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/raid1/www/Hosts/bankrupt/TCR_Public/120628.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 28, 2012, Vol. 16, No. 178 Headlines 205 EAST: Klestadt & Winters Approved as Bankruptcy Counsel 205 EAST: Marcus & Pollack Approved as Property Tax Counsel 4KIDS ENTERTAINMENT: Sale Approved with Excess for Shareholders AFA FOODS: Two Plants Sold for $11.6 Million ALL AMERICAN PET: Changes Domicile from Maryland to Nevada AMERICAN AIRLINES: Ruling Friday on Rejection of CBAs AMERICAN AIRLINES: Could Retain Pilot A Plan With DOT Regulation AMERICAN AIRLINES: Wins Lawsuit Over NMB Election AMERICAN AIRLINES: Has Green Light to Purchase 9 MD-82 Aircraft AMERICAN ARCHITECTURAL: Meeting to Form Panel Set on July 10 AMERICAN INDUSTRIAL: Case Summary & 15 Largest Unsecured Creditors APEX KATY: Hoover Slovacek Approved as Bankruptcy Counsel APEX KATY: Seyfarth Shaw OK'd as Counsel for Health Care Law APEX KATY: Sperry Van Ness Approved as Real Estate Broker APEX KATY: Taps J. Patrick Magil as Strategy Consultant APPLETON PAPERS: Amends Equity Purchase Agreement with Hicks ARMORED AUTOGROUP: S&P Cuts Corporate Credit Rating to 'B-' BANKRATE INC: S&P Affirms 'BB-' Corporate Credit Rating BERNARD L. MADOFF: Customers Raise New Defenses in Lawsuits BMB MUNAI: Swings to $139.2 Million Net Loss in Fiscal 2012 BROADCAST INTERNATIONAL: Files Amendment No. 2 to Form S-1 CAZ INVESTMENTS: Voluntary Chapter 11 Case Summary CDC CORP: D. Crenshaw Substitutes as CDC Software Counsel CELL THERAPEUTICS: Files Form S-3, Registers 12.6MM Shares CENTRAL FALLS, RI: State Receivership Cost Climbs CERIDIAN CORP: Moody' Rates New $720MM Senior Secured Notes 'B1' CINRAM INTERNATIONAL: Chapter 15 and CCAA Case Summaries CIRCUS AND ELDORADO: Taps Downey Brand as Nevada Counsel CIRCUS AND ELDORADO: Files Schedules of Assets and Liabilities COEUR D'ALENE: Moody's Assigns 'B2' CFR/PDR; Outlook Stable COEUR D'ALENE: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable COMPREHENSIVE CARE: Expects 2nd Straight Quarterly Profit CORD BLOOD: Agrees to Pay BioCells Sellers $60,000 in 2012 CORDILLERA GOLF: Blames Small But Vocal Minority for Bankruptcy CORDILLERA GOLF: Case Summary & 20 Largest Unsecured Creditors CYNERGY GROUP: Voluntary Chapter 11 Case Summary DANCEHALL LLC: Involuntary Chapter 11 Case Summary DEWEY & LEBOEUF: Creditors Want to Pay Counsel $1,055 Per Hour DUNDEE RESORT: Executive Denies Receivership Rumors EIG INVESTORS: Moody's Lowers Corp. Family Rating to 'B2' ENGILITY CORP: Moody's Revises Corporate Family Rating to 'Ba3' ENGILITY CORP: S&P Keeps 'BB+' Rating on $385M Sr. Unsecured Notes EPICOR SOFTWARE: S&P Affirms 'B' CCR on Successful Merger ESCOTO CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors FRANKLIN CREDIT: Combined Plan Hearing Scheduled for July 18 FRANKLIN CREDIT: Section 341(a) Meeting Scheduled for July 11 FRANKLIN CREDIT: Taps SNR Denton as Special Securities Counsel FULLER BRUSH: Taps FocalPoint Securities as Investment Banker G. P. HOLDINGS: Case Summary & 5 Largest Unsecured Creditors GENERAL MARITIME: Issues 83,129 Common Shares to Houlihan GEORGES MARCIANO: Sale of California Houses to Be Challenged GRANITE DELLS: Plan Outline Hearing Scheduled for July 27 GUIDED THERAPEUTICS: Extends KM License Agreement for One Year HALCON RESOURCES: S&P Gives 'B-' Corp. Credit Rating; Outlook Pos HAMPTON ROADS: Shareholders OK Issue of 135.7MM Common Shares HARRISBURG, PA: Sues to Wrest Financial Control From State IBIZA MERGER: Moody's Assigns 'B2' Corporate Family Rating IDEAL CONCRETE: Voluntary Chapter 11 Case Summary INDIANAPOLIS DOWNS: Files First Amended Reorganization Plan INTERNATIONAL UNION: Case Summary & 20 Largest Unsecured Creditors JAMES RIVER: S&P Cuts Corp. Credit Rating to 'CCC+'; Outlook Neg KENAN ADVANTAGE: Moody's Affirms 'Ba3' Corporate Family Rating KRONOS INC: S&P Keeps 'B' Corporate Credit Rating; Outlook Stable LA PROMENADE: Case Summary & 12 Largest Unsecured Creditors LENNY DYKSTRA: Enters Plea Agreement in Bankruptcy-Fraud Case LIGHTSQUARED INC: 'LP' Lenders Object to Cost Allocations LSP MADISON: Moody's Affirms 'Ba2' Rating on New $800MM Sec. Loan MAINLINE EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors MARIANA RETIREMENT FUND: Retiree Files $378K Admin. Expense Claim MARIANA RETIREMENT FUND: Can Continue Paying Benefits MARIANA RETIREMENT FUND: Member Wants Court to Deny Lawyers' Fees MCCLATCHY COMPANY: Maturity of BOA Credit Extended to 2015 MOUNTAIN PROVINCE: Plan of Arrangement Has July 5 Record Date NAVISTAR INTERNATIONAL: Mark Rachesky Owns 13.6% of Shares NEDAK ETHANOL: T. Shane Named Principal Financial Officer NEW ENGLAND BUILDING: Richardson Whitman Okayed as Special Counsel NEW ENGLAND BUILDING: Court OKs Spinglass as Financial Advisor NEW ENGLAND BUILDING: Court Approves Marcus Clegg as Counsel NEW ENGLAND BUILDING: Warren Brodie Approved as Special Counsel NEWPAGE CORP: Creditors File Motion to Prosecute Certain Claims NORTHSTAR AEROSPACE: Versa Seeks Info on Rival's Bid OLD REPUBLIC: Fitch Puts Rating on $550-Mil. Sr. Notes at 'BB-' OMEGA NAVIGATION: Has Until Aug. 3 to File Plan of Reorganization PHOENIX COS: Improvement in GAAP Cues Fitch to Affirm 'B' Rating PINNACLE AIRLINES: Colgan Crash Victims Seek Punitive Damages RG STEEL: Kurtzman Carson OK'd to Provide Administrative Services RG STEEL: U.S. Trustee Forms Seven-Member Creditors Committee RG STEEL: Willkie Farr Approved as Bankruptcy Co-Counsel RITE AID: 10 Directors Elected at 2012 Annual Meeting RITZ CAMERA: Meeting to Form Panel Set on July 2 ROSETTA GENOMICS: Amends Annual Report for Reverse Stock Split RUDEN MCCLOSKY: Buyer Objects to Chapter 7 Switch SAINT CATHERINE INDIANA: Has Interim Approval of First Day Motions SLS CAPITAL: Chapter 15 Case Summary SBA COMMS: Moody's Alters Ratings Outlook to Neg. on TowerCo Deal SM ENERGY: Moody's Rates Proposed $300-Mil. Senior Notes 'B1' SON CORPORATION: Case Summary & 10 Largest Unsecured Creditors SONIC AUTOMOTIVE: S&P Rates Proposed $200MM Subordinated Debt 'B+' SOUP KITCHEN: Court-Appointed Trustee Goes After Former Owners STOCKTON, CA: May File for Chapter 9 This Week; Budget Okayed SYMS CORP: Creditors Want Exclusivity Termination TRAINOR GLASS: Can Hire Thomas Feldman as Local Texas Counsel TRAINOR GLASS: Court Approves Pollice as Local Michigan Counsel TRAINOR GLASS: Court OKs Kasimer & Annino as Virginia Counsel TRAVELCLICK INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg TRAINOR GLASS: Taps Arnold & Arnold as Local Colorado Counsel TRAWOOD LANCERS: U.S. Trustee Wants Case Converted to Chapter 7 TRI STATE: Case Summary & 4 Largest Unsecured Creditors TRIDENT MICROSYSTEMS: Seeks to Expand PwC Employment Scope TRU-EMAAN LLC: Case Summary & 20 Largest Unsecured Creditors VOLKSWAGEN-SPRINGFIELD: Wants to Hire Wiley Rein LLP as Counsel WASHINGTON MUTUAL: D&O Suit is in Wrong Court, Insurers Say WOONSOCKET, RI: Facing Possible Receivership ZAYO GROUP: Term Loan Add-On No Impact on Moody's 'B2' CFR * Fitch Completes Peer Review of 6 Rated Business Development Cos. * Moody's Says Media Firms' Dividends Won't Harm Credit Quality * U.S. High-Yield Companies Remain Stables Despite EU Debt Crisis * Junk Defaults to Remain Benign, Moody's Predicts * Weil Gotshal Named No. 1 Bankruptcy Law Firm by Vault.com * Great American Group Hires Bryan Seeley as Appraisal Director * Recent Small-Dollar & Individual Chapter 11 Filings ********* 205 EAST: Klestadt & Winters Approved as Bankruptcy Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized 205 East 45 LLC and EALC, LLC to employ Klestadt & Winters, LLP as bankruptcy counsel. K&W is expected to, among other things, prepare on behalf of the Debtors, motions, applications, answers, orders, reports, and papers necessary to the administration of the estates, for these hourly rates: Tracy L. Klestadt $625 Brendan M. Scott $375 Partners $375 - $625 Associates $195 - $225 Paralegals $150 Mr. Klestadt attests to the Court that K&W is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About 205 East 45 LLC and EALC LLC 205 East 45 LLC, owner of the Alex Hotel, and EALC LLC, owner of Flatotel in Manhattan, filed Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 12-12208 and 12-2209) on May 21, 2012, to complete a transfer of ownership to secured lenders. The Debtors filed a Chapter 11 plan of reorganization together with the petitions. A copy of the disclosure statement explaining the Plan is available for free at http://bankrupt.com/misc/205_East_Ch11_Plan.pdf The Alex, at 205 East 45th Street in Manhattan, has 203 luxury hotel rooms and suites and $123 million in mortgage debt. The Flatotel, at 135 West 52nd Street in mid-town Manhattan, is a 46-story boutique luxury hotel. The Flatotel has 290 rooms and $245.2 million in mortgages. The hotels defaulted on mortgage debt in January 2009. Foreclosure for the Alex Hotel and Flatotel began in July and August 2010, respectively. In October, a receiver, Neal Fellenbaum, of Zegen and Fellenbaum, was appointed. The proposed Chapter 11 plan will carry out a settlement negotiated in the foreclosure proceeding where the state court ruled this year that the lenders were entitled to foreclose. The salient terms of the Plan are: * Holders of $100.3 million of secured debt against 205 East and $192.5 million of secured debt against EALC will receive 100% of the ownership of the reorganized Debtors plus a new note. 205 East's secured lender will have a 70.29% recovery while EALC's secured creditor will have a 40.49% recovery. * Holders of general unsecured claims totaling under $1 million will receive the lesser of the pro rata share of the general unsecured claims distribution or cash in the amount of 20%. * the owners who include Simon Elias and Iazk Senbahar will receive releases from guarantees to lenders and will receive $2.5 million cash. The lenders are Rockport Group LLC, Atlas Capital Group LLC and Procaccianti Group. They purchased the debt from the original lender Anglo Irish Bank Corp. Ltd. Alex Hotel is also home to Riingo, the restaurant under the direction of Executive Chef Jose Diaz, and serves unique organic American cuisine. The Debtor intends to reject the lease with Riingo. Bankruptcy Judge Allan L. Gropper oversees the Chapter 11 cases. 205 East and EALC LLC each estimated assets of $50 million to $100 million and debts of $100 million to $500 million. The petitions were signed by Steven A. Carlson, chief restructuring officer. The receiver is represented by Andre Cizmarik, Esq., at Edwards Wildman Palmer LLP. ARL Hotel Management LLC, ARL Manhattan West Management LLC and ARL Manhattan East Management LLC are represented by Douglas B. Rosner, Esq., at Goulston & Storrs. Secured lenders RPAP Hotel Debt (Flatotel), L.L.C and RPAP Hotel Debt (Alex), L.L.C are represented by Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP. 205 EAST: Marcus & Pollack Approved as Property Tax Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, according to 205 East 45 LLC and EALC, LLC's case docket, authorized the Debtors to employ Marcus & Pollack, LLP as property tax counsel. M&P is expected to represent the Debtors in certain tax certiorari proceedings. M&P will negotiate with the City of New York on behalf of the Debtors and prepare, serve and file necessary papers and documentation, including applications for review of assessments to the New York City Tax Commission and petitions to review assessments in New York State Supreme Court and legal proceedings. The Debtors and M&P have agreed to a contingency fee structure in consideration for the services to be rendered by M&P to the Debtors. In the event that a tax savings results from the negotiations with the City of New York and hearings before the Tax Commission of the City of New York or from a trial or a settlement resulting in a judgment or a decree of a court, which reduce either the tentative or final assessments placed upon the Properties for any tax year, the Debtors shall be billed, upon Court approval, at the rate of 15% of the Tax Savings effectuated for such tax year. Tax Savings shall be calculated by multiplying the amount of the actual assessment reduction applied that year by the applicable tax rate. To the extent the Tax Savings are transitionalized over a five-year period, the fee shall likewise be payable over a five-year period, commencing in the year receiving the actual assessment reduction. To the best of the Debtors' knowledge, M&P is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About 205 East 45 LLC and EALC LLC 205 East 45 LLC, owner of the Alex Hotel, and EALC LLC, owner of Flatotel in Manhattan, filed Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 12-12208 and 12-2209) on May 21, 2012, to complete a transfer of ownership to secured lenders. The Debtors filed a Chapter 11 plan of reorganization together with the petitions. A copy of the disclosure statement explaining the Plan is available for free at http://bankrupt.com/misc/205_East_Ch11_Plan.pdf The Alex, at 205 East 45th Street in Manhattan, has 203 luxury hotel rooms and suites and $123 million in mortgage debt. The Flatotel, at 135 West 52nd Street in mid-town Manhattan, is a 46-story boutique luxury hotel. The Flatotel has 290 rooms and $245.2 million in mortgages. The hotels defaulted on mortgage debt in January 2009. Foreclosure for the Alex Hotel and Flatotel began in July and August 2010, respectively. In October, a receiver, Neal Fellenbaum, of Zegen and Fellenbaum, was appointed. The proposed Chapter 11 plan will carry out a settlement negotiated in the foreclosure proceeding where the state court ruled this year that the lenders were entitled to foreclose. The salient terms of the Plan are: * Holders of $100.3 million of secured debt against 205 East and $192.5 million of secured debt against EALC will receive 100% of the ownership of the reorganized Debtors plus a new note. 205 East's secured lender will have a 70.29% recovery while EALC's secured creditor will have a 40.49% recovery. * Holders of general unsecured claims totaling under $1 million will receive the lesser of the pro rata share of the general unsecured claims distribution or cash in the amount of 20%. * the owners who include Simon Elias and Iazk Senbahar will receive releases from guarantees to lenders and will receive $2.5 million cash. The lenders are Rockport Group LLC, Atlas Capital Group LLC and Procaccianti Group. They purchased the debt from the original lender Anglo Irish Bank Corp. Ltd. Alex Hotel is also home to Riingo, the restaurant under the direction of Executive Chef Jose Diaz, and serves unique organic American cuisine. The Debtor intends to reject the lease with Riingo. Bankruptcy Judge Allan L. Gropper oversees the Chapter 11 cases. 205 East and EALC LLC each estimated assets of $50 million to $100 million and debts of $100 million to $500 million. The petitions were signed by Steven A. Carlson, chief restructuring officer. The receiver is represented by Andre Cizmarik, Esq., at Edwards Wildman Palmer LLP. ARL Hotel Management LLC, ARL Manhattan West Management LLC and ARL Manhattan East Management LLC are represented by Douglas B. Rosner, Esq., at Goulston & Storrs. Secured lenders RPAP Hotel Debt (Flatotel), L.L.C and RPAP Hotel Debt (Alex), L.L.C are represented by Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP. 4KIDS ENTERTAINMENT: Sale Approved with Excess for Shareholders --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that 4Kids Entertainment Inc. received approval from the bankruptcy court in New York to sell the business for $15 million to two buyers. The price will pay creditors in full, with a "substantial" amount left over for owners, the company said in a court filing. According to the report, an affiliate of Tokyo-based Konami Corp. is purchasing the licenses for the Yu-Gi-Oh! animated television programs. Kidsco Media Venture LLC, affiliated with Saban Capital Group Inc., is buying the programming agreement with the CW Network LLC. The eventual sale represented a $3.2 million improvement over the $11.8 million bid Saban made for all the assets at auction. After the auction, 4Kids worked out a joint offer that improved the effective net sale price. Konami develops video-game software and arcade games. 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. AFA FOODS: Two Plants Sold for $11.6 Million -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AFA Foods Inc. received authority from the bankruptcy judge at a hearing yesterday to sell two plants for a combined $11.6 million. Tri West Investments LLC, having submitted the only bid, is buying the plant in Los Angeles for $4.4 million. PL Food LLC, in an auction with another bidder, came out on top with an offer of $7.2 million for the Georgia plant. 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. ALL AMERICAN PET: Changes Domicile from Maryland to Nevada ---------------------------------------------------------- All American Pet Company, Inc., on June 11, 2012, entered into an Agreement and Plan of Merger and Reincorporation with All American Pet Company, Inc., a Nevada corporation, in order to change the domicile of the Company from Maryland to Nevada. Pursuant to the terms of the Agreement and Plan of Merger and Reincorporation, the Registrant merged with and into AAPT NV, making AAPT NV the surviving corporation. The merger for reincorporation was completed on June 15, 2012. The merger and reincorporation agreement was approved by the unanimous consent of the Board of Directors of the Company on June 11, 2012, and by AAPT NV on June 11, 2012, and occurred as a result of the Company's stockholders approving the amendments at the 2011 Annual Meeting of Stockholders. A copy of the Agreement is available for free at: http://is.gd/RpQQmU About All American Pet All American Pet Company, Inc., a reporting public company with executive offices in Beverly Hills, California, was incorporated on Feb. 13, 2003. The Company produces, markets, and sells super premium dog food under the brand names Grrr-nola(R)Natural Dog Food and BowWow Breakfast(R) Heart Healthy Dog Food. R. R. Hawkins & Associates International, a PC, in Los Angeles, expressed substantial doubt about All American Pet's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception, retained deficit and negative working capital. The Company reported a net loss of $7.44 million on $20 of net sales for 2010 (revenue from sales of super-premium dog food products of $146,598 less marketing and product placement fees of $146,578), compared with a net loss of $2.01 million on $0 revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed $1.08 million in total assets, $4.45 million in total liabilities, and a stockholders' deficit of $3.37 million. AMERICAN AIRLINES: Ruling Friday on Rejection of CBAs ----------------------------------------------------- Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York delayed entry of a ruling regarding AMR Corp. and American Airlines, Inc.'s motion to reject collective bargaining agreements to give the airline and its pilots union more time to negotiate a contract, Mary Schlangenstein and David McLaughlin of Bloomberg News reported. Judge Lane, however, gave the Allied Pilots Association board until June 27 to decide if AMR's latest offer is acceptable, with his ruling to follow two days later, The Dallas Morning News related. Judge Lane was previously set to issue the ruling on June 22. The bankruptcy judge will convene a hearing on June 28 for possible updates on the labor contracts matter, according to a notice filed with the Court. In its latest offer to the APA, American proposed to reduce the concessions it sought from the union from $370 million to $315 million, The Dallas Morning News reported. Other terms of the latest offer include: pay rates that are 14.8% higher than they are now, a $13.5 stake in reorganized AMR, and no pilot furloughs, the report cited. The pilots' union was meeting Tuesday to reconsider whether to send the final contract offer to members for a vote, according to a separate report by David Koenig of The Associated Press. On June 20, the APA decided not to send American's proposals, which they say were too vague, to members for a vote, the report noted. Meanwhile, flight attendants and mechanics at American want to resume talks on consensual contracts, The Associated Press disclosed. The Transport Workers Union, which represents the mechanics, said its negotiators