approximately $226 million pro forma for announced transactions. FILENE'S BASEMENT: Syms, Creditors Schedule Fight Over Plans ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Syms Corp. and the unsecured creditors' committee sharpened their knives in anticipation of a July 9 hearing where each side will likely blame the other for being unable to agree upon a Chapter 11 plan everyone can support. Syms, according to the report, filed papers at the end of last week so the bankruptcy judge can approve disclosure material explaining the merits of the company-equity plan. If the judge goes along with the schedule, there will be a confirmation hearing on Aug. 29 for approval of the plan. The report recounts that in May, Syms, along with subsidiary Filene's Basement LLC, filed a proposed reorganization plan in conjunction with the official shareholders' committee. The creditors said in court papers filed last week that the company- equity plan "will be soundly rejected by creditors." According to the report, the creditors' committee, opposing the company's plan, filed papers last week seeking permission to file a competing Chapter 11 plan. The creditors' motion for authority to propose their own plan also is on the July 9 calendar. In addition, July 9 will be a hearing on Syms's motion for an extension of the company's exclusive right to propose a plan. This month the bankruptcy judge in Delaware tapped a judge in New York to be a mediator, attempting to bring peace between the warring factions. Syms's plan calls for eventually paying creditors in full, with stockholders retaining the equity and eventual surplus. Creditors insist on being paid more quickly, with interest. Creditors fault the company plan for forcing them to wait as many as four years for their money while Marcy Syms, the controlling shareholder, receives a complete release from claims and sells her stock to other stockholders. Creditors say the 17 parcels of real estate could be sold in 18 months maximum. The creditors' panel said the company has received $100 million in unsolicited offers for the properties. About Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. FIRST STREET: Can Hire Michael Brooks as Litigation Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California authorized First Street Holdings NV LLC, et al., to employ the Law Offices of Michael Brooks Carroll as special litigation counsel to prosecute claims against MS Mission Holdings, LLC, and its predecessor in interest, CapitalSource Finance LLC. The firm will perform services for the Debtors, based on these hourly fees: Michael Brooks Carroll $400 Associate Attorneys $280 Law Clerks & Legal Assistants $100 Case Clerks $50 About First Street First Street Holdings NV, LLC, and Lydian SF Holdings, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case Nos. 11-49300 and 11-49301) on Aug. 30, 2011, before Judge Roger L. Efremsky. Iain A. MacDonald, Esq., and Reno F.R. Fernandez III, Esq., at MacDonald and Associates, in San Francisco, serve as the Debtor's bankruptcy counsel. Debtor-affiliates 78 First Street, LLC, 88 First Street LLC, 518 Mission, LLC, First/Jessie LLC, JP Capital, LLC, Peninsula Towers LLC, and Sixty-Two First Street LLC (Bankr. N.D. Calif. Case Nos. 11-70224, 11-70228,, 11-70229, 11-70231, 11-70232, 11-70233 and 11-70234) filed for Chapter 11 bankruptcy on Sept. 23, 2011. Colliers Parrish International Inc. serves as appraiser to value certain real properties and other assets held by the Debtors. The cases are jointly administered under Lead Case No. 11-49300. Investor David Choo is associated with CMR Capital, LLC, the manager of the Debtors. Debtors First Street Holdings NV, LLC, Lydian SF Holdings, LLC, 78 First Street, LLC, 88 First Street, LLC, 518 Mission, LLC, First/Jessie, LLC, Sixty-two First Street, LLC, Peninsula Towers, LLC, and JP Capital, LLC; and David Choo, individually, have filed a combined joint plan and disclosure statement with the Bankruptcy Court. The Joint Plan, dated Nov. 29, 2011, provides for the payment of all of their secured, administrative, priority and general unsecured claims in full. Interests in the Debtors will be retained without modification. FREDERICK'S OF HOLLYWOOD: M. Tokarz Has 36.3% Stake at May 23 ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Michael T. Tokarz and his affiliates disclosed that, as of May 23, 2012, they beneficially own 16,415,204 shares of common stock of Frederick's of Hollywood Group Inc. representing 36.3% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/G76dtB About Frederick's of Hollywood Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) -- http://www.fredericks.com/-- through its subsidiaries, sells women's intimate apparel, swimwear and related products under its proprietary Frederick's of Hollywood brand through 122 specialty retail stores, a world-famous catalog and an online shop. Frederick's of Hollywood sought bankruptcy in July 10, 2000. On Dec. 18, 2002, the court approved the company's plan of reorganization, which became effective on Jan. 7, 2003, with the closing of the Wells Fargo Retail Finance exit financing facility. GENERAL AUTO: Court OKs Apex Real as Leasing Agent -------------------------------------------------- General Auto Building, LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Apex Real Estate Partners as leasing agent. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtor will pay the firm on a commission-basis according to this schedule: (1) Office/Commercial Property Gross Leases: 5% of the total rental for the first 5 years or any fraction thereof, plus 2.5% of the total rental for the next 5 years of the term. If transaction is represented by an outside broker, a 7.5% commission will be paid: -- 5% to the Tenant broker of the gross aggregate rent of the first 5 years, -- 2.5% to the Landlord broker of the gross aggregate rent of the first 5 years; -- 2.5% to the Tenant broker of the gross aggregate rent for the next 5 years of the term, and -- 1.25% to the Landlord broker of the gross aggregate rent for the next 5 years of the term. Net Leases: (Where Tenant pays Operating Expenses including Real Estate Taxes) 6 % of the total rental for the first 5 years or any fraction thereof, plus 3% of the total rental for the next 5 years of the term. If transaction is represented by an outside broker, a 9% commission will be paid as: -- 6% to the Tenant broker of the gross aggregate rent to the first 5 years, -- 3% to the Landlord broker of the gross aggregate rent for the first 5 years, -- 3% to the Tenant broker of the gross aggregate rent for the next 5 years of the term, -- 1.5% to the Landlord broker of the gross aggregate rent for the next 5 years of the term. Apex's fee for a month-to-monthe tenancy is one average month's rental with a minimum fee of $1,000 -- so long as the original term of the lease was 12 months or greater. Otherwise no fee shall be pail until after 1 year of month-to-month occupancy. Renewal: If broker is actively involved in the negotiations of a renewal -- fees shall be 50% of the amount as outlined above. Automatic renewals shall not apply. Sale: This is an exclusive listing and should a sale be made by whomever during the term of the Agreement, or as a result of negotiations originating during such term, the Fee shall be payable to Apex. The fee payment shall be calculated on the basis of 4% of the total gross selling price. Apex shall maintain a registration list of all properly qualified prospects and will allow other licensed Real Estate broker to seek and obtain registration of their qualified prospects. Apex shall be solely responsible for any Fee payable to any other licensed Real Estate Brokers. About General Auto General Auto Building, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor is an Oregon limited liability company formed in 2007 with its principal place of business in Spokane, Washington. It was formed to renovate and lease its namesake commercial property located at 411 NW Park Avenue, Portland, Oregon. As of the Petition date, the Debtor has developed virtually all of the General Automotive Building and has leased approximately 98% of the building's space to retail and commercial tenants. The Debtor continues to seek tenants for the remaining spaces. Judge Elizabeth L. Perris presides over the case. Albert N. Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve as the Debtor's counsel. The Debtor has scheduled $10,010,620 in total assets and $13,519,354 in total liabilities. The U.S. Trustee was unable to appoint an official committee of unsecured creditors in the case. GEOEYE INC: Moody's Lowers Corporate Family Rating to 'B2' ---------------------------------------------------------- Moody's Investors Service downgraded GeoEye Inc.'s corporate family rating ("CFR") and the probability of default rating ("PDR"), each to B2 from B1, following the company's announcement that the National Geospatial-Intelligence Agency ("NGA") is seeking to amend the terms of the Service Level Agreement ("SLA") with the company. In addition, Moody's maintains the ratings on review for downgrade, given the uncertainty over the future contractual status with the US government. As part of the rating action, Moody's downgraded the instrument ratings on the company's 8.625% Senior Secured 2nd Lien Notes due 2016 to Caa1 (LGD5-88%) from B3 (LGD5-89%) and on the 9.625% Senior Secured Notes due 2015 to B1 (LGD3-37%) from Ba3 (LGD3- 38%). In addition, due to the uncertainty of the appropriations, Moody's downgraded the company's liquidity rating to SGL-4 from SGL-3, indicating weak liquidity as the company's may use a significant portion of its cash over the next 12 months to continue the construction of GeoEye-2. As the company does not have an external credit facility, in Moody's opinion, amid questions surrounding the continuing support from the US government, it may need to cut operating expenses to continue the construction of GeoEye-2 according to the original timeline. Moody's also notes that the company was able to stretch the deployment schedule of GeoEye-1 satellite when it faced liquidity issues in the past. Issuer: GeoEye Inc. Downgrades: Probability of Default Rating, Downgraded to B2 from B1; Placed Under Review for further Possible Downgrade Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Corporate Family Rating, Downgraded to B2 from B1; Placed Under Review for further Possible Downgrade US$400M 9.625% Senior Secured Regular Bond/Debenture, Downgraded to B1 (LGD3, 37%) from Ba3 (LGD3, 38%); Placed Under Review for further Possible Downgrade US$125M 8.625% Senior Secured Regular Bond/Debenture, Downgraded to Caa1(LGD5, 88%) from B3 (LGD5, 89%); Placed Under Review for further Possible Downgrade Outlook Actions: Outlook, Changed To Rating Under Review From Negative Ratings Rationale The B2 CFR reflects the recalibration of the company's credit risk profile in light of possible material cutbacks to the contractual relationship between GeoEye and NGA. As GeoEye in aggregate, receives over 65% of its revenues from the US Government, replacing that revenue stream with other customers may stress the financial profile in the interim. The rating review will focus on the company's construction and deployment plans of GeoEye-2 in the face of reduced support from the US government, its ability to diversify its revenue stream away from the US government, and if needed, ability to obtain external financing to complete GeoEye-2. The NGA alerted the company that it is unlikely to extend the SLA for the next contract year starting September 1, 2012 through August 31, 2013, but instead proposes a three month option which the NGA intends to exercise providing for service revenue to the company from September 1, 2012 through November 30, 2012 of $39.75 million, and a further nine month option for the remainder of the Contract Year through August 31, 2013 providing for service revenue to the Company, based upon the availability of funding, of $119.25. More importantly, The NGA is electing not to obligate additional funding under its cost share agreement with the company for the development and launch of GeoEye- 2, scheduled for launch in the first half of 2013. NGA is proposing new milestones for payment of the remaining $70 million, three of which would occur before the launch of GeoEye-2, and no additional cost share funding would be provided. In Moody's view, a material curtailment in support from NGA for the ongoing construction of GeoEye-2 will force the company to cut expenses or to slow down the construction of GeoEye-2. In August, 2010, GeoEye received a $2.8 billion NGA award in a series of ten one-year contracts, which includes an SLA for $150 million per year for satellite imagery, increasing by $183 million to $333.4 million per year when the company's GeoEye-2 satellite is expected to become operational in the second half of 2013. NGA had also agreed provide $337 million in cost share payments towards the build and launch of GeoEye-2. As per most recent communication to the company, NGA is looking to cut back the cost share payments to a total of $181 million, The company expects to receive the first cost-share installment of $111 million by early July 2012. What Could Change the Rating - Up Upward rating momentum will occur if the US budget deliberations result in the confirmation of the expected revenue streams and at minimum $181 million in cost share reimbursement for GeoEye-2, which carries the company over to a successful launch and deployment of the new satellite. Additionally, ratings may be raised if the company diversifies its revenue stream away from the US government, and the resulting cash flow augments the company's liquidity. What Could Change the Rating - Down The rating downgrades would be driven by unfavorable DoD budget outcome which would significantly curtail US government revenues, and if the company is unable to replenish those revenues from other customers. Given the high technology risk endemic in the company's business model, ratings would come under pressure if there is a significant impairment of assets in space that is not covered by insurance. The principal methodology used in rating GeoEye Inc. was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Dulles, VA, GeoEye, Inc. is a commercial satellite company (formed as a result of ORBIMAGE's January, 2006 acquisition of Space Imaging) operating two earth imaging satellites -- GeoEye-1 and IKONOS. The company also owns and operates a network of ground stations and provides aerial imagery services. The company has an extensive archive of satellite imagery, and has advanced geospatial imagery processing capabilities. GeoEye is one of two US based companies (along with DigitalGlobe Inc) operating in this industry, and the larger of the two by revenues. GLC LIMITED: Ex-Football Coach Agrees to Settlement --------------------------------------------------- The Associated Press, citing court documents, reports that former University of Georgia football coach Jim Donnan has agreed to a proposed bankruptcy settlement with retail liquidation company GLC Limited and investors who say the ex-coach owes them $40 million lost in a Ponzi scheme. According to the report, the deal would require Mr. Donnan to repay $7.35 million to GLC, which says it's owed more than $13 million by the ex-coach. Mr. Donnan would also agree to repay 80% of the losses of investors he recruited for GLC. Investors had filed claims saying Mr. Donnan owed them about $27 million. The report relates a federal bankruptcy judge in Ohio signed off on the settlement last week. The agreement still needs approval of a judge in Georgia, where Mr. Donnan and his wife filed for Chapter 11 protection last July. A hearing is scheduled for July 19, 2012. The report says GLC's owners accused Mr. Donnan of playing an active role in the creation and maintenance of the Ponzi scheme that drove the company into bankruptcy. Mr. Donnan has insisted he was not a part of any scheme. He has not been charged with any criminal wrongdoing. About GLC Limited Proctorville, Ohio-based GLC Limited is a retail liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. It distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. It owns four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief restructuring officer, signed the Chapter 11 petition. The Debtor disclosed $18,231,434 in assets and $28,095,356 in liabilities as of the Chapter 11 filing. Ronald E. Gold, Esq., and Joseph B. Wells, Esq., at Frost Brown Todd LLC, serve as the Debtor's bankruptcy counsel. James R. Burritt is the Chief Restructuring Officer and Leon C. Ebbert, PC, CPA, has been tapped as accountants. The Official Committee of Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case has tapped Morris, Manning & Martin, LLP, as counsel. GOLDEN TEMPLE: Plan Filing Deadline Temporarily Moved to July 19 ---------------------------------------------------------------- EWTC Management, LLC, fka Golden Temple Management, LLC, asks the Court to extend its exclusive period to file a Chapter 11 plan through Sept. 21, 2012, and the period to obtain acceptance of the Chapter 11 plan to Nov. 20, 2012. A hearing will be held on July 19, 2012, at 10:00 a.m. to consider approval of the extension request. The exclusivity period is extended until July 19 subject to further order of the Court. About Golden Temple Management EWTC Management, LLC, fka Golden Temple Management LLC, the management company of Golden Temple of Oregon LLC, the makers of Yogi Tea, filed for Chapter 11 protection (Bankr. D. Ore. Case No. 12-60536) on Feb. 18, 2012. Winston & Cashatt, Lawyers, P.S., serves as its lead Chapter 11 counsel. Albert & Tweet, LLP, serves as its local counsel. The Debtor's primary asset is its 90% ownership of Golden Temple of Oregon LLC, which has its principal assets in Springfield, Oregon. The Debtor and GTO are parties to a number of suits involving monetary and equitable relief sought against them as well as litigation related to the intellectual property of the companies, notably the Golden Temple and Yogi Tea brands. The Register-Guard reports that Golden Temple CEO Kartar Singh Khalsa and the company's management group filed for Chapter 11 in anticipation of large claims being filed against them after they lost a lawsuit in December 2011. Multnomah County Circuit Judge Leslie Roberts ruled that Mr. Khalsa breached his fiduciary duties to the Sikh religious community founded by the late Yogi Bhajan and that he and other Golden Temple Management members were unjustly enriched, when they gained ownership of 90% of the company in 2007. GTO itself is not a party to the bankruptcy. The Debtor disclosed assets of $49,077,498 and liabilities of $10,434,000. GTO is valued at $40 million. The Debtor has 100% control of GTO and share in annual profits, valued at $4 million. Contingent and unliquidated claims of the Debtor include a holdback on the sale of a business division to Hearthside Food Solutions, LLC, valued at $5 million, and potential malpractice claims against Schwabe Williamson & Wyatt and other professionals. Golden Temple sold its cereal division in May 2010 for $71 million to Hearthside. Bankruptcy Judge Thomas M. Renn, who presides over the Chapter 11 case, appointed U.S. District Judge Michael Hogan as mediator between the Debtor and parties involved in litigation claims. Judge Hogan had been conducting mediation and a mediation session was scheduled for Feb. 22-24, 2012, in Eugene, Oregon. The Debtor's counsel said a single global mediation under the authority of the Bankruptcy Court would have the advantage of getting all parties and all claimants under one umbrella and serve to protect the very assets to which multiple parties lay claim. The Debtor said the mediation sessions would allow it to craft a reorganization plan that will satisfy disparate groups of creditors and provide a dividend to unsecured creditors. Kartar Singh Khalsa filed a separate Chapter 11 petition (Bankr. D. Ore. Case No. 12-60538) on Feb. 18, 2012. He disclosed assets of $30.95 million and liabilities of $1.27 million. GOLDEN TEMPLE: Bankruptcy Court Approves Myers as Receiver ---------------------------------------------------------- The Bankruptcy Court authorized and directed Myers and Co., Consultants LLC, and its agents to carry out the directions of the Circuit Court in its "Order Appointing Fiduciary." EWTC Management, LLC, and Kartar Singh Khalsa are, among others, defendants in consolidated actions before the Circuit Court of the State of Oregon for Multnomah County entitled Sardani Guru Amrit Kaur Khalsa, et al v. Kartar Singh Khalsa, et al, No. 0909-13281, and State of Oregon v. Siri Singh Sahib Corporation, et al, No. 1010-14518. The Debtors removed the case to the Bankruptcy Court. The Bankruptcy Court allowed plaintiffs' motion to remand the case to the Circuit Court, finding that the state court should proceed in order to liquidate the plaintiff's claims against the Debtors. To effectuate the order remanding the case, the Bankruptcy Court entered an order modifying the automatic stay under Section 362 of the Bankruptcy Code to allow the Circuit Court Case to proceed. After the stay was modified, the Circuit Court entered, on May 31, 2012, a "Corrected Remedies Order," followed on June 6 by an "Order Appointing Fiduciary". The Orders appoint Myers and Co., Consultants LLC as "special fiduciary," or receiver, and instructed the receiver to take possession or control of certain assets. A substantial portion -- but not necessarily all -- of the assets described in the Order Appointing Fiduciary are property of one the estates created by the filing of the petitions for relief by the Debtors. About Golden Temple Management EWTC Management, LLC, fka Golden Temple Management LLC, the management company of Golden Temple of Oregon LLC, the makers of Yogi Tea, filed for Chapter 11 protection (Bankr. D. Ore. Case No. 12-60536) on Feb. 18, 2012. Winston & Cashatt, Lawyers, P.S., serves as its lead Chapter 11 counsel. Albert & Tweet, LLP, serves as its local counsel. The Debtor's primary asset is its 90% ownership of Golden Temple of Oregon LLC, which has its principal assets in Springfield, Oregon. The Debtor and GTO are parties to a number of suits involving monetary and equitable relief sought against them as well as litigation related to the intellectual property of the companies, notably the Golden Temple and Yogi Tea brands. The Register-Guard reports that Golden Temple CEO Kartar Singh Khalsa and the company's management group filed for Chapter 11 in anticipation of large claims being filed against them after they lost a lawsuit in December 2011. Multnomah County Circuit Judge Leslie Roberts ruled that Mr. Khalsa breached his fiduciary duties to the Sikh religious community founded by the late Yogi Bhajan and that he and other Golden Temple Management members were unjustly enriched, when they gained ownership of 90% of the company in 2007. GTO itself is not a party to the bankruptcy. The Debtor disclosed assets of $49,077,498 and liabilities of $10,434,000. GTO is valued at $40 million. The Debtor has 100% control of GTO and share in annual profits, valued at $4 million. Contingent and unliquidated claims of the Debtor include a holdback on the sale of a business division to Hearthside Food Solutions, LLC, valued at $5 million, and potential malpractice claims against Schwabe Williamson & Wyatt and other professionals. Golden Temple sold its cereal division in May 2010 for $71 million to Hearthside. Bankruptcy Judge Thomas M. Renn, who presides over the Chapter 11 case, appointed U.S. District Judge Michael Hogan as mediator between the Debtor and parties involved in litigation claims. Judge Hogan had been conducting mediation and a mediation session was scheduled for Feb. 22-24, 2012, in Eugene, Oregon. The Debtor's counsel said a single global mediation under the authority of the Bankruptcy Court would have the advantage of getting all parties and all claimants under one umbrella and serve to protect the very assets to which multiple parties lay claim. The Debtor said the mediation sessions would allow it to craft a reorganization plan that will satisfy disparate groups of creditors and provide a dividend to unsecured creditors. Kartar Singh Khalsa filed a separate Chapter 11 petition (Bankr. D. Ore. Case No. 12-60538) on Feb. 18, 2012. He disclosed assets of $30.95 million and liabilities of $1.27 million. GRANITE DELLS: Needs $20MM Add'l Funding for Plan Implementation ---------------------------------------------------------------- Granite Dells Ranch Holdings, LLC submitted to the U.S. Bankruptcy Court for the District of Arizona its proposed Plan of Reorganization dated June 11, 2012. The Plan provides for, among other things: -- the continuation of Debtor's ownership and development of the property under current management; -- operating expenses, additional property development costs, and debt service will be funded through additional equity contributions from current Equity Holders and third-party loans and also through the sale of parcels of the Property to home builders and end users; -- additional funding of $20 million in total, with $7 million to be provided before the Effective Date of the Plan and with the balance to be provided in annual installments payable on the first three anniversaries of the Effective Date; -- restructuring of the AED Secured Claim, Debtor's primary secured obligation, in accordance with provisions of the Bankruptcy Code; -- full payment of the Allowed AED Secured Claim from minimum quarterly payments and partial release payments from the proceeds of sales of parcels of the Property; -- the establishment of an Unsecured Creditor Fund of $5 million to be funded quarterly over eight years and to be distributed pro rata to the holders of Unsecured Claims except (i) Inter-Company Claims, and (ii) Investor Claims held by Persons who elect to participate in the funding of the Reorganized Debtor; -- Interests of Equity Holders will be canceled except to the extent that an Equity Holder elects to participate in the funding of the Reorganized Debtor; -- holders of Investor Claims an opportunity to participate in the funding of the Reorganized Debtor and to convert their Claims to equity. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GRANITE_DELLS_plan.pdf About Granite Dells Ranch Holdings Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962) in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr. oversees the case. The Debtor is represented by Alan A. Meda, Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed $2.22 million in assets and $157 million in liabilities as of the Chapter 11 filing. Cavan Management Services, LLC is the Debtor's manager. David Cavan, member of the firm, signed the Chapter 11 petition. Arizona ECO Development LLC, which acquired a $83.2 million 2006 loan by the Debtor, is represented by Snell & Wilmer L.L.P. The resolution authorizing the Debtor's bankruptcy filing says the Company is commencing legal actions against Stuart Swanson, AED, and related entities relating to the purchase by Mr. Swanson of a promissory note payable by the Company to the parties that sold a certain property to the Company. According to Law 360, AED sued Granite Dells on March 6 asking the Arizona court to appoint a receiver. Arizona ECO is foreclosing on a secured loan backed by 15,000 acres of Arizona land. The United States Trustee said that an official committee has not been appointed in the bankruptcy case of Granite Dells because an insufficient number of unsecured creditors have expressed interest in serving on a committee. GUIDED THERAPEUTICS: Has Exchange Offer for Outstanding Warrants ---------------------------------------------------------------- Guided Therapeutics, Inc., has commenced an exchange offer for certain of its outstanding warrants to purchase up to an aggregate of approximately 28.4 million shares of its common stock. The warrants eligible for exchange have an exercise price of $0.65 per share and exercise periods ending on July 26, 2012, or March 1, 2013. Each eligible warrant is exchangeable for a combination of three classes of new warrants, all of which will be exercisable immediately, but which will have different exercise prices and exercise periods. The first class of new warrants will have a variable exercise price of $0.40 per share if exercised on or before July 15, 2012, $0.45 per share if exercised between July 16, 2012, and Aug. 15, 2012, and $0.50 per share if exercised after Aug. 15, 2012, and an exercise period ending on Sept. 15, 2012, the second class will have an exercise price of $0.65 per share and an exercise period ending on the date that is one year after the end of the exercise period of the corresponding exchanged warrant, and the third class will have an exercise price of $0.80 per share and an exercise period ending on the date that is two years after the end of the exercise period of the corresponding exchanged warrant. Each holder that tenders an eligible warrant in the exchange offer may elect, in that holder's discretion, the allocation of shares underlying each class of new warrant, provided that the new warrant from the first class must be exercisable for a minimum of one-third and may be exercisable for up to a maximum of all of the number of shares of common stock for which the exchanged warrant is exercisable, and each of the warrants from the second and third class will be exercisable for one-half of the number of shares of common stock for which the exchanged warrant is exercisable that remain following allocation by the holder of shares to the first class of new warrant. The exchange offer is scheduled to expire on June 27, 2012. The Company intends to apply any proceeds received in connection with the subsequent exercise of the new warrants to increase inventory of the Company's LuViva Advanced Cervical Device to meet current demand for the product, expand its international marketing and sales efforts, continue to seek FDA approval for the LuViva device and begin Phase 2 multicenter clinical trials of a non- invasive test for Barrett's Esophagus using the same technology platform. Holders of eligible warrants should read the Tender Offer Statement on Schedule TO, including all exhibits thereto, that the Company has filed with the SEC, because those documents contain important information about the exchange offer. Holders of eligible warrants may obtain the Tender Offer Statement, including all exhibits and any supplements thereto, as well as the Company's other filings with the SEC, without charge from the SEC's Web site, http://www.sec.gov. In addition, holders of eligible warrants may obtain copies of the Offer to Exchange, the documents referred to therein and all other documents related to the exchange offer without charge from the Company by directing requests to the Company at Guided Therapeutics, Inc., 5835 Peachtree Corners East, Suite D, Norcross, Georgia 30092, Attn: Jacque Tapley, or by telephone at (770) 242-8723. Any questions concerning the exchange offer may be directed to the Company. About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. In its report on the Company's 2011 Form 10-K, UHY LLP, in Sterling Heights, Michigan, noted that the Company's recurring losses from operations and accumulated deficit raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $6.64 million in 2011, compared with a net loss of $2.84 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.08 million in total assets, $2.17 million in total liabilities and $908,000 in total stockholders' equity. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company's capital-raising efforts are ongoing. If sufficient capital cannot be raised during the fourth quarter of 2012, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support, such as under the Konica Minolta development agreement and additional NCI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In that a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate or file for bankruptcy protection. GUN LAKE: Moody's Confirms 'B3' Corp. Family Rating --------------------------------------------------- Moody's Investors Service confirmed Gun Lake Tribal Gaming Authority's B3 Corporate Family and Probability of Default ratings along with the B3 rating on its $165 million first lien term loan due 2015. This rating action concludes the review for upgrade status that was initiated by Moody's on March 21, 2012. The rating outlook is stable. Gun Lake Tribal Gaming Authority owns and operates the Gun Lake Casino in Allegan County, Michigan and is an unincorporated instrumentality and political subdivision of the Match-E-Be-Nash- She-Wish Band of Pottawatomi Indians of Michigan ("Tribe"). Moody's decision to confirm Gun Lake's B3 ratings and assign a stable rating outlook concludes the review process initiated on March 21, 2012, and is in response to the U.S. Supreme Court's decision, rendered on June 18, 2012, to allow the lawsuit that questions whether the federal government improperly took land into trust for the Gun Lake Tribe to build a casino, to move forward in the district court. As a result, the risk continues that there could be an unfavorable ruling that would put the Tribe's right to operate class III gaming in jeopardy. Had the Supreme Court ruled in favor of the Tribe, this litigation risk, a key limiting factor with respect to Gun Lake's rating, would have been permanently eliminated. Ratings confirmed and LGD assessment revised: Corporate Family Rating at B3 Probability of Default Rating at B3 $165 million first lien term loan due 2015 at B3 (to LGD 4, 50% from LGD 3, 35%) Rating Rationale In addition to the analytical considerations surrounding the recent Supreme Court ruling, Gun Lake's B3 Corporate Family Rating considers the company's small, undiversified operations -- Gun Lake relies on one casino for all of its earnings and cash flow -- and aggressive debt amortization schedule. Also considered are the unique risks common to Native American gaming issuers including cash distribution obligations, the high degree of uncertainty regarding the enforceability of claims, and the value of collateral. Positive rating consideration is given to Gun Lake's favorable location and the demographic profile of its target market, formal restrictions on competition in the casino's primary market area, and relatively low leverage. Gun Lake's debt/EBITDA for the latest 12-month period ended March 31, 2012 was only 1.7 times, significantly better than the 4.5 times to 6.0 times range that is typical of 'B' category rated gaming issuers, according to Moody's Global Gaming Methodology. Gun Lake's B3 Probability of Default Rating considers that despite having only bank debt in its capital structure, a characteristic that typically results in a 65% family recovery assumption and a Probability of Default rating that is one-notch below the Corporate Family Rating when applying Moody's Loss Given Default methodology, Moody's assumed a 50% family recovery rate. Moody's decision to apply this lower family recovery considers that Native American gaming issuers exhibit several of their own unique risks that equally impact all rated Native American gaming issuers, regardless of their rating. These concerns, which are largely a function of a tribe's status as a sovereign entity, include the high degree of uncertainty regarding the enforceability of claims in the event of default, the value of collateral, as well as the effectiveness of a tribe's limited waiver of sovereign immunity, which, if held to be ineffective, could prevent creditors from enforcing their rights and remedies. The stable rating outlook is based on Moody's view that the ruling by the U.S. Supreme Court was a procedural decision only, did not directly address the merits of the case, and in Moody's opinion, will have no near-term impact on the operations at Gun Lake Casino. The stable outlook also considers the favorable earnings and positive free cash flow profile of the Gun Lake Casino, which Moody's expects will continue to support credit metrics characteristic of a higher rating. A higher rating is not likely in the near-term given the risks related to pending litigation. Longer-term ratings improvement would require a permanent and favorable outcome of the pending litigation for Gun Lake and the ability and willingness of Gun Lake to maintain debt/EBITDA below 3.25 times. Ratings could be negatively impacted if there is an unfavorable outcome rendered in the pending litigation against the Gun Lake Tribe, which adversely affects the casino's right to operate Class III gaming and triggers an event of default under the term loan indenture. The principal methodology used in rating Gun Lake Tribal Gaming Authority was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The Gun Lake Tribal Gaming Authority is an unincorporated instrumentality and political subdivision of the Match-E-Be-Nash- She-Wish Band of Pottawatomi Indians of Michigan ("Tribe"). Gun Lake owns the Gun Lake Casino -- which opened on February 6,2011 - - in Allegan County, Michigan. The Gun Lake casino is managed and operated by MPM Enterprises, LLC pursuant to a formal management agreement that has been approved by the National Indian Gaming Commission. MPM is owned by SC Michigan, LLC a wholly owned subsidiary of Station Casinos, Inc and individual investors from Michigan. HALCON RESOURCES: Moody's Assigns 'B2' CFR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service assigned a first time Corporate Family Rating (CFR) of B2 to Halcon Resources Corporation in conjunction with its plans to issue $500 million of senior unsecured notes to fund a portion of the purchase price of GeoResources, Inc.(GeoResources). Moody's also assigned a B3 senior unsecured note rating and a SGL-3 Speculative Grade Liquidity Rating. The outlook is stable. Halcon Resources Corporation is an independent exploration and production (E&P) company that was formed in 2011 when the previous management team of PetroHawk Energy Corporation (PetroHawk) and an investor group re-capitalized RAM Energy Resources, Inc. with a $550 million investment. After the re-capitalization, the company's name was changed to Halcon Resources Corporation. Halcon has aggressive growth plans which it hopes to achieve by focusing on existing and emerging resource plays, a strategy that was successfully employed at PetroHawk and culminated with its sale to BHP Billiton for $15.1 billion in August of 2011. With the closing of the GeoResources purchase and two recently announced property acquisitions, Halcon will have meaningful interests in a portfolio of resource plays including the Utica Shale, the Woodbine in East Texas, the Wilcox Trend in South Louisiana, the Mississippian Lime in Oklahoma, the Bakken Shale, and to a lesser extent, the Eagle Ford Shale. Pro forma for the acquisitions, Halcon has estimated proved reserves in excess of 70 million Boe and production that is in excess of 14,000 Boe per day. Over 70% of its production is oil or natural gas liquids. "Moody's B2 rating is supported by Halcon's current reserve base and production profile despite the highly leverage balance sheet," said Stuart Miller, Moody's Vice President -- Senior Analyst. "The company has set aggressive growth targets that may reduce leverage over the next two years. However, there is significant execution risk to achieve this growth." Ratings Rationale Halcon's B2 Corporate Family Rating (CFR) reflects its early stage of evolution, its seasoned management team, and its highly leveraged balance sheet. The company's business plan carries a high degree of execution risk and significant levels of negative free cash flow as the company builds its acreage position and begins to develop these resource plays in earnest. The negative free cash flow, which Moody's estimates to be in excess of $800 million in 2012 and 2013, will likely require the issuance of debt or equity. Leverage is expected to remain high over the next few years, a management philosophy that was used at PetroHawk. Through 2013, unless additional equity is issued, Moody's expects that leverage will remain above $50,000 per average daily Boe of production and that debt to proved developed reserves will be more than $15 per Boe. Both levels are very high and are more consistent with a Ca rating level. Moody's also expects overall finding and development (F&D) costs to remain elevated, over $20 per Boe, as long as the company continues to invest in undeveloped acreage blocks in the sweet spots of new and emerging resource plays. With this F&D level, the leveraged full cycle ratio will stay below 1.5x offsetting the positive benefit of the high cash margin generated by an oil and natural gas liquids focus. The B2 CFR factors in the high leverage and relatively low efficiency ratio, but also considers the growth trend for Halcon and the track record of using a balanced mix of equity and debt to finance this growth. Since the recapitalization in late 2011, Halcon has issued over $1.6 billion of equity to investors and as consideration for acquisitions. Moody's ratings also incorporate the expectation that management will be able to re-create the success it had at PetroHawk where it experienced rapid reserve and production growth by successfully applying new technology to unconventional resource plays such as the Haynesville Shale and the Eagle Ford Shale. After the completion of the acquisitions, Halcon will have adequate liquidity. The negative free cash flow is expected to be funded by cash on hand of about $85 million and by borrowing under a new $775 million senior secured credit facility. The new credit facility is expected to have a $525 million borrowing base that takes into account the recent acquisitions. Halcon's outspending of cashflow is expected to continue into 2013 and will require additional borrowings under the credit facility, assuming the borrowing base is expanded, as well as debt and/or equity issuances in the capital markets. If additional external capital is not available, the capital spending plans could be adjusted lower as many of the budgeted capital expenditures are deferrable. However, this could reduce the reserve and production growth rate and possibly delay the de-leveraging of the balance sheet. The senior secured credit facility matures in Feb 2017 and has two financial covenants: a minimum interest coverage ratio of 2.5x and a minimum current ration of 1.0x. Initially the interest coverage test will be tight, but this situation is expected to improve as historical quarters roll off and cash flow begins to ramp up. Secondary liquidity is limited since 80% of the company's reserves are mortgaged as collateral and there is a negative pledge on the un-mortgaged properties. Moody's stable outlook reflects the likelihood that reserve and production growth will bring leverage levels lower. Moody's would consider an upgrade once average daily production exceeds 30,000 Boe and leverage, as measured by debt to proved developed reserves and debt to average daily production, approaches $10 and $40,000 per Boe, respectively. Conversely, the B2 CFR assumes Halcon is successful in growing reserves and production. Should reserve and production growth stall and leverage remain high, a downgrade is possible. In addition, because of the large amount of negative free cash flow that is expected, if liquidity drops below $100 million, a downgrade will be considered. The principal methodology used in rating Halcon Resources 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. Halcon Resources Corporation is an independent exploration & production company based in Houston, Texas. HALE MOKU: Court Converts Bankruptcy Case to Chapter 7 ------------------------------------------------------ The Hon. Vincent P. Zurzolo of the U.S. Bankruptcy Court for the Central District of California granted the U.S. Trustee's motion to convert the Chapter 11 case of Hale Moku LLC to one under Chapter 7 of the Bankruptcy Code. In view of the case conversion, the U.S. Trustee will convene a meeting of Hale Moku's creditors on July 7, 2012, at 10:00 a.m. The meeting will be held at RM 101, 725 S Figueroa St., Los Angeles, California. Peter C. Anderson, the U.S. Trustee for Region 16, requested dismissal of the case or conversion of the case to Chapter 7 because, among other things: -- to date, no disclosure statement or chapter 11 plan has been filed; and -- the Debtor has failed to comply with the U.S. Trustee's requirements of (i) notice of setting/increasing insider compensation; (ii) application to employ attorney; (iii) sufficient evidence of closing of all prepetition bank accounts; and (iv) closing bank statements. On May 25, 2012, a month and a day since the bankruptcy filing, the Debtor filed an application seeking permission to employ Thomas Corcovelos, Esq. -- corforlaw@corforlaw.com -- at Corcovelos Law Group as general bankruptcy counsel. Secured creditor, OneWest Bank FSB, also asked the Court to convert the Debtor's case, saying the bankruptcy was commenced in response to an imminent foreclosure by OneWest on real property located at 1251 N. Clark Street, in Los Angeles, Calif. The Debtor filed an earlier Chapter 11 case on March 9, 2012, which was dismissed on March 22. However, the Debtor's list of 20 largest unsecured creditors in the current case contains none of the creditors listed on the 20 largest unsecured creditor list in the first case. Counsel to OneWest, Lewis R. Landau, Esq., at Dykema Gossett LLP, said the bank is investigating the facts and circumstances surrounding the Debtor's acquisition of its seven real properties because the facts disclosed in the Debtor's schedules and U.S. Trustee filings simply cannot be reconciled. OneWest's borrower is Elizabeth Medina, who transferred the Clark Property into the Debtor on Dec. 29, 2011. Ms. Medina is the sister of Douglas Reed, the Debtor's manager. Mr. Landau alleged that: -- the Debtor's filings provided to the U.S. Trustee reveal numerous discrepancies; -- the Debtor's case reflects many badges of a bad faith filing involving multiple property transfers into the filing entity; and -- the Debtor's estate's assets are materially underinsured. Hale Moku, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24357) on April 24, 2012. Hale Moku, a Los Angeles- based property developer, disclosed $20.1 million in assets and $14.9 million in liabilities in its schedules. The Debtor owns seven single family residences in Venice and Los Angeles, valued at an aggregate of $20.1 million. The properties serve as collateral to $14.83 million in secured debt. Judge Vincent P. Zurzolo presides over the case. Thomas C. Corcovelos, Esq., at Corcovelos & Forry LLP, in Manhattan Beach, California, serves as counsel. Hale Moku LLC first filed a bankruptcy petition, pro se (Bankr. C.D. Calif. Case No. 12-18574) on March 9, 2012. HALE MOKU: Hires Ervin Cohen & Jessup as New Counsel ---------------------------------------------------- Hale Moku LLC advised the Bankruptcy Court it has retained a new lawyer: Byron Z. Moldo, Esq. ERVIN COHEN & JESSUP LLP 9401 Wilshire Boulevard, 9th Floor Beverly Hills, CA 90210 Tel: 310-273-6333 Fax: 310-887-6802 E-mail: bmoldo@ecjlaw.com Mr. Moldo replaces Thomas S. Corcovelos, Esq., as general bankruptcy counsel. Papers filed by the Debtor in court indicate the Corcovelos firm charged these hourly rates: Thomas Corcovelos ($400), Bahar Geslin ($300). The hourly rate for paralegals is $200. About Hale Moku, LLC Hale Moku, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24357) on April 24, 2012. Hale Moku, a Los Angeles- based property developer, disclosed $20.1 million in assets and $14.9 million in liabilities in its schedules. The Debtor owns seven single family residences in Venice and Los Angeles, valued at an aggregate of $20.1 million. The properties serve as collateral to $14.83 million in secured debt. Judge Vincent P. Zurzolo presides over the case. Thomas C. Corcovelos, Esq., at Corcovelos & Forry LLP, in Manhattan Beach, California, serves as counsel. Hale Moku LLC first filed a bankruptcy petition, pro se (Bankr. C.D. Calif. Case No. 12-18574) on March 9, 2012. HALLWOOD ENERGY: Hunton to Face $50MM Suit in Federal Court ----------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that U.S. District Judge A. Joe Fish on Monday agreed to take on Hallwood Energy I Creditors' Trust trustee's $50 million malpractice suit against Hunton & Williams LLP, rejecting the trustee's attempts to send the suit back to state court. Bankruptcy Law360 relates that Judge Fish said he would grant the law firm's motion to withdraw the reference and take over the adversary proceeding, which had been pending in Texas bankruptcy court, but allow the bankruptcy judge to handle the pretrial matters. About Hallwood Energy Based in Dallas, Texas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation, engaging in the exploration, acquisition, development and production of oil and gas properties. The Company and five of its affiliates filed separate petitions for Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31253) on March 1, 2009. Kathleen M. Patrick, Esq., Michael R. Rochelle, Esq, Scott Mark DeWolf, Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough L.L.P., represent the Debtors in their restructuring efforts. Blackhill Partners LLC serves as the Debtors' business consultant. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, in Dallas, and Brian D. Roman, Esq., at Okin Adams & Kilmer LLP, in Houston, represent the official committee of unsecured creditors. In its bankruptcy petition, Hallwood estimated assets between $50 million and $100 million, and debts between $100 million and $500 million. HARBORSIDE 17: Sec. 341 Creditors' Meeting on July 26 ----------------------------------------------------- A first Meeting of Creditors under 11 U.S.C. Sec. 341(a) has been scheduled in the Chapter 11 case of Harborside 17 Partners, LLC, for July 26, 2012, at 10:00 a.m. at Wilson 341 Meeting Room. The last day to file a complaint is Sept. 24, 2012. Proofs of claim are due in the case by Oct. 24, 2012. Government proofs of claim are due by Dec. 17, 2012. According to the case docket, the Debtor must file a Chapter 11 plan of reorganization and explanatory disclosure statement by Sept. 17. The Court will hold a status hearing on July 30, 2012, at 11:00 a.m. via Telephone Conference. Orlando, Florida-based Harborside 17 Partners, LLC, filed a bare- bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04512) in Wilson, North Carolina on June 18, 2012. The Debtor disclosed assets of $32.01 million and liabilities of $16.88 million. The Debtor owns a marina, clubhouse, and yacht club located on approximately 9.94 acres of land, located at 111-B Street, Bridgeton, North Carolina. According to the schedules, the property is worth $31.99 million and secures a $15.98 million debt. The Debtor also holds a 100% interest in Bridgeton Harbor Management, LLC. A copy of the schedules filed with the petition is available at http://bankrupt.com/misc/nceb12-04512.pdf Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. Amy Bissette has been assigned as case manager. The petition was signed by Daniel R. Robison, manager of JUSA Management, LLC, manager. HD SUPPLY: Widens Net Loss to $360 Million in April 29 Quarter -------------------------------------------------------------- HD Supply, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $360 million on $1.83 billion of net sales for the three months ended April 29, 2012, compared with a net loss of $164 million on $1.61 billion of net sales for the three months ended May 1, 2011. The Company's balance sheet at April 29, 2012, showed $6.32 billion in total assets, $7.10 billion in total liabilities and a $780 million total stockholders' deficit. "I am exceptionally proud of our associates' strong execution and focus on customer success," stated Joe DeAngelo, CEO of HD Supply. "As a result of our team's dedication and performance excellence, we've had eight consecutive quarters of year-over-year sales growth. We have outstanding sales and EBITDA momentum in all of our businesses and have an uncompromised focus on growing our market share in our core leadership businesses. We've positioned HD Supply for future success by delivering quality products, providing outstanding customer service and strengthening our industry-leading businesses." A copy of the Form 10-Q is available for free at: http://is.gd/GnwdxT About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company reported a net loss of $543 million for the year ended Jan. 29, 2012, a net loss of $619 million for the year ended Jan. 30, 2011, and a net loss of $514 million on $6.94 billion of net sales for the year ended Jan. 31, 2010. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HERCULES OFFSHORE: Files Fleet Status Report as of June 20 ---------------------------------------------------------- Hercules Offshore, Inc., posted on its Web site at www.herculesoffshore.com a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status (as of June 20, 2012), which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for May 2012, including revenue per day and operating days. The Fleet Status Report is available for free at http://is.gd/7YVQ72 About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. The Company's balance sheet at March 31, 2012, showed $2.04 billion in total assets, $1.07 billion in total liabilities, and $966.52 million in stockholders' equity. * * * The Troubled Company Reporter said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc., Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. HOSPITAL DAMAS: Chapter 11 Plan of Reorganization Confirmed ----------------------------------------------------------- Judge Edward A. Godoy of the U.S. Bankruptcy Court for the District of Puerto Rico has confirmed the plan of reorganization of Hospital Damas, Inc., filed on Nov. 4, 2011. As previously reported by the Troubled Company Reporter on Dec. 16, 2011, the Plan segregates various claims and shareholder interest into five classes. The Class 1 Allowed Claim of Banco Popular de Puerto Rico for $23,081,328 will be paid in full over time. Class 2 Allowed General Unsecured Claims arising from medical malpractice actions, totaling $1,006,613 as of July 31, 2011, will be paid on a pro rata basis from a self-insured fund to be established. Class 3 Other Allowed General Unsecured Claims, estimated at $6,988,997, is projected to make a 50% recovery from a creditor trust to be established. Class 4 Allowed General Unsecured Claims arising from assumed executory contracts, estimated at $3,627,259, is estimated to make a 62.9% recovery through different payment plans negotiated with landlords or suppliers. Class 5 Interests will be retained. A copy of the First Amended Joint Disclosure Statement explaining the Plan is available for free at: http://bankrupt.com/misc/hospitaldamas.dkt819.pdf About Hospital Damas Ponce, Puerto Rico-based Hospital Damas, Inc., operates a general acute care hospital, providing critical care, general medical and skilled nursing services. Debtor is a wholly owned subsidiary of Fundacion Damas Inc. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 10-08844) on Sept. 24, 2010. According to its schedules, the Debtor disclosed US$24,017,166 in total assets and US$21,267,263 in total liabilities. Attorneys at Charles A. Cuprill, P.S.C., in San Juan, Puerto Rico, represent the Debtor as counsel. Jorge P. Sala Law Offices serves as the Debtor's labor law special counsel, to be assisted by special counsel Fiddler, Gonzalez & Rodriguez, P.S.C. Attorneys at Kilpatrick Townsend & Stockton LLP, in Atlanta, Ga., represent the Official Committee of Unsecured Creditors as counsel. HOUGHTON MIFFLIN: Emerges From Chapter 11 Bankruptcy ---------------------------------------------------- Houghton Mifflin Harcourt completed its financial restructuring and emerged from its chapter 11 reorganization, 32 days after its initial "pre-packaged" filing on May 21, 2012. "We have achieved our financial restructuring objectives and moved through this process quickly and successfully. Now we have emerged with significantly less debt, a much improved balance sheet and capital structure and the financial strength to invest in new products and innovative digital education solutions to grow our business for the benefit of our customers. Our emergence reflects the dedication of our team and the strong support of our investors and lenders to position HMH for long-term success," Linda K. Zecher, President and Chief Executive Officer of HMH, said in a statement on June 22. Mr. Zecher added, "We take seriously our role as a global education leader and with our new financial flexibility and a strong leadership team in place, we are well-positioned to accelerate our growth initiatives and continue combining the best media and technology with HMH's publishing heritage to encourage passionate, curious learners around the world." HMH emerged from chapter 11 after meeting all closing conditions to the Company's Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court for the Southern District of New York, on June 22. About Houghton Mifflin Houghton Mifflin Harcourt Publishers Inc., headquartered in Boston, Massachusetts, is one of the three largest U.S. education publishers focusing on the K-12 market with roughly $1.3 billion of revenue for fiscal year ended December 2011. Houghton Mifflin Harcourt and its affiliates filed a prepackaged Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-12171) on May 21, 2012. Paul, Weiss, Rifkind, Wharton & Garrison LLP has been tapped as bankruptcy counsel. Blackstone Advisory Services, LP, is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. The Debtor disclosed assets of $2.68 billion and debt totaling $3.535 billion as of the Chapter 11 filing. HUDSON VALLEY: Moody's Downgrades BFSR to 'D+'; Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded all ratings of Hudson Valley Bank (long-term bank deposits to Ba1 from Baa2, short-term obligations to Not Prime from P-2, and the standalone bank financial strength (BFSR) to D+/ba1 from C-/baa2. The outlook is stable. These rating actions conclude the review for downgrade that commenced on March 30, 2012. Hudson Valley Bank is the banking subsidiary of Hudson Valley Holding Corp., which is not rated by Moody's. The rating downgrade reflects Hudson Valley's weakened business franchise. Hudson Valley faces the challenge of generating loans in a low-risk manner, away from its traditional activity of making high yielding commercial real estate (CRE) loans. This transition will pressure its net-interest margin while at the same time expenses are expected to rise as it enhances its risk infrastructure in part to support its new lending business, said Moody's. The bank's franchise challenge results from its large CRE concentration that led to an April 2012 written agreement with its regulator, the Office of the Comptroller of the Currency (OCC). The agreement imposed lending restrictions on Hudson Valley's core CRE lending business and required the bank to significantly enhance its procedures, systems, and management resources. Moody's added that the agreement could threaten the bank's somewhat narrow franchise of taking low cost deposits from the niche of professionals, small businesses and not-for-profit organizations serving the communities where it operates, principally in New York. Moody's said that Hudson Valley's capital levels are high and its liquidity profile is prudent, which support its stable outlook. Moody's last rating action on Hudson Valley was on March 30, 2012 when Moody's placed all ratings of Hudson Valley Bank on review for downgrade. The methodologies used in this rating were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. Hudson Valley Holding Corp. is headquartered in Yonkers, New York and its reported assets were $2.8 billion as of March 31, 2012. IMEDICOR INC: Incurs $641,000 Net Loss in March 31 Quarter ---------------------------------------------------------- iMedicor, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to common shareholders of $641,293 on $284,941 of revenue for the three months ended March 31, 2012, compared with a net loss attributable to common shareholders of $940,668 on $133,996 of revenue for the same period during the prior year. The Company reported a net loss attributable to common shareholders of $1.80 million on $637,295 of revenue for the nine months ended March 31, 2012, compared with a net loss attributable to common shareholders of $3.31 million on $477,119 of revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $1.81 million in total assets, $6.12 million in total liabilities and a $4.31 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/j0q32X About iMedicor Inc. Nanuet, N.Y.-based iMedicor, Inc., formerly Vemics, Inc., builds portal-based, virtual work and learning environments in healthcare and related industries. The Company's focus is twofold: iMedicor, the Company's web-based portal which allows Physicians and other healthcare providers to exchange patient specific healthcare information via the internet while maintaining compliance with all Health Insurance Portability and Accountability Act of 1996 ("HIPAA") regulations, and; recently acquired ClearLobby technology, the Company's web-based portal adjunct which provides for direct communications between pharmaceutical companies and physicians for the dissemination of information on new drugs without the costs related to direct sales forces. The Company's solutions allow physicians to use the internet in ways previously unavailable to them due to HIPAA restrictions to quickly and cost- effectively exchange and share patient medical information and to interact with pharmaceutical companies and review information on new drugs offered by these companies at a time of their choosing. Demetrius & Company, L.L.C., expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. The Company had a net loss of $5.20 million for the year ended June 30, 2011, following an $11.40 million net loss in the preceding year. JASMINE AT ORLANDO: Hiring Berger Singerman as Bankruptcy Counsel ----------------------------------------------------------------- Jasmine at Orlando East, LLC, seeks Court authority to hire bankruptcy lawyers at: Jordi Guso, Esq. Debi Evans Galler, Esq. BERGER SINGERMAN LLC 1450 Brickell Avenue, Suite 1900 Miami, FL 33131 Telephone: (305) 755-9500 Facsimile: (305) 714-4340 On Sept. 27, 2010, the Debtor retained Berger Singerman to act as its counsel in connection with insolvency and restructuring matters and thereafter provided Berger Singerman an initial retainer of $50,000. Since that date, Berger Singerman has provided pre-petition litigation, insolvency and restructuring services to the Debtor. On Jan. 12, 2012, the Debtor provided Berger Singerman an additional retainer of $150,000. Between Sept. 27, 2010 and June 14, 2012, Berger Singerman incurred $64,179.50 in fees and $2,420.52 in costs in connection with its representation of the Debtor which were paid from the retainer. After application of the amounts, Berger Singerman holds $133,399.98 on retainer as security for the fees and costs it will incur in connection with its representation of the Debtor in this case. The current hourly rates for the attorneys at Berger Singerman range from $215 to $625. The current hourly rate of Jordi Guso, the shareholder who will be principally responsible for Berger Singerman's representation of the Debtor, is $575, and the current hourly rates of the of-counsel and associate attorneys who will work on this matter range from $235 to $475 per hour. The current hourly rates for the legal assistants and paralegals at Berger Singerman range from $75 to $200. Mr. Guso attests that his firm does not represent any interest adverse to the Debtor, and that Berger Singerman is a "disinterested person" within the scope and meaning of Section 101(14) of the Bankruptcy Code. About Jasmine at Orlando East Jasmine at Orlando East, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-24621) on June 15, 2012 in Miami. The Debtor owns a multi-family apartment development containing 296 units contained in 32 two-story buildings located on 19.64 acres located in Orlando, Florida. The Debtor estimated assets and liabilities of $10 million to $50 million. The Debtor financed its acquisition of its Florida properties through, inter alia, a $12.9 million acquisition loan provided by Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a Division of Lehman Brothers Holdings Inc. The loan has been assigned to LaSalle Bank National Association, as trustee for certain commercial mortgage pass-through certificates. Judge Robert A. Mark presides over the case. The petition was signed by Oscar A. Garcia, authorized representative. JASMINE AT ORLANDO: Schedules & Statement Due June 29 ----------------------------------------------------- Jasmine at Orlando East, LLC, is facing a June 29 deadline to file these documents: -- List of Equity Security Holders; -- Schedules of Assets and Liabilities; -- Statement of Financial Affairs Jasmine at Orlando East, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-24621) on June 15, 2012 in Miami. The Debtor owns a multi-family apartment development containing 296 units contained in 32 two-story buildings located on 19.64 acres located in Orlando, Florida. The Debtor estimated assets and liabilities of $10 million to $50 million. The Debtor financed its acquisition of its Florida properties through, inter alia, a $12.9 million acquisition loan provided by Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a Division of Lehman Brothers Holdings Inc. The loan has been assigned to LaSalle Bank National Association, as trustee for certain commercial mortgage pass-through certificates. Judge Robert A. Mark presides over the case. The petition was signed by Oscar A. Garcia, authorized representative. JASMINE AT ORLANDO: Files List of 20 Largest Unsecured Creditors ---------------------------------------------------------------- Jasmine at Orlando East, LLC, filed with the Bankruptcy Court a list of its creditors holding the 20 largest unsecured claims, disclosing: Creditor Claim Amount -------- ------------ Chadwell Supply $28,803.23 1721 S. Kings Avenue Brandon, FL 33511 Orange County Utilities $10,344.13 9150 Curry Ford Rd. Orlando, FL 32825-7600 Wilmar $9,765.32 P.O. Box 404284 Atlanta, GA 30384-4284 Progress Energy of FL $6,808.41 Lifestyle Carpets $6,267.02 Chaser Pool $4,000.00 Savitar Realty Advisors $2,919.00 All Construction Services of Central FL $1,890.00 Rent Grow, Inc. $1,794.20 ForRent Magazine $1,787.00 DisposALL, Inc. $1,779.15 Carpet Cure Systems $1,775.00 Apartment Finders $1,298.00 The Sherwin Williams $1,194.39 All American Pool-N-Patio $925.00 Sears Commercial One $679.78 AT&T $545.19 Traffic2Revenue $498.00 Rent.com $409.00 Power Exterminators $308.00 KENNETH IRA STARR: 'Jacob The Jeweler' Files $12M Suit Vs. Adviser ------------------------------------------------------------------ Dan Packel at Bankruptcy Law360 reports that New York's "Jacob the Jeweler" and his wife filed an $11.9 million complaint Friday against imprisoned money manager to the stars Kenneth Ira Starr, claiming the fraudster bilked them out of the money after recommending that they enter a range of investments in 2008. In an adversary proceeding filed in New York bankruptcy court, Jacob Arabov, nicknamed "Jacob the Jeweler," and his wife Angela alleged that Starr cheated them of the money by misrepresenting the risks of the investments and failing to share details about conflicts, according to Bankruptcy Law360. About Kenneth Starr Starr Investment Advisors LLC and Starr & Co., the former businesses of money manager Kenneth I. Starr who pleaded guilty to fraud in September, filed for Chapter 7 bankruptcy on Feb. 17 in New York, Tiffany Kary at Bloomberg News reports. Starr & Co., in its Chapter 7 petition (Bankr. S.D.N.Y. Case No. 11-10637), disclosed debt of $3.15 million and assets of $154,466. Starr Investment Advisors has less than $23,000 in assets versus $3.1 million in debts. Mr. Starr himself -- not the prosecutor in the Whitewater investigation -- faces an involuntary Chapter 7 bankruptcy petition, which court papers show several creditors filed against him in January 2011. On May 27, 2010, the Securities and Exchange Commission commenced an action styled SEC v. Kenneth Ira Starr, et al. (10-civ-4270- SHS) in the United States District Court for the Southern District of New York against defendants Kenneth Starr, Starr Investment Advisors, LLC, and Starr & Company, LLC and relief defendants Diane Passage and Colcave, LLC. The SEC action seeks to halt an alleged fraudulent scheme by the Defendants and asserts claims against the Defendants for violations of the Investment Advisers Acts of 1940. On June 7, 2010, the court appointed Aurora Cassirer, Esq. as the temporary receiver (the Receiver) for the estates of Starr Investment Advisors, LLC, Starr & Company, LLC and Colcave, LLC. On July 8, 2010, the court appointed Aurora Cassirer, Esq. as the permanent Receiver. The Receiver may be reached at: Aurora Cassirer TROUTMAN SANDERS LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174 E-mail: aurora.cassirer@kennethstarrreceivership.com Mr. Starr's celebrity clients included Sylvester Stallone and Wesley Snipes. He was originally accused of defrauding at least 11 of them, including heiress Rachel "Bunny" Mellon, out of $59 million. KENNETH SCHACTER: Rare Poster to Be Auctioned Off ------------------------------------------------- Andy Lewis at The Hollywood Reporter says a rare and coveted Metropolis movie poster has been seized as part of a Chapter 7 liquidation bankruptcy case involving its owner Kenneth Schacter, a well-known collector. The poster will be auctioned off soon. The report notes the case is being overseen by the U.S. Bankruptcy Court in Los Angeles, with John Menchaca serving as the bankruptcy trustee. According to the report, German painter Heinz Schulz-Neudamm (1899-1969) created this poster for the famed 1927 film directed by Fritz Lang (1890-1976). The film is based on the novel of the same name by his wife Thea Von Harbou (1888-1954) about the dystopian future of the year 2000. The report relates the poster had been offered for sale in March for $850,000 by Movieposterexchange.com. Estimates vary as to what it would fetch on the open market. Mr. Schacter paid a still-record $690,000 for it in 2005. The report notes, in the bankruptcy filing, Mr. Schacter estimates its value at just $250,000, a number most observers view as comically low. High-end estimates put the value of the poster at more than $1 million, which would make it the first poster to cross that barrier in a public sale. Conversely, a sale at Mr. Schacter's low estimate of $250,000 or even any number below $690,000 would represent a softening of the poster market at a time when other collectibles such as movie props and rare comics are selling for record amounts. Kenneth Schacter filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-60372) on Dec. 12, 2011. The case was converted to Chapter 7 on March 12, 2012, at the behest of Robert Mannheim, an investor who provided money for Mr. Schacter to invest in posters to sell for a profit. KV PHARMACEUTICAL: Has $20 Million SPA with Commerce Court ---------------------------------------------------------- K-V Pharmaceutical Company entered into a Common Stock Purchase Agreement dated as of June 5, 2012, with Commerce Court Small Cap Value Fund, Ltd., pursuant to which the Company may, subject to certain customary conditions, require Commerce Court to purchase up to $20.0 million of shares of the Company's Class A Common Stock over the 24-month term following the effectiveness of the resale registration statement. That arrangement is sometimes referred to as a "committed equity line financing facility." The Company has paid approximately $35,000 of Commerce Court's legal fees and expenses. No additional legal fees incurred by Commerce Court are payable by the Company in connection with any sale of shares to Commerce Court. In consideration for Commerce Court's execution and delivery of the Purchase Agreement and upon the execution and delivery of the Purchase Agreement, the Company issued Commerce Court 200,000 shares of the Company's Class A Common Stock. In connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement with Commerce Court, pursuant to which the Company granted to Commerce Court certain registration rights related to the shares issuable in accordance with the Purchase Agreement. Under the Registration Rights Agreement, the Company agreed to use its commercially reasonable efforts to prepare and file with the Securities and Exchange Commission one or more registration statements for the purpose of registering the resale of the maximum shares of Class A Common Stock issuable pursuant to the Purchase Agreement. Financial West Group, member FINRA/SIPC, served as the Company's placement agent in connection with the financing arrangement contemplated by the Purchase Agreement. Pursuant to an Engagement Letter with FWG, the Company have agreed to pay FWG, upon each sale of the Company's Class A Common Stock to Commerce Court under the Purchase Agreement, a fee equal to $2,000 upon settlement of each such sale. The Company has also agreed to indemnify and hold harmless FWG against certain liabilities, including certain liabilities under the Securities Act. A copy of the APA is available for free at: http://is.gd/1spkLR About KV Pharmaceutical Company KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. KV Pharmaceutical has not timely filed its Form 10-K for the year ended March 31, 2010 and its Form 10-Qs for the subsequent quarterly periods. The Company's independent accounting firm, KPMG, resigned on June 25, 2010, and the Company has tapped BDO USA, LLP, to audit the fiscal 2010 financial statements. The Form 10-Q for the quarter ended June 30, 2010, was only filed March 10, 2011. The Company was not able to complete its Form 10-Q for the three- and six-month periods ended Sept. 30, 2011, by the filing deadline of Nov. 9, 2011, without unreasonable effort and expense. The Company expects to file this Form 10-Q with the SEC as soon as practicable after filing the amended filings, and, in any case, within five days of those filings. KPMG LLP, in St. Louis, Missouri, expressed substantial doubt about K-V Pharmaceutical's ability to continue as a going concern. The independent auditors noted that the Company has suspended the shipment of all products manufactured by it and must comply with a consent decree with the FDA before approved products can be reintroduced to the market. Significant negative impacts on operating results and cash flows from these actions including the potential inability of the Company to raise capital; suspension of manufacturing; significant uncertainties related to litigation and governmental inquiries; and debt covenant violations. The Company's balance sheet at of March 31, 2011, showed $564.70 million in total assets, $942.50 million in total liabilities and a $377.80 million total shareholders' deficit. The Company reported a net loss of $271.70 million on $27.30 million of net revenues for the year ended March 31, 2011, compared with a net loss of $283.60 million on $9.10 million of net revenues during the prior year. KV PHARMACEUTICAL: 2012 Annual Meeting Scheduled for Sept. 13 ------------------------------------------------------------- K-V Pharmaceutical Company has scheduled its 2012 annual meeting of stockholders at 10:00 a.m., central daylight time, on Thursday, Sept. 13, 2012, at a location to be announced at a later time. Stockholders of record as of the close of business on July 16, 2012, are entitled to notice of and to vote at the 2012 Annual Meeting. The Company will be filing a proxy statement providing further details of the 2012 Annual Meeting. About KV Pharmaceutical Company KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. The Company reported a net loss of $102.30 million on $23.20 million of net revenues for the year ended March 31, 2012. The Company previously disclosed a net loss of $271.70 million on $27.30 million of net revenues for the year ended March 31, 2011, and a net loss of $283.60 million on $9.10 million of net revenues for the year ended March 31, 2010. The Company's balance sheet at March 31, 2012, showed $253.40 million in total assets, $734.10 million in total liabilities and a $480.70 million total shareholders' deficit. BDO USA, LLP, in Chicago, Illinois, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that the Company among other things has experienced recurring losses from operations, has a significant shareholders' deficit, and negative working capital; the potential inability of the Company to raise additional capital or debt financing; a potential cash shortfall in meeting near term obligations; significant uncertainties related to litigation and governmental inquiries; and potential debt covenant violations. These factors raise substantial doubt about the Company's ability to continue as a going concern. LEE BRICK: Sec. 341 Creditors' Meeting Set for July 24 ------------------------------------------------------ The Bankruptcy Administrator scheduled a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Lee Brick & Tile Company for July 24, 2012, at 10:00 a.m. at Raleigh 341 Meeting Room. The last day to file a complaint is Sept. 24. Proofs of claim are due in the case by Oct. 22. Government proofs of claim are due by Dec. 12. According to the case docket, the Debtor is required to file a Chapter 11 plan and disclosure statement by Sept. 13. A status hearing will be held on July 23 at 9:30 a.m. via Telephone Conference. Aileen Gibson has been assigned as Case Manager. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. The Debtor estimated assets and debts of $10 million to $50 million. Capital Bank is owed $13.0 million, of which $6.5 million is secured. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. LEHMAN BROTHERS: Wins OK of Settlement With Japan Loans ------------------------------------------------------- Lehman Brothers Holdings Inc. obtained a court order approving a settlement of claims with Japan Loans Opportunities B.V. Under the deal, both agreed to reduce the amount of claims asserted by Japan Loans against the company. A portion of Claim No. 14795 held by Japan Loans will be reduced to $70,599,681, and will be allowed as an unsecured guarantee claim against Lehman in Class 5 of its Chapter 11 plan. Another claim, designated as Claim No. 18829, will be reduced to $65,923,071, and will also be allowed as an unsecured guarantee claim against the company in Class 5. The agreement also contains terms protecting Lehman in case Japan Loans receives full payment of its claims. Japan Loans agreed to be liable with any subsequent holders of the allowed claims to Lehman for the disgorgement of any distributions or other consideration. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: Wins Approval of BTSX Settlement ------------------------------------------------- The trustee liquidating Lehman Brothers Holdings Inc.'s brokerage obtained approval of his agreement with BTSX Inc., which calls for the dismissal of his lawsuit against the company. Under the deal, James Giddens, the court-appointed trustee, agreed to dismiss the suit in exchange for a payment of $300,000 from BTSX, formerly known as Townsend Analytics, Ltd. The suit alleges that the Lehman brokerage holds a claim against BTSX for the transfer of more than $3 million made by the brokerage during the days leading up to Lehman's bankruptcy. BTSX, which was once a subsidiary of Lehman, was sold to Barclays Capital Inc. following Lehman's bankruptcy filing in 2008. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: eClerx Settlement Agreement Approved ----------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved a settlement between eClerx Services Limited and the trustee liquidating Lehman Brothers Holdings Inc.'s brokerage. Under the deal, the trustee agreed not to pursue his claim against eClerx in exchange for a payment of $23,000 from the company. The claim stemmed from the transfer of more than $1.05 million made by the brokerage prior to Lehman's bankruptcy filing. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: $2.5-Bil. in Claims Traded Hands in April ---------------------------------------------------------- The number and amount of claims against Lehman Brothers Holdings Inc. that traded in April 2012 decreased to a little more than 100 claims totaling $2.5 billion. The previous month, Lehman claims that changed hands reached almost a thousand totaling more than $6 billion. According to a report by SecondMarket, the face value of claims traded in April declined significantly to $1.5 billion in total transfers, making it the lowest level of claims traded by dollar value since February 2010. The report recalled that Lehman exited bankruptcy on March 6, established a distribution record date on March 18 and announced they would commence distributions to creditors on April 17. In the 30 days prior to March 18, LBHI claims trading accelerated to more than $6.4 billion transfers but after the March 18 record date, transfers of LBHI claims substantially decreased to just $1.1 billion of trading activity, the report pointed out. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LIFEPOINT HOSPITAL: Fitch Affirms 'BB' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has affirmed its ratings for LifePoint Hospitals, Inc., including the Issuer Default Rating (IDR), at 'BB'. The Rating Outlook is Stable. The ratings apply to approximately $1.7 billion of debt at March 31, 2012. The ratings reflect the following: -- At 3.0x EBITDA at March 31, 2012, LifePoint's gross debt leverage is the amongst the lowest in the for-profit hospital industry. -- Fitch expects debt could trend higher at the end of 2012 as the result of funding acquisitions and a higher level of capital expenditures, but remain consistent with the company's publicly stated leverage target of 3x-4x EBITDA. -- Liquidity is solid. While lower profitability and higher capital expenditures could pressure the level of free cash flow (FCF; cash from operations less dividends and capital expenditures) generation, Fitch expects it to remain above $150 million annually. Debt maturities for 2012-2013 are manageable. -- Organic operating trends in the for-profit hospital industry are weak and Fitch expects them to remain so throughout 2012. LifePoint's recent hospital acquisitions will support growth for the company. Solid Balance Sheet Helps Acquisition Strategy LifePoint has consistently demonstrated a strong level of financial flexibility in recent years and at current levels the financial and credit metrics provide significant headroom within the 'BB' rating category. Gross debt leverage is among the lowest in the for-profit hospital industry, dropping to 3.0x EBITDA at March 31, 2012 as a result of growth in EBITDA primarily through the contribution of recently acquired hospitals. Debt-to-EBITDA equals 1.2x through the senior secured bank debt, 1.5x through the senior unsecured notes, and 3.0x through the senior subordinated convertible notes. Fitch believes LifePoint's debt leverage could trend slightly higher at the end of 2012, but will remain consistent with the 'BB' rating category and below the upper end of the company's stated target leverage range of 3.0x-4.0x debt-to-EBITDA. A higher debt level would be the result of the funding of the company's recent hospital acquisitions. Fitch believes that LifePoint's relatively stronger balance sheet, coupled with a track record of successfully managing sole provider hospitals in rural markets, help make the company an attractive acquirer in its preferred markets. However, based upon the relatively higher debt leverage levels of LifePoint's industry peers, Fitch does not believe that the company has a financial incentive to manage its balance sheet with debt below 3.0x EBITDA. LifePoint has some capacity under its bank facility financial maintenance covenants for additional debt. The bank facility requires total leverage of below 3.75x and interest coverage of above 3.5x. Good Financial Flexibility A favorable debt maturity schedule and adequate liquidity also support LifePoint's credit profile. Aside from the undrawn bank revolver, which matures in December 2012, there are no debt maturities in the capital structure until 2014. The $225 million senior subordinated convertible debentures due 2025 are puttable to the company in February 2013. Fitch expects the company to address the December 2012 maturity of its bank revolver in a manner that will provide financial flexibility to refinance the notes should holders put the notes to the company. Pending refinancing of the $575 million senior subordinated convertible notes due 2014, maturity of the $443 million bank term loan will be extended to April 2015 from February 2014. At March 31, 2012, liquidity was provided by approximately $116 million of cash, availability on the company's $350 million bank credit facility revolver ($322 million available reduced for outstanding letters of credit), and FCF ($133 million for the LTM period, defined as cash from operations less dividends and capital expenditures). Fitch projects that LifePoint's FCF will contract by about $30 million in 2012 versus the 2011 level of $182 million. This is because of lower profitability and higher capital expenditures. An expectation for a slight contraction in the EBITDA margin in 2012 is primarily because of the integration of less profitable acquired hospitals. Capital investments in recently acquired hospitals and spending to implement electronic health records systems are driving a higher level of capital expenditures. LifePoint's capital expenditures as a percent of revenue ticked up to 6.2% in 2011 from 5.2% in 2010, and Fitch expects a higher level of spending to persist in 2012. A higher level of capital expenditures is consistent with the broader industry trend. Rural Market Recovery Lagging Broader Industry LifePoint operates 55 acute-care hospitals, primarily located in rural markets. In 52 of its 55 markets, LifePoint's facility is the sole acute care hospital provider in the market. Having sole provider status in the vast majority of its markets confers certain benefits to LifePoint in capturing organic patient volume growth as well as in negotiating price increases with commercial health insurers. While LifePoint's organic patient volume growth lagged the broader for-profit hospital industry in 2011, the company's results were not inconsistent with the experience of other rural and suburban market hospital operators. Across the Fitch-rated group of for- profit hospital providers, same-hospital admissions adjusted admissions (a measure that is adjusted for outpatient activity) grew by 0.4% in 2011. LifePoint's same adjusted admissions were down 0.4% during the same period. While persistently weak organic volume trends across the industry began to show signs of improvement in the second half of 2011, providers in urban markets have exhibited a much stronger rebound in volume growth. Systemic issues outside of management control, such as weak seasonal flu and obstetrics volumes, seem to be driving the relatively weaker organic growth in rural markets. Healthcare Reform Driving Industry Value Proposition Fitch does not expect the pending Supreme Court decision on the Affordable Care Act (ACA) to have an immediate effect on the credit profile of the for-profit hospital industry. Regardless of the Court's decision, the industry is expected to continue to move toward a care delivery model focused on quality and reducing the cost of care, as opposed to the largely volume-driven reimbursement model that is in place today. The main provisions of the ACA that will affect the for-profit hospital industry include the mandate for individuals to purchase health insurance or face a financial penalty, and the expansion of Medicaid eligibility. If these provisions survive the judicial and legislative challenges to their existence, they will take effect in 2014. Fitch expects an initially positive effect on the acute-care hospital industry because of the coverage expansion elements of the ACA, mostly as the result of reduced levels of uncompensated care, but also through a mildly positive boost to utilization of healthcare services. Over the several years following the coverage expansion, Fitch expects to see some erosion of the initial benefits due to a reduction in Medicare reimbursement required by the ACA, as well as likely lower rates of commercial health insurance reimbursement. Guidelines for Further Rating Actions Maintenance of a 'BB' IDR for LifePoint will require debt-to- EBITDA maintained at or below 4.0x, coupled with a sustained solid liquidity profile, with FCF sustained above $150 million annually. A leveraging acquisition or deterioration in financial flexibility resulting from difficulties in integration of its recent acquisitions would be the most likely causes of a negative rating action for LifePoint. Also of concern is the potential for a sustained weak organic growth trend for the hospital industry, which could erode profitability and financial flexibility over time. Debt Issue Ratings Fitch has taken the following actions on LifePoint's ratings: -- IDR affirmed at 'BB'; -- Secured bank facility affirmed at 'BB+'; -- Senior unsecured notes affirmed at 'BB'; -- Subordinated convertible notes affirmed at 'BB-'. LONG ISLAND: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: Long Island Rubbish Removal Eastern Corp 449 James Street Holbrook, NY 11741 Case Number: 12-73870 Involuntary Chapter 11 Petition Date: June 21, 2012 Court: Eastern District of New York (Central Islip) Judge: Dorothy Eisenberg Petitioner's Counsel: Brooke Anthony, Esq. LAW OFFICE OF RAYMOND A GIUSTO 136 East Main Street East Islip, NY 11730 Tel: (631) 277-7086 E-mail: brookeanthony@optonline.net Long Island's petitioner: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Winters Bros. Judgments $208,194 Holdings, LLC c/o Raymond A. Giusto 715 South Country Road West Bay Shore, NY 11706 METHOD ART: Court Approves Stipulations on Cash Collateral Use -------------------------------------------------------------- The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the District of Nevada approved stipulations with secured creditor StanCorp Mortgage Investors, LLC relating to the Debtor's use of the cash collateral for: * 6151 Lakeside Drive, Reno, Nevada; * 2598 Windmill Parkway, Henderson, Nevada; * 2405,2415, and 2435 Pyramid Way, Sparks, Nevada; and * 1700 East Dyer Road, Santa Ana, California. Full-text copies of the stipulations are available for free at: http://bankrupt.com/misc/METHODART_cashcoll_stipulation.pdf http://bankrupt.com/misc/METHODART_cashcoll_stipulation_b.pdf http://bankrupt.com/misc/METHODART_cashcoll_stipulation_c.pdf http://bankrupt.com/misc/METHODART_cashcoll_stipulation_june20.pdf As reported in the Troubled Company Reporter on April 10, 2012, StanCorp holds: -- a first priority security interest in the Debtor's real property located at 1700 E. Dyer Road, Santa Ana, California, on account of $894,572 in secured debt. The Debtor said the Dyer Property is worth $1,800,000; -- a first priority security interest in the Debtor's real property located at 2405 Pyramid Way, Sparks, Nevada, on account of $937,713 in secured debt. The Debtor said the Pyramid Property is worth $900,000; and -- a first priority security interest in the Debtor's real property located at 6151 Lakeside Drive, Reno, Nevada, on account of $923,485 in secured debt. The Debtor said the Lakeside Property is worth $2,400,000. -- a first priority security interest in the Debtor's real property located at 2598 Windmill Parkway, Henderson, Nevada, on account of $1,548,367. The Debtor said the Windmill Property is worth $1,500,000. Other creditors holding security interests in the Debtor's properties are: * Clarica Life Insurance Company, which holds a first priority security interest in the Debtor's real property located at 9480 & 9490 Gateway Drive, Reno, Nevada, on account of $1,823,445 in secured debt. The Debtor said the Gateway Property is worth $1,800,000; and * The Life Insurance Company of the Southwest, which holds a first priority security interest in the Debtor's real property located at 940 Columbia Avenue, Riverside, California, on account of $1,448,771 on a first priority deed of trust, and $1,440,516 on a second priority deed of trust, both against the Columbia Property. The Debtor said the Property is worth $5,400,000. As adequate protection for the use of: * the Dyer Property, Method Art offers Stancorp adequate protection in the form of an equity cushion of over 100%; and continued monthly payments of principal, interest and impounds in accord with the current contractual terms, which is currently $7,379 per month. The Debtor will also continue to maintain insurance on the Dyer Property; and Stancorp's cash collateral is being used to maintain and operate the Dyer Property by paying taxes, insurance and other operating expenses, plus pay Stancorp its regular contractual payment, which all together averages roughly $7,770 per month; * the Pyramid Property, Method Art offers STANCORP adequate protection in the form of continued monthly payments of principal, interest and impounds in accord with the current contractual terms, which is currently $8,725 per month. The Debtor also will continue to maintain insurance on the Pyramid Property. STANCORP's cash collateral is being used to maintain and operate the Pyramid Property by paying taxes, insurance and other operating expenses, plus pay STANCORP its regular contractual payment, which all together averages approximately $11,240 per month; * the Lakeside Property, Method Art offers STANCORP adequate protection in the form of an equity cushion of over 100%; and monthly net rents generated from the Lakeside Property, after paying all taxes, insurance and other operating expenses, estimated to average $7,455 per month. The Debtor also will continue to maintain insurance on the Lakeside Property. STANCORP's cash collateral is being used to maintain and operate the Lakeside Property and projects monthly expenses of $9,045; * the Windmill Property, Method Art offers STANCORP adequate protection in the form of continued monthly payments of principal, interest and impounds in accord with the current contractual terms, which is currently $14,814 per month. Method Art also will continue to maintain insurance on the Windmill Property. STANCORP's cash collateral is being used to maintain and operate the Windmill Property by paying taxes, insurance and other operating expenses, plus pay STANCORP its regular contractual payment, which all together averages approximately $15,564 per month. * the Gateway Property, Method Art offers CLARICA adequate protection in the form of monthly payments of the net rents generated after paying necessary operating expenses, including taxes and insurance, estimated to be $6,015 per month. Method Art will also continue to maintain insurance on the Gateway Property. CLARICA's cash collateral is being used to maintain and operate the Gateway Property by paying taxes, insurance and other operating expenses averaging $6,380 per month; and * the Columbia Property, Method Art offers LICOTS adequate protection in the form an equity cushion of over 100%; continued monthly payments of principal, interest and impounds in accord with the current contractual terms, which is currently $18,430.34 per month on the first mortgage, and $11,646.43 per month on the second mortgage, for a total of $30,079.77 per month. Method Art will also continue to maintain insurance on the Columbia Property. LICOTS's cash collateral is being used to maintain and operate the Columbia Property by paying taxes, insurance and other operating expenses, plus pay LICOTS its regular contractual payment, which all together averages approximately $32,010 per month. About Method Art Method Art Corporation filed a bare-bones Chapter 11 petition (Bankr. D. Nev. Case No. 12-50745) in its home-town in Reno, Nevada, on April 1, 2012. The Debtor disclosed $14.5 million in assets and $11.7 million in debts in its schedules. The Debtor owns six properties in Nevada and California. The properties are valued $13.8 million and secure debt totaling $10.9 million. Judge Bruce T. Beesley presides over the case. Kevin A. Darby, Esq., at Darby Law Practice, Ltd., serves as the Debtor's counsel. The petition was signed by Brynn Miner, who has the role of director, president, secretary and treasurer. MORGANS HOTEL: Partners with Hivernage Collection in Morocco ------------------------------------------------------------ Morgans Hotel Group Co. announced a partnership with Moroccan entrepreneur Ahmed Bennani and Hivernage Collection which will see the unveiling of two properties in Marrakech Morocco; a 73-room Delano slated to open in September 2012, followed by a Mondrian- branded property scheduled to open in late 2013. The collaboration was marked by a meeting with representatives from both parties, who came together to sign 15-year management agreements for both properties. Located in the heart of the Hivernage District, Delano Marrakech, the brand's second outpost and first international property, reflects Morgans Hotel Group's global expansion plan for its signature luxury brand. Following the footsteps of its South Beach predecessor, Delano Marrakech will provide world-travelers with another sophisticated world-class urban resort marked by unparalleled style and five- star service. As a self-contained destination, Delano Marrakech will offer a haven of luxury and relaxation in heart of the vibrant, magical city. Commenting on the brands' expansion into the North African market, Michael Gross, Chief Executive Officer of Morgans Hotel Group, said: "We are excited to be working with Ahmed Bennani and his team to bring the second Delano in the world to Marrakech. This collaboration signifies Morgans Hotel Group's entry into North Africa and we are thrilled to be one of the first U.S. based hotel companies to extend our brand portfolio to the dynamic city of Marrakech. Delano has become a truly iconic brand, synonymous with luxury and unrivaled standards of service, and our Marrakech property will showcase this unique hotel offering to a brand new audience." Designed by internationally acclaimed interior designer Jacques Garcia, the hotel's unconventional baroque interior brings together precious marbles, sumptuous draped velvet, and rare fabrics to create a relaxing and intimate atmosphere that befits Delano's discerning guests. Delano Marrakech is a luxurious boutique hotel boasting 73-opulent suites, a 20,000 square foot spa offering the some of the most prestigious wellness brands in the world including Valmont and marocMaroc, as well as three private pools. Delano Marrakech will become a premier nightlife destination with the introduction of a brand new roof deck, which will be programmed during the day and evening hours, as well as a subterranean nightclub located below the ground level of the hotel. The Light Group, one of the United States' leading hospitality development and management companies, in which Morgans Hotel Group acquired a controlling interest last November, will operate both venues. The Light Group has a ten-year proven track record of delivering cutting-edge food and beverage experiences at world-class locations. Delano Marrakech will also showcase new lounge and bar concepts to offer guests a diverse array of nightlife venues to choose from without ever needing to leave the resort. To complete the experience, Delano guests can dine at the hotels' French or Italian restaurants, which are presided over by Michelin stared chefs, Michel Rostang and Giancarlo Morelli respectively. For the last 30 years, culinary legend Rostang has received wide spread acclaim from critics and foodies alike. His latest venture, Bon R, further demonstrates Rostang's passion for food with his simple yet exquisite dishes. Opening in August, Bon R will offer a French menu with pairings of classical and modern flavours for breakfast, lunch and dinner. Dishes will change weekly, enabling Rostang-trained chefs to constantly create and inspire using fresh seasonal ingredients. This August also sees the opening of Giancarlo Morelli's latest offering, Pomireu. Morelli, renowned for marrying traditional Italian techniques with boundless creativity, has concocted a menu with a feast of flavours not to be missed. Italian fine dining offering Pomireu will bring a slice of old school Italian glamour to Marrekech. Just minutes from downtown Marrakech in the hotel area of Agdal, the 69-room Mondrian Marrakech, will provide guests with an oasis of rest and relaxation. The hotel will comprise a portion of a 480,000 square foot complex that will include extensive state of the art fitness facilities, several food and beverage outlets and world class spa facilities. This expansion of the Mondrian brand joins the collection of planned Mondrian hotels in London, the Bahamas, Doha and Istanbul. Morgans Hotels Group currently has properties in Boston, New York, Miami, Los Angeles, San Francisco and London. Under the Delano agreement, the Company will contribute $2.5 million in key money within five business days of signing of the agreement, which funds are refundable if the hotel fails to open by Sept. 30, 2012, and under the Mondrian agreement, the Company will contribute $2.5 million in key money upon the hotel's opening. Under both agreements, the Company has guaranteed fundings to the owners if the hotels do not attain specified levels of net operating profits set forth in the management agreements up to certain maximum amounts for the first ten years of the contract. Those guarantee fundings, if any, are recoverable out of future hotel cash flows and under certain other conditions. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company reported a net loss of $87.95 million in 2011, a net loss of $83.64 million in 2010, and a net loss of $101.60 million in 2009. The Company's balance sheet at March 31, 2012, showed $544.25 million in total assets, $642.07 million in total liabilities, $5.41 million in redeemable noncontrolling interest, and a $103.23 million total deficit. MSR RESORT: Hearing on Hilton Dispute Slated for June 29 -------------------------------------------------------- Dow Jones Newswires reports that a trial between MSR Resort and Hilton Worldwide is set to begin June 29, 2012, in New York. MSR wants a judge to terminate the management agreements on three resorts run by Hilton, and is seeking an estimate on the damages it should pay for canceling those contracts. According to the report, MSR, which is majority owned by hedge fund manager Paulson & Co., has said that clearing up its issues with Hilton is key to it exiting from Chapter 11 protection. Dow Jones notes Hilton's Waldorf Astoria brand manages the Arizona Biltmore Resort & Spa in Phoenix, Hawaii's Grand Wailea Resort Hotel & Spa and the La Quinta Resort & Club in Palm Springs, Calif., three of the five resorts put into bankruptcy last year. The report adds MSR earlier this month said it is close to finalizing a bankruptcy-exit strategy that hinges on the possibility of a "significant new equity investment" from its current equity owners and co-investors plus the potential sales of the Biltmore and another of its properties, Claremont Resort & Spa in Berkeley, Calif. The report relates Judge Sean H. Lane of U.S. Bankruptcy Court in Manhattan has already signed off on the $150 million sale of one of the resorts, the Doral Golf Resort & Spa in Miami, to Donald Trump. That deal closed in March. 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. 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. MUNSON KINGDOM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: The Munson Kingdom, LLC dba Country Village Apartments 3161 Fryden Court San Diego, CA 92117 Bankruptcy Case No.: 12-13961 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Carolyn R. Tatkin, Esq. Jonathan B. Frutkin, Esq. THE FRUTKIN LAW FIRM PLC 101 North First Avenue, Suite 2410 Phoenix, AZ 85003 Tel: (480) 295-3470 Fax: (480) 295-3479 E-mail: tatkin@frutkinlaw.com jfrutkin@frutkinlaw.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 together with the petition is available for free at http://bankrupt.com/misc/azb12-13961.pdf The petition was signed by Miles Munson, managing member. NATIONAL NOTE OF UTAH: SEC Halts $100 Million Ponzi Scheme ---------------------------------------------------------- The Securities and Exchange Commission on June 25 obtained a temporary restraining order and asset freeze against a Utah man and company charged with operating a real estate-based Ponzi scheme that bilked $100 million from investors nationwide. The SEC's complaint filed in U.S. District Court for the District of Utah, names Wayne L. Palmer and his firm, National Note of Utah, LC, both of West Jordan, Utah. According to the complaint, Palmer told investors that their money would be used to buy mortgage notes and real estate assets, or to make real estate loans. More than 600 individuals invested, lured by promises of annual returns of 12%, the SEC alleged. "Palmer promised double-digit returns at his real estate seminars, where investors learned the hard way about his lies and deceit," said Kenneth Israel, Director of the SEC's Salt Lake City Regional Office. Palmer told investors that their money would be completely secure and that National Note had a perfect record, having never missed paying principal or interest on its promissory notes. Glossy marketing materials that Palmer provided to some investors showed that National Note returns did not fluctuate and stated that investors were guaranteed payment even if property owners missed payment on mortgage loans that National Note held. Contrary to Palmer's claims, National Note used most of the money it took in from new investors to pay earlier investors, making it a classic Ponzi scheme, the SEC alleged. It said that since 2009, National Note would not have been able survive but for the influx of new investor funds, and that its payments to investors all but stopped in October 2011. According to the SEC's complaint, Palmer reassured investors that the money would be forthcoming, and continued to solicit new investors in National Note without disclosing the fact that it is delinquent in making payments to existing investors. The SEC's complaint charges National Note and Palmer with violating the anti-fraud and securities registration provisions of U.S. securities laws. Palmer also faces charges that he operated as an unregistered broker-dealer. Scott Frost, Paul Feindt, Matthew Himes and Alison Okinaka of the SEC's Salt Lake Regional Office conducted the investigation; Thomas Melton will lead the litigation. NAVISTAR INT'L: Fitch Cuts Rating on LT IDRs to 'BB-'; Neg. Watch ----------------------------------------------------------------- Fitch Ratings has downgraded the long-term IDRs for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) to 'BB-' from 'BB'. The ratings remain on Rating Watch Negative. The downgrade reflects: -- Heightened risks surrounding certification of NAV's emissions compliant engines; -- Higher than anticipated warranty costs on engines; -- Delayed improvement in NAV's market share of medium and heavy duty trucks in the U.S. and Canada; and -- Low margins. These developments contributed to a material loss in first half- 2012 (1H'12) and could pressure NAV's cash flow and liquidity. Manufacturing debt/EBITDA increased materially, to slightly above 4 times (x) at April 30, 2012, from 2.4x at Oct. 31, 2011. Fitch believes this level may remain elevated compared to recent levels. Fitch expects to resolve the Negative Rating Watch after the Environmental Protection Agency (EPA) determines whether or not NAV's EGR engine technology meets emissions requirements. If certification is denied or substantially delayed, NAV's competitive position and financial performance could be impaired, and the company may be required to reconsider its engine strategy. NAV's ratings may remain at heightened risk for a downgrade if warranty costs don't stabilize and eventually improve. Other possible factors that may precipitate a downgrade are if free cash flow doesn't recover sufficiently to support liquidity, or if NAV encounters additional execution issues with respect to its integration strategy and expansion overseas. In addition, activist investors have accumulated approximately 25% of NAV's common shares in recent months. This introduces some uncertainty about long term operating and financial policies. Conversely, Fitch may resolve the Negative Rating Watch with an affirmation if NAV's emission compliant engines receive timely certification by the EPA. Also supporting a possible future rating affirmation will be if engine quality improves materially, operating margins improve, NAV manages commodity costs effectively, and the company's market share recovers. Weak financial performance reported by NAV in 1H'12 reflected large warranty charges, higher commodity costs for steel and rubber and the negative impact of lower sales of military trucks and parts. Also factoring into the performance were weaker results in Brazil associated with engine pre-buying in 2011 and a transition to contract engine manufacturing for a large customer, start-up and restructuring costs in certain businesses. Other factors included ongoing consolidation of engine and truck engineering operations, and the relocation of NAV's headquarters. NAV's performance could improve during 2H'12 due to seasonality, operating improvements associated with ongoing integration and restructuring actions, and the elimination of special warranty charges (largely non-cash) and certain one-time costs. However, Fitch believes NAV will be challenged to achieve profitability for the full year. Fitch views NFC as neutral to the rating. NFC is performing as expected by Fitch, including steady progress with respect to capitalization and asset quality. NAV's market share for medium and heavy duty trucks in the U.S. and Canada has been slow to improve. The delay can be partly attributed to NAV's strategy of producing its own engines which it initially introduced at a measured pace. In addition, there are possible customer concerns about NAV's emissions compliant engines surrounding engine quality and delayed certification by the EPA. NAV estimates emission credits will run out for heavy duty engines in 2012 and medium duty engines in 2013. Manufacturing free cash flow (FCF) in 1H'12 was negative $388 million. This reflected low margins and capital expenditures which remain higher than average as NAV integrates its engineering functions, invests in a research center and engine testing facility, and realigns other parts of its business. Fitch estimates FCF could break even or be slightly positive in 2H'12, though it will remain negative for the full year. Fitch's estimate assumes NAV's emission compliant engines are certified in the near term. This would allow NAV to continue selling its heavy duty engines. NAV's manufacturing FCF is constrained by recurring pension contributions. NAV's net pension obligations totaled $1.8 billion (approximately 57% funded) at the end of 2011. NAV expects to contribute $190 million to the plans in 2012. Of this amount, $82 million was contributed during the first half of the year. Between 2013 and 2015, NAV estimates it will be required to contribute at least $210 million annually. Liquidity is currently adequate. However, it could become a concern if performance doesn't improve, or if temporary cash requirements, such as higher working capital requirements for used-truck inventories, do not reverse. At April 30, 2012, Navistar's liquidity, excluding NFC, included $681 million of cash and marketable securities. This is down from nearly $1.2 billion at Oct. 31, 2011, and $192 million of availability under a $355 million asset-based credit facility ('ABCL') that matures in 2016. In June 2012, NAV borrowed an additional $138 million under the ABCL. Liquidity is offset by $230 million of manufacturing debt due within one year. NAV repurchased a combined $200 million of shares in fiscal 2011 and the first half of fiscal 2012. Fitch anticipates further repurchases will be minimal in the near to medium term until NAV resolves concerns about engine certification and low margins. NFC's financial performance is generally in line with Fitch's expectations. Profitability has declined slightly in the six- months ended April 30, 2012 due to the run-off of NFC's retail portfolio. The retail balance is expected to decline further over the next several years due to NFC's agreement with GE Capital in 2010 as the primary funding source for the company's retail portfolio Asset quality continues to improve and provisioning volatility has declined as NFC focuses on its relatively lower risk wholesale portfolio. NAV's capitalization is consistent with similarly rated captives, and Fitch expects leverage to improve and stay below historical levels due to reduced financing needs as a result of NFC's exit from retail financing. In fourth quarter-2011, NFC completed a significant refinancing of its credit facilities. Fitch believes the refinancing of its credit facilities may mitigate any potential near-term liquidity concerns. Due to NFC's close operating relationship and importance to the parent, its ratings are directly linked to those of the ultimate parent. The relationship is governed by the Master Intercompany Agreement. There is a requirement referenced in the NFC credit agreement requiring Navistar, Inc. or NAV to own 100% of NFC's equity at all times. Fitch's ratings cover approximately $2 billion of debt at NAV and $2.5 billion of outstanding debt at its Financial Services segment, the majority of which is at NFC, as of April 30, 2012. Fitch has downgraded the ratings for NAV and NFC as follows: Navistar International Corporation -- Long-term IDR to 'BB-' from 'BB'; -- Senior unsecured notes to 'BB-' from 'BB'; -- Senior subordinated notes to 'B' from 'B+'. Cook County, Illinois -- Recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 to 'BB-' from 'BB'; Illinois Finance Authority (IFA) -- Recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 to 'BB-' from 'BB'; Navistar Financial Corporation -- Long-term IDR to 'BB-' from 'BB'. -- Senior unsecured bank credit facilities to 'BB-' from 'BB'. The ratings remain on Rating Watch Negative. NAVISTAR INT'L: Incurred $162-Mil. Net Loss in Fiscal Q2 -------------------------------------------------------- Navistar International Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $162 million on $3.29 billion of net sales and revenues for the three months ended April 30, 2012, compared with net income of $88 million on $3.35 billion of net sales and revenues for the same period during the prior year. The Company reported a net loss of $302 million on $6.35 billion of net sales and revenues for the six months ended April 30, 2012, compared with net income of $94 million on $6.09 billion of net sales and revenues for the same period a year ago. The Company's balance sheet at April 30, 2012, showed $11.38 billion in total assets, $11.79 billion in total liabilities and a $412 million total stockholders' deficit. "Certainly, our first half performance was unacceptable. It included a warranty reserve to repair early 2010 and 2011 vehicles," said Daniel C. Ustian, Navistar chairman, president and chief executive officer. "We were also affected by speculation surrounding our engine certification for our Class 8 engine, which is why we are working tirelessly with the U.S. EPA to get resolution." A copy of the Form 10-Q is available for free at: http://is.gd/COQZSv About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. * * * Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in summary credit opinion at the end of April 2012 that the B1 Corporate Family Rating of Navistar International reflects the company's highly competitive position in the North American medium and heavy duty truck markets, and the continuing recovery in demand. It also reflects the progress Navistar continues to make in implementing a strategy that should reduce its vulnerability to cyclical downturns and strengthen returns. The key elements of this strategy include: expanding its scale and operating efficiencies by offering a full line of medium and heavy-duty trucks equipped with Navistar engines; building its position in international truck and engine markets through alliance and joint ventures; and, strengthening its domestic dealer network. NEDAK ETHANOL: AgCountry Credit Demands Payment of $24.7-Mil. ------------------------------------------------------------- NEDAK Ethanol, LLC, on June 19, 2012, received a notice of continuing default and a demand for payment from AgCountry Farm Credit Services, FLCA, in response to its receipt of the Company Default Notice. As previously disclosed by the Company, on June 11, 2012, the Company provided the Senior Lender with written notice of an occurrence of an event of default under the Restated Loan Documents as required under the terms of the Restated Loan Documents. AgCountry advised the Company that, as a result of the Events of Default, it is accelerating the repayment of all amounts due under the Restated Note. As a result, the Senior Lender has made a demand that the Company pay immediately the aggregate outstanding balance due and owing to the Lender pursuant to the Restated Loan Documents which, as of June 19, 2012, was $24,786,168 plus attorneys' fees and other sums due or becoming due under the Restated Loan Documents. Until the Company satisfies all of the outstanding obligations under the Restated Loan Documents, interest and other charges continue to accrue at the default rate specified therein which, as of June 20, 2012, was 8.0%. NEDAK Ethanol is a party to an Amended and Restated Credit Agreement dated Dec. 31, 2011, with AgCountry. The Senior Lender advised the Company that it intends to exercise its remedies under the Restated Loan Documents and take such action as may be necessary or desirable under the circumstances to protect its interest in the collateral and specifically reserved all rights, remedies, and privileges afforded under the Restated Loan Documents and any other documents between the parties. Those remedies include, among others, the right to take possession of the plant, foreclose on the liens on the Company's property and sell the premises independent of any foreclosure proceedings. The Company continues to have discussions with the Senior Lender concerning the Events of Default; however, there can be no assurance that the Company and the Senior Lender will arrive at any agreement (either oral or written) regarding forbearance, waiver of the Events of Default, modifications to the Restated Loan Documents or otherwise reach a satisfactory agreement. The Company held its 2012 Annual Meeting of Members on June 20, 2012. About NEDAK Ethanol Atkinson, Neb.-based NEDAK Ethanol, LLC -- http://www.nedakethanol.com/-- operates a 44 million gallon per year ethanol plant in Atkinson, Nebraska, and produces and sells fuel ethanol and distillers grains, a co-product of the ethanol production process. Sales of ethanol and distillers grains began in January 2009. NEDAK Ethanol reported a net loss of $781,940 on $152.11 million of revenue in 2011, compared with a net loss of $2.08 million on $94.77 million of revenue in 2010. The Company's balance sheet at March 31, 2012, showed $73.42 million in total assets, $33.68 million in total liabilities, $10.80 million in preferred units Class B, and $28.93 million in total members' equity. Amends Agreement with AgCountry In February 2007, the Company entered into a master credit agreement with AgCountry Farm Credit Services FCA regarding a senior secured credit facility. As of Dec. 31, 2010, and throughout 2011, the Company was in violation of several loan covenants required under the original credit agreement and therefore, the Company was in default under the credit agreement. However, the Company entered into a forbearance agreement with AgCountry which remained effective until June 30, 2011. This default resulted in all debt under the original credit agreement being classified as current liabilities effective as of Dec. 31, 2010. The loan covenants under the original credit agreement included requirements for minimum working capital of $6,000,000, minimum current ratio of 1.20:1.00, minimum tangible net worth of $41,000,000, minimum owners' equity ratio of 50%, and a minimum fixed charge coverage ratio of 1.25:1.00, and also included restrictions on distributions and capital expenditures. On Dec. 31, 2011, the Company and AgCountry entered into an amended and restated master credit agreement pursuant to which the parties agreed to restructure and re-document the loans and other credit facilities provided by AgCountry. Under the amended agreement, the Company is required to make level monthly principal payments of $356,164 through Feb. 1, 2018. Beginning on Sept. 30, 2012, and the last day of the first, second, and third quarters thereafter, the Senior Lender will make a 100% cash flow sweep of the Company's operating cash balances in excess of $3,600,000 to be applied to the principal balance. In addition, the Company is required to make monthly interest payments at the one month LIBOR plus 5.5%, but not less than 6.0%. The interest rate was 6.0% as of Dec. 31, 2011. In addition to the monthly scheduled payments, the Company made a special principal payment in the amount of $7,105,272 on Dec. 31, 2011. As of Dec. 31, 2011, and 2010, the Company had $26,000,000 and $38,026,321 outstanding on the loan, respectively. NEW ENGLAND BUILDING: Committee Retains Bernstein Shur as Counsel ----------------------------------------------------------------- The Official Creditors Committee of New England Building Materials LLC, fka Lavalley Lumber Company LLC, asks for permission from the U.S. Bankruptcy Court to retain the law firm of Bernstein, Shur, Sawyer & Nelson, P.A. as its attorneys. Michael A. Fagone, Esq., and D. Sam Anderson, Esq., among the firm's shareholders, will lead the engagement. The firm's rates are: Professional Rates ------------ ----- Shareholders $215-$600 Paralegals $105-$215 Associates $160-$290 Mr. Fagone, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About New England Building Materials Based in Sanford, Maine, New England Building Materials LLC, fka Lavalley Lumber Company LLC and Poole Brothers, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on Feb. 14, 2012. New England Building Materials is engaged in the business of manufacturing and selling, at wholesale, Eastern White Pine lumber and related products. It was also engaged in the business of selling lumber products at retail, through outlets in Maine and Massachusetts, although, as of the bankruptcy filing date, it has made the determination to cease retail activities. Chief Judge James B. Haines Jr. presides over the case. Lawyers at Marcus, Clegg & Mistretta, P.A., serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard I. Thompson, chief financial officer. William K. Harrington, the United States Trustee for the District of Maine, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. NEW ENGLAND BUILDING: Butts Commercial Approved as Brokers ---------------------------------------------------------- New England Building Materials LLC, fka Lavalley Lumber Company LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ commercial real estate brokerage agency Butts Commercial Brokers to assist the Debtor. A key component of the Debtor's current reorganization is the sale of retail operations, ideally as a going concern, and the Debtor requires professional assistance from a financial advisor to do so. Before the bankruptcy filing date, the Debtor retained the Agency to assist with the marketing and sale of one of its retail locations, located at 39 Enterprise Drive, Windham, Maine. The Debtor proposes to compensate the Agency in accordance with the terms of the Agreement, which terms call for a commission- based transaction fee to be paid to the Agency upon the successful conclusion of the sale or exchange of the Windham Property. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About New England Building Materials Based in Sanford, Maine, New England Building Materials LLC, fka Lavalley Lumber Company LLC and Poole Brothers, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on Feb. 14, 2012. New England Building Materials is engaged in the business of manufacturing and selling, at wholesale, Eastern White Pine lumber and related products. It was also engaged in the business of selling lumber products at retail, through outlets in Maine and Massachusetts, although, as of the bankruptcy filing date, it has made the determination to cease retail activities. Chief Judge James B. Haines Jr. presides over the case. Lawyers at Marcus, Clegg & Mistretta, P.A., serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard I. Thompson, chief financial officer. William K. Harrington, the United States Trustee for the District of Maine, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. NEW ENGLAND BUILDING: Court OKs EMA Partners as Fin'l Advisor ------------------------------------------------------------- New England Building Materials LLC, fka Lavalley Lumber Company LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ EMA Partners LLC and its principal Tod White as special financial advisors. The Firm will assist the Debtor to efficiently sell portions of its pre-petition business, reorganize quickly, and marshal available resources to support continuing operations and repayment to creditors. The Debtor proposes to compensate the Firm in accordance with the terms of a Letter Agreement, which terms call for a commission- based transaction fee to the Firm upon the successful conclusion of a Purchase Transaction or Sale Transaction, as those terms are defined in the Letter Agreement, or a flat fee if the Debtor consummates a transaction with a certain limited pool of parties without the Firm's direct involvement in negotiations. Tod White -- twhite@emapartners.com -- attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About New England Building Materials Based in Sanford, Maine, New England Building Materials LLC, fka Lavalley Lumber Company LLC and Poole Brothers, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on Feb. 14, 2012. New England Building Materials is engaged in the business of manufacturing and selling, at wholesale, Eastern White Pine lumber and related products. It was also engaged in the business of selling lumber products at retail, through outlets in Maine and Massachusetts, although, as of the bankruptcy filing date, it has made the determination to cease retail activities. Chief Judge James B. Haines Jr. presides over the case. Lawyers at Marcus, Clegg & Mistretta, P.A., serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard I. Thompson, chief financial officer. William K. Harrington, the United States Trustee for the District of Maine, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. NEW ENGLAND BUILDING: Court Approves Albin Randall as Accountants ----------------------------------------------------------------- New England Building Materials LLC, fka Lavalley Lumber Company LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ Ronald Bennett, CPA and Albin, Randall & Bennett as accountants. Based in Sanford, Maine, New England Building Materials LLC, fka Lavalley Lumber Company LLC and Poole Brothers, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on Feb. 14, 2012. New England Building Materials is engaged in the business of manufacturing and selling, at wholesale, Eastern White Pine lumber and related products. It was also engaged in the business of selling lumber products at retail, through outlets in Maine and Massachusetts, although, as of the bankruptcy filing date, it has made the determination to cease retail activities. Chief Judge James B. Haines Jr. presides over the case. Lawyers at Marcus, Clegg & Mistretta, P.A., serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard I. Thompson, chief financial officer. William K. Harrington, the United States Trustee for the District of Maine, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. NEW MEXICO HOSPITAL: Fitch Cuts Rating on $6MM Revenue Bonds to B ----------------------------------------------------------------- Fitch Ratings has downgraded the rating on the approximately $6.58 million New Mexico Hospital Equipment Loan Council (Rehoboth McKinley Christian Hospital) hospital facility improvement and refunding revenue bonds, series 2007A to 'B' from 'BB-'. The Outlook has been revised to Stable from Negative. Security The bonds are secured by a pledge of revenues and equipment. In addition, there is a debt service reserve fund. Key Rating Drivers DRASTIC DETERIORATION IN FINANCIAL PROFILE: The rating downgrade is driven by the drastic deterioration in Rehoboth McKinley Christian Hospital's (Rehoboth) financial profile as a number of events resulted in very poor operating performance and strained liquidity. Fiscal 2011 results included negative debt service coverage and only five days cash on hand. SMALL REVENUE BASE: Although performance has rebounded in the first four months of fiscal 2012, Fitch believes Rehoboth's small revenue base remains a key credit concern as it is exposed to volatility in performance, which was demonstrated in fiscal 2011. RELIANCE ON SUPPLEMENTAL FUNDING: Rehoboth is highly reliant on sole community provider (SCP) funds and tax revenue from a mill levy for profitability. A temporary decline in SCP funding, which was ultimately restored in fiscal 2012, was one of the catalysts of the poor performance in fiscal 2011. CONTINUED MANAGEMENT TURNOVER: During Fitch's rating history of Rehoboth there has been constant management turnover. The current CEO and CFO are on an interim basis and have served in that capacity since December 2011 and February 2012, respectively. Credit Profile Rehoboth's rating history has fluctuated between the 'B' and 'BB' category since 2005 and reflects the volatility in Rehoboth's financial performance in addition to constant management turnover. Since Fitch's last review in July 2011, a new CEO and CFO are in place on an interim basis. A search is underway for both positions, and the interim CEO has committed to stay until December 2012. Fiscal 2011 performance was very poor due to a number of events that led to a $9 million variance in net income in 2011 from 2010 including $2.8 million reduction in revenue from lower volume, increased write offs and reduction in SCP funding while expenses rose by $6.6 million from increased contract labor and use of locum tenens, an information systems conversion and an increased hospital lease payment to the county. Fiscal 2011 ended with a $6.9 million operating loss (negative 10.7% operating margin) compared to solid performance in the prior year with a 2.4% operating margin. Rehoboth's debt service coverage calculation was negative 5.88x compared to its covenant of 1.5x, which resulted in a technical default but all bond payments were current. The default was cured by the trustee as year to date 2012 performance has improved. Improved performance has been driven by cost reductions in the areas of labor and supplies. Supplemental funding in the form of SCP and the mill levy are critical since without these funds, Rehoboth would be unprofitable. In fiscal 2011, there was litigation surrounding the mechanism behind the SCP funding, which resulted in an increase in the hospital lease payment to the county ($1.5 million a year), which will now be utilized to generate the federal matching funds for SCP funding. SCP funding was restored after the state litigation was settled in late fiscal 2011. Total SCP funds were $7.063 million in fiscal 2011 compared to $8.645 million in fiscal 2010 and $7.7 million in fiscal 2009. Management expects SCP to be $8.8 million in fiscal 2012. Rehoboth benefits from a mill levy imposed by the county, which totaled $1.6 million in fiscal 2011 compared to $1.43 million in fiscal 2010 and is expected to be $1.35 million in fiscal 2012. The mill levy expires in 2012 and will require voter approval in November for a renewal. The mill levy has existed since 2004 and management stated that the continuation of the mill levy is widely supported. Rehoboth's debt service coverage calculation excludes the mill levy revenue as a source of funds for debt service. Revenue cycle issues and the negative cash flow in fiscal 2011 resulted in a drain on cash to only 5.2 days cash on hand and 13% cash to debt at Dec. 31, 2011 from 65.9 days and 136.8% the prior year. Unrestricted cash and investments have rebounded to 25 days and 57.1% cash to debt at April 30, 2012 and should further improve as a portion of the SCP funding in fiscal 2011 is expected to be received in fiscal 2012 ($1.129 million). Rehoboth has a liquidity covenant of 23 days in fiscal 2012 and 25 days in fiscal 2013, but failure to meet the covenant does not constitute an event of default. Although Rehoboth maintains the dominant market position of 62% in its service area, the payor mix is challenging with 33% of revenues from Medicaid and 7% self-pay. Rehoboth's revenue mix is 36% inpatient and 64% outpatient. Total debt outstanding was $7.04 million including $6.58 million of bonds and $463,000 of capital leases. All of the debt is fixed rate and Fitch used maximum annual debt service (MADS) of $1.1 million, which includes the capitalized leases. MADS drops to $841,586 in fiscal 2012. The Stable Outlook reflects Fitch's expectation that Rehoboth will sustain its improved performance exhibited in the first four months of 2012. Rehoboth had long-term capital plans to open a specialty hospital for medical detox, but those plans have been put on hold given its financial performance. Rehoboth McKinley Christian Hospital is a 69-bed general acute care hospital located in Gallup, New Mexico (138 miles east of Albuquerque, NM and 180 miles west of Flagstaff, AZ). Rehoboth changed its fiscal year end in fiscal 2010 to December from August. Total operating revenue in fiscal 2011 was $64.5 million. Rehoboth covenants to provide annual financial statements within 30 days after the approval of the report by the state auditor, which has usually resulted in fairly late receipt of audits. Management stated that the audit should be available by August. The fiscal 2011 results cited in this report are based on a draft audit. Rehoboth has also been posting monthly financial statements on EMMA. NORTEL NETWORKS: UK Pension Regulators Can't Appeal --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.K. pension regulators for a European branch of Nortel Networks Inc. won't be permitted to appeal to the U.S. Supreme Court from an opinion in December by the U.S. Court of Appeals in Philadelphia blocking the foreign regulators from deciding whether Nortel owes $3.1 billion on underfunded pension plans. The report recounts that the trustee for Nortel's U.K. pension plan filed a claim in the U.S. bankruptcy court saying the company could be liable for as much as $3.1 billion in underfunding. Later, the pension trustee began