are expected to meet with American soon, the report noted. The mechanics previously rejected American's contract offer that was accepted by five other work groups represented by the TWU. Separately, the talks between American and the Association of Professional Flight Attendants broke down in early June. American spokesperson Bruce Hicks said the carrier will extend the same reduction in the value of concessions to five TWU groups that earlier ratified agreements with the airline and non-union customer service and reservation agents, Bloomberg relayed. Mr. Hicks, Bloomberg noted, could not immediately quantify the change in total annual labor savings from American's original $1.25 billion, which included $990 million from unions. "The sooner we get agreements, the sooner we can begin to achieve the cost savings we must have. Labor agreements allow us to keep moving the restructuring forward," according to Mr. Hicks. Bloomberg noted that spending cuts are central to AMR's bid to win creditor support for its plan to exit bankruptcy and the voluntary accords would lock in savings now that have eluded the carrier in more than five years of talk. Notably, US Airways Group Inc. has reached tentative contracts with American's unions, contingent on a merger, the report said. Hunter Keay, analyst at Wolfe Trahan & Co., said in a Bloomberg interview, that American's Official Committee of Unsecured Creditors wants to see a business plan laid out with contractual terms for labor so the panel can evaluate two plans side by side. "If American is unable to execute a deal with labor, they are unable to give the creditors that option. That makes the creditors' unhappy, and the last thing American wants is an unhappy creditors' committee." Mr. Keay said the agreements between American and its union could help US Airways because it would preserve the labor groups' claims in bankruptcy and their status as creditors. The APA, APFA and TWU are members of the American Creditors' Committee. Denise Lynn, senior vice president for labor, said in a letter to employees that American has been emphasizing consensual agreements throughout negotiations, Bloomberg related. "It was that focus, and the additional benefit of our recent revenue improvements, that allowed us to put forward a proposal to APA that adjusts the savings target while still achieving the goals of our business plan." American Chief Executive Officer Tom Horton previously announced that the carrier is focused on restructuring independently. The CEO also recognized that restructuring labor contracts is one of the most challenging aspects of the reorganization. TWA Pilots Seek to Intervene in Section 1113 Trial The TWA Pilots Seniority Defense Fund LLC has sought the Court's permission to intervene in the proceeding involving American's motion to reject its collective bargaining agreements governing the rates of pay, rules, and working conditions of American's pilots under Section 1113 of the Bankruptcy Code. The TWA Pilots Seniority Defense Fund is a limited liability company formed by former TWA pilots who are employed by American to insure that the limited job protections they have from American's acquisition of TWA in 2001 are fully protected. The Fund's interests in the proceeding stem from an agreement -- Supplement CC -- that American entered into on November 8, 2001 with the Allied Pilots Association -- the collective bargaining representative of AA pilots -- to integrate the seniority of the TWA pilots into that of the AA pilots and to provide job protections that their placement on the integrated list denied them. "The continued application of that agreement, with its conditions designed to protect TWA pilots' job rights, is threatened by American's Section 1113 application to reject its collective bargaining agreements with the APA," argues John O'B. Clarke, Esq. -- jclarke@highsaw.com -- at Highsaw, Mahoney & Clarke, P.C., in Fairfax, Virginia. Mr. O'B. Clarke argues that former TWA pilots, as do all American pilots, have an interest in preserving their collective bargaining agreements with American, and, thus, in being heard on American Section 1113 motion. That interest is being protected by APA, he notes. But, with respect to Supplement CC, the interests of the former TWA pilots diverge from the interests of the American pilots who do not have TWA job protections in St. Louis, for relieving American of the St. Louis restrictions, which Supplement CC places upon it, increases the flying opportunities for non-TWA American pilots -- but at the expense of the TWA pilots because of the placement of the majority of the TWA pilots on the seniority list below all American pilots hired before April 10, 2001, he points out. This conflict among the pilots represented by APA warrants granting the minority pilots a chance to be heard separately in this rejection proceeding, he maintains. While the TWA pilots are not asking the Court to appoint a special representative for the TWA pilots in the Section 1113(b) negotiations, they are asking that the Fund be permitted to intervene for the limited purpose of placing before the Court (a) the reasons why the rejection of Supplement CC should be considered separately from American's motion to reject its basic collective bargaining agreement with the APA, and (b) why American has not shouldered its burden concerning its request to reject Supplement CC. The Court will consider the TWA Pilots' request on July 19, 2012. Objections are due no later than July 12. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Could Retain Pilot A Plan With DOT Regulation ---------------------------------------------------------------- American Airlines said a proposed regulation from the U.S. Department of the Treasury could move the carrier closer to being able to freeze and retain the Pilot "A" Plan instead of terminating that plan. Under the proposed regulation dated June 20, 2012, companies are allowed to remove lump sum benefit payouts in some circumstances, making a freeze a possibility for American. American noted that the lump sum benefit could drive pilot retirements that could pose significant operational risk. "We committed to work collaboratively with the APA, PBGC and UCC to explore every option that would allow us to retain the Pilot "A" Plan. This news puts us in a position to make major progress in that effort," said Tom Horton, AMR Chairman and Chief Executive Officer. "A top APA priority is preserving the benefits American's pilots deserve. I'm devoted to making that happen and pleased that we're moving one step closer to protecting a very important and valued benefit," said Captain Dave Bates, President -- Allied Pilots Association. "It is great news that American is continuing to work to preserve its pilot pension plan. It's encouraging that American recognizes this benefit doesn't need to be sacrificed to ensure success," said Josh Gotbaum, Director -- Pension Benefit Guaranty Corporation. Since March, American Airlines, the APA, the PBGC and the Creditors' Committee have been diligently working toward that goal. There will be a 60-day comment period on the Proposed Regulation. Following that process, the U.S. Department of Treasury typically issues its Final Regulation. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wins Lawsuit Over NMB Election ------------------------------------------------- American Airlines won a court order blocking a mediation board from conducting a union-representation election among passenger service employees until a threshold is met, David McLaughlin of Bloomberg News reported. Judge Terry Means of the U.S. District Court for the Northern District of Texas held that the National Mediation Board used the wrong standard when it authorized the election and "acted in excess of its delegated authority," according to a June 22 decision obtained by Bloomberg. The Communications Workers of America, who sought to represent 10,000 passenger workers of American, said it would appeal the order, which it called "a disgrace and a travesty of justice," Bloomberg noted. "Agents have been denied their democratic right to vote." American recently won a temporary restraining order to block the union-representation election, unless there is a showing of interest from at least 50% of the employees, not the 35% standard the board used, the report said. The federal judge agreed with American, ruling that the 50% threshold governs the board's conduct, Bloomberg related. The case is American Airlines Inc. v. National Mediation Board, 12-00276, U.S. District Court, Northern District of Texas (Fort Worth). About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Has Green Light to Purchase 9 MD-82 Aircraft --------------------------------------------------------------- AMR Corp. and its affiliates sought and obtained the Court's permission to terminate the leases on nine MD-82 aircraft owned by U.S. Bank National Association and buy the aircraft for an undisclosed purchase price. U.S. Bank is the pass through trustee and loan trustee with respect to each of the Aircraft. The Debtors recognize that the Aircraft are useful in the operation of their business but believe that the lease rates under the existing leases substantially exceed market rates for comparable aircraft. Pursuant to a purchase agreement with U.S. Bank, the Debtors will terminate the leases of, and buy the, Aircraft bearing FAA registration nos. N556AA, N557AN, N558AA, N559AA, N560AA, N561AA, N573AA, N574AA and N575AM. The parties also agree to liquidate the aggregate amount of the allowed general unsecured non- priority prepetition damages claim with respect to the Aircraft pursuant to a proposal under certain of the aircraft agreements. In their request, the Debtors also asked the Court to: (a) direct the owner trustees to ratify and confirm the sale of each Aircraft to the Debtors by executing and delivering to the Loan all bills of sale, assignments, releases and other proper instruments to effect such ratification and confirmation as may be sought by the Loan Trustee, as required by each Trust Indenture relating to the Aircraft in connection with a foreclosure by the Loan Trustee; and (b) release the Debtors and the Loan Trustee under certain of the Aircraft Agreements, from any liability related to or arising out of their participation in the negotiation and implementation of the Proposal, the Purchase Agreement or relief sought in this motion. The Debtors also obtained Court permission to file under seal the purchase price for the Aircraft, the amount of the unsecured claim, the proposal and certain portions of the Purchase Agreement because they contain sensitive commercial information. A full- text copy of the Purchase Agreement is available for free at http://bankrupt.com/misc/AmAir_USBankAircraftPurchaseAgr.pdf HNB Investment Corp., as owner participant with respect to each of the nine aircraft, and Wilmington Trust Company, as owner trustee for the Aircraft, had objected to the Debtors' request, telling the Court they did not consent to the proposed foreclosure of the Owner Trustee's interests and the subsequent sale of the Aircraft to American. HNB, as joined by WTC, argued that the approval of the terms of the Purchase Agreement would: (i) violate the terms of each indenture governing the loans made to the Owner Trustee in which the Loan Trustee agreed that, if it enforced remedies against the Owner Trustee, it would simultaneously enforce remedies against the Debtors, and by allowing a foreclosure that is inherently not commercially reasonable; (ii) allow the Loan Trustee to obtain non-consensual, impermissible third-party releases and injunctions that the Court lacks subject matter jurisdiction to consider and, even if it did have such jurisdiction, in a manner that is procedurally defective; (iii) potentially allow a claim that belongs only to the Owner Participant, and that was not pledged to the Loan Trustee as collateral, to be transferred to the Loan Trustee under the aegis of a court-approved settlement in direct contravention of recent Second Circuit precedent; and (iv) in effect, cross-collateralize rights among nine separate Aircraft financing transactions by providing for only one allowed claim on account of those nine transactions. Counsel to the Debtors, Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in New York, countered that if HNB believes that the settlement is not in its best interests, its contractual remedy as Owner Participant is clear: HNB is entitled to redeem the outstanding debt, take control of the Aircraft and the claims resulting from the termination of the existing leveraged leases from its lenders and seek its own settlement with the Debtors. However, Mr. Perez pointed out HNB has shown no interest in placing its own assets at risk. Mr. Perez insisted the settlement is consistent with the terms of the Aircraft Agreements and applicable law. He said the releases and injunctions sought in the Debtors' Motion are proper and similar as those approved as part of settlements considered by the Court pursuant to Sections 105(a) and 363 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure. Counsel to U.S. Bank, Craig M. Price, Esq., at Chapman and Cutler LLP, in Chicago, Illinois, also argued that the Loan Trustee is well within its rights to exercise the remedies contemplated by the Trust Indentures, including conducting a public or private foreclosure sale of its collateral. He said the Owner Trustee has failed to pay interest and principal when due under the Trust Indentures, aggregating more than $35,000,000. He said the Owner Participant's and the Owner Trustee's exercise of their right to pay the obligations due under the Trust Indentures gives them all of the protection they need. Thus, the settlement will allow the Loan Trustee to maximize the value of its collateral through the exercise of its remedies. Nelson A. Klug, senior director of consulting and valuation at AVITAS, Inc. retained by U.S. Bank, said in court filings that the proposed price to be paid by American Airlines upon re-sale of the Aircraft by the winning bidder at the foreclosure sales is higher than the estimated value of the Aircraft. Mr. Price said the "equity squeeze" provisions of the Trust Indentures simply do not prohibit these proposed transactions. The proposed transactions proposed also do not interfere with the rights of the Owner Participant and the Owner Trustee to protect their interests -- namely, to pay off the senior secured debt owed to the Loan Trustee or otherwise bid at the foreclosure sales -- and do not adversely affect or transfer the claims under a tax indemnity agreement with respect to the Aircraft. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN ARCHITECTURAL: Meeting to Form Panel Set on July 10 ------------------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on July 10, 2012, at 11:00 a.m. in the bankruptcy case of American Architectural, Inc. The meeting will be held at: Office of the United States Trustee 833 Chestnut Street, Room 501 Philadelphia, PA 19107 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About 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 INDUSTRIAL: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: American Industrial Supply Inc 6355 Topanga Cayon Blvd Woodland Hills, CA 91367 Bankruptcy Case No.: 12-15761 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Warren Nemiroff, Esq. TDG LAW GROUP, APC 433 N Camden Dr #400 Beverly Hills, CA 90021 Tel: (310) 279-5282 Fax: (310) 550-7401 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-15761.pdf The petition was signed by Robert Nadler, president. APEX KATY: Hoover Slovacek Approved as Bankruptcy Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for Southern District of Texas authorized Apex Katy Physicians LLC, to employ Edward L. Rothberg, Esq., at Hoover Slovacek LLP as counsel. On April 24, the Debtor amended its motion requesting employment of HSLLP to include these personnel to represent the Debtor in the case: 1. Harold "Hap" May is an attorney and CPA with the firm and is Certified in Financial Forensics by the American Institute of Certified Public Accountants. Mr. May represents clients in tax matters. 2. Curtis McCreight, an associate attorney with the firm, is a Certified Public Accountant and is Certified in Financial Forensics by the American Institute of Certified Public Accountants. Mr. McCreight assists clients in tax matters and is well qualified to assist the Debtor in certain tax matters in this case. The hourly rates of the firm's personnel are: Edward L. Rothberg $395 Mr. May $400 (Legal Services) Mr. May $350 (Accounting Services) Annie Catmull $310 Melissa Haselden $275 Mr. McCreight $275 (Legal Services) Mr. McCreight $250 (Accounting Services) T. Josh Judd $250 MazelleS.Krasoff $175 Legal Assistants/Paralegals $85 - $125 Mr. Rothberg attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Apex Katy Physicians Apex Katy Physicians, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-31848) on March 6, 2012, estimating $10 million to $50 million in assets and debts. Judge Marvin Isgur presides over the case. Attorneys at Hoover Slovacek, LLP, represent the Debtor. Affiliate Apex Long Term Acute Care-Katy, LP, a long-term care facility, filed a separate Chapter 11 petition (Case No. 09-37096) on Sept. 25, 2009. The Debtor disclosed $15,237,691 in assets and $13,646,951 in liabilities. APEX KATY: Seyfarth Shaw OK'd as Counsel for Health Care Law ------------------------------------------------------------ The U.S. Bankruptcy Court for Southern District of Texas authorized Apex Katy Physicians LLC, to employ Sheryl T. Dasco of Seyfarth Shaw LLP as special counsel in health care law and licensing issues. Ms. Dasco is expected to assist, advise, investigate and prepare necessary documents related to certain healthcare compliance and licensing issues, and performing any other legal services that may be appropriate in connection with the healthcare licensing and compliance issues. The hourly rates of the firm's personnel are: Ms. Dasco, partner $460 Associate Attorneys $265 - $400 Ms. Dasco tells the Court that the firm has requested a $15,000 retainer. Pankaj K . Shah, MD, the manager of the Debtor has agreed to advance the retainer through a loan to the debtor-in- possession. Mr. Shah is also the manager of Indus Associates, LLC, which holds a 76.7% equity interest in the Debtor. Ms. Dasco assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Dasco can be reached at: 700 Louisiana Street, Suite 3700 Houston, TX 77002 Tel: (713) 225-2300 Fax: (713) 225-2340 About Apex Katy Physicians Apex Katy Physicians, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-31848) on March 6, 2012, estimating $10 million to $50 million in assets and debts. Judge Marvin Isgur presides over the case. Attorneys at Hoover Slovacek, LLP, represent the Debtor. Affiliate Apex Long Term Acute Care-Katy, LP, a long-term care facility, filed a separate Chapter 11 petition (Case No. 09-37096) on Sept. 25, 2009. The Debtor disclosed $15,237,691 in assets and $13,646,951 in liabilities. APEX KATY: Sperry Van Ness Approved as Real Estate Broker --------------------------------------------------------- The U.S. Bankruptcy Court for Southern District of Texas authorized Apex Katy Physicians LLC, to employ William C. Forrest and Ladean Rethford with Sperry Van Ness/W. Forrest Group, Commercial Real Estate Advisors as real estate broker and agent. The Debtor has determined that the lease or sale of its real property is in the best interest of the estate. The Debtor owns the real property and improvements located at (i) 25660 Kingsland Blvd., Katy, Texas (the Hospital Building); (2) 25772 Kingsland Blvd., Katy, Texas (the Medical Office Building) and (iii) approximately 8.4 acres of undeveloped land off of Kingsland Blvd., and Pin Oak Blvd. In connection with the lease or sale, the firm is expected to provide brokerage and related services including, but not limited to: i) preparing marketing materials or offering packages to be used in soliciting prospective purchasers or tenants for the Real Property; and ii) locating, qualifying, and furnishing prospective purchasers or tenants to the Debtor. Under the agreement, the firm will be paid a commission of 4% of the sales price for any sale that is ultimately approved and closes, and 2% for any lease agreement that is executed with Debtor. The agreement will be non-exclusive. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Apex Katy Physicians Apex Katy Physicians, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-31848) on March 6, 2012, estimating $10 million to $50 million in assets and debts. Judge Marvin Isgur presides over the case. Attorneys at Hoover Slovacek, LLP, represent the Debtor. Affiliate Apex Long Term Acute Care-Katy, LP, a long-term care facility, filed a separate Chapter 11 petition (Case No. 09-37096) on Sept. 25, 2009. The Debtor disclosed $15,237,691 in assets and $13,646,951 in liabilities. APEX KATY: Taps J. Patrick Magil as Strategy Consultant ------------------------------------------------------- Apex Katy Physicians LLC, asks the U.S. Bankruptcy Court for Southern District of Texas for permission to employ J. Patrick Magill with MCR Capital Advisors as strategy consultant. The Debtor relates that it employed Sperry Van Ness/W. Forrest Group, Commercial Real Estate Advisors as its real estate broker to sell the Hospital Building. In addition, the Debtor has retained Dr. Sheri Dasco as special counsel to actively work towards resolving certain healthcare licensing issues for the Hospital Building. In connection with the lease or sale, Mr. Magill will provide consulting services including, but not limited to, design, development and implementation of an appropriate strategy for the sale of the Hospital Building and to determine if the Hospital Building can be sold in a prudent manner, subject to renewal of the hospital license as LTACH facility, or outline and implement alternative plans for the sale of Hospital Building in the event and LTACH license cannot be obtained. The hourly rates of the firm's personnel are: Mr. Magill, senior partner $300 Associates $175 The firm has requested a $10,000 retainer. Pankaj K. Shah, MD, the manager of the Debtor has agreed to advance the retainer through a loan to the debtor-in-possession. Mr. Shah is also the manager of Indus Associates, LLC, which holds a 76.7% equity interest in the Debtor. To the best of the Debtor's knowledge, the firm is a "disinterested person" as tha term is defined in Section 101(14) of the Bankruptcy Code. About Apex Katy Physicians Apex Katy Physicians, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-31848) on March 6, 2012, estimating $10 million to $50 million in assets and debts. Judge Marvin Isgur presides over the case. Attorneys at Hoover Slovacek, LLP, represent the Debtor. Affiliate Apex Long Term Acute Care-Katy, LP, a long-term care facility, filed a separate Chapter 11 petition (Case No. 09-37096) on Sept. 25, 2009. The Debtor disclosed $15,237,691 in assets and $13,646,951 in liabilities. APPLETON PAPERS: Amends Equity Purchase Agreement with Hicks ------------------------------------------------------------ On May 16, 2012, Appleton Papers Inc. and Paperweight Development Corp. entered into an Equity Purchase Agreement with Hicks Acquisition Company II, Inc., and HH-HACII, L.P., and PDC entered into a Cross Purchase Agreement with HACII, pursuant to which, through a series of transactions, Appleton will become, subject to stockholder approval and other closing conditions, a non-wholly- owned subsidiary of HACII. On June 20, 2012, Appleton and PDC entered into Amendment No. 1 to Equity Purchase Agreement with HACII and the Sponsor, which amends the Equity Purchase Agreement to: (i) allow HACII to seek approval to amend the terms of HACII's outstanding warrants to purchase shares of common stock of HACII; (ii) increase the amount of cash that must remain in the trust account established in connection with HACII's initial public offering in order to satisfy a closing condition; and (iii) give HACII the flexibility to seek approval of a charter amendment to extend HACII's dissolution deadline by 60 days, if HACII so desires, to pursue the Transaction. The Amendment permits HACII to seek the approval of the holders of 65% of its outstanding publicly-held Warrants to amend the warrant agreement that governs the Warrants to (i) make each Warrant exercisable for one-half of one share of Common Stock (rather than one full share) at an exercise price of $6.00 per half-share, (ii) allow each holder of Public Warrants to elect, for each such outstanding Public Warrant, either (x) the right to receive $0.625 in cash or (y) the right to exercise the existing warrant for an additional 0.0879 of a share of Common Stock, at an exercise price of $0.0001, in the event the last sales price of shares of Common Stock equals or exceeds $12.00 per share for 20 trading days out of 30 consecutive trading days on or prior to the fifth anniversary of the closing of the Transaction, subject to a limitation that the holders of no more than 4,550,626 Public Warrants may receive the Public Earnout Shares and (iii) cause the Sponsor to receive (in exchange for the reduction of shares for which the Sponsor Warrants are exercisable) an additional 0.0879 of a share of Common Stock per Sponsor Warrant, subject to forfeiture by the Sponsor in the event the last sales price of shares of Common Stock does not equal or exceed $12.00 per share for 20 trading days out of 30 consecutive trading days on or prior to the fifth anniversary of the closing of the Transaction. The Sponsor Earnout Shares are effectively the same as the Public Earnout Shares, as the economic value of both the Sponsor Earnout Shares and the Public Earnout Shares are triggered by the same target stock price. The effect of the Warrant Adjustment will be to reduce the number of shares of Common Stock issuable upon exercise of the Warrants by half. In addition, the Amendment (i) amends a closing condition that previously required there to be at least $75.0 million in cash held in trust, after giving effect to any redemptions and permitted repurchases of Common Stock in connection with the stockholder vote to approve the Transaction, to increase such amount to $82.0 million and (ii) gives HACII the ability to seek to amend its charter to extend HACII's dissolution deadline by 60 days, if HACII so desires, for purposes of consummating the Transaction. A copy of the Amendment is available for free at: http://is.gd/H52Tsf About Appleton Papers Appleton, Wisconsin-based Appleton Papers Inc. -- http://www.appletonideas.com/-- produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. Appleton Papers is a 100%-owned subsidiary of Paperweight Development Corp. The Company reported a net loss of $2.11 million for the year ended Dec. 31, 2011, compared with a net loss of $31.66 million for the year ended Jan. 1, 2011. Appleton's balance sheet at April 1, 2012, showed $609.83 million in total assts, $864.04 million in total liabilities and a $254.21 million in total deficit. * * * Appleton Papers carries a 'B' corporate credit rating, with stable outlook, from Standard & Poor's. IT has a 'B2/LD' probability of default rating from Moody's. ARMORED AUTOGROUP: S&P Cuts Corporate Credit Rating to 'B-' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Danbury, Conn.-based automotive aftercare market provider Armored Autogroup Inc. to 'B-' from 'B'. The rating outlook is stable. "In addition, we revised our recovery rating on the company's senior secured credit facilities to '3' from '2'. Consequently, we lowered the issue-level rating on these facilities to 'B-' from 'B+'," S&P said. "We also lowered the issue-level rating on the senior unsecured notes issue to 'CCC' from 'CCC+'. The '6' recovery rating on these notes remains unchanged," S&P said. "The downgrade reflects weaker credit measures and cash flow generation following the company's investment in transitioning to a stand-alone business from a subsidiary of Clorox Co.," S&P said. "The company has thin cushions on its leverage and interest coverage covenants on the revolving credit facility, resulting primarily from high administrative expenses to support the stand- alone business as well as increased spending on advertising to invigorate previously neglected brands," said Standard & Poor's credit analyst Nalini Saxena. "Although we do forecast revenues to increase thanks to investments in the business over the last several months, because of step-downs in the credit agreement for the revolving credit facility and the absence of a waiver or amendment on the horizon, we expect the company to operate with thin covenant cushions at least through year-end. We believe the company's financial sponsor, Avista Capital Partners, would consider a capital injection as a cure, if such a measure were needed." "The rating outlook is stable. This is based on our expectation that Armored Autogroup's credit protection measures will slightly improve but remain weak given the company's limited cash flow generation, high debt load, and ongoing EBITDA margin pressures," S&P said. "We could lower the rating if the covenant cushion and operating performance do not improve through the end of 2012. This could occur in the face of intense competition, unexpected additional marketing and administrative expenses, or increases to commodity costs. Other considerations could include loss of key customers or a more aggressive financial policy," S&P said. "Although less likely within the next year, we would consider raising the rating if sales growth exceeds our expectations and EBITDA margins strengthen from improved efficiency, leading to stronger cash flow generation and credit measures, such that adjusted leverage approaches the 5.5x area. For this to occur, we estimate EBITDA margins would need to improve approximately 750 basis points, coupled with a low-double-digit percentage increase in sales or, alternatively, debt levels would need to be reduced by about $170 million at present EBITDA levels," S&P said. BANKRATE INC: S&P Affirms 'BB-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on North Palm Beach, Fla.-based Bankrate Inc.'s secured debt upward to '3' from '4'. "The '3' recovery rating indicates our expectation of meaningful (50%-70%) recovery prospects in the event of a default," S&P said. "We also affirmed our 'BB-' corporate credit rating on Bankrate. The outlook is stable," S&P said. "In addition, we affirmed our 'BB+' issue-level rating on the company's $30 million super-priority revolver credit facility and our 'BB-' issue-level rating on its senior secured notes and senior secured revolving credit facility. The recovery rating on the tranche A debt is '1', indicating expectations for very high (90%-100%) of recovery in the event of payment default," S&P said. "The rating on Bankrate reflects our expectation that leverage will remain moderate as the company continues to benefit from the growth in online advertising," said Standard & Poor's credit analyst Daniel Haines. "We consider the company's business risk profile 'fair' (based on our criteria), reflecting its exposure to the financial services industry, the highly competitive online advertising market, and its acquisition-oriented growth strategy, while also weighing its strong EBITDA margin. We view Bankrate's financial risk profile as 'significant,' with the potential for debt-financed acquisitions and shareholder-favoring transactions tempering the benefit of moderate debt leverage." "Our stable outlook reflects our expectation that Bankrate will experience healthy growth over the medium term and that acquisitions could increase debt leverage somewhat. We could lower the rating if operating performance deteriorates, likely in conjunction with increasing competition. We could consider an upgrade over the longer term if the company can expand its revenue base and maintain its good competitive position, high profitability, and moderate debt leverage," S&P said. BERNARD L. MADOFF: Customers Raise New Defenses in Lawsuits ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that customers of Bernard L. Madoff Investment Securities LLC filed a 50-page brief raising new arguments and asking U.S. District Judge Jed Rakoff to reverse an opinion he issued in late April when he sided with the trustee and ruled that fictional profits in an account statement can't be used to offset the trustee's fraudulent transfer claims. According to the report, the brief was filed on behalf of customers in about 300 lawsuits that Rakoff is handling together. The trustee will be filing his brief on July 25. The customers will file reply papers on Aug. 8 in anticipation of oral argument in Judge Rakoff's courtroom on Aug. 20. Mr. Rochelle recounts that Judge Rakoff's April 30 opinion denied customers' defenses in 84 cases based on the notion that securities laws gave them the right to rely on account statements although no securities in reality were ever purchased. Judge Rakoff told customers' lawyers in the 300 cases to raise new theories not addressed in the April 30 opinion. The customers, the report relates, responded with several arguments they contend are "issues of first impression" giving them the ability to fend off fraudulent transfer suits for taking out more principal than they invested. Among other arguments, the customers contend they have the right to use claims for interest, consequential damages, and lost opportunity costs to offset the trustee's fraudulent transfer claims. Mr. Rochelle notes that Judge Rakoff has ruled through a series of opinions that customers in substance don't have defenses when sued for fictional profits received within two years of bankruptcy. In the process, Judge Rakoff precluded trustee Irving Picard from suing to recover profits going back six years from bankruptcy. The issue of whether Judge Rakoff was wrong in limiting suits to two years is going up on appeal to the U.S. Court of Appeals. The mass cases are being handled by Rakoff in Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 12-mc-00115, U.S. District Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BMB MUNAI: Swings to $139.2 Million Net Loss in Fiscal 2012 ----------------------------------------------------------- BMB Munai, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $139.21 million on $0 of revenue for the year ended March 31, 2012, compared with net income of $4.88 million on $0 of revenue for the year ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $41.42 million in total assets, $20.04 million in total liabilities, all current, and $21.37 million in total shareholders' equity. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, 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 will have no continuing operations that result in positive cash flow, which raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/5kpcnk About BMB Munai Based in Almaty, Kazakhstan, BMB Munai, Inc., is a Nevada corporation that originally incorporated in the State of Utah in 1981. Since 2003, its business activities have focused on oil and natural gas exploration and production in the Republic of Kazakhstan through its wholly-owned operating subsidiary Emir Oil LLP. Emir Oil holds an exploration contract that allows the Company to conduct exploration drilling and oil production in the Mangistau Province in the southwestern region of Kazakhstan until January 2013. The exploration territory of its contract area is approximately 850 square kilometers and is comprised of three areas, referred to herein as the ADE Block, the Southeast Block and the Northwest Block. BROADCAST INTERNATIONAL: Files Amendment No. 2 to Form S-1 ---------------------------------------------------------- Broadcast International, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to THE Form S-1 relating to the resale of up to 46,470,000 shares of the Company's common stock owned by Gem Asset Management LC, Kingsbrook Opportunities Master Fund LP, John & Lois Teerling, et al., including up to 18,270,000 shares of the Company's common stock upon exercise of certain warrants held by the selling shareholders. The Company will not receive any proceeds from the sale of the common stock. All proceeds from the sale of the common stock will be paid to the selling shareholders. The Company may, however, receive proceeds from the exercise of the outstanding warrants. If all of the warrants covered by this prospectus are exercised in full, the Company will issue an aggregate of 18,270,000 shares of the Company's common stock, and the Company may receive aggregate proceeds of $6,394,500. The Company's common stock is currently traded on the OTC Bulletin Board under the symbol "BCST." On April 2, 2012 the closing sale price of the Company's common stock was $.35 per share. A copy of the amended prospectus is available for free at: http://is.gd/Gsxn1x About Broadcast International Based in Salt Lake City, Broadcast International, Inc., installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. The Company reported net income of $1.30 million in 2011, compared with a net loss of $18.66 million in 2010. The Company's balance sheet at March 31, 2012, showed $4.52 million in total assets, $11.22 million in total liabilities and a $6.69 million total stockholders' deficit. CAZ INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: CAZ Investments LLC 8281 Bolsa Ave Midway City, CA 92655 Bankruptcy Case No.: 12-17721 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Catherine E. Bauer Debtor's Counsel: Christian R. Juarez, Esq. JUAREZ & ASSOCIATES 1506 Dalmatia Dr San Pedro, CA 90732 Tel: (310) 567-1665 Scheduled Assets: $1,370,000 Scheduled Liabilities: $1,741,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Carol Pham, managing member. CDC CORP: D. Crenshaw Substitutes as CDC Software Counsel --------------------------------------------------------- John F. Isbell, Esq., counsel previously representing CDC Software Corporation, notifies the U.S. Bankruptcy Court for the Northern District of Georgia that David W. Crenshaw of the law firm of Morris, Manning & Martin LLP, will substitute as counsel for CDC Software. Mr. Cranshaw will replace Mr. Isbell, Russell J. Rogers, Garrett A. Nail and the law firm Thompson Hine LLP in the case. Mr. Cranshaw can be reached at: Morris, Manning & Martin LLP 1600 Atlanta Financial Center 3343 Peachtree Road, NE Atlanta, GA 30326 Tel: (404) 233-7000 Fax: (404) 365-9532 E-mail: dcranshaw@mmmlaw.com All further pleadings, orders and notices must be sent to the substitute counsel. About CDC Corp. Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corp., doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at US$100 million to US$500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corp. is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. The stock of CDC Software Corp. was sold for $249.8 million to an affiliate of Vista Equity Holdings. The Debtor's Plan provides that in addition to paying creditors in full and distributing the excess to shareholders, the plan would allow filing lawsuits against insiders who CDC claims were behind the motion to dismiss. China.com filed a competing reorganization plan. CDC interprets the plan as giving releases of claims that CDC's plan would prosecute instead. CELL THERAPEUTICS: Files Form S-3, Registers 12.6MM Shares ---------------------------------------------------------- Cell Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission a Form S-3 relating to the resale from time to time of up to an aggregate of 12,605,042 shares of the Company's common stock issued upon conversion of certain shares of preferred stock by S*BIO Pte Ltd. and Onyx Pharmaceuticals, Inc., including their respective transferees, donees, pledgees, assignees and successors-in-interest. The shares of preferred stock were originally issued by the Company in May 2012 in connection with the closing of an asset acquisition. The selling shareholders may offer and sell their shares in public or private transactions, or both. These sales may occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market price, or at negotiated prices. The Company's common stock is quoted on The NASDAQ Capital Market and on the Mercato Telematico Azionario, or the "MTA", stock market in Italy under the symbol "CTIC." On June 22, 2012, the last reported sale price of the Company'sr common stock on The NASDAQ Capital Market was $0.62 per share. A copy of the prospectus is available for free at: http://is.gd/an4kd1 About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of $62.36 million in 2011, compared with a net loss attributable to CTI of $82.64 million in 2010. The Company's balance sheet at March 31, 2012, showed $44.15 million in total assets, $18.50 million in total liabilities $13.46 million in common stock purchase warrants, and $12.18 million in total shareholders' equity. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are $47.1 million as of Dec. 31, 2011. The Company's total current liabilities were $17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL FALLS, RI: State Receivership Cost Climbs ------------------------------------------------- wpri.com reports that the price tag of the state receivership in Central Falls has climbed to US$3.2 million. State Revenue Director Rosemary Booth Gallogly said that's the anticipated cost through the current fiscal year, according to wpri.com. The report notes that the state took over Central Falls in 2010, and the appointed receiver filed for bankruptcy last August. wpri.com discloses that the state pays the costs of the receivership up front but is seeking repayment from the city. The report notes that a five-year recovery plan filed in U.S. Bankruptcy Court defers the costs to later years. Ms. Gallogly says that's to give Central Falls time to stabilize and pay other creditors. wpri.com says that the city could exit bankruptcy in late summer or early fall. Some local elected officials and state legislators representing Central Falls say the city can't afford to pay the costs, wpri.com adds. About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The receiver is negotiating new contracts with unions representing city workers. The receiver filed a proposed debt adjustment plan for the city in September. It won't affect bondholders. CERIDIAN CORP: Moody' Rates New $720MM Senior Secured Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Ceridian Corporation's proposed $720 million of Senior Secured Notes due 2019 ("Secured Notes"). All other ratings, including the B3 corporate family rating (CFR), and the stable outlook remain unchanged. Proceeds of the new Secured Notes will repay about 40% of the $1.8 billion extended Term Loan B. Issuance of the Secured Notes is a condition to extend the maturity of a portion of the Term Loan B to May 2017. Moody's notes that Ceridian's total debt will not change with the $720 million of Secured Notes, although the debt scheduled to mature in 2014 would be $344 million as the net result of these Secured Notes and extension of the Term Loan B maturity. "Nevertheless, Ceridian will still have $1.3 billion of debt maturing in 2015," added Terry Dennehy, Senior Analyst at Moody's Investors Service. Ratings Rationale Ceridian's B3 corporate family rating reflects Ceridian's high financial leverage (with debt to EBITDA of over 8x) and weak financial metrics compared to others also at the B3 rating level, as well as a high level of cyclicality in both its human resources and transportation card servicing (Comdata) businesses. Ceridian's small scale relative to larger U.S. payroll processors with greater financial resources is also factored into the ratings. Nonetheless, Ceridian's business model provides for a relatively predictable recurring revenue stream because of the long term contracts. The stable rating outlook reflects expectations that Ceridian will continue to make progress in restructuring its remaining 2014 and 2015 debt maturities. In the near term, Moody's expects financial leverage to remain high relative to other B3 rated companies, but the rating agency expects this to improve over the intermediate term due to increases in EBITDA. Ceridian's ratings could be downgraded if Ceridian does not make meaningful progress in restructuring the remaining 2014 and 2015 debt maturities and progress toward increasing EBITDA such that the ratio of debt to EBITDA (Moody's standard adjustments) declines to below 8x by the end of 2013. The ratings could be upgraded if Ceridian successfully restructures its debt maturities and Ceridian achieves sustained growth in EBITDA such that Moody's expects that the ratio of debt to EBITDA (Moody's standard adjustments) will be sustained below 6x. The following ratings have been assigned: Senior Secured Notes due 2019: B1 (LGD-2, 26%) Senior Secured Revolving Credit Facility due 2016: B1 (LGD-2, 26%) Senior Secured Term Loan B due 2017: B1 (LGD-2, 26%) The following ratings remain unchanged: CFR: B3 PDR: B3 Senior Secured Revolving Credit Facility due 2014 (non-extended tranche): B1 (LGD-2, 26%) Senior Secured Term Loan B due 2014 (non-extended tranche): B1 (LGD-2, 26%) Senior Notes due 2015: Caa2 (LGD-5, 82%) Senior Toggle Notes due 2015: Caa2 (LGD-5, 82%) The principal methodology used in rating Ceridian was the Global Business and Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative Grade Non-Financial Companies in the U.S., Canada, and EMEA published in June 2009. Ceridian Corporation, based in Minneapolis, Minnesota, is a services and transaction processing company operating in the human resource, transportation, and retail markets. Moody's expects Ceridian to generate about $1.5 billion in revenue in 2012. CINRAM INTERNATIONAL: Chapter 15 and CCAA Case Summaries -------------------------------------------------------- Chapter 15 Debtor: Cinram International Inc. 2255 Markham Road Toronto, Onatario M1B-2W3 Canada Chapter 15 Case No.: 12-11882 Affiliates that simultaneously filed Chapter 15 petitions: Debtor Case No. ------ -------- Cinram (U.S.) Holdings Inc. 12-11883 Cinram, Inc. 12-11884 IHC Corporation 12-11885 Cinram Manufacturing LLC 12-11886 Cinram Distribution LLC 12-11887 Cinram Wireless LLC 12-11888 Cinram Retail Services LLC 12-11889 One K Studios, LLC 12-11890 Chapter 15 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Kevin J. Carey CCAA Debtors: Cinram International Inc., Cinram International Income Fund, CII Trust and subsidiaries CCAA Filing Date: June 25, 2012 About the Debtors: Cinram International is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. Cinram 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 Total Assets: $452.7 Million as of Dec. 31, 2011. Total Debts: $527.8 Million as of Dec. 31, 2011. Debtors' Chapter 15 Counsel: Pauline K. Morgan Esq. YOUNG, CONAWAY, STARGATT & TAYLOR Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: bankfilings@ycst.com Monitor in CCAA case: 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: 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 CIRCUS AND ELDORADO: Taps Downey Brand as Nevada Counsel -------------------------------------------------------- BankruptcyData.com reports that Circus and Eldorado Joint Venture filed with the U.S. Bankruptcy Court a motion to retain Downey Brand (Contact: Sallie B. Armstrong) as Nevada counsel at these hourly rates: paralegal at $145 and partner at $375 to $410. About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, is due and payable. The Debtors have entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplates a proposed plan will be filed no later than June 1, 2012. The plan will contain creditor treatments that have already been negotiated with and agreed to by creditor constituents. The Debtors will seek approval of the explanatory disclosure statement within 45 days after the Petition Date and obtain confirmation of the Plan 60 days later. Judge Bruce T. Beesley presides over the case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture had assets of $264 million and liabilities of $174 million as of March 31, 2012. The petitions were signed by Stephanie D. Lepori, chief financial officer. August B. Landis, Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. CIRCUS AND ELDORADO: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Circus and Eldorado Joint Venture filed with the U.S. Bankruptcy Court for the District of Nevada its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $190,641,124 B. Personal Property $74,008,676 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $153,339,309 E. Creditors Holding Unsecured Priority Claims $710,944 F. Creditors Holding Unsecured Non-priority Claims $4,703,237 ----------- ----------- TOTAL $264,649,800 $158,753,490 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/CIRCUS_AND_ELDORADO_sal.pdf About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, is due and payable. The Debtors have entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplates a proposed plan will be filed no later than June 1, 2012. The plan will contain creditor treatments that have already been negotiated with and agreed to by creditor constituents. The Debtors will seek approval of the explanatory disclosure statement within 45 days after the Petition Date and obtain confirmation of the Plan 60 days later. Judge Bruce T. Beesley presides over the case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture had assets of $264 million and liabilities of $174 million as of March 31, 2012. The petitions were signed by Stephanie D. Lepori, chief financial officer. August B. Landis, Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. COEUR D'ALENE: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Coeur d'Alene Mines Corporation, including a corporate family rating of B2, a probability of default rating of B2, and a B3 rating to the company's proposed $350 million of guaranteed senior unsecured notes. At the same time, Moody's assigned a speculative grade liquidity rating of SGL-2. The outlook is stable. Assignments: Issuer: Coeur d'Alene Mines Corporation Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2 Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Unsecured Regular Bond/Debenture, Assigned B3, 73 - LGD5 Outlook Actions: Issuer: Coeur d'Alene Mines Corporation Outlook, Stable Ratings Rationale Coeur's B2 corporate family rating reflects its modest size and high concentration in two mines, relatively short reserve life, exposure to political risk in Bolivia, and uncertainties over potential new investments that the company may make to boost its reserves and productive capacity. The company's properties consist of Kensington gold mine in Alaska, Rochester silver and gold mine in Nevada, Palmarejo silver and gold mine in Mexico, Endeavor silver mine in Australia, Martha silver and gold mine in Argentina, San Bartolome silver mine in Bolivia and 51% interest in Joaquin silver project in Argentina. Most of the company's production comes from Palmarejo and San Bartolome. Martha mine is at the end of its life and will not contribute to production beyond first half of 2012. Joaquin project is in early stages of development and will not contribute to the company's production in Moody's rating horizon, or require substantial capital investments in the next eighteen months. With roughly 19.1 million ounces of silver and 220,000 ounces of gold produced in 2011, Coeur represents a small portion of the global supply of silver and gold. In addition, approximately 70% of the company's silver production comes from its Palmarejo and San Bartolome mines, increasing the risk that operational or geological issues encountered at one of them would significantly impact the company. That said, positive factors for the rating include the company's diversification in two metals and production stream from five operating mines in diverse locations. At December 31, 2011, proven and probable reserves at currently operating mines represented approximately twelve years of production at current production levels. Given the relatively short reserve lives at its existing mines, Coeur will need to continue to be successful in development of its reserves to maintain existing production levels. The ratings reflect the uncertainties over the nature and extent of capital investments that Coeur may make in the medium term to ensure adequate reserves in the long term. While Moody's acknowledges that the company has been able to generate healthy margins in the twelve months ended December 31, 2011, this was in large part attributable to the run-up in gold and silver prices, which are the price levels Moody's views as unsustainable over the medium-term. The company's margins are less favorable than some of its peers, and in a less favorable pricing environment, the company could experience EBIT margin pressures. Moody's also expects that in 2012 and 2013 the company will experience declining production levels at Palmarejo and declining silver recovery rates at San Bartolome, which could potentially increase costs at Coeur's two largest operating mines. Declining production volumes as the mines approach the end of their lives also have the potential to pressure margins over medium term. Although Moody's expects total metal production in 2012 to remain fairly consistent with 2011, as a result of increasing silver production from Rochester following mine expansion at the end of 2011, Moody's notes that this leach pad operation incurs high cash costs and as such, could become uneconomic if silver prices decline. Kensington gold mine, responsible for over 40% of the company's gold production, is also relatively high cost, even though at currently high gold prices, is expected to be profitable. In November 2011, management instituted a six months reduction in ore processing to implement several operating efficiency improvement initiatives. As such, production levels are expected to be suppressed and costs elevated in the first half of 2012, normalizing to the range of $900 - $1000 per ounce of gold after that. High cost production at some of the mines further increases the risk that the company's margins would experience pressure in a less favorable price environment, and highlight the need for the company to continue developing its reserves. The fact that one of Coeur's largest mines, San Bartolome, is in Bolivia, is a negative factor for the rating. Moody's considers the event risk surrounding the government's attitude to nationalization, revision of mining contracts and increasing royalty payment requirements to be high. The government of Bolivia has recently moved to nationalize a number of foreign assets, and is in process of drafting a new mining law which may redefine the structure of mining contracts in Bolivia. Any issues with property nationalization or material limitations on the company's mining operations could have a significant detrimental impact on the company's results and would put negative pressure on the ratings, given that San Bartolome is responsible for approximately quarter of the company's revenues. As noted above, Coeur's continued success is dependent on its ability to develop its resources. That said, Moody's expects the company to generate a reasonable amount of operating cash flows, which, in conjunction with the revolving credit facility and existing cash, should provide it with adequate liquidity to support these requirements over the rating horizon. SGL-2 rating reflects Moody's expectation that the company will have good liquidity, pro-forma for the proposed issuance. As of March 31, 2012, the company had $153 million in cash, which, pro- forma for the issuance, is expected to be $418 million. The company is also expected to enter into $100 million secured revolver agreement, the entire amount of which is expected to be available. The revolver is expected to contain financial maintenance covenants, and Moody's expects the company to be in compliance over the next twelve months. The B3 rating on senior unsecured notes reflects their junior position in the capital structure relative to the revolver. The stable outlook reflects Moody's expectation that market conditions and prices for precious metals over the next twelve to fifteen months will remain favorable. Going forward, the ratings could be lowered if Coeur experiences any significant operational difficulties, its capital requirements escalate, political risk increases, or if its liquidity position deteriorates. A downgrade would be considered if Debt/ EBITDA, as adjusted, is expected to exceed 5x on a sustainable basis, or if (CFO - Dividends)/ Debt is expected to fall below 9%. Upward rating pressure is limited at this time due to investments needed to diversify company's operations and increase reserves. That said, ratings could be upgraded once the company expands its productive capacity and increases diversification with new mines coming online. The principal methodology used in rating Coeur was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. COEUR D'ALENE: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B+' corporate credit rating to Idaho-based Coeur d'Alene Mines Corp. The rating outlook is stable. "In addition, we have assigned our 'BB-' (one notch higher than the corporate credit rating) issue-level rating to the company's proposed $350 million senior unsecured notes due 2020. The recovery rating is '2', indicating our expectation of a substantial (70% to 90%) recovery for bondholders under our default scenario. The ratings are based on preliminary terms and conditions and are being sold pursuant to Rule 144a with registration rights. The revolving credit facility is unrated," S&P said. "The 'B+' corporate credit rating on Coeur d'Alene incorporates our view of company's 'weak' business risk profile, characterized by its exposure to volatile metals prices, high cost position, limited mine diversity, relatively small size, and the risks of being a primary silver producer, including that the majority of silver supply comes as a byproduct of other mining activities," said Standard & Poor's credit analyst Gayle Bowerman. "The 'significant' financial risk profile reflects our view of the company's recent strong cash flow generation, sound pro forma credit metrics and adequate liquidity. Recent operating performance and cash flow have benefited from unprecedented high metals prices, increased volumes, and lower capital expenditures as new mines have been completed," S&P said. "Despite being the largest primary silver producer in the U.S., Coeur is a relatively small miner with six operating mines. The company has doubled its annual silver production volumes and significantly increased its gold production since 2006. Its assets have relatively long mine lives, but each has faced significant operating issues including regulatory troubles in Bolivia, labor difficulties in Mexico, operating problems in Alaska, and a claims dispute over reserves in Nevada. In addition, Coeur is party to a royalty agreement which effectively precludes the company from realizing the market value of half the gold produced at its highly profitable Palmarejo mine. Moreover, we believe that Coeur is a relatively high cost producer, placing it at a disadvantage to peers, with all of its primary mines posting silver cash costs above industry averages. In addition, the company's position as a primary silver producer in an industry where most of the largest suppliers mine silver as a byproduct introduces additional uncertainty. In our view, byproduct producers are likely to continue to mine silver as long as it remains economical to mine their primary products, which include copper, gold, zinc, and lead," S&P said. "Although we expect good credit metrics and strong cash flow generation while gold and silver prices remain high, we project that metrics may deteriorate if prices were to return to historical norms and that price swings will introduce volatility into earnings, cash flow generation, and credit metrics over the longer term. Silver prices are driven by demand for the metal for industrial use and as a financial store of value. While industrial demand is expected to grow as promising new markets for industrial silver are emerging, the growth rate is likely to reflect the overall growth of the global economy. Lastly, the financial investment component inherent in both silver and gold prices introduces significant volatility into Coeur's revenue and cash flow stream, and current high prices are likely to return to historical norms as the global economy strengthens," S&P said. "The stable rating outlook reflects our view that metals prices will remain high enough to support performance consistent with the rating despite high operating costs and price volatility. Risks to our forecast include the company's past operating difficulties and cost escalation throughout the industry. We believe the company's cost position may challenge its ability to remain profitable should prices fall to historical levels," S&P said. "We could take a negative rating action if market prices experience greater-than-expected declines, if production at one of the company's key mines is disrupted for an extended period, or if the company's cash costs become uneconomic relative to market prices. We could take a negative rating action if the company's leverage were to rise above 4x and its FFO to debt were to fall below 20%," S&P said. "A positive action is less likely in the near term given our assessment of the company's weak business risk. One could occur, however, if the company further diversified its asset base and achieved higher production volumes at costs in line with industry levels to better manage its exposure to metals prices," S&P said. COMPREHENSIVE CARE: Expects 2nd Straight Quarterly Profit --------------------------------------------------------- Comprehensive Care Corporation expects to report a profit for the second quarter of 2012, with revenues for the quarter of approximately $18 million. Revenues for the same quarter in 2011 were $18.6 million. However, during that quarter, the Company posted a loss of $4 million. Commenting on the expected results for the quarter, Robert J. Landis, CompCare's Chief Financial Officer, stated, "The Company is particularly excited about our second quarter expected results since, if realized, it will be the first time in many years that the Company has been able to post a profit for two consecutive quarters. The improvement in results from the second quarter of 2011 to the second quarter of 2012, we believe, is primarily attributable to our Pharmacy Management Program which is now achieving traction and our cost reduction efforts to streamline our internal systems. Part of the shift in the pharmacy program occurred from our establishing Company-owned clinics in areas where we experience high patient utilization and cost. The clinics have the effect of reducing those costs and providing us with a greater opportunity to directly service the needs of the patients. Based on our best current available information, for example, the Company expects to realize a profit in its at-risk pharmacy operations in April, and this trend continues in May where preliminary numbers indicate an increase profit in the Company's at-risk pharmacy operations. While there can be no assurances that this trend will continue or that there might not be subsequent positive or negative adjustments to the April and May results, the upward trend is what we were looking for since we believe that it indicates the viability of the overall program. Other aspects of the Pharmacy Management Program are in the process of being implemented and will occur shortly." Mr. Landis continued, "Another aspect of the Pharmacy Management Program that contributed to a successful second quarter was the signing of a Third Amendment (the "Amendment") to a material agreement with one of our existing, at-risk pharmacy clients. As a result of the Amendment, the Company received a $2.2 million, retroactive, cash adjustment to pharmacy prescriptions, which were originally charged to the Company. Additionally, the Amendment shifts the financial responsibility for a significant number of prescriptions from the Company to the client for the remainder of 2012. We expect this financial responsibility shift to further reduce the Company's pharmacy expenses throughout the year, and although there can be no guarantees that these expectations will be achieved, we expect the shift to further enhance the Company's profitability in its pharmacy operations for the remainder of 2012." "Additionally, we were able to implement administrative, cost- saving measures that also contributed to a profitable second quarter," Mr. Landis said. On June 20, 2012, CompCare de Puerto Rico, Inc., a wholly-owned subsidiary of Comprehensive Care, entered into a Third Amendment to the original agreement with MSO of Puerto Rico, Inc., to provide its health plan members mental health, substance abuse treatment, and pharmacy management services. Pursuant to the Amendment, the parties agreed to revise their method of operations and clarified their respective financial responsibilities for the payment of certain prescriptions during the period May 1, 2012, through Dec. 31, 2012, defined in the Amendment as the "Collaboration Period" and thereafter, during the period defined as the "Post-Collaboration Period." The Company's financial responsibility for psychotropic prescription drugs will be limited to the costs of psychotropic drugs prescribed for current mental health conditions. The parties also agreed to settle, for $2.2 million, all Pharmacy Adjustments previously identified as they relate to drugs which were not prescribed for mental health conditions, which drugs were previously charged to the Company, for all periods prior to April 1, 2012. The $2.2 million was paid to the Company's providers by MSO on behalf of the Company. A copy of the Amendment is available for free at http://is.gd/E4CetU About Comprehensive Care Tampa, Fla.-based Comprehensive Care Corporation provides managed care services in the behavioral health, substance abuse, and psychotropic pharmacy management fields. Following the 2011 results, Mayer Hoffman McCann P.C., in Clearwater, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has not generated sufficient cash flows from operations to fund its working capital requirements. Comprehensive Care reported a net loss of $14.08 million in 2011, compared with a net loss of $10.47 million in 2010. The Company's balance sheet at March 31, 2012, showed $15.02 million in total assets, $31.27 million in total liabilities and a $16.25 million total stockholders' deficiency. CORD BLOOD: Agrees to Pay BioCells Sellers $60,000 in 2012 ---------------------------------------------------------- Cord Blood America, Inc., entered into an agreement with Sebastian Nicolas Neuspiller, Diego Esteban Rissola, Jorge Alejandro Jurado, Mauro Leonardo Bruno, and Alejandro Jorge Rico Douglas, from whom the Company purchased its majority ownership interest in Biocordcell Argentina S.A., an Argentine corporation, in 2010. The Agreement operates as a settlement between the parties as to the amount of compensation owed by the Company to BioCells as "earn-out" compensation under the Stock Purchase Agreement entered into between the parties on or around Sept. 20, 2010. Under the Stock Purchase Agreement, for the earn-out the Company could have owed the Sellers up to $705,000 plus a sum equal to 20% of the amount of BioCells Net Profit for fiscal year 2011 exceeding $577,000. The terms of the Agreement limit the cash payout to the sellers during 2012 to $60,000. Additionally, the Agreement provides for future cash amounts, not to exceed $440,000, to be paid through CBAI's percentage portion of dividends earned solely based on BioCells' operating performance in 2012 and 2013. This structure should also reverse a portion of the previous accrual related to the 2011 earn-out amount on the balance sheet booked for year ending 2011, and negates any further balance sheet liability which could have been recorded upwards of $455,000 if no such agreement was reached. "I am most pleased that the sellers of BioCells, through Diego Rissola, President of BioCells, and Cord Blood America management were not only able to reach an agreement on the final year of the earn-out, but also use the extensive dialogue to strengthen several components of the relationship that will leverage the two entities in the years ahead," said Chairman and President Joseph Vicente. Mr. Vicente in addition said: * BioCells is a financially self sufficient operation. It is important to note that CBAI has not invested any money into the working capital of BioCells since its acquisition in September 2010. Additionally, BioCells carries no long term debt or loan balances on its balance sheet. "We are at a point in our life cycle where each subsidiary and/or investment needs to demonstrate its financial independence; we hold out BioCells as a model of such achievement," Mr. Vicente said. * From 2009 to 2011, BioCells increased the number of new enrollments over 15% per annum, primarily through organic growth. The company currently stores approximately 5,000 umbilical cord blood samples for families at its facility headquartered in Buenos Aires, Argentina. * In addition to the already strong organic growth engine in Argentina, BioCells is fast establishing a footprint in other markets throughout South America. In the last six months, it has added franchise operations in Brazil, Paraguay, Mexico and Panama. It will take some time for this franchise model to bear results, but this new sales channel provides BioCells with an additional opportunity to expand quickly into these emerging markets and seize the front end of the growth curve. Key to this strategy of expansion is the co-branding of the CBAI name via the use of company trademarks with these franchises. "It is exciting to see the ever increasing recognition by the Latin American population of the value of storing stem cells. We believe our relationship with BioCells places us in a unique position to continue to expand our knowledge and presence in South America and Central America for this growing population, as we also continue to expand our efforts in reaching the Hispanic population in the United States," Mr. Vicente concluded. About Cord Blood America Based in Las Vegas, Nevada, Cord Blood America, Inc., is primarily a holding company whose subsidiaries include Cord Partners, Inc., CorCell Co. Inc., CorCell Ltd.; CBA Professional Services, Inc. D/B/A BodyCells, Inc.; CBA Properties, Inc.; and Career Channel Inc, D/B/A Rainmakers International. Cord specializes in providing private cord blood stem cell preservation services to families. BodyCells is a developmental stage company and intends to be in the business of collecting, processing and preserving peripheral blood and adipose tissue stem cells allowing individuals to privately preserve their stem cells for potential future use in stem cell therapy. Properties was formed to hold the corporate trademarks and other intellectual property of CBAI. Rain specializes in creating direct response television and radio advertising campaigns, including media placement and commercial production. After auditing the 2011 results, Rose, Snyder & Jacobs, LLP, in Encino, California, expressed substantial doubt substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained recurring operating losses, continues to consume cash in operating activities, and has insufficient working capital and an accumulated deficit at Dec. 31, 2011. Cord Blood reported a net loss attributable to the Company of $5.97 million in 2011, compared with a net loss attributable to the Company of $8.09 million in 2010. The Company's balance sheet at March 31, 2012, showed $7.41 million in total assets, $7.31 million in total liabilities and $101,042 in total stockholders' equity. CORDILLERA GOLF: Blames Small But Vocal Minority for Bankruptcy --------------------------------------------------------------- Cordillera Golf Club, LLC filed for protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 12-11893) amid lower membership rates and tensions with current members. The Debtor owns an exclusive 730-acre four-course golf club at the Cordillera resort community in Edwards, Colorado. The club is located at the 7,000-acre Cordillera development, which has 1,087 residential lots. Non-equity club membership is open to community residents. The club has three golf courses, a Dave Pelz designed short course, five swimming pools, and tennis courts. The membership plan provides that there will be no more than 1,085 golf memberships and up to 100 social memberships. Half of all property owners within Cordillera are club members. David Wilhelm acquired 100% interest in the Debtor in 2009 following an arbitration that stemmed from revelations that the then owners of the 70% interests had diverted funds away from the Debtor's operations. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Debt includes $12.7 million owing to senior lender Alpine Bank. Mr. Wilhelm is owed $7.5 million. A June 1, 2012 appraisal by Chrysalis Valuation Consultants, LLC values the Debtor's property at $33 million. "This is a chance to reorganize and bring the Club back to its prominence," Vail Daily quotes Dan Fitchett, the Cordillera Club's chief executive officer, as saying. "The court system will take charge and help guide us through this process." The Vail Daily report says the Wilhelms and some Cordillera Club members have been locked in litigation for more than a year. The report relates the Wilhelm Family Partnership collected $8 million in membership dues last year and paid themselves almost $1 million, while failing to open three Cordillera golf courses. The members say that violated the membership agreement. The members sued Mr. Wilhelm in a class action lawsuit, asking that the 2011 dues be repaid and that all the membership deposits be refunded. It could total $108 million, the report adds. Road to Bankruptcy "Starting in August 2010, a small but vocal minority of current and former Club members commenced tactical activities that, in the Debtor's view, represents and orchestrated and pervasive pattern of conduct and activities designed to create an environment that the Debtor believes was intended to result in a below-market transfer of ownership and control of the Cordillera club to those current and former members," according to papers filed by the Debtor in court. Activities included inciting club members to resign in substantial numbers and boycott the facilities. The auctions resulted in a decrease in annual dues and similar revenue. The Debtor retained accounting firm of Ehrardt Keefe Steiner & Hottman to conduct a forensic audit and debunk accusations that the Debtor had diverted monies to other entities or purposes. Nonetheless, the damage resulting from the small group's campaign required the Debtor to dramatically cut back its planned operations for 2011. In May 2011, the club advised the members that the mass exodus of members, coupled with certain members' apparent boycott of the facilities, had severely and detrimentally impacted the club, and, as a result, the club had no alternative but to open only one of the four club facilities -- the Valley Club. Later in 2011, the decision was made to also open the Summit Course. The Mountain Course and the Short course were not opened in 2011. Litigation is outstanding between the club and the sub-group of club members. The case turns upon a series of actions taken by the club members in furtherance of an apparent strategy to discredit the Debtor and incite resignations. The first series of depositions is scheduled to begin in the week of July 9, 2012. Sec. 363 Sale Due to its woes, the Debtor was unable to make the payment due to Alpine Bank by June 26. After considering alternatives, the Debtor concluded that the most effective way to maximize the value of its estates is to complete a prompt sale of one of its club facilities -- the Mountain Course -- pursuant to Section 363 of the Bankruptcy Code, subject to higher and better bids at a public auction. The Debtor has retained real estate consultant GA Keen Realty Advisors, LLC, to assist the Debtor in conducting a robust postpetition marketing process. The Debtor has filed a motion to use cash derived from operating the businesses claimed as collateral by Alpine and Mr. Wilhelm. The Debtor has also filed motions to honor obligations to clients, bar utilities from discontinuing service, designate Alfred H. Siegel of Crowe Horwath, LLC as chief restructuring officer, and Tap Rust Consulting/Bankruptcy as the claims and notice agent. Judge Christopher Sontchi will convene a hearing on the first day motions on June 29, 2012. CORDILLERA GOLF: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Cordillera Golf Club, LLC dba The Club at Cordillera 97 Main Street, Suite E202 Edwards, CO 81632 Bankruptcy Case No.: 12-11893 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Christopher S. Sontchi About the Debtor: 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. Debtor's Counsel: Donald J. Bowman, Jr., Esq. YOUNG, CONAWAY, STARGATT & TAYLOR 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 E-mail: bankfilings@ycst.com - and ? Joseph M. Barry, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 E-mail: bankfilings@ycst.com Debtor's Co-Counsel: FOLEY & LARDNER LLP 402 West Broadway, Suite 2100 San Diego, CA 92101-3542 Tel: (619) 234-6655 Debtor's Claims Agent: OMNI MANAGEMENT GROUP LLC Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by David A. Wilhelm, manager of CGH Manager LLC, manager. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Rush Family Trust Guaranty $2,500,000 12348 High Bluff Drive, Suite 100 San Diego, CA 92130 Eagle County Treasurer Personal Property $66,249 P.O. Box 479 Taxes Eagle, CO 81631 Thomas Genshaft Legal Services $64,344 39 Boomerang Road, Suite 8130 Aspen, CO 81611 Cox, Castle & Nicholson LLP Legal Services $55,988 Greenberg Traurig Legal Services $49,631 Ceres Design & Arborscape LLC Vendor $29,262 Collett Enterprises, Inc. Utility ? Fuel $27,622 Holy Cross Electric Assoc., Inc. Utility $23,341 Winfield Solutions, LLC Vendor $19,805 CVC Property Owners Assn. Home Owners' $18,721 Association LL Johnson Distrib. Co. Vendor $18,697 Centurylink, Inc. Utility ? Telephone $13,337 River Centre Development, LLC Landlord $11,098 U.S. Dept. of the Interior Bureau Utility ? Water $7,782 of Reclamation Acushnet Company Vendor $7,282 Callaway Golf, Inc. Vendor $7,163 Araphoe Pumping Systems Vendor $6,038 Dickinson, Prud'Homme, Adams & Legal Services $5,558 Ingram, LLP Taylor Made, Inc. Vendor $5,289 Colorado Motor Parts Vendor $4,805 CYNERGY GROUP: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Cynergy Group International, LLC 4316 Marina City Drive, PH29 Marina Del Rey, CA 90292 Bankruptcy Case No.: 12-31954 Chapter 11 Petition Date: June 25, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Moises S. Bardavid, Esq. LAW OFFICES OF MOSES S. BARDAVID 16133 Ventura Blvd 7th Fl Encino, CA 91436 Tel: (818) 377-7454 Fax: (818) 377-7455 E-mail: mbardavid@hotmail.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 Mark Shehata, secretary. DANCEHALL LLC: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Dancehall, LLC 1313 Viewmont Niskayuna, NY 12309 Case Number: 12-11696 Involuntary Chapter 11 Petition Date: June 22, 2012 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Petitioner's Counsel: Peter A. Pastore, Esq. MCNAMEE, LOCHNER, TITUS & WILLIAMS, PC P.O. Box 459 677 Broadway Albany, NY 12201-0459 Tel: (518) 447-3246 E-mail: pastorepa@mltw.com Dancehall, LLC's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Daniel J. Hogarty, Jr. Loan $80,909 44 West Rd., Troy, NY 12180 Alexander Keeler Loan $14,522 37 Old Niskayuna Rd. Loudonville, NY 12211 James Clark Loan $7,261 121 Ball Court Menanda, NY 12203 James T. O'Hearn Loan $14,522 5 Fenway Dr. Loudonville, NY 12211 Michael Nahl Loan $14,522 111 Woods Lane Menands, NY 12204 Carl Florio Loan $3,630 9 Hills Rd. Loudonville, NY 12211 E. Stewart Jones, Jr. Loan $2,074 46 Schuyler Rd. Loudonville, NY 12211 John Murray Loan $3,630 10 Naples Court Troy, NY 12180 John Nigro Loan $3,630 12 West Cobble Hill Rd. Loudonville, NY Daniel Nolan Loan $12,343 35 Princess Lane Loudonville, NY 12211 Peter E. Platt Loan $3,630 8 Alfred Drive E. Colonie, NY 12205-2912 DEWEY & LEBOEUF: Creditors Want to Pay Counsel $1,055 Per Hour -------------------------------------------------------------- Linda Sandler at Bloomberg News reports that the official committee of unsecured creditors of Dewey & LeBoeuf LLP has sought permission from the U.S. Bankruptcy Court for the Southern District of New York to pay their lawyer, Edward Weisfelner, who runs the law firm Brown Rudnick LLP, $1,055 per hour. The three-member committee has tapped Brown Rudnick as its bankruptcy counsel. Members of the creditors committee are HireCounsel, Inta Boro Acres Inc., and Fidelity National Capital, Inc. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey & LeBoeuf has won Court authority to use lenders' cash collateral through July 31, 2012. DUNDEE RESORT: Executive Denies Receivership Rumors --------------------------------------------------- Bruce Erskine at Herald Business reports that Scott MacAulay, chief executive officer of Cape Breton Resorts, which owns Dundee Resort and Golf Club in Cape Breton, Nova Scotia, Canada, denied rumors that the resort is in the brink of receivership. Mr. MacAulay said staff levels at Dundee, which has been open for more than a month, fluctuate to meet business requirements and have been cut recently, according to Herald Business. However, the report notes that Mr. MacAulay said that only makes good business sense. "It depends on the day. . . It varies," the report quoted Mr. MacAulay as saying. Cape Breton Resorts also owns the Inverary Resort in Baddeck, the Glenghorm Beach Resort in Ingonish and the Bell Bay Golf Club in Baddeck. The company recently announced plans to build 20 fractional ownership units at the Dundee Resort. EIG INVESTORS: Moody's Lowers Corp. Family Rating to 'B2' --------------------------------------------------------- Moody's Investors Service downgraded EIG Investors Corp.'s corporate family rating to B2 from B1 and affirmed the Company's B2 probability of default rating as well as the B1 ratings for its existing first lien secured credit facilities. Moody's also assigned a B1 rating to EIG's proposed incremental first lien credit facilities and a Caa1 rating to its $125 million of proposed second lien term loans. The Company plans to use approximately $210 million of net proceeds from the new credit facilities and some cash on hand to finance the pending acquisition of HostGator. The outlook for the ratings is stable. The downgrade reflects Moody's expectation that EIG will continue to be a consolidator in the web services industry and that the Company will pursue aggressive financial policies to drive returns for shareholders. The acquisition of HostGator will enhance EIG's market position and scale and the combined companies should produce strong free cash flow relative to debt driven by organic subscriber growth and synergies from the acquisition. However, Moody's lowered EIG's ratings because of the increase in the Company's debt levels to finance the acquisition, close on the heels of a series of leveraging events over the past 12 months, including EIG's leveraged buyout by its current sponsors, and the increases in debt related to the purchase of minority equity interest and the acquisition of Dotster. At the close of the HostGator acquisition, EIG's pro forma leverage (total debt to LTM 1Q 2012 cash flow from operations plus interest), including synergies, is expected to be about 5.0x. However, excluding synergies, leverage will be approximately 6.0x and it could take 4 to 8 quarters to realize targeted cost savings and achieve forecasted improvements in profitability. Moody's believes that, absent another leveraging event, EIG's leverage should decline to about 4.0x towards the end of 2013 from growth in operating cash flow and as cash is applied toward mandatory debt repayments. Nevertheless, according to Moody's analyst Raj Joshi, "the downgrade incorporates the potential for re-leveraging in the future as the Company's executes its strategy of growing market share through acquisitions." Rating Rationale The B2 corporate family rating considers EIG's aggressive financial policies and its high financial leverage, especially in the context of the intensely competitive domain name and web hosting services industry. The industry is characterized by the commoditized nature of services, relatively few barriers to entry, modest pricing power, and a fragmented and evolving market. The B2 CFR is supported by EIG's sizeable prospective free cash flow of at least 10% of its total debt in 2013, driven by organic growth, economies of scale and the Company's high cash EBITDA margins, pro forma for the acquisition of HostGator. The rating benefits from EIG's leading position in the web hosting market through its multiple brands, the rapidly growing market for web services to small and medium size businesses, and the Company's stable operating cash flow derived from a highly diversified customer base with low subscriber churn rates. The stable outlook reflects Moody's expectation that EIG will produce free cash flow of at least 10% of total debt over the next 12 to 18 months, its organic net subscriber addition rates will remain strong, and that it will maintain stable EBITDA margins. In addition, Moody's expects the Company to achieve targeted cost savings from the HostGator acquisition in the next 4 to 8 quarters. Moody's could downgrade EIG's ratings if cash flow from operations falls short of expectations as a result of increasing competition, deterioration in customer churn rates, weak organic subscriber growth, or challenges in business execution. More specifically, EIG's ratings could be downgraded if the Company is unable to sustain leverage (Total Debt/CFFO plus interest expense, Moody's adjusted) below 6.5x or its free cash flow falls below 5% of total debt. Moody's could raise EIG's ratings if the Company maintains good organic revenue and operating cash flow growth and if Moody's believes that the Company will sustain leverage (Total Debt/CFFO plus interest expense, Moody's adjusted) below 4.5x and free cash flow to debt ratio of in excess of 10%. Moody's has taken the following rating actions: Issuer: EIG Investors Corp. Corporate Family Rating -- Downgraded to B2 from B1 Probability of Default Rating -- B2, affirmed $75 million (increased from $55 million) senior secured revolving credit facility due 2016 -- Affirmed B1, LGD 3 (38%), LGD assessment changed from LGD3 (35%) $535 million senior secured 1st lien term loan facility due 2018 -- Affirmed B1, LGD 3 (38%), LGD assessment changed from LGD3 (35%) $100 million incremental senior secured 1st lien term loan facility due 2018 -- Assigned B1, LGD3 (38%) $125 million senior secured 2nd lien term loan facility due 2018 -- Assigned Caa1, LGD5 (87%) Outlook: Stable The principal methodology used in rating EIG Investors was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Burlington, MA, EIG provides web hosting and other online services primarily to small and medium-sized businesses. EIG is a successor entity to The Endurance International Group which was acquired by private equity firms Warburg Pincus and Goldman Sachs Capital Partners in December 2011. ENGILITY CORP: Moody's Revises Corporate Family Rating to 'Ba3' --------------------------------------------------------------- Moody's Investors Service has revised the ratings of Engility Corporation (Engility, press release dated June 14, 2012) to incorporate the lower debt level now planned in the capital structure following the company's spin-out from L-3 Communications Holdings, Inc. (L-3). The new beginning debt load consists of a $335 million term loan instead of the previously planned $450 million ($200 million term loan and $250 million of unsecured notes). The corporate family rating (CFR) has been revised to Ba3 from B1 reflecting greater credit resiliency expected from the 25% lower beginning debt amount. Additionally, the rating on the senior secured facility has been changed to Ba2 (one notch above the CFR) from Ba1 (three notches above the CFR) due largely to the elimination of the unsecured tranche. With the all bank debt structure now planned and pursuant to Moody's Loss Given Default Methodology, a 65% family recovery assumption has been applied instead of 50% before, resulting in continuation of the previously assigned B1 probability of default rating (PDR). The ratings: Corporate Family rating, to Ba3 from B1 Probability of Default rating, unchanged at B1 $50 million first-lien revolver due 2017, assigned at Ba2, LGD2, 24% $335 million first-lien term loan due 2017, assigned at Ba2, LGD2, 24% $100 million first-lien revolver due 2017, rating withdraw from Ba1 LGD2 18% $200 million first-lien term loan due 2017, rating withdraw from Ba1 LGD2 18% $250 million senior unsecured notes due 2019, rating withdrawn from B2, LGD5, 75% Speculative Grade Liquidity, to SGL-3 from SGL-2 Rating Outlook, Stable Ratings Rationale The Ba3 corporate family rating reflects expectation of debt to EBITDA remaining below 4x with beginning leverage, proforma for transaction, of about 2.6x on a Moody's adjusted basis. Engility's revenues and margins will likely decline as U.S. troops prepare to leave Afghanistan by 2014 and the tighter federal procurement practices taking hold across the U.S. Department of Defense continue pressuring margins. Although, revenue and margin pressure will pose an operating headwind, the moderate beginning leverage level provides a reasonably good buffer from which Engility can execute its planned operational restructuring. The restructuring should help lower the company's overhead and thereby boost its ability to compete better, and the separation from L-3 will eliminate organizational conflicts of interest that previously precluded a broader set of bidding opportunities. Further, the $335 million term loan will amortize at about $50 million per year beginning in 2013, an amount which the company's cash flow generation should be able to cover. While the challenging environment for defense servicing contractors ahead and need for growth as a public company could encourage Engility to pursue acquisitions, the modest revolver size and the scheduled term loan amortization pace suggest much greater emphasis on debt reduction versus acquisition spending. The speculative grade liquidity rating has been decreased to SGL-3 from SGL-2 due to decreased commitment size of the revolver (to $50 million from $100 million) and the higher annual debt amortization requirement (to $50 million from $20 million, beginning in 2013). The rating outlook is stable reflecting the prospect for enough free cash flow generation to meet required annual debt amortizations without much likelihood of revolver dependence. The company should be able to maintain debt to EBITDA in the 3x to 4x range, supportive of the Ba3. The rating could be upgraded with backlog growth, expectation of debt to EBITDA sustained below 3x, solid free cash flow generation and good liquidity. Downward rating pressure would grow if debt to EBITDA were to rise above 4x, covenant compliance headroom were to become tight or if the annual rate of free cash flow generation were to fall below $60 million. The principal methodology used in rating Engility 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. Following the spin-off from L-3 Communications Holdings, Inc. ("L- 3"), Engility Corporation, a provider of systems engineering services, training, program management and operational support for the U.S. Government worldwide, will be the main subsidiary of Engility Holdings, Inc. Engility Holdings, Inc. had 2011 revenues of $2 billion. ENGILITY CORP: S&P Keeps 'BB+' Rating on $385M Sr. Unsecured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services' 'BB+' issue-level rating and '1' recovery rating on Engility Corp. remain unchanged following the company's announcement that it has upsized its proposed senior secured credit facilities from $300 million to $385 million, consisting of a $50 million revolver and a $335 million first-lien term loan, both due in 2017. "At the same time, we withdrew our 'BB-' issue rating and '3' recovery rating on the company's proposed $250 million senior unsecured notes offering, which it has withdrawn," S&P said. "Our 'BB-' corporate credit rating and stable outlook on Engility remain unchanged. Standard & Poor's continues to view Engility's financial risk profile as 'significant,' despite a somewhat lower pro forma adjusted debt-to-EBITDA of 3.0x at the close of the revised financing transaction, versus 3.8x leverage based on the originally proposed financing terms. We expect revenues in 2012 to be approximately $1.6 billion, a significant decline from $2.1 billion in 2011, primarily due to the continued decline in contracts supporting the U.S. military operations in Iraq and Afghanistan. We also anticipate lower profitability over the intermediate term, with adjusted EBITDA margin declining from approximately 10% in 2011 to the low-8% area in 2013, primarily as a result of reduced higher margin business related to overseas contingency missions, and customers' increasing preference to migrate from higher margin time-and-material contract types to lower margin cost-plus contracts," S&P said. Engility is a provider of systems engineering services, training, program management, and operational support for the U.S. government worldwide. Its business is focused on supporting the mission success of its customers by providing a full range of engineering, technical, analytical, advisory, training, logistics, and support services. RATINGS LIST Engility Corp. Corporate Credit Rating BB-/Stable/-- Senior Secured BB+ Recovery Rating 1 Ratings Withdrawn Engility Corp. To From Senior Unsecured nts NR BB- Recovery Rating NR 3 EPICOR SOFTWARE: S&P Affirms 'B' CCR on Successful Merger --------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Dublin, Calif.-based enterprise resource planning (ERP) provider Epicor Software Corp. to stable from negative. "We affirmed our ratings on the company and its debt issues, including our 'B' corporate credit rating," S&P said. "We revised our rating outlook to stable from negative due to the successful integration of its merger with Activant, the continued traction gained by the company's ERP solutions segment, and modestly reduced leverage over the past year," said Standard & Poor's credit analyst David Tsui. "The rating on the Epicor reflects Standard & Poor's view of the company's highly recurring revenue base from its ERP software maintenance and services, but pro forma operating lease-adjusted leverage that has been modestly reduced, to about 6.5x at March 31, 2012. We view the company's business risk profile as 'weak,' primarily characterized by its competition with much larger and more diversified software firms," S&P said. "We view the company's financial risk profile as 'highly leveraged,'" added Mr. Tsui, "but the company has good free operating cash flow characteristics, which we estimate at about $90 million for fiscal year ended Sept. 30, 2012." "The outlook is stable, reflecting the successful integration of Epicor and Activant and our expectations for modest organic revenue and EBITDA growth over the near term. While not likely in the coming year, we would consider an upgrade if organic revenue growth accelerates, improving adjusted EBITDA margin above the mid-20% area such that adjusted leverage declines to low-5x area," S&P said. "If revenue declines or profitability deteriorates due to intense competition or loss of leadership position in the midmarket ERP market, resulting in adjusted leverage approaching the 8x area, we could lower the rating," S&P said. ESCOTO CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Escoto Construction Corp. 6534 Clara Street Bell Gardens, CA 90201 Bankruptcy Case No.: 12-31810 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: Warren Nemiroff, Esq. TDG LAW GROUP, APC 433 N Camden Dr #400 Beverly Hills, CA 90210 Tel: (310) 279-5282 Fax: (310) 550-7401 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-31810.pdf The petition was signed by Martin Escoto, president. FRANKLIN CREDIT: Combined Plan Hearing Scheduled for July 18 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey will convene a combined hearing on July 18, 2012, at 10 a.m., to consider adequacy of the Disclosure Statement and confirmation of Franklin Credit Holding Corporation's Chapter 11 Plan. Objections, if any, are due seven days before the hearing. Franklin Credit filed a prepackaged plan. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. In exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. Over the last several years, the Debtor and FCMC have been parties to multiple restructuring agreements with their primary creditors arising in an effort to address the challenges resulting from the severe deterioration in the housing market and the nearly complete shutdown of the mortgage credit market for borrowers without excellent credit histories. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Franklin_Credit_Plan_Outline.pdf About Franklin Credit Holding Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. The Court has established July 18, 2012, as the hearing on the adequacy of the Disclosure Statement. FRANKLIN CREDIT: Section 341(a) Meeting Scheduled for July 11 ------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors of Franklin Credit Holding Corporation on July 11, 2012, at 2 p.m. The meeting will be held at Suite 1401, One Newark Center. Proofs of claim are due by Oct. 9. About Franklin Credit Holding Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. The Court has established July 18, 2012, as the hearing on the adequacy of the Disclosure Statement. FRANKLIN CREDIT: Taps SNR Denton as Special Securities Counsel -------------------------------------------------------------- Franklin Credit Holding Corporation asks the U.S. Bankruptcy Court for the District of New Jersey for permission to employ SNR Denton as special securities and corporate counsel. SNR Denton has acted as the Debtor's corporate and SEC counsel and is the best position to provide excellent and cost effective corporate and SEC-related services. SNR Denton will (a) advise the Debtor with respect to corporate law matters; (b) represent the Debtor in corporate transactions; and (c) represent the Debtor in connection with securities law compliance. To the best of the Debtor's knowledge, SNR Denton is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Franklin Credit Holding Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. The Court has established July 18, 2012, as the hearing on the adequacy of the Disclosure Statement. FULLER BRUSH: Taps FocalPoint Securities as Investment Banker ------------------------------------------------------------- The Fuller Brush Company, Inc., et al., ask the U.S. Bankruptcy Court Southern District of New York for permission to employ FocalPoint Securities, LLC, as investment banker. FocalPoint will, among other things: -- advise the Debtors in analyzing its strategic alternatives and structuring and effecting the financial aspects of any restructuring transaction; -- design the appropriate financial models, financial analysis, or marketing material necessary to initiate and effect any restructuring transaction, including analysis of the various alternatives and, the lenders and investors to be contracted for the restructuring transaction; and -- solicit interest from counterparties in any restructuring transaction. FocalPoint's compensation structure includes: a. commencing as of March 30, 2012, whether or not a Restructuring Transaction is proposed or consummated, an advisory fee of $25,000 per month during the term hereof; b. a fee of $350,000, payable only upon the completion of a Restructuring Transaction; c. in the event that Fuller Brush pursues a Sale, a fee to be paid upon the closing of any sale. The parties acknowledge that more than one sale transaction may be contemplated and the thresholds will be applied on a cumulative basis taking into account all such transactions. i. 2.5% of cumulative Transaction Value up to and including $15,000,000; plus ii. 5.0% of cumulative Transaction Value greater than $15,000,000 and up to and including $25,000,000; plus iii. 7.5% of cumulative Transaction Value in excess of $25,000,000. d. FocalPoint will credit 100% of the sale fee(s) against the Completion Fee; provided, that in no case will the Completion Fee be less than zero. FocalPoint will also credit 100% of the Monthly Advisory Fees paid to FocalPoint up to $100,000, against the total fees payable to FocalPoint. As of the Petition Date, FocalPoint did not hold a prepetition claim against the Debtor for services rendered. According to the case docket, access to transcript regarding the May 4, 2012, hearing relating to the approval of FocalPoint's employment will be restricted through Aug. 15, 2012. About The Fuller Brush Company The Fuller Brush Company -- http://www.fuller.com/-- sells branded and private label products for personal care, commercial and household cleaning and has a current catalog of 2,000 cleaning products. Some of Fuller's retail partners include Home Trends, Bi-Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime Solutions, Vermont Country Store and Starcrest. Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. Fuller said it will be business as usual while undergoing Chapter 11 restructuring. But it said that while in reorganization, it intends to trim about half of the current catalog of cleaning products. Herrick Feinstein LP is the bankruptcy counsel. Fuller, which has 180 employees as of the Chapter 11 filing, disclosed $22.9 million in assets and $50.9 million in debt. The official committee of unsecured creditors has tapped the law firm of Kelley Drye & Warren LLP as counsel. The reorganization is being financed with a $5 million loan from an affiliate of Victory Park Capital Advisors LLC, the secured lender owed $22.7 million that plans to buy the business in exchange for debt. G. P. HOLDINGS: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: G. P. Holdings, LLC 217 N. East Ave. Fayetteville, AR 72701 Bankruptcy Case No.: 12-72443 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Judge: Ben T. Barry Debtor's Counsel: David G. Nixon, Esq. NIXON LAW FIRM 2340 Green Acres Road, Ste. 12 Fayetteville, AR 72703 Tel: (479) 582-0020 Fax: (479) 582-0030 E-mail: david@nixonlaw.com Scheduled Assets: $1,250,000 Scheduled Liabilities: $631,078 A copy of the Company's list of its five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/arwb12-72443.pdf The petition was signed by Gregory House member of Houses Development. GENERAL MARITIME: Issues 83,129 Common Shares to Houlihan --------------------------------------------------------- Pursuant to (i) the Equity Purchase Agreement, dated as of Dec. 15, 2011, and amended on March 26, 2012, by and among General Maritime Corporation and Oaktree Principal Fund V, L.P., Oaktree Principal Fund V (Parallel), L.P., Oaktree FF Investment Fund, L.P. - Class A, and OCM Asia Principal Opportunities Fund, L.P., and (ii) the order of the Bankruptcy Court authorizing the Debtors to enter into the Purchase Agreement, the Company is required to reimburse Oaktree for certain advisory fees, including those of Houlihan Lokey Capital, Inc., incurred in connection with the Purchase Agreement, the Chapter 11 cases and certain related matters. On June 22, 2012, pursuant to a subscription agreement dated as of June 19, 2012, the Company issued 83,129 shares of common stock, par value $0.01 per share, of the Company to Houlihan, having an agreed-upon value of $36.84 per share, or $3,062,472 in the aggregate, which payment was deemed to be a reimbursement by the Company of Oaktree, in accordance with the Purchase Agreement and the Purchase Agreement Order, for certain fees (equal to $3,062,472) owed to Houlihan. About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. General Maritime emerged from Chapter 11 protection in May 2012. The Plan reflects the terms of a global settlement among the Company's main creditor constituencies. The plan gives unsecured creditors $6 million in cash, 25 of the new stock, and warrants for another 3%, for a predicted 5.41% recovery. GEORGES MARCIANO: Sale of California Houses to Be Challenged ------------------------------------------------------------ The purchase of three Los Angeles properties that belong to Georges Marciano, worth a total of over $40 million, will be challenged following appeals submitted by the founder of Guess Jeans. Three judges at the California Court of Appeal reversed the judgment of the trial judge, Elizabeth White, ruling the damages obtained by Gary Iskowitz, Mr. Marciano's former accountant, to be excessive. The situation is likely to be the same for all the other trial judgments rendered in the cases of Fahs et al. These appeals will be heard in the coming months. If the appeals are successful, the reversal of the judgments will, for all practical purposes, nullify the reason for the forced sale of Mr. Marciano's properties. Mr. Marciano also intends to appeal any court-approved sales of the properties and will seek an order to prevent the sales from being consummated. It will be recalled that on Dec. 8, 2011, the Hon. Mark Schrager of the Superior Court of Quebec rejected the warrant and the authorization to seize assets belonging to Mr. Marciano and to third parties. In his decision, the Hon. Justice Schrager pointed out that the decisions made in California were not final, as they were still before the Court of Appeal, and that no bankruptcy had been filed under the Bankruptcy and Insolvency Act. He ordered the American trustee David Gottlieb to return to Mr. Marciano and to the third parties involved all assets seized before judgment. About Georges Marciano Georges Marciano is the co-founder of the apparel company Guess?, Inc. and an investor in various companies and real estate ventures. Three of the five former employees of Mr. Marciano, who won a $370 million libel judgment against him in July 2009, filed an involuntary chapter 11 bankruptcy petition (Bankr. C.D. Calif. Case No. 09-39630) against the Guess? Inc. co-founder on Oct. 27 2009. Mr. Marciano challenged the involuntary petition for 14 months, and Judge Victoria S. Kaufman entered an order for relief against Mr. Marciano on Dec. 29, 2010. GRANITE DELLS: Plan Outline Hearing Scheduled for July 27 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona will convene a hearing on July 27, 2012, at 9 a.m. to consider adequacy of the Disclosure Statement explaining Granite Dells Ranch Holdings, LLC's Plan of Reorganization dated June 11, 2012. According to the Disclosure Statement, the Plan provides for the continuation of the management and development of the property -- approximately 15,000 acres in Yavapai County, Arizona, near the city of Prescott. The Plan also provides that the operations of the Reorganized Debtor will be funded from revenues from mining and grazing leases, sale of parcels of the property, loans from third parties, and equity contributions made by participating investors and holders of Interests that elect to contribute additional capital and to participate. Under the Plan, priority Claims will be paid in full on the Effective Date or in installments over specified periods. Secured Claims will be paid in full, in installments over time and as parcels of the property are sold. Holders of Unsecured Claims will receive installments payments over eight years from the Unsecured Creditor Fund, to be funded by Debtor in the aggregate amount of $5 million. Holders of Investor Claims and holders of equity interest will be provided an election to participate in the funding of approximately $20 million over three years, to cover payments to creditors and other anticipated costs of development of the property. The Interests of Equity Holders who do not choose to participate in the funding of the Reorganized Debtor will be canceled and the Equity Holders will receive nothing on account of their Interests. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GRANITE_DELLS_ds.pd 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: Extends KM License Agreement for One Year -------------------------------------------------------------- Guided Therapeutics, Inc., executed an agreement to extend its existing license agreement with Konica Minolta Technology Center, Inc., to co-develop a Barrett's Esophagus detection product for one year, effective May 1, 2012. Pursuant to the extension agreement, KM will pay the Company $2.0 million in installments payable as follows: first payment of $1.06 million due by June 30, 2012, or earlier; a second payment of $310,000 due by July 31, 2012, or earlier; upon the attainment of certain milestones, a third payment of $320,000 due by Oct. 31, 2012, or earlier; and, upon the attainment of certain milestones a fourth payment of $310,000 due by Jan. 31, 2013 or earlier. Guided Therapeutics will retain all rights to lung and biliary cancer that were previously shared in the original agreement with Konica Minolta Opto, Inc., dated April, 2009. A copy of the Assigned Task Agreement is available for free at: http://is.gd/iHnx82 A copy of the Collaboration Agreement is available for free at: http://is.gd/dqmsoJ 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. HALCON RESOURCES: S&P Gives 'B-' Corp. Credit Rating; Outlook Pos ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Houston, Texas-based Halc¢n Resources Corp. The outlook is positive. "At the same time, we assigned a 'CCC+' issue rating to Halc¢n's proposed $500 million senior unsecured notes due 2020. We assigned a '5' recovery rating to the notes, indicating our expectation of modest (10% to 30%) recovery in the event of a payment default," S&P said. "The ratings on Halcon reflect its small reserve and production base, very aggressive capital spending plans that will require significant external sources to fund, high current cost structure and limited reserve replacement history," said Standard & Poor's credit analyst Ben Tsocanos. "The ratings also reflect the volatility and capital intensive nature of the oil and gas industry. These weaknesses are adequately offset at the rating level by an oil-weighted reserve profile, a well-regarded management team, and extensive acreage holdings in multiple onshore liquids-rich U.S. basins. Standard & Poor's characterizes Halc¢n's business risk as 'vulnerable', its financial risk as 'highly-leveraged' and its liquidity as 'less than adequate.'" Halcon plans to buy GeoResources Inc. for approximately $1 billion and East Texas properties for approximately $500 million. The company intends to use the proceeds from the note issuance to fund a portion of the GeoResources purchase price. If the acquisition does not close by Dec. 31, 2012, the notes will be repaid. "Pro forma for the acquisitions, Halcon will have approximately 73 million barrels of oil equivalent (MBoe) of proved reserves and daily production of approximately 14,550 barrels of oil equivalent (Boe), which is comparable with similarly rated peers. Oil and natural gas liquids account for 74% of reserves and 55% are categorized as proved-developed, which we view as relatively favorable characteristics. Halc¢n and GeoResources' combined historical operating costs are high at $21 per boe (lease operating expense and production tax) in the first quarter of 2012, reflecting the mature nature of a substantial portion of their producing assets, which require artificial lift to produce. We expect costs to improve as Halc¢n adds new production and that its historically poor reserve replacement record will improve as the company develops its extensive acreage holdings," S&P said. "Halcon will derive about half of its pro forma production from major liquids-rich resource plays that offer attractive growth prospects: Bakken Shale in Montana and North Dakota, Austin Chalk and Woodbine formation in Texas. Properties in the Eagle Ford Shale will be divested following the GeoResources acquisition to comply with management's non-competition agreement. The remaining half of Halc¢n's pro forma production comes from conventional assets located mainly in Texas, Louisiana and Oklahoma. We expect the company to focus on optimizing production and reducing costs at these relatively mature properties. Halc¢n also holds leases for more than 700,000 net acres in more prospective areas including the Wilcox, Mississippi Lime and Utica Shale formations as well as areas where it has existing proved reserves and production. Concerns about the level and source of capital required to develop this enviable collection of properties are reflected in the ratings on Halcon. The company's management, including CEO Floyd C. Wilson, has an impressive record of building E&P companies, which we regard as a positive for attracting capital and talented personnel," S&P said. "The positive outlook reflects the potential that we could raise ratings if Halcon achieves ambitious cost reduction and production growth targets while maintaining projected leverage under 5x debt to EBITDA and improving liquidity. Meeting financial goals while funding an aggressive capital spending program require that Halcon obtain significant external funding. We could change the outlook to stable if these sources do not materialize or if the company cost reduction and production growth progress fall short of Expectations," S&P said. HAMPTON ROADS: Shareholders OK Issue of 135.7MM Common Shares ------------------------------------------------------------- A special meeting of the shareholders of Hampton Roads Bankshares, Inc., was held on June 25, 2012. The shareholders approved the issuance, including for purposes of NASDAQ Stock Market Rule 5635, of up to 135,714,286 shares of the Company's common stock at $0.70 per share and related transactions, including the payment of $3 million in fees to certain investors. The shareholders approved an amendment to the Articles of Incorporation of the Company to change the voting requirements for certain corporate transactions and future amendments to the Articles of Incorporation and amendments to the Company's 2011 Omnibus Incentive Plan. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.13 billion in total assets, $2.02 billion in total liabilities and $105.29 million in total shareholders' equity. HARRISBURG, PA: Sues to Wrest Financial Control From State ---------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that the Harrisburg City Council made its latest bid to regain control over the Pennsylvania capital's perilous finances Tuesday, launching a complaint in federal court that challenges the governor and the appointed city receiver on constitutional grounds. Bankruptcy Law360 relates that the suit claims Act 47 -- the law empowering Gov. Thomas W. Corbett to declare a state of fiscal emergency and appoint a special receiver to take charge of the city's finances -- violates the plaintiffs' rights to due process and equal protection under the 14th Amendment. About Harrisburg, Pennsylvania The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. The Harrisburg city council voted 4-3 on Oct. 11, 2011, to authorize the filing of a Chapter 9 municipal bankruptcy (Bankr. M.D. Pa. Case No. 11-06938). The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. Judge Mary D. France presided over the Chapter 9 case. Mark D. Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. Harrisburg said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the Chapter 9 petition. The state later adopted a new law allowing the governor to appoint a receiver. Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. In November 2011, the Bankruptcy Judge dismissed the Chapter 9 case because (1) the City Council did not have the authority under the Optional Third Class City Charter Law and the Third Class City Code to commence a bankruptcy case on behalf of Harrisburg and (2) the City was not specifically authorized under state law to be a debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2). Dismissal of the Chapter 9 petition was upheld in a U.S. District Court. That same month, the state governor appointed David Unkovic as receiver for Harrisburg. Mr. Unkovic is represented by the Municipal Recovery & Restructuring group of McKenna Long & Aldridge LLP, led by Keith Mason, Esq., co-chair of the group. Mr. Unkovic resigned as receiver March 30, 2012. IBIZA MERGER: Moody's Assigns 'B2' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family ("CFR") and Probability of Default ("PDR") ratings to Ibiza Merger Sub, Inc. ("New Intelligrated") as well as B1 and Caa1 ratings to the first and second lien credit facilities respectively being arranged for Permira funds' leveraged acquisition of Intelligrated, Inc. The acquisition has a transaction value slightly more than $500 million and will involve $305 million of borrowed funds of which approximately $112 million will be used to refinance existing Intelligrated debt. The outlook is stable. Intelligrated, Inc. (CFR/PDR of B1) announced earlier in June that funds managed by Permira had reached an agreement to acquire the company. Ibiza Merger Sub, Inc. is the entity created to fund the acquisition. Upon closing of the purchase, Ibiza Merger Sub, Inc. will be folded into Intelligrated, Inc. As Moody's currently maintains ratings on existing Intelligrated's first lien debt, "New Intelligrated" refers to the pro forma corporate structure under Permira funds' ownership. Upon closing of the purchase, existing Intelligrated, Inc. ratings would be withdrawn and, shortly thereafter, the name of the rated issuer within Moody's database will revert to Intelligrated, Inc. Ratings Rationale New Intelligrated's B2 Corporate Family and Probability of Default ratings recognize the company's modest revenue size but strong position within a relatively narrow niche. Regional and customer concentration issues as well as ongoing cyclicality also influence the ratings. Furthermore, the ratings incorporate a leveraged capital structure, moderate coverage metrics for the rating category and anticipation of sustainable free cash flow. Moody's adjusted debt/EBITDA leverage will initially be close to 6 times, but free cash flow will continue to benefit from relatively low re-investment requirements for property, plant and equipment and from net operating loss carry-forwards minimizing future tax outlays. Still, the resultant level of fixed charges going forward could limit flexibility should a cyclical downturn occur. The company's volumes are driven by capital expenditure plans of major North American retailers, consumer product manufacturers and shipping/logistics providers. While a large portion of Intelligrated's revenues are tied to the level of investment in new and expanded warehouse and distribution facilities, an increasing portion of the company's business is tied to projects that can considerably improve the efficiency of existing facilities. The bulk of Intelligrated's revenues come from new equipment and systems sales. However, its business profile includes an installed base of equipment, establishing a stream of higher margin revenue from customer service, aftermarket parts and license fees. Its backlog of orders strengthened over the last twelve months and provides a degree of revenue visibility. While overall EBITDA margins have increased, they are fairly modest but have capacity to expand further as savings from cost reduction actions are realized and as volumes expand. The stable outlook considers prospects for single digit organic revenue growth over the intermediate period along with steady-to- increasing profitability and expectations of ongoing free cash flow. The ratings and outlook could experience upward pressure should the company's scale increase, its margins appreciably strengthen and resultant cash flows used to de-lever the balance sheet. Lower customer concentration in the business model would also be viewed favorably. Quantitatively this could include EBITA margins consistently above 8% through the cycle, debt/EBITDA under 4 times, EBITA/interest at 2 times or higher, and FCF/debt sustained above 7%. Negative pressure on the rating or outlook could develop should prospects for new orders or Intelligrated's market share or margins appreciably decline, leading to lower profitability and slimmer coverage metrics. Debt/EBITDA above 6 times, EBITA/interest less than 2 times or several quarters of negative free cash flow could adversely impact the ratings. The B1 (LGD-3, 35%) rating on the first lien facilities, one notch above the underlying CFR recognize their senior status in the liability waterfall as well as the benefits of a meaningful layer of junior claims serving as a loss absorption cushion in downside scenarios. The Caa1 (LGD-5, 83%) rating on the second lien, two notches below the CFR, reflects its junior ranking to the first lien claims which constitute the bulk of the liabilities included in Moody's Loss Given Default assessment. Ratings assigned: Corporate Family, B2 Probability of Default, B2 $35 million first lien revolving credit, B1 (LGD-3, 35%) $215 million first lien term loan, B1 (LGD-3, 35%) $90 million second lien term loan, Caa1 (LGD-5, 83%) The principal methodology used in rating New Intelligrated was the Global Heavy Manufacturing Industry Methodology published in November 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. Intelligrated, Inc., headquartered in Mason, OH, manufactures high speed automated material handling equipment and is currently owned by affiliates of Gryphon Investors, Tudor Ventures, and members of executive management. Annual revenues in 2011 were approximately $435 million. IDEAL CONCRETE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Ideal Concrete, Inc. 2475 Waynoka Place Colorado Springs, CO 80915 Bankruptcy Case No.: 12-23345 Chapter 11 Petition Date: June 25, 2012 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: A. Bruce Campbell Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Ave., Ste. 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.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 Clarence Gianarelli, president. INDIANAPOLIS DOWNS: Files First Amended Reorganization Plan ----------------------------------------------------------- BankruptcyData.com reports that Indianapolis Downs filed with the U.S. Bankruptcy Court a First Amended Joint Plan of Reorganization and related Disclosure Statement. "The Recapitalization set forth in the Plan will result in each Holder of a Class 3 Claim receiving its Pro Rata Share of (i) all of the New Second Lien Term Loan, or in the alternative, all of the proceeds from the Alternative Second Lien Financing, (ii) 95% of the New Unsecured PIK Term Loan issued and outstanding on the Effective Date and (iii) 95% of the New Series A Warrants issued and outstanding on the Effective Date. Each Holder of a Class 4 Claim will receive (a) 5% of the New Unsecured PIK Term Loan issued and outstanding on the Effective Date, (ii) 5% of the New Series A Warrants issued and outstanding on the Effective Date and (iii) 100% of the New Series B Warrants issued and outstanding on the Effective Date. All of the DIP Claims, Administrative Claims, and Priority Tax Claims will be paid in full as provided in the Plan. The Plan also provides that Other Priority Claims and Other Secured Claims will be Unimpaired. Holders of General Unsecured Claims and Holders of Interests will receive no Distribution under the Plan," according to the Disclosure Statement cited by BankruptcyData.com. About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INTERNATIONAL UNION: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: International Union of Operating Engineers, Local No. 501, AFL-CIO 2405 West Third Street Los Angeles, CA 90057-1972 Bankruptcy Case No.: 12-31803 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Robert N. Kwan Debtor's Counsel: Scott H. Yun, Esq. STUTMAN, TREISTER & GLATT PROFESSIONAL CORP 1901 Ave of the Stars, Suite 1200 Los Angeles, CA 90067 Tel: (310) 228-5750 Fax: (310) 228-5788 E-mail: syun@stutman.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/cacb12-31803.pdf The petition was signed by Edward Curly, business manager. JAMES RIVER: S&P Cuts Corp. Credit Rating to 'CCC+'; Outlook Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Richmond, Va.-based James River Coal Co. to 'CCC+' from 'B-'. "We are removing the ratings from CreditWatch, where we placed them with negative implications on Feb. 29, 2012. The outlook is negative," S&P said. "At the same time, we lowered our issue rating on the company's $275 million senior unsecured notes to 'B-' from 'B'. The recovery rating remains '2', indicating our expectation for a substantial (70% to 90%) recovery in the event of payment default. We also lowered our issue rating on the company's convertible notes to 'CCC-' from 'CCC'. The recovery rating on the convertible notes remains '6', indicating our expectation for a negligible (0% to 10%) recovery in the event of payment default," S&P said. "The downgrade reflects our assessment that market demand for coal has deteriorated such that we expect James River Coal's performance will likely be materially lower than we previously expected," said Standard & Poor's credit analyst Megan Johnston. "We believe that a warmer-than-normal winter and natural gas substitution have accelerated what we view as a sustained decline in the economic viability of thermal coal produced in the Central Appalachia (CAPP) basin. In addition, fewer production disruptions in Australia and slowing demand in China and the eurozone have caused metallurgical (met) coal prices to decline, further pressuring James River Coal's performance. Based on our expectation that coal markets will be weaker through 2013, we believe that the company's liquidity is likely to deteriorate." "As of May 2012, James River Coal had priced 8.6 million tons of CAPP coal at an average price of about $95 per ton and 2.8 million tons of Illinois Basin coal at about $44 per ton in 2012. In addition, the company had sold about 600,000 tons of met coal that it had not yet priced. For 2013, the company has priced 1.3 million tons of CAPP coal at $80 per ton and 2.1 million tons of Illinois Basin coal at $45 per ton. Thermal coal production costs in CAPP are about $70 to $80 per ton, which we believe are the highest in the region," S&P said. "As a result, our base case scenario anticipates that James River Coal will generate about $100 million in adjusted EBITDA in 2012, lower than the $170 million in EBITDA the company generated in 2011, because of lower prices and higher costs. As a result, debt to EBITDA is likely to be 7x or higher by year end, and the company is likely to burn cash. For 2013, Standard & Poor's believes that high coal inventories and low natural gas prices are likely to keep coal prices weak. In addition, export prices for met coal are unlikely to be high enough to offset domestic weakness, and port capacity is limited. Although met-coal markets have improved since the first quarter, weak global steel demand will likely keep prices from increasing significantly. Given that James River has contracted a very small amount of tonnage in 2013, EBITDA and liquidity are likely to decline further from 2012 levels," S&P said "The corporate credit rating on James River Coal reflects what Standard & Poor's considers to be the combination of the company's 'highly leveraged' financial risk and 'vulnerable' business risk, characterized by the company's small size, high operating costs, capital-intensive operations, and exposure to cyclical end markets. In addition, James River Coal faces the challenges of operating in the CAPP region, which is becoming increasingly expensive and difficult to mine because of mature, thinning seams; escalating costs; and stringent permitting and safety regulations," S&P said. "Coal demand is highly cyclical. With increased competition from natural gas because of its greater supply, the swings in demand as a result of the economy can be more significant than has historically been the case. We remain concerned that CAPP coal producers will continue to lose market share to the Powder River Basin and Northern Appalachian coal-producing regions during the next several years as output from the CAPP region continues to shrink because of difficult operating conditions," S&P said. "The negative rating outlook reflects our view that although the company's liquidity is likely to remain sufficient to cover its financial obligations over the near term, liquidity could become strained barring an improvement in shipments and pricing in 2013. It also takes into account the extremely difficult operating environment for James River Coal as a relatively high cost producer in the CAPP basin and our expectations the company will burn cash and post debt to EBITDA of 7x or higher," S&P said. "We could lower our rating if the company's liquidity deteriorates, such that cash burn accelerates, and the cushion narrows on the covenants that govern its credit facility. This could occur if coal pricing remains weak into 2013," S&P said. "A positive rating action is unlikely in the near term, given the challenging operating conditions and weak demand for coal. However, one could occur if market demand and pricing gained significant positive momentum such that James River Coal would be able to significantly increase its production, secure long-term contracts at economic prices for its coal, and improve its liquidity," S&P said. KENAN ADVANTAGE: Moody's Affirms 'Ba3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Kenan Advantage Group, Inc., which includes the Ba3 rating on its amended Senior Secured Credit Facility, the Corporate Family Rating of Ba3 and the Probability of Default Rating of B1. The ratings outlook is stable. Ratings Rationale Kenan's credit facility has been amended primarily to increase its size to cover recent and expected future acquisitions. The term loan due 2016 has been increased to $450 million from $375 million and the commitment under the delayed draw term loan due 2016 has been increased to $150 million from $125 million. The size of the revolving credit facility remains unchanged at $100 million, but the termination date has been extended one year to 2016. Proceeds from the increased term loan facility will be used to repay borrowings outstanding under the current $125 million delayed draw term loan facility, cover fees and expenses and to increase the company's cash balance. The ratings considers Kenan's leading position as a provider of liquid bulk transportation services and logistics to the fuels, chemical and food markets with nationwide service, and the relative stability of earnings and cash flow that the company has experienced throughout the economic cycle. The Ba3 Corporate Family Rating also takes into consideration the sizeable, but manageable, amount of debt that the company carries resulting from its June 2010 acquisition by Goldman Sachs Capital Partners and Centerbridge Partners and the subsequent almost $50 million of increases via amendments to cover acquisitions. With $450 million of funded debt on close, Moody's estimates pro forma LTM March 2012 Debt to EBITDA of 4.0x, which is in line with the rating, and EBIT to Interest coverage of approximately 1.7x, which is somewhat low for the rating. It is expected that these metrics will show improvement through 2012 driven by modest demand growth that is anticipated for the company's fuel and chemical distribution businesses. The ratings however are constrained by the company's acquisitive nature. The company has grown in size (revenue of over $1 billion LTM March 2012 compared to $672 million in 2009) and geographic breadth over the past few years primarily through the purchase of other operators. The latest series of acquisitions, which have been primarily debt-funded, demonstrates the company's willingness to undertake leveraged acquisitions on a frequent basis. Although Kenan has demonstrated the capability to integrate smaller regional operations that it had acquired in the past, this growth model will continue to add an element of risk to the company's credit profile going forward. Moreover, Moody's views the replenishment and increased size of the delayed-draw term loan available to Kenan as an indication that the company intends to pursue potentially sizeable acquisitions going forward and will likely continue to make use of additional debt to partially fund such acquisitions. The stable rating outlook reflects Moody's expectations that Kenan Advantage's credit profile will slowly strengthen as the company integrates recent acquisitions and benefits from freight demand growth through 2012. The stable outlook also assumes that, to the extent the company does make use of the delayed draw term loan for acquisitions, such purchases represent companies or assets that can relatively quickly and smoothly be integrated into the company's operations and contribute cash flow and operating income at approximately the same rate as the current businesses, thereby minimizing deterioration in Kenan's credit metrics. Ratings or their outlook could be revised downward if market conditions were to substantially deteriorate over the near term, or if the company were to undertake a large leveraged acquisition involving an undue level of additional debt. Ratings could be lowered if Debt to EBITDA were to exceed 4.5x, if EBIT to Interest remains below 1.8x, or if availability under the revolving credit facility were to diminish due to high usage or covenant restrictions. Ratings could be adjusted upward if, after taking into account acquisitions, the company could demonstrate improving margins and reduction of debt through use of free cash flow. EBIT to Interest would need to exceed 3x with Debt to EBITDA sustained below 3.5x to warrant an upgrade to a CFR of Ba2. Kenan Advantage Group, Inc., headquartered in North Canton, OH, is a provider of liquid bulk transportation services and logistics to the fuels, chemical and food markets. KRONOS INC: S&P Keeps 'B' Corporate Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned Chelmsford, Mass.- based Kronos Inc.'s extended and incremental first-lien credit facilities its 'B' bank loan rating and a recovery rating of '3'. The '3' recovery rating indicates expectations for meaningful (50%-70%) recovery of principal in the event of payment default. "In addition, we assigned Kronos' extended second-lien credit facilities a 'CCC+' bank loan rating with a recovery rating of '6'. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery of principal in the event of payment default," S&P said. "Our 'B' corporate credit rating on the company remains unchanged. The outlook is stable," S&P said. "The rating on Kronos reflects the company's focus on workforce management, a niche segment in the $6.4 billion human capital management market, and high leverage," explained Standard & Poor's credit analyst Jacob Schlanger. Sufficient free cash flow and fairly predictable revenue generation partially offset those factors. With the additional debt financing for the $551 million shareholder distribution, leverage rose to 5.9x in December 2011 compared with the year-end September 2011 level of 4.6x. Cash on hand funded $202 million of the dividend, and the remainder came from the additional credit facility. As of March 30, 2012 leverage was 5.9x. "We do expect that ongoing predictable earnings and strong cash flows will lower this ratio gradually,' added Mr. Schlanger. "The stable outlook reflects our expectation that leverage will gradually decline from current levels, reflecting continued EBIDA growth. We could raise the rating if the company can lower leverage to no more than 5x on a sustained basis. Alternatively, we could lower the rating if a loss of customer accounts, competitive margin pressures, or aggressive debt-financed shareholder dividends result in leverage rising to more than 7x," S&P said. LA PROMENADE: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: La Promenade Villas, LLC 3085 24th St., Ste. 201 San Francisco, CA 94110 Bankruptcy Case No.: 12-11732 Chapter 11 Petition Date: June 24, 2012 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: John H. MacConaghy, Esq. MACCONAGHY AND BARNIER PLC 645 1st St. W #D Sonoma, CA 95476 Tel: (707) 935-3205 E-mail: macclaw@macbarlaw.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 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb12-11732.pdf The petition was signed by Vladimir Abramov, managing member. LENNY DYKSTRA: Enters Plea Agreement in Bankruptcy-Fraud Case ------------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that former New York Mets outfielder Lenny Dykstra, who was accused of bankruptcy fraud after he sold items from his $18 million mansion during a freeze on his property, reached a plea agreement with federal prosecutors Tuesday. Bankruptcy Law360 relates that the terms of the deal were not available Tuesday, as the document, filed in Los Angeles federal court, was sealed. A spokesman for the U.S. Attorney's Office for the Central District of California said there is no date set for a plea change and declined to comment further. About Lenny Dykstra Lenny Dykstra is a former Major League Baseball all-star player. He was center fielder for the New York Mets and Philadelphia Phillies. He filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 09-18409) on July 7, 2009, in Woodland Hills, California. The Law Office of M. Jonathan Hayes, in Northridge, California, represents the Debtor. The Debtor estimated up to $50,000 in assets and $10 million to $50 million in debts in his Chapter 11 petition. A Chapter 11 trustee was appointed in September 2009, and the case was converted to a liquidation in Chapter 7 on November 20, 2009. The trustee -- Arturo M. Cisneros -- was investigating the disposition of personal property both before and after the Chapter 11 filing. In August 2010, Mr. Cisneros stepped down as Chapter 7 trustee following issues with his failing to disclose the extent of his business with J.P. Morgan Chase & Co., which happens to be largest creditor in Mr. Dykstra's case. LIGHTSQUARED INC: 'LP' Lenders Object to Cost Allocations --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that some secured lenders to LightSquared Inc. are questioning how the expenses of the Chapter 11 case should be allocated between the company and affiliate LightSquared LP. Some of the so-called LP lenders disagree with the idea of charging 80% of costs to LP under the proposed financing agreement. They are owed $1.7 billion from a secured borrowing in October 2010 by LightSquared LP. According to the report, the LP lenders noted in their court filing that the company says LP is "wildly solvent." Consequently, they contend expenses should be charged to LightSquared Inc. or its shareholders. Mr. Rochelle relates that there will be a hearing today, June 28, in U.S. Bankruptcy Court in Manhattan for interim approval of a $30 million credit to help finance the Chapter 11 effort. The LP lenders aren't opposing interim approval of financing. The new facility is being provided by the so-called Inc. lenders owed $322.3 million. LightSquared already has approval to use incoming cash representing collateral for both the Inc. lenders and the LP lenders. About LightSquared LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. LSP MADISON: Moody's Affirms 'Ba2' Rating on New $800MM Sec. Loan ----------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 rating on the proposed $800 million senior secured term loan B due June 2019, to be issued by LSP Madison Funding, LLC. The rating outlook for LSP Madison Funding remains stable. Ratings Rationale The rating affirmation considers the issuer's decision to increase the size of the facility by $50 million to $800 million due to market demand. Moody's notes that the increased facility size (a 6.7% increase) will cause some diminution in the credit metrics for LSP Madison Funding, but that it was not considered to be material enough to cause a change in the rating outcome. The other proposed change to the structure of the term loan involved a reduction in the sale disposition amount of Cherokee, a 98MW gas-fired combined cycle QF facility in South Carolina, from $40MM to $20MM by June 30th, 2013. The disposition amount would be $40MM until December 30, 2012; $25MM until June 30, 2013; and $20MM thereafter. Moody's views this change to be slightly negative, but not material enough to change the Ba2 rating outcome. On June 11, 2012, Moody's issued a press release assigning a Ba2 rating on LSP Madison Funding's then proposed $750 million senior secured term loan. LSP Madison Funding is a holding company created by LS Power for the purposes of recapitalizing a portion of its generation business. These assets were acquired in four transactions beginning in 2009. The assets are held in the LS Power's Fund II, an approximate $3.1 billion fund. In aggregate between its Funds, LS Power has acquired and operated over 18,000 MW of power generation assets in aggregate. The principal methodology used in this rating was Power Generation Projects published in December 2008. MAINLINE EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Mainline Equipment, Inc. dba Consolidated Repair Group 20917 Higgins Court Torrance, CA 90501 Bankruptcy Case No.: 12-31956 Chapter 11 Petition Date: June 25, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Julia W. Brand Debtor's Counsel: Robert I. Brayer, Esq. HABERBUSH FEINBERG LLP 444 W Ocean Blvd Ste. 1400 Long Beach, CA 90802 Tel: (562) 435-3456 Fax: (562) 435-6335 E-mail: rbrayer@lbinsolvency.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-31956.pdf The petition was signed by Jennifer PeGan, CFO. MARIANA RETIREMENT FUND: Retiree Files $378K Admin. Expense Claim ----------------------------------------------------------------- Marianas Variety reports that retiree John Angello filed a motion for administrative expenses at the District Court for the NMI claiming $378,010 from the trust. According to the report, based on his computation, Mr. Angello is asking $27,000 for every year for the next 14 years of his remaining life expectancy plus $10 in administrative cost for filing the motion. Mr. Angello said he filed the request after U.S. Bankruptcy Judge Robert J. Faris said in his memorandum of