proceedings in the U.K. that could have resulted in orders requiring further contributions to the pension plan. Nortel notched the first victory when the bankruptcy judge halted the U.K. proceedings for being in violation of Section 362 of the U.S. Bankruptcy Code, which automatically stops actions by creditors outside bankruptcy court. The U.K. pension administrators lost again on appeal to the district court and sustained a third loss on Dec. 29 in the appeals court. The appeals court in Philadelphia concluded that the U.K. pension proceedings didn't fit within the exception to the automatic stay allowing governmental police or regulatory actions to go forward regardless of bankruptcy. The court also ruled that neither the pension trustee nor the U.K. Board of the Pension Protection Fund was a "governmental unit" and thus couldn't take advantage of the police and regulatory exception. Mr. Rochelle relates that on June 25, the Supreme Court decided not to allow a further appeal. Mr. Rochelle notes that Nortel's victory has practical significance by removing a threat that foreign courts could determine major liabilities in the U.S. bankruptcy. The ruling from the Supreme Court also gives greater stature to the appeals court's opinion about the primacy of the U.S. automatic stay over proceedings abroad. The case in the Supreme Court is Trustees of Nortel Networks U.K. Pension Plan v. Nortel Networks Inc., 11-1271, U.S. Supreme Court (Washington). The opinion in the circuit court is Trustees of Nortel Networks U.K. Pension Plan v. Nortel Networks Inc. (In re Nortel Networks Inc.), 11-1895, 3rd U.S. Circuit Court of Appeals (Philadelphia). The ruling by the district judge is Trustees of Nortel Networks U.K. Pension Plan v. Nortel Networks Inc. (In re Nortel Networks Inc.), 10-230, U.S. District Court, District of Delaware (Wilmington). The opinion by the magistrate judge is Trustees of Nortel Networks U.K. Pension Plan v. Nortel Networks Inc. (In re Nortel Networks Inc.), 10-230, in the same court. About Nortel Networks Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Office of the United States Trustee for the District of Delaware has appointed an Official Committee of Unsecured Creditors in respect of the Debtors, and an ad hoc group of bondholders has been organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. The Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel has collected almost $9 billion for distribution to creditors. Of the total, US$4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTHCORE TECHNOLOGIES: Launches ArtSmarts.com Site --------------------------------------------------- Northcore Technologies Inc. launched a new customer web presence delivered through its portfolio company Envision Online Media Inc. As previously announced Northcore has acquired Envision, an Ottawa based software development company and Microsoft Partner. Envision has been one of the most respected boutique solutions providers in the National Capital Area for over a decade and brings a complementary product and skill set to Northcore. The customer, ArtSmarts, is a national not for profit agency which supports, promotes, and demonstrates the impact of the arts as a way of engaging students in 21st century life and learning. It has been the advocacy group for a dynamic approach to teaching, learning, doing and thinking that has been changing the lives of students, artists, educators, and entire schools and communities since 1998. The web site and more information can be found at http://www.artssmartsopen.ca/. "The launch of the new ArtSmarts Open website is a major milestone for our team," said Colin Jackson, Chair of Art Smarts. "This innovative Web presence will allow us to reach an even broader range of participants and engage students and teachers in a wide variety of novel and effective ways. Thanks to the team at Envision for their great work on this project." "We are excited to welcome the team at ArtSmarts to our growing list of customers," said Amit Monga, CEO of Northcore Technologies. "It is gratifying to see such a worthy cause supported by a strong and vibrant web presence. Kudos to the team at Envision for the delivery of a quality product to another satisfied customer." Further disclosure on Envision's portfolio and capabilities can be found on their web presence located at www.Envisiononline.ca. About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. The Company reported a loss and comprehensive loss of C$3.93 million in 2011, compared with a loss and comprehensive loss of C$3.03 million in 2010. The Company's balance sheet at March 31, 2012, showed C$3.96 million in total assets, C$903,000 in total liabilities and C$3.06 million in total shareholders' equity. NORTHSTAR AEROSPACE: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, said a committee of unsecured creditors has not been appointed in the Chapter 11 cases of Northstar Aerospace (USA) Inc., and its affiliates due to an insufficient response to the U.S. Trustee communication/contact for service on the committee. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. NORTHSTAR AEROSPACE: Sec. 341 Creditors' Meeting on July 18 ----------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will convene a Meeting of Creditors under 11 U.S.C. Sec. 341 in the Chapter 11 cases of Northstar Aerospace (USA) Inc., and its affiliates on July 18, 2012, at 1:30 p.m. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. NORTHSTAR AEROSPACE: Hiring Harris Williams as Investment Banker ---------------------------------------------------------------- Northstar Aerospace (USA) Inc., and its debtor-affiliates seek Bankruptcy Court authority to employ Harris Williams LLC, d/b/a Harris Williams & Co., as their investment banker. Harris Williams is a leading national middle market investment banking firm headquartered in Richmond, Virginia. Harris Williams is part of The PNC Financial Services Group, a global diversified financial services firm and Fortune 200 company. Harris Williams provides public and private companies primarily with M&A sell-side investment banking and financial advisory services. Harris Williams has successfully completed more than 115 strategic and financial M&A sell-side advisory engagements over the past 24 months. The Debtors first engaged Harris Williams in October 2010 to advise a special committee of the Debtors' parent company Northstar Aerospace, Inc.'s board of directors to provide M&A sell-side investment banking services and financial advice with respect to a possible merger, stock or investment transaction by the company and further described in the Engagement Letter. Harris Williams worked diligently to assist Northstar in undertaking a transaction during the 12 month exclusive period gaining valuable knowledge and background on the company. However, the initial exclusive period for the engagement expired after 12 months on Oct. 15, 2011, without a transaction acceptable to Northstar being achieved. Northstar re-engaged Harris Williams in late January 2012 to continue its M&A sell-side efforts for Northstar and an amendment to the parties' engagement letter was signed in February 2012. The 2012 marketing process was broader than the prior marketing process. Among other things, Harris Williams assisted Northstar with preparation of an updated confidential information memorandum for delivery to potential purchasers. In addition to contacting potential interested bidders from the first process, an additional group of financial and strategic buyers were contacted about a potential transaction and portion bids for specific facilities of Northstar (as opposed to Northstar as a whole) were specifically encouraged. Harris Williams proposes to continue to render its services on the compensation terms set forth in the parties' engagement letter: -- A monthly fee of $25,000 per month; -- In the event of a Transaction, Northstar will pay Harris Williams a cash fee, equal to an amount calculated as 1.5% of the Purchase Price up to $280 million, plus 3.0% of that portion of the Purchase Price between $280 million and $310 million, plus 5.0% of that portion of the Purchase Price in excess of $310 million. If the Purchase Price is less than $250 million then the Closing Fee shall be calculated as 1.25% of the Purchase Price; -- In the event of a Recapitalization Transaction, Northstar will pay Harris Williams a cash fee equal to (i) 1.5% of the aggregate committed amount of all new senior notes and new bank debt (regardless of the amount of such capital that is funded as of the closing), plus (ii) 3.5% of the aggregate committed amount of all unsecured or secured, new non-senior and new subordinated debt securities (regardless of the amount of such capital that is funded as of the closing), plus (iii) 6% of the aggregate committed amount of all new equity and new equity-linked securities of Northstar (including without limitation new convertible securities and new preferred stock, regardless of the amount of such capital that is funded as of the closing); and -- Harris Williams will be reimbursed promptly for all reasonable out-of-pocket expenses incurred in connection with the proposed Transaction. Pursuant to the Engagement Letter, "Transaction" means a sale through merger, exchange or sale of all or substantially all of the assets, business or shares of Northstar in a single or series of related transactions as well as any recapitalization of Northstar or other extraordinary dividend of cash, securities or other assets to the shareholders of Northstar. "Recapitalization Transaction" means a private issuance, sale, exchange or placement of new financing in the form of equity, equity-linked, or debt securities, instruments or obligations of Northstar with one or more lenders and/or investors, or any loan or other financing including without limitation any such transaction that are consummated in the context of a proceeding initiated under the CCAA in Canada, whether in connection with a Plan of Arrangement or otherwise. The Debtors have also agreed to indemnify Harris Williams. The Debtors believe that the Fee Structure constitutes market- based, fair and reasonable terms and conditions for the retention by the Debtors of Harris Williams as its investment banker. Jon Nemo, Managing Director of Harris Williams' Aerospace, Defense & Government Services Group, attests that his firm (a) has no connection with the Debtors, their creditors, or other parties-in- interest in the Debtors' cases; (b) does not hold any interest adverse to the Debtors' estates; and (c) is a "disinterested person" as defined by section 101(14) of the Bankruptcy Code. Harris Williams may be reached at: Jonathan (Jon) E. Nemo HARRIS WILLIAMS & CO. 1600 Market Street, 21st Floor Philadelphia, PA 19103 Tel: 267) 675-5900 Fax: (267) 675-5901 E-mail: jnemo@harriswilliams.com About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. NORTHSTAR AEROSPACE: Employs Logan & Co as Administrative Agent --------------------------------------------------------------- Northstar Aerospace (USA) Inc. and its affiliates seek Court authority to appoint Logan & Company, Inc., as administrative advisor. By employing an administrative advisor to handle various administrative tasks in the cases, the Debtors can focus their efforts and those of their professionals on facilitating an efficient going-concern sale of assets or confirmation of a plan of reorganization or liquidation. The Debtors have already won authority to employ Logan as claims and noticing agent. Under the parties' Engagement Agreement, the Debtors paid Logan a $10,000 retainer. Kathleen M. Logan attests that her firm (a) is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code, except that Logan & Co. was employed by the Debtors prior to the Petition Date as allowed by section 1107(b) of the Bankruptcy Code and (b) does not hold or represent an interest materially adverse to the Debtors' estates. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. OILSANDS QUEST: Negotiations With Bidders Ongoing ------------------------------------------------- Oilsands Quest Inc. continues to work with its advisor, TD Securities Inc., to review various bids submitted under the previously announced solicitation process to find investors to acquire, restructure or recapitalize the Company's business. The Company believes that some of the bids received could, if subject to further negotiation, be capable of being brought before the court for approval. Negotiations with certain bidders are ongoing and Oilsands Quest and its court appointed monitor, Ernst & Young Inc., have agreed that the best interests of the Company and its stakeholders would be served by transferring responsibility for managing the Company's operations to the Monitor to reduce operating costs. To accomplish this, the Company intends to apply to the court on Thursday, June 28, to expand the powers of the Monitor to pursue the completion of a transaction. If that application is granted, each member of the Board of Directors intends to resign and leave oversight of the Company's activities in the Monitor's hands. The Monitor is expected to take steps to limit the Company's activities to those core functions necessary to complete a transaction and to distribute the proceeds to the Company's stakeholders pursuant to the Companies' Creditors Arrangement Act ("CCAA") process that was launched late in 2011. In combination with these activities, Oilsands Quest is seeking an extension of the protection of the CCAA until September 28, 2012, to provide the Monitor with adequate time to conclude negotiations and to consider which, if any, of the bids ought to be accepted and brought before to the court. There can be no assurance that this process will result in a financing or a sale of the Company or in any other transaction. As part of limiting of activities to focus on the sale and distribution process, Oilsands Quest will not be pursuing its proposed listing on the Canadian National Stock Exchange ("CNSX"). The Company expects its shares to be delisted from the NYSE MKT on or about July 2, 2012. Trading in the common shares of Oilsands Quest remains halted on NYSE MKT. About Oilsands Quest Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is exploring and developing oil sands permits and licenses, located in Saskatchewan and Alberta, and developing Saskatchewan's first commercial oil sands discovery. The Company reported a net loss of US$10.3 million for the six months ended Oct. 31, 2011, compared with a net loss of US$25.1 million for the six months ended Oct. 31, 2010. The Company's balance sheet at Oct. 31, 2011, showed US$156.6 million in total assets, US$33.3 million in total liabilities, and stockholders' equity of US$123.3 million. As at Oct. 31, 2011, the Company had a deficit accumulated during the development phase of US$721.7 million. On Nov. 29, 2011, the Company and certain of its subsidiaries voluntarily commenced proceedings under the CCAA obtaining an Initial Order from the Court of Queen's Bench of Alberta (the "Court"), in In re Oilsands Quest, Inc., et al., Case No. 1101- 16110. The CCAA Proceedings were initiated by: Oilsands Quest, Oilsands Quest Sask Inc., Township Petroleum Corporation, Stripper Energy Services, Inc., 1291329 Alberta, Ltd., and Oilsands Quest Technology, Inc. Under the Initial Order, Ernst & Young, Inc., was appointed by the Court to monitor the business and affairs of the Oilsands Entities. Neither of Oilsands' other subsidiaries, 1259882 Alberta, Ltd., and Western Petrochemical Corp., have filed for creditor protection. The Company's common shares remain halted from trading until either a delisting occurs or until the NYSE Amex permits the resumption of trading. Oilsands Quest obtained June 29, 2012, extension of the order providing creditor protection under the Companies' Creditors Arrangement Act (Canada). PET RESORTS: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Mesa, Arizona-based Pet Resorts, Inc., filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 12-13494) on June 15, 2012, citing about $9.5 million in debts. Judge George B. Nielsen Jr. presides over the case. Stephen E. Traverse, Esq., at Buckley King LPA, represents the Debtor. The Debtor disclosed assets of $2,300,802, and liabilities of $9,500,934. Danielle Verbrigghe, editorial intern at Phoenix Business Journal, reports that Pet Resorts owns a 52% stake in Pete and Mac's Pet Resorts with two Phoenix locations. The report says all the claims against the company are unsecured. The largest claim is about $6.9 million by Wes Remington, who owns about 37% of the company. The report notes the company owes more than $300,000 to American Pet Care Properties Northglenn LLC for unpaid rent. ARC Building Group Inc. is another large creditor, with a disputed claim of nearly $500,000. Pet Resorts also owes unpaid wages. The report adds Pete and Mac's is listed as a co-debtor for some of the claims. PETTERS COMPANY: Andrew Moran Substitutes Zachary Crain as Counsel ------------------------------------------------------------------ Petters Company, et al., notified the U.S. Bankruptcy Court for the District of Minnesota that Andrew D. Moran will substitute for Zachary J. Crain who has withdrawn as counsel for the Debtors. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PHILADELPHIA ORCHESTRA: Files Disclosure Statement on Amended Plan ------------------------------------------------------------------ The Philadelphia Orchestra Association and the Academy of Music of Philadelphia Inc. filed a disclosure statement in support of its first amended joint plan of reorganization dated June 11, 2012. The Plan contemplates the reorganization of the Debtors and the resolution of all outstanding Claims against, and Interests in, the Debtors. Subject to the specific provisions set forth in the Plan, all Claims will be satisfied by cash payments to be issued by the Debtors. Because the Debtor POA is a non-profit corporation, there are no Interests in it to be cancelled. POA's ownership interest in Debtor AOM, which is a non-profit stock- issuing corporation, and the membership interests of the respective Boards in the Debtors, will be retained. The Debtors have estimated the ultimate distributions that will be made in respect of Allowed Claims and Interests. The Debtors believe that if the Plan is not consummated, it is likely that Holders of Claims against and Interests in the Debtors' estates will receive less than they would if the Plan is confirmed because dismissal of these Chapter 11 Cases and subsequent dissolution of the Debtors' organizations will not result in a higher distribution to any Class of Claims or Interests. Similarly, if the Debtors' organizations were for-profit entities that could be involuntarily liquidated under chapter 7 of the Bankruptcy Code, liquidation of the Debtors' assets will not result in a higher distribution to any Class of Claims or Interests. The classification and treatment of claims under the plan are: A. Class 1 (Secured Claims) will receive (a) Cash equal to the amount of the Allowed Secured Claim on or as soon as practicable after the later of (i) the Effective Date, (ii) the date that the Secured Claim becomes Allowed, and (iii) a date agreed to by the applicable Debtor and the Holder of the Class 1 Secured Claim; (b) Reinstatement of the Allowed Secured Claim; (c) the Property securing the Secured Claim; or (d) other treatment on such other terms and conditions as may be agreed upon in writing by the Holder of Claim and the Debtor. B. Class 2 (Priority Claims) will receive (a) the amount of unpaid Allowed Claim in Cash on or as soon as reasonably practicable after the later of (i) the Effective Date, (ii) the date on which such Class 2 Claim becomes Allowed, and (iii) a date agreed to by the applicable Debtor and the Holder of the Class 2 Priority Claim; or (b) other treatment on other terms and conditions as may be agreed upon in writing by the Holder of the Claim and the applicable Debtor. C. Class 3 (ESI, PNPP and Peter Nero Claims against POA) will receive payment in accordance with the terms of the ESI Settlement. All contracts and other agreements between ESI, PNPP, Finger Prince, Inc. and/or Peter Nero, on the one hand, and POA, on the other, are terminated pursuant to the Plan and replaced with the ESI Settlement. D. Class 4 (KCI Claims) will be paid as set forth in the KCI Settlement in full satisfaction of these Claims. Upon the Effective Date, the KCI Lease will be assumed as modified by the KCI Settlement. E. Class 5 (AFM-EPF Claims) will be paid in accordance with the AFM-EPF Settlement, such that upon the Effective Date, AFM-EPF will receive $1,750,000 in full satisfaction of such Claims. All AFM-EPF Claims asserted in these Chapter 11 Cases will be fully resolved upon the Effective Date upon the payment of the amount of the AFM-EPF Settlement. F. Class 6 (PBGC Claims and Termination Premiums) POA will pay to PBGC the sum of $1,317,387. Upon the Effective Date, POA will pay to PBGC a payment of $124,887 in full satisfaction of the PBGC Claims. In addition, POA will pay Termination Premiums to PBGC in an amount totaling $1,192,500 to be paid in three payments: the initial payment of $397,500 will be paid upon the Effective Date; the second payment of $397,500 will be paid not later than 12 months following the Effective Date; and the final payment of $397,500 will be paid not later than 24 months from the Effective Date. G. Class 7A (General Unsecured Claims Against POA) will receive an amount of Distributable Cash equal to 50% of the aggregate amount in U.S. dollars of the Holder's Class 7A Allowed General Unsecured Claim, without payment of interest. H. Class 7B (General Unsecured Claims Against AOM) will receive an amount of Distributable Cash equal to 100% of the aggregate amount in U.S. dollars of such Holder's Class 7B Allowed General Unsecured Claim, without payment of interest. I. Class 8 (Convenience Class Claims Against POA) will receive an amount of Distributable Cash equal to the lesser of the value of the Allowed Claim or $1,000, without payment of interest, upon the Effective Date. J. Class 9 (SpectiCast Claims) will be deemed rejected and terminated pursuant to the Plan. All SpectiCast Claims are Disputed. If any, Allowed SpectiCast Claims will receive, in full satisfaction, settlement, release, extinguishment and discharge of the Claims, treatment in accordance with Class 7A of this Plan. K. Class 10 (Interests) will retain its Interest and receive no Property or other distribution of value on account of its Interest. A full-text copy of the disclosure statement is available for free at http://bankrupt.com/misc/PHILADELPHIAORCHESTRA_ds_1amended.pdf About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Philadelphia Orchestra disclosed $15,950,020 in assets and $704,033 in liabilities as of the Chapter 11 filing. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. Reed Smith LLP serves as the Committee's counsel. The orchestra postpetition signed a new contract with musicians and authority to terminate the existing musicians' pension plan. PINNACLE AIRLINES: Hearing on NSB Aviation Hiring Set for Today --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing today, June 27, 2012, at 9:45 a.m., to consider Pinnacle Airlines Corp., et al.'s motion to (i) employ NSB Aviation, LLC, as their advisor/consultant to provide interim management and restructuring services; and (b) designate Steven A. Rossum as chief restructuring officer. Damian S. Schaible, Esq., at Davis Polk & Wardwell LLP, counsel for the Debtors, submitted a declaration of no objections after the deadline for filing objections to the motion has passed. In separate filings, parties expressed some concerns relating to the Debtors' application: -- Air Line Pilots Association, International related that it does not oppose to the application, however, at the minimum the parties and the Court must monitor those services and accrual of fees, well as considering them in the context of related issues in the case. ALPA is the collective bargaining representative of the air line pilots employed by the Debtors. -- the Official Committee of Unsecured Creditors related that the Debtors and Mr. Rossum must take steps to minimize expenses in a variety of areas, and is supportive of any actions by the Debtors to rein in costs during the Chapter 11 cases. As reported in the Troubled Company Reporter on June 21, 2012, NSB will, among other things: a) assist the Debtors' management in the design and implementation of a restructuring strategy; b) advise the Debtors' management and boards of directors and working with management and its advisors on achieving cost targets contemplated by the Debtors' business plan; and c) provide, if requested by the Debtors, testimony in connection with any Chapter 11 cases. Mr. Rossum, president and managing director of NSB, tells the Court that the Debtors agreed to compensate him and NSB as: 1. A monthly fee in the amount of $57,000, payable upon submission of monthly invoices. 2. In the event of a Termination without Cause by the Debtors, the Engagement Letter provides that the Debtors will have no further liability or obligation whatsoever, except that they will pay NSB all compensation that has accrued, but is unpaid prior to the termination, and any expenses incurred prior to the termination and payable pursuant to the Engagement Letter. 3. NSB will submit monthly invoices to the Debtors that will include (i) a reasonable summary of services provided, (ii) an approximation of the aggregate hours worked, and (iii) a summary of expenses incurred to the Debtors. 4. NSB will file with the Court quarterly reports of compensation earned and provide copies to the U.S. Trustee and Committee Counsel; and parties-in-interest in these Chapter 11 cases will have the right to object to fees paid and expenses reimbursed to NSB within 20 days after NSB files the reports. Mr. Rossum assures the Court that NSB and its professionals are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. 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: Agrees on Protective Order With Unions --------------------------------------------------------- Pinnacle Airlines Corp., et al., notified the U.S. Bankruptcy Court for the Southern District of New York that they entered into stipulated protective orders with: 1. Air Line Pilots Association, International; 2. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO�CLC; 3. Association of Flight Attendants-CWA; and 4. Transport Workers Union of America. Under the stipulations, the parties agreed that disclosures of Confidential Information by Pinnacle to the recipients will be governed by these terms and conditions, among other things: -- Recipients will use the Confidential Information only for the Business Purpose and will use reasonable best efforts to hold and maintain the Confidential Information in strict confidence; and -- Recipients agree that because of the unique nature of the Confidential Information, any breach of the agreement would cause Pinnacle irreparable harm and monetary damages and other damages available at law may be inadequate to compensate Pinnacle for the breach. Full-text copies of the stipulated orders are available for free at: http://bankrupt.com/misc/Pinnacle_StipulatedProtectiveOrder4.pdf http://bankrupt.com/misc/Pinnacle_StipulatedProtectiveOrder1.pdf http://bankrupt.com/misc/Pinnacle_StipulatedProtectiveOrder2.pdf http://bankrupt.com/misc/Pinnacle_StipulatedProtectiveOrder3.pdf 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. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. 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. PT ARPENI: OK With Gramercy Funds Suit on Exchange Offer -------------------------------------------------------- PT. Arpeni Pratama Ocean Line Tbk. asks the U.S. Bankruptcy Court for the Southern District of New York to approve a stipulation modifying the recognition order, solely and exclusively for the purpose of permitting Gramercy Funds Management LLC to commence suit in a court in order to resolve the dispute and litigate the suit to final judgment. As reported in the Troubled Company Reporter on Jan. 20, 2012, the Debtor won the signature of a bankruptcy judge in New York on an order recognizing a court in Indonesia as having the company's principal insolvency proceeding. The Debtor relates that it has been unable to resolve the dispute with Gramercy on Exchange and Tender Offer for its 8.75% Guaranteed Senior Secured Notes Due 2013, which were issued by Arpeni Pratama Ocean Line Investment B.V. The stipulation also provides that the Foreign Representative and Foreign Debtor, by agreeing to modify the Recognition Order, are not consenting to service with respect to, and are not waiving any claims, rights or defenses in connection with, any suit commenced by Gramercy to resolve the Dispute, all of which the claims, rights and defenses are expressly reserved. About PT Arpeni Pratama PT Arpeni Pratama Ocean Line Tbk -- http://www.apol.co.id/-- is Indonesia's leading diversified shipping company, owning and operating the largest fleet of Indonesian flagged dry bulk vessels. Arpeni operates a fleet of general-purpose specialist, such as their tweendecker MV Alas, which is designed to transport dry cargoes such as plywood and agricultural products. As of June 30, 2011, Arpeni operated 77 wholly-owned vessels and two vessels under long term charters. Arpeni filed for bankruptcy protection on Dec. 12, 2011, in the U.S. to block a group of dissident note holders from torpedoing its debt restructuring in Indonesia. Fida Unidjaja, as PT Arpeni's foreign representative, estimated $500 million to $1 billion in assets and liabilities in the Chapter 15 petition (Bankr. S.D.N.Y. Case No. 11-15691) for the company. Judge Allan L. Gropper oversees the Chapter 15 case. Fida Unidjaja is represented by Pedro A. Jimenez, Esq., and Ross Barr, Esq., at Jones Day. Arpeni sought U.S. court recognition of its proceeding before the Commercial Court at the Central Jakarta District Court as a foreign main proceeding. PT Bank Central Asia Tbk., an unsecured lender, commenced the Jakarta proceeding on Aug. 5, 2011, which Arpeni voluntarily joined. On Aug. 24, 2011, the Jakarta Court issued a temporary suspension of debt payment decision, effectively staying actions on claims against the Foreign Debtor for an initial period of 45 days. Throughout the proceeding, Arpeni remained in possession of and continued its business while it restructured its debt. On Dec. 9, 2009, Arpeni announced an informal payment moratorium with certain of its creditors pursuant to which Arpeni ceased making payments of interest or principal. The trustee under the indenture with respect to the U.S. Notes on Sept. 6, 2011, had accelerated the U.S. Notes and demanded performance by the Debtor of its obligations as guarantor under the U.S. Notes Indenture. In the Jakarta proceeding, the Debtor sought and obtained approval of a composition plan from the requisite percentage of its creditors participating in the plan pursuant to Indonesian bankruptcy law. In particular, the Composition Plan was approved by approximately 95% of the Debtor's secured creditors and 80% of the Debtor's unsecured creditors, in each case present and voting at a hearing before the Indonesian Court on Nov. 1, 2011 and holding claims that had been verified for inclusion in the Foreign Proceeding. As provided in the Composition Plan as embodied in the Settlement Agreement, on Nov. 18, 2011, Arpeni launched an exchange offer and tender offer. RG STEEL: Environmentalists Want Stay Exception ----------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that environmental advocates asked a Delaware bankruptcy judge on Friday to allow an appeal to go forward of a federal court decision that trimmed RG Steel LLC's obligations to monitor contamination at its Sparrows Point, Md., steel mill. Bankruptcy Law360 relates that the Chesapeake Bay Foundation Inc., Blue Water Baltimore Inc. and several individuals filed a motion to modify the automatic stay in RG Steel's bankruptcy case to pursue the appeal to the Fourth Circuit, saying the appeal qualifies for the "police powers exception" provided for in the Bankruptcy Code. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. RITZ CAMERA: Wins Interim Approval to $20MM DIP Financing --------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Kevin Gross on Monday gave interim approval to $20 million in debtor-in-possession financing for Ritz Camera and Image LLC, allowing the bankrupt retailer access to working capital as it proceeds to shutter roughly half its stores in advance of a Chapter 11 auction. Judge Gross signed off on a slate of first-day motions, including interim approval of the DIP facility and the use of cash collateral, which the company said it will use to stabilize operations, according to Bankruptcy Law360. About Ritz Camera Ritz Camera & Image LLC, the operator of 265 camera stores in 34 states as well as an Internet business, sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012. Beltsville, Maryland-based Ritz Camera -- http://www.ritzcamera.com-- claims to be the largest camera and image chain the U.S. The Ritz Camera business, which has 1,960 employees, has returned to bankruptcy court to close unprofitable stores. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. Attorneys at Cole, Shcotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. RCI estimated total assets and liabilities of $50 million to $100 million as of the Chapter 11 filing. ROOMSTORE INC: Delays Fiscal 2012 Form 10-K Due to Bankruptcy ------------------------------------------------------------- RoomStore, Inc., filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court of the Eastern District of Virginia, Case No. 11- 37790-DOT, on Dec. 12, 2011. RoomStore determined that it was necessary and prudent to delay the filing of its annual report on Form 10-K to focus on providing the required information and making the necessary filings with the Bankruptcy Court in its Chapter 11 proceeding and to focus on certain other business matters. Due to the nature of these undertakings and important competing demands on Company management, the delay could not be avoided without unreasonable effort and expense. About RoomStore Inc. Richmond, Virginia-based RoomStore, Inc., operates retail furniture stores and offers home furnishings through Furniture.com, a provider of Internet-based sales opportunities for regional furniture retailers. RoomStore was founded in 1992 in Dallas, Texas, with four retail furniture stores. With more than $300 million in net sales for its fiscal year ending 2010, RoomStore was one of the 30 largest furniture retailers in the United States. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. When it filed for bankruptcy, the Company operated a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also had five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. RoomStore also owns 65% of Mattress Discounters Group LLC, which operates 83 mattress stores (as of Aug. 31, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore acquired the Mattress Discounters stake after it filed its second bankruptcy in 2008. Mattress Discounters sought Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on March 14, 2003. Judge Douglas O. Tice, Jr., presides over RoomStore's case. Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. RoomStore's balance sheet at Aug. 31, 2011, showed $70.4 million in total assets, $60.3 million in total liabilities, and stockholders' equity of $10.1 million. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. RTW PROPERTIES: Aug. 10 Hearing on Continued Cash Collateral Use ---------------------------------------------------------------- The Bankruptcy Court set a hearing for Aug. 10, 2012, at 9:00 a.m. to consider the request of RTW Properties LP to continue using the cash collateral involving Arvest Bank. When it filed for bankruptcy, the Debtor obtained the court's signature on an Agreed Interim Order Granting and Conditioning Debtor's Use of Cash Collateral. A Chapter 11 plan for small businesses is due in the case by Dec. 17. Schertz, Texas-based RTW Properties, LP, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-20319) in Corpus Christi on June 18, 2012. RTW Properties owns a petroleum-storage facility in the Port of Brownville, Texas. The facility includes tanks with storage capacity of 230,000 barrels. The Debtor also owns a tract of land in Schertz, Texas. The Debtor sought bankruptcy protection to deal with a $22 million federal income tax lien. Langley & Banack, Inc., serves as the Debtor's bankruptcy counsel. William O. Grimsinger and Chamberlain Hrdlicka serve as special counsel to prosecute an adversary complaint in connection with the tax lien. William R. Mallory, member manager of Royal Holding, LLC, the general partner of the Debtor, explains in a court filing that before the petition date, the Internal Revenue Service asserted a federal tax lien in the amount of $22 million on account of unpaid excise taxes dating back to years as early as 2003. For years prior to the petition date, the Debtor has attempted to resolve the IRS tax lien to no avail. The Debtor believes that the Federal tax lien claimed by the IRS is overstated. The Debtor intends to resolve the tax lien through an adversary proceeding. RUBICON FINANCIAL: Horizon Issues Shares After Deal Cancelled ------------------------------------------------------------- Dial-A-Cup, Inc., a wholly owned subsidiary of Rubicon Financial Incorporated, cancelled the Feb. 17, 2011, letter of intent to merge with Horizon Exterior Technology, Inc. Pursuant to the terms of the cancellation, Horizon has agreed to issue the Company 100,000 shares of its common stock. About Rubicon Irvine, Calif.-based Rubicon Financial Incorporated is a financial services holding company. The Company operates primarily through Newport Coast Securities, Inc., a fully-disclosed broker-dealer, which does business as Newport Coast Asset Management as a registered investment advisor and dual registrant with the Securities and Exchange Commission and Newport Coast Securities insurance general agency. After auditing the 2011 results, Weaver Martin & Samyn, LLC, in Kansas City, Missouri, expressed substantial doubt about Rubicon Financial's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and had negative cash flows from operations. The Company reported a net loss of $2.0 million for 2011, compared with a net loss of $1.7 million for 2010. The Company's balance sheet at March 31, 2012, showed $5.16 million in total assets, $4.79 million in total liabilities and $362,683 total stockholders' equity. SEMINOLE TRIBE: Fitch Raises Rating on $528-Mil. Bonds to 'BB+' --------------------------------------------------------------- Fitch Ratings upgrades approximately $1.74 billion of Seminole Tribe of Florida's (STOF) outstanding gaming division bonds and term loans to 'BBB-' from 'BB+' and approximately $528 million of STOF's special obligation bonds to 'BB+' from 'BB'. STOF's Issuer Default Rating (IDR) is also upgraded to 'BB+' from 'BB'. The Rating Outlook is Stable. The upgrade of STOF's ratings reflects Fitch's increased level of comfort about the tribe's governance practices since the agency downgraded all of STOF's ratings out of investment grade in June 2010. The 'BB+' IDR is still being weighed down somewhat by the lack of an established track record of prudent governance practices at the tribal level in the context of concerns surrounding STOF's leadership history. Other concerns being incorporated into the IDR include: -- The expiration of the tribe's authority to operate table games in 2015; -- Possible legalization of expanded gaming in Florida (next session starts early 2013); -- The need to address the term loan bullet coming due March 2014, and -- Gaming division management's employment contracts expiring May 2013. Longer-term, STOF's operating profile can support an investment grade IDR. Further reduction in debt levels through amortization and/or expansion of the gaming division's cash generation can expedite an upgrade to 'BBB-'. STOF's 'BB+' IDR, which is among the highest in Fitch's Native American gaming universe, is largely supported by the gaming division's: -- Strong competitive position in southeast Florida and monopoly in the Tampa area; -- Considerable market/geographic diversification relative to other tribal gaming credits; -- Solid credit metrics. Governance The downgrade in 2010 followed an issuance of a Notice of Violation (NOV) letter to the tribe by the National Indian Gaming Commission (NIGC). The NOV cited the tribe's failure to comply with the tribe's own bylaws and the Indian Gaming Regulatory Act (IGRA) with respect to allocating gaming related revenues. Since the downgrade, STOF has cured all of the violations cited in the NOV and has entered into a Civil Fine Assessment (CFA) agreement with the NIGC. The tribe agreed to pay a $500,000 fine and agreed to undergo three annual audits of its adherence to the use of net gaming revenue provisions. So far the tribe completed two clean audits. Importantly, STOF canceled its tribal council's discretionary accounts, which historically increased the risk of mismanaging gaming revenues with respect to RAP compliance. Fitch views positively STOF's recent dedication to building and maintaining cash and investment reserves at the tribal level. Relative to the time of the downgrades, Fitch is less concerned about the tribe's governance issues interrupting the gaming operations or the flow of funds that secures the rated debt. Due to the tight trustee controlled flow of funds, interruption in debt service payments can only be caused by fraud at the gaming division or trustee level or by the closure of the casinos by regulators. (Flow of funds can also be shutoff prior to the special obligation debt service being paid if debt service coverage at the gaming enterprise declines below 2 times [x]). The tribe covenants to maintain fidelity insurance to protect against the possibility of fraud occurring that may prevent gaming revenues from entering the trustee waterfall. Closure risk is also manageable within the context of the ratings. Fitch is aware of only ten Closure Orders from the NIGC and most were triggered by tribes operating casinos without a compact. There is one instance of a closure due to a leadership dispute and another due to failure to maintain proper records and conduct proper background checks. Operating Profile The tribe operates six major casinos throughout the state of Florida, including two flagship Hard Rock branded properties in Tampa and Hollywood. STOF recently expanded its casino in Coconut Creek adding 700 slot machines, 34 table games, a new parking structure and additional amenities. The Tampa Hard Rock is also undergoing an expansion which will add 750 new slots and a 1,200 space parking structure by the end of this June. STOF's gaming division operating performance has been resilient through the 2008-2009 recession and the period of heavy expansion of slot machines at the pari-mutuel facilities in the Miami-Dade and Broward Counties (mostly in late 2006/early 2007 and late 2009/early 2010). The resiliency can be largely attributed to STOF's strong market position and the conversion to Class III slots and addition of table games starting 2008. Gaming division's revenues exhibited strong uninterrupted growth over the last five years with the exception of fiscal 2010, when revenues were flat. Per the 2010 compact with the state, the tribe has exclusivity to Class III slots outside of Miami-Dade and Broward Counties through 2030. Table game exclusivity applies to the entire state but the tribe's authorization and exclusivity to operate table games expires in 2015 unless renewed. Competition At present competition is limited to six pari-mutuel facilities that offer Class III slots - three in Broward County and three in Miami-Dade County. Each facility is permitted to operate 2,000 slot machines and there were 6,389 slot machines in aggregate at these facilities as of May 2012. Two more facilities can potentially open slot operations, including Dania Jai-Alai near Ft. Lauderdale and Hialeah Park in Miami. The pari-mutuels are at a competitive disadvantage relative to STOF since they are taxed at 35% compared to STOF's 12% (on the first $2 billion of revenue), do not offer table games and are mandatorily non-smoking. The tax rate was reduced to 35% from 50% in 2010 when STOF's compact was ratified. A more significant competitive threat is the possibility of the state legislature expanding gaming in the state. In 2011, two nearly identical bills were filed proposing three integrated casino resorts in Broward and Miami-Dade Counties. The minimum investment was set at $2 billion and the tax rate was initially proposed at 10%. Prior to going to committee in the 2012, session the bills were pulled due to lack of support. However, Fitch expects similar proposals in the 2013 session since the initiative is heavily lobbied for by commercial operators, especially Genting Malaysia Berhad, which has purchased substantial prime land in Miami for a mixed-use development. Fitch believes there is a low likelihood that the integrated resort proposal passes in the near-term since it faces heavy opposition from STOF, the pari-mutuels, the Orlando theme-park companies and other interest groups. If it eventually passes, Fitch expects the impact on STOF's financial profile will be manageable. Per the compact agreement, STOF would be able to stop making the compact fee payments from its Broward County casinos (Hollywood Hard Rock and the non-branded casinos in Hollywood and Coconut Creek) which account for about half of the gaming division's revenues. Other facilities in Immokalee, Tampa and Brighton would not be directly impacted. Credit Metrics And Liquidty The gaming division's credit metrics remain strong and are expected to improve as the tribe's debt amortizes and expansions at Coconut Creek and Tampa ramp up. STOF's leverage measured as total debt (including special obligation bonds) divided by the gaming division's LTM March 31, 2012 EBITDA is 2.1x. Scheduled principal amortization and interest coverage by EBITDA is 3.9x (4.9x for the gaming division debt only) for the same period. There is some room in the ratings for modest deterioration in the credit metrics driven by mild recessionary pressures or additional borrowing for capital projects. At some point, Fitch expects that STOF may seek to further expand its Hard Rock branded properties in Tampa and Hollywood, as well as its Coconut Creek facility. Cash levels are adequate at the casino and on the tribal government side to absorb a minor cash flow shock. However, STOF does not have a revolving credit facility and the total available liquidity is limited. About half of STOF's debt is self- amortizing but the tribe does have a $736 million term loan bullet that is due in March 2014. Also $367 million in outstanding gaming division bonds issued in 2010 come due in 2017. The looming term loan maturity is a concern that is factored into the ratings. Security Specific Ratings The one notch differential on the gaming division debt (includes the bonds and the term loan) relative to the IDR and the investment grade rating reflects: -- The additional debt incurrence test of 3.5x leverage for the senior lien gaming division debt (4.5x for total gaming division debt) and gaming division maximum annual debt service (MADS) coverage by EBITDA test of 3.0x. For covenant purposes, MADS is calculated by spreading bullet maturities over six years. -- The gaming division seniority in the casino revenue trustee guided waterfall relative to the special obligations bonds. -- The gaming division debt holders' ability to shut off the flow of funds at the gaming division level before distributions into the Governmental Distribution Fund are made if MADS coverage by EBITDA goes below 2x (3.4x as of March 31, 2012). Money retained in the waterfall would go towards redeeming the gaming revenue debt with some carveouts for payments to the tribe to maintain critical governmental operations. The special obligation bonds only have recourse to the funds available in the Governmental Distribution Fund so there is risk that the debt service on these bonds will not get paid if MADS coverage goes below 2x on the gaming side. The special obligation bondholders do not have recourse to the tribe outside of the cash in the Governmental Distribution Fund, which receives the flow of funds monies through a trustee after the gaming division debt is paid. Money is released to the tribe from the Governmental Distribution Fund once the debt service on the special obligation bonds is paid. The special obligation bonds' indenture has an additional debt incurrence covenant stipulating that pari passu debt cannot exceed 15% of Available Revenues. Fitch upgrades the following ratings: Seminole Tribe of Florida -- IDR to 'BB+' from 'BB'; -- $367 million gaming division bonds, series 2010A&B to 'BBB-' from 'BB+'; -- $412 million gaming division bonds, series 2005A&B to 'BBB-' from 'BB+'; -- $889 million term loan to 'BBB-' from 'BB+'; -- $435 million special obligation bonds, series 2007A&B to 'BB+' from 'BB'; -- $94 million special obligation bonds, series 2008A to 'BB+' from 'BB'. SLS CAPITAL: Luxembourg Firm Files in US Amid Missing Funds ----------------------------------------------------------- Liquidators of Luxembourg based SLS Capital S.A. filed in Manhattan, New York a petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 12-12707) to seek recognition of proceedings in Luxembourg as "foreign main proceeding". Maitre Yann Baden, the liquidator and foreign representative, estimated SLS Capital to have assets and debts of $100 million to $500 million. SLS was a financial services company whose primary business was the issuance of bonds to persons residing outside the United States. In the operation of its business SLS had counterparties and advisors in the United States and had significant assets held in custodial asset and cash accounts in New York City. The assets held in the United States were the primary collateral for the bonds that SLS issued. On June 4, 2009, the State Prosecutor in Luxembourg filed an application in the District Court of and in Luxembourg (Case Number L-6258/09), to wind up and order the liquidation of SLS, a Luxembourg joint stock company, pursuant to Article 203 of the law of 10 August 1915 of Luxembourg, as subsequently amended. On Oct. 1, 2009, the Luxembourg Court ordered the dissolution of SLS and placed SLS into liquidation "declar[ing] applicable those legal provisions pertaining to the liquidation of a bankruptcy" and "appoint[ing] as magistrate in bankruptcy [Supervising Judge] Mrs. Carole BESCH, judge with the Luxembourg Court, and designat[ing] as liquidator Maitre Yann BADEN, lawyer residing in Luxembourg. . . ." The liquidator says that there is need for U.S. recognition of the Luxembourg proceeding. As part of the process of marshaling SLS's assets and paying SLS's debts, the SLS Liquidator seeks to investigate the disappearance of SLS's assets including assets held in custodial accounts and to pursue such actions as are appropriate in order to recover SLS's assets and/or seek damages from culpable third parties. SOLYNDRA LLC: Court OKs Sept. 29 Loan Termination Date Extension ---------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Solyndra LLC, et al., to: -- extend until Sept. 29, 2012, extension of the commitment termination date; and -- increase the amount of borrowing available from $4 million to $7 million. As reported in the Troubled Company Reporter on May 23, 2012, the commitment termination date under the final order was June 2, and the extent of financing available to the Debtors was $4 million. The Debtors proposed to borrow additional funds consistent with the increased DIP commitment and to make disbursements through the proposed extended commitment termination date. The Debtors were soliciting consent to the proposed extended commitment termination date and increase commitment from their principal secured lenders, Argonaut Ventured, L.L.C., as prepetition tranche A term loan facility representative and prepetition tranche E agent, and the United States Department of Energy, as prepetition tranche B/D agent. A full-text copy of the terms of the amendment is available for free at http://bankrupt.com/misc/SolyndraLLC_dipfinancingext.pdf 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. SONIC AUTOMOTIVE: Moody's Affirms B1 CFR, Rates $200MM Notes B3 --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Sonic Automotive, Inc.'s proposed $200 million senior subordinated notes due 2022, and affirmed the company's B1 Corporate Family and Probability of Default ratings. The outlook is stable. Proceeds from the proposed note issue will be used to repay Sonic's $135 million 5% senior unsecured convertible notes due 2029 (not rated), fund share repurchases for the variable portion above the par amount of the convertible notes, including assumed tender premium, and transaction fees and expenses. The B3 rating on the proposed senior subordinated notes -- two notches below the company's Corporate Family Rating -- largely reflects the instruments legal subordination to the company's $175 million ABL facility and syndicated floor plan facility, and first lien mortgage notes related to its dealership properties. The affirmation of Sonic's B1 Corporate Family Rating considers that the proposed transaction will eliminate the risk of the senior unsecured convertible notes due 2029 being put back to Sonic in October 2014. Holders of these notes have the right to require Sonic to purchase the convertible notes for cash at that time. Additionally, the affirmation considers that despite the slight increase in leverage and interest costs resulting from the transaction, pro forma debt/EBITDA at 4.7 times remains well below the 5.25 times rating debt/EBITDA level that could trigger a downgrade, and above the 4.5 times debt/EBITDA trigger for an upgrade. New rating assigned: Proposed $200 million senior subordinated notes due 2022 at B3 (LGD 6, 90%) Ratings affirmed and LGD point estimates adjusted: Corporate Family Rating at B1 Probability of Default Rating at B1 $210 senior subordinated notes at B3 (to LGD 6, 90% from LGD 6, 94%) Ratings Rationale In addition to benefits afforded by the proposed transaction, Sonic's B1 Corporate Family Rating considers Moody's expectation of further revenue and earnings growth, the company's brand diversity and broad product offering which span across almost all of the major Asian, German and domestic auto brands, and the contribution from Sonics' parts and service and finance and insurance segments, which help reduce its reliance on new car sales. While only 18% of Sonics' revenues come from its parts and service and finance and insurance segments, these segments account for about 66% of the company's consolidated gross margin. Key rating concerns include the company's exposure to macroeconomic conditions which Moody's expects will continue to have a significant impact on overall new car sales. Currently, the environment for new car sales has been favorable, and Moody's expects this trend to continue in the foreseeable future. However, this trend can change both on a national and/or local basis at any time and negatively impact new car sales which in turn could have an unfavorable short-term and/or long-term impact on Sonic's earnings. The stable rating outlook reflects Moody's view that while the rating agency expects Sonic's earnings will continue to benefit from current new car sales demand and a high degree of operating leverage, Moody's believes some uncertainty exists with respect to Sonic's ability to achieve and maintain debt/EBITDA at or below 4.5 times and EBIT/interest of 2.5 times (2.2 times on a pro forma basis) -- the triggers required for an upgrade -- over the longer- term, particularly given the automotive retailing sector's exposure to changes in macroeconomic conditions. Separately, ratings could be lowered if Sonic's operating performance were to weaken or if financial policy were to become aggressive such that debt/EBITDA rose above 5.25 times or if EBIT/Interest approached 2 times. The principal methodology used in rating Sonic Automotive was the Global Automotive Retailer Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sonic Automotive, headquartered in Charlotte, NC, is a leading auto retailer with 118 stores representing 135 franchises, and annual revenues of around $8 billion. SOUTH MOUNTAIN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: South Mountain Property Enterprises, LLC 3 Friends Lane Suite 202 Newtown, PA 18940 Bankruptcy Case No.: 12-15977 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Jean K. FitzSimon Debtor's Counsel: Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 E-mail: aciardi@ciardilaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John J. McGrath, Jr., managing member. SOUTHEAST HOUSING: Moody's Cuts Rating on Revenue Bonds to 'Ba1' ---------------------------------------------------------------- Moody's has downgraded the rating on $451,700,000 of outstanding Southeast Housing, LLC'S Taxable Military Housing Revenue Bonds, Series 2007 Class I Bonds to Ba1 from Baa3. The outlook is negative. Rating Rationale The rating rationale is that despite a project rescope and financial restructuring last year, the project displays weak financial performance. The financial restructuring of the project is still in process, and it is contemplated that additional bonds may be redeemed using proceeds of two property sale dispositions at Key West and Jacksonville bases. Moody's analyzed several scenarios where sale disposition proceeds were used to redeem debt. If the restructuring and rescope are completed as planned, the project will likely perform in line with other military housing credits in this rating category. Credit Strengths * Revised rescope is nearing completion with only two units to renovate and approximately 110 units left to demolish * Potential financial restructuring from the sale of land and bond redemptions before the end of the initial development period (IDP) in November 2013 will reduce debt service on the bonds and increase debt service coverage * Occupancy has improved from 87.7% in 2010 to 93.5% in 2011 * Several bases are essential, which limits the risk of base closure or significant downsizing * Project has debt service reserve fund provided by a surety bond by National Public Finance Guarantee Corporation (rated Baa2/NEG) Credit Challenges * Moody's calculated debt service coverage from audited financial statements for the year ending in 2011 show 1.03x debt service coverage. This calculation is based on asset and management incentive fees subordinated to debt service, demolition costs above the line, and includes capitalized interest. * Low BAH increase of 0.92% for 2012 and decrease of 3.67% for 2011 * Future financial performance is contingent upon sale of land at Key West and Jacksonville and subsequent debt restructuring consented to by bondholders * The project is subject to real estate risks, including competition from surrounding real estate. Outlook The outlook on the bonds is negative due to the uncertainty surrounding the execution of the sale of disposition properties and subsequent financial restructuring. The project has already been able to successfully redeem $75,000,000 of Class I bonds and believes there is a likelihood the project will be able to complete the financial restructuring. The negative outlook is also due to the soft real estate markets surrounding the bases. The economic downturn has significantly reduced the home prices and created strong competition for on-base housing. What could change the rating UP: - Increase in debt service coverage - Improvement in occupancy rates and BAH increases What could change the rating DOWN: - Decline in debt service coverage - Significant troop population changes at one or more of the project's bases Principal Methodology The principal methodology used in this rating was Global Housing Projects published in July 2010. SPRINT NEXTEL: Virgin Mobile Selling Contract-Less iPhone --------------------------------------------------------- One of Sprint Nextel Corporation's prepaid brands, Virgin Mobile USA, will offer Apple Inc.'s iPhone without a contract beginning on June 29. iPhone 4 on Virgin Mobile will cost $549.99 for the 8GB model, and iPhone 4S will be $649.99 for the 16GB model. Any iPhone devices sold by Virgin Mobile will count toward Sprint's current unit commitment under the existing agreement with Apple. Sprint expects that bringing the iPhone to Virgin Mobile should have no material impact to Adjusted OIBDA in 2012. About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's balance sheet at March 31, 2012, showed $50.61 billion in total assets, $40.02 billion in total liabilities, and $10.59 billion in total shareholders' equity. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. Fitch Ratings has assigned ratings to Sprint's $2 billion notes offering. This includes a 'BB/RR2' rating to the junior guaranteed unsecured notes due 2020 and a 'B+/RR4' rating to the unsecured senior notes due 2017. SPRINT NEXTEL: Dodge & Cox Holds 10.3% of Series 1 Common Shares ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Dodge & Cox disclosed that, as of May 31, 2012, it beneficially owns 307,414,528 common shares - series 1 of of Sprint Nextel Corporation representing 10.3% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/q96th5 About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's balance sheet at March 31, 2012, showed $50.61 billion in total assets, $40.02 billion in total liabilities, and $10.59 billion in total shareholders' equity. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. Fitch Ratings has assigned ratings to Sprint's $2 billion notes offering. This includes a 'BB/RR2' rating to the junior guaranteed unsecured notes due 2020 and a 'B+/RR4' rating to the unsecured senior notes due 2017. TRAINOR GLASS: Has Access to Cash Collateral Until July 11 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois extended Trainor Glass Company's authorization to: (a) use cash collateral; (b) incur postpetition debt; and (c) grant adequate protection and provide security and other relief to First Midwest Bank. The Court ordered that the definition of the termination date in the final cash collateral order/DIP financing order is amended to read as: At the prepetition lender's election, the earlier to occur of: (a) the date on which postpetition lender provides, via facsimile or overnight mail, written notice to counsel for the Debtor and counsel for the Committee of the occurrence of an event of default; and (b) July 11, 2012, unless the postpetition lender will have agreed in writing to a budget providing for the use of the cash collateral beyond July 11, 2012. Under the final cash collateral/DIP financing order, as amended by order dated May 10, 2012, the Debtor's access to the cash collateral is set to expire on June 6. First Midwest Bank, in its capacity as Postpetition Lender, has agreed to a further amended and supplemental budget which runs through the week ending June 29. About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. The Hon. Carol A. Doyle oversees the Chapter 11 case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge Partners, Inc., serves as its financial consultant. The Debtor scheduled $14,276,745 in assets and $64,840,672 in liabilities. A three-member official committee of unsecured creditors has been appointed in the case. The committee retained Sugar Felsenthal Grais & Hammer LLP as counsel. TRAINOR GLASS: Hires William Black as Local North Carolina Counsel ------------------------------------------------------------------ Trainor Glass Company asks for permission from the U.S. Bankruptcy Court to employ William M. Black, Jr., and the partners, associates and paralegals of the law firm of William M. Black, Jr. Attorneys as local North Carolina counsel. The Debtor requires Black to render all lien-related services for these construction projects: (a) Duke Cancer Center Quiet Room (Durham, North Carolina); (b) Project Green (Whitsett, North Carolina); (c) all other legal services for the Debtor related to the review, preparation recording and perfection of liens on the construction projects. The Debtor believes that the amount of outstanding claims to be served with lien notices may total nearly $500,000 with a net balance to the Debtor of approximately $230,000. The firm's rates are: Personnel Rates -------- ----- William M. Black, Jr. $210 per hour Pat A. Cook $210 per hour William M. Black, Jr., the owner and principal of Black, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. The Hon. Carol A. Doyle oversees the Chapter 11 case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge Partners, Inc., serves as its financial consultant. The Debtor scheduled $14,276,745 in assets and $64,840,672 in liabilities. A three-member official committee of unsecured creditors has been appointed in the case. The committee retained Sugar Felsenthal Grais & Hammer LLP as counsel. TRONOX INC: Expert Says Firm Was Bankrupt at Time of IPO -------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that a Tronox Inc. solvency expert took the stand Monday in a trial in which the pigment maker is suing ex-parent Kerr-McGee Corp. over legacy environmental liabilities it says sent it into bankruptcy, testifying that Tronox was insolvent following its 2005 initial public offering. 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. VCR I: Voluntary Chapter 11 Case Summary ---------------------------------------- Debtor: VCR I, LLC 559 Bozeman Rd Madison, MS 39110 Bankruptcy Case No.: 12-02009 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Edward Ellington Debtor's Counsel: Robert Rex McRaney, Jr., Esq. MCRANEY & MCRANEY P.O. Drawer 1397 Clinton, MS 39060 Tel: (601) 924-5961 Fax: (601) 924-1516 E-mail: mcraneymcraney@bellsouth.net Estimated Assets: $0 to $50,000 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 Pradeep Raj Rai, manager. VHGI HOLDINGS: Scott Haire Resigns as Board Chairman and CFO ------------------------------------------------------------ Scott A. Haire informed VHGI Holdings, Inc., that he would be resigning from his positions as a member and chairman of the Company's Board of Directors and as the Company's Chief Financial Officer. His resignation was effective as of May 25, 2012. About VHGI Holdings Fort Worth, Tex.-based VHGI Holdings, Inc., is a holding company with revenue streams from the following business segments: (a) precious metals (b) oil and gas (c) coal and (d) medical technology. For 2011, Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about VHGI Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. The Company reported a net loss of $5.43 million on $499,600 of revenues for 2011, compared with a net loss of $1.67 million on $482,300 of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $7.22 million in total assets, $9.12 million in total liabilities, and a stockholders' deficit of $1.90 million. VITRO SAB: Bondholders Opposing Expedited Circuit Appeal -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Vitro SAB bondholders told the U.S. Court of Appeals in New Orleans Monday that Mexican glassmaker should be denied an expedited appeal from a ruling by the bankruptcy judge on June 13 refusing to enforce the Mexican reorganization plan in the U.S. The report recounts that the bankruptcy judge in Dallas ruled that the Mexican reorganization violated U.S. law and public policy by reducing the liability of non-bankrupt Vitro subsidiaries on their guarantees of $1.2 billion in defaulted bonds. The bankruptcy judge recommended that the 5th Circuit permit a direct appeal to avoid an intermediate appeal in the federal district court in Dallas. According to the report, the bondholders are opposing an expedited appeal even though they may soon be able to start seizing assets of Vitro and its subsidiaries. Bondholders argue that the subsidiaries can file their own bankruptcies to avoid having their assets attached. The bondholders want the usual 30 days to file their brief on appeal after Vitro submits its papers. Vitro would have the bondholders brief filed within 10 days. Mr. Rochelle notes that in deciding that the Vitro reorganization won't be enforced in the U.S., the bankruptcy judge in Dallas said his ruling won't take effect until June 29. After that, any injunction halting seizure of assets must be granted by an appellate court, the bankruptcy judge said. There will be a hearing in district court on June 28 to decide whether bondholders will be precluded from seizing assets while the case is processed in the appeals court. The appeal is Vitro SAB de CV v. Ad Hoc Group of Vitro Noteholders (In re Vitro SAB de CV), 12-90055, 5th U.S. Circuit Court of Appeals (New Orleans). Vitro's motion in district court for a stay pending appeal is In re Vitro SAB de CV, 11-3554, U.S. District Court, Northern District of Texas (Dallas). The suit in bankruptcy court where the judge decided not to enforce the Mexican reorganization in the U.S. is Vitro SAB de CV v. ACP Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S. Bankruptcy Court, Northern District of Texas (Dallas). About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas entered a ruling that precluded Vitro from enforcing its Mexican reorganization plan in the U.S. The judge ruled that the Mexican reorganization was "manifestly contrary" to U.S. public policy because it bars the bondholders from holding Vitro operating subsidiaries liable to pay on their guarantees of the bonds. The Mexican plan reduced the debt of subsidiaries on $1.2 billion in defaulted bonds even though they weren't in bankruptcy in any country. VNSD INC: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------- Debtor: VNSD, Inc. 218 N Washington Ave Bergenfield, NJ 07621 Bankruptcy Case No.: 12-25799 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Robert L. Sweeney, Esq. 141 Main Street, 2nd Floor Hackensack, NJ 07601 Tel: (201) 488-0182 Fax: (201) 488-3463 E-mail: rsweeneylaw@aol.com Scheduled Assets: $1,500,000 Scheduled Liabilities: $2,559,122 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/njb12-25799.pdf The petition was signed by Peter Darakjian. WASHINGTON MUTUAL: JPMorgan Wins Interim OK for $4M Settlement -------------------------------------------------------------- Kelly Rizzetta at Bankruptcy Law360 reports that JPMorgan Chase Bank NA earned preliminary approval Monday for a $4 million settlement that lays to rest a Pennsylvania class action accusing Washington Mutual Inc. of collecting kickbacks in return for referring borrowers to certain private mortgage insurers. If the proposed settlement wins final approval this fall, it would close the book on a five-year-old lawsuit left over from JPMorgan's 2008 acquisition of WaMu following its seizure by the Federal Deposit Insurance Corp., according to Bankruptcy Law360. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. In March 2012, the Debtors' Seventh Amended Joint Plan of Affiliated, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the chapter 11 restructuring process. The Plan is based on a global settlement that removed opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu established a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. WHITE ELEPHANT TRADING: SEC Sues Over Astrology-Based Ponzi Scheme ------------------------------------------------------------------ The Securities and Exchange Commission on June 21 charged that a former broker in Orlando, Fla., defrauded investors in an astrology-based Ponzi scheme. The SEC alleges that Gurudeo "Buddy" Persaud lured family, friends, and others into investing in his firm, White Elephant Trading Company LLC, by falsely guaranteeing their money would be safe and yield lofty returns ranging from 6% to 18%. Persaud told investors he would invest in the debt, stock, futures, and real estate markets, but did not reveal that his trading strategy was based on his belief that markets are affected by gravitational forces. According to the SEC's complaint filed in U.S. District Court for the Middle District of Florida, Persaud used investors' money to make payments to other investors, the hallmark of a Ponzi scheme. Persaud also lost $400,000 of investor funds through his trading and diverted at least $415,000 to pay for his personal expenses, the SEC alleged. The same month Persaud began receiving investor money, he started using some of that money for his personal expenses. The SEC said that Persaud created phony account statements to hide his trading losses and give investors a false sense of security. "Persaud preyed on people who trusted him by promising high and steady returns while hiding his unconventional trading strategy," said Eric I. Bustillo, Director of the SEC's Miami Regional Office. "When Persaud blatantly lied to investors and hid their losses through a Ponzi scheme, he should have known that an SEC enforcement action was in the stars." Persaud was a registered representative at a Florida-based broker- dealer but separately operated the now-inactive White Elephant, starting in mid-2007. In all, Persaud raised more than $1 million from at least 14 investors between July 2007 and January 2010. The SEC alleges that in making trading decisions, Persaud chiefly relied on an Internet service that provided directional market forecasts based on lunar cycles and gravitational pull. Persaud's strategy was premised on the idea that gravitational forces affect mass human behavior, and in turn, the stock market. For example, Persaud believed that when the moon exerts greater gravitational pull on the Earth, people feel dejected and are more inclined to sell securities. The SEC's complaint seeks disgorgement of ill-gotten gains, financial penalties, and injunctive relief against Persaud to enjoin him from future violations of the federal securities laws. The SEC's investigation was conducted in the Miami Regional Office by Senior Counsel Rachel K. Paulose and Accountant Karaz S. Zaki under the supervision of Assistant Regional Director Elisha L. Frank, with assistance from examiners Anson Kwong and Brian H. Dyer, Examination Manager George Franceschini, Assistant Regional Director Nicholas A. Monaco, and Associate Regional Director John C. Mattimore. Amie Riggle Berlin will lead the SEC's litigation. WSG RIVERVIEW: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: WSG Riverview, LP 400 Arthur Godfrey Road, Suite 200 Miami, FL 33140 Bankruptcy Case No.: 12-13888 Chapter 11 Petition Date: June 21, 2012 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Brian F. Kenney Debtor's Counsel: Christopher A. Jones, Esq. WHITEFORD TAYLOR & PRESTON, LLP 3190 Fairview Park Drive, Suite 300 Falls Church, VA 22042 Tel: (703) 280-9263 Fax: (703) 280-8942 E-mail: cajones@wtplaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its eight largest unsecured creditors is available for free at http://bankrupt.com/misc/vaeb12-13888.pdf The petition was signed by Eric Sheppard. Previous Chapter 11 filings by related entities: Petition Debtor Case No. Date ------ -------- ---- ATL 2130 LP 11-76017 09/06/11 WSG Charlottesville, LLC 12-12785 05/01/12 WSG Dulles GL, LLC 12-11151 02/23/12 WSG Dulles, L.P. 12-11149 02/23/12 WSG Trace Fork, L.P. 12-11756 03/16/12 ZALE CORP: Incurs $4.5 Million Net Loss in April 30 Quarter ----------------------------------------------------------- Zale Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $4.52 million on $445.17 million of revenue for the three months ended April 30, 2012, compared with a net loss of $8.99 million on $411.84 million of revenue for the same period during the prior year. The Company reported a net loss of $7.56 million on $1.45 billion of revenue for the nine months ended April 30, 2012, compared with a net loss of $79.66 million on $1.36 billion of revenue for the same period a year ago. The Company's balance sheet at April 30, 2012, showed $1.22 billion in total assets, $1.01 billion in total liabilities and $202.13 million in total stockholders' investment. A copy of the Form 10-Q is available for free at: http://is.gd/FFTDiv About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ * State SFAs Respond to Decline in Single Family Bond Issuance -------------------------------------------------------------- State housing finance agencies (HFA) are responding in a number of new ways as single family bond issuance has declined substantially since 2009, says Moody's Investors Service, which has recently issued three distinct reports on state HFAs. "With conventional mortgage rates at 40-year lows, HFAs are not able to offer competitive single family mortgage loan products utilizing their traditional financing method of issuing mortgage revenue bonds, and are now turning to the secondary mortgage market," said Moody's Eileen Hawes, author of one of the reports, "Secondary Market Funding Strategies Buoy State HFAs' Growth But Add to Their Risks." The secondary market, including the To Be Announced (TBA) program, was established in the 1970s for the forward trading of mortgage- backed securities, creating parameters under which mortgage pools can be considered fungible and thus do not need to be explicitly known --"To Be Announced" -- when a trade is initiated. "The approach is positive but there could be challenges if they are not properly managed," said Ms. Hawes. "The secondary market may also expose HFAs to potential interest rate risk in the event the market shifts adversely against the hedges executed in secondary market trades." If current trends continue, Moody's also foresees an increasing number of HFA single family programs entering run-off, as the number of bonds outstanding are reduced over time due to the lack of new issuance. "While certain risks may increase as programs run off, we believe the programs will maintain stable credit quality during run-off," said Moody's VP-Senior Credit Officer William Fitzpatrick. "Their structure allows them to become stronger as no new mortgages are added, and we expect that HFA financial management teams will continue to make decisions that support credit quality." Mr. Fitzpatrick is the author of the special comment, "State Housing Finance Agency Single Family Programs in Run-off Likely to Maintain Credit Quality. " In the past several years, state HFAs have also sought new bond structures to help facilitate the replacement of expiring liquidity contracts for variable rate demand bonds (VRDBs). "These structures include floating-rate notes, direct purchase notes, direct loans, and index floaters and all carry many of the same risks as VRDBs, including interest rate risk, renewal risk, and the risk of bond acceleration due to an event of default," said Moody's VP - Senior Analyst Rachael McDonald, author of the third report, "Availability of Floating-Rate Debt Structures a Benefit for State Housing Finance Agencies." "However, they do not allow for optional tenders which eliminates remarketing risk, one of the key risks inherent with VRDBs," said Ms. McDonald. "While we view all variable rate debt, including these structures, as riskier than fixed rate bonds, the alternative structures are a potential credit positive for HFAs if they are used to replace traditional VRDB structures." * US Manufacturers' Cash Piles Decline as Acquisitions Ramp Up -------------------------------------------------------------- US manufacturing corporate cash holdings declined 23% in 2011 as spending on acquisitions and shareholder initiatives ramped up, says Moody's Investors Service in a new special comment titled, "US Manufacturing Industry: Cash Pile Declines As Spending on Shareholder Returns and Acquisitions Surges." "Spending on acquisitions and shareholder returns has outpaced capital expenditures by the manufacturing industry, with little impact on credit quality," said Edwin Wiest, a Moody's Vice President -- Senior Analyst and author of the report. "Share repurchases tripled in value during 2011, and dividend payments jumped by 20%." Investment-grade issuers held 75% of cash held by manufacturers at the end of 2011. While that was comparable to the 77% they held of total corporate cash, holdings are down 27% from the previous year, says Moody's. The report's findings are based on an analysis of the cash holdings of 80 rated manufacturers. General Electric Company (Aa3 stable) experienced by far the largest cash decline in dollar terms during 2011. But GE's decline in cash was largely due to energy-related acquisitions rather than efforts to boost shareholder returns. Other manufacturers that saw cash declines in excess of $1 billion were 3M (Aa2 stable), Danaher Corporation (A2 stable) and Tyco International Ltd., the guarantor of Tyco International Finance S.A. (A3 under review). Despite these outflows among manufacturers, Mr. Wiest says liquidity generally remains strong and operating cash flow-to-debt metrics are still healthy. Moody's outlook on the heavy manufacturing/capital goods sector is positive, while the diversified manufacturing sector outlook is stable. * 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 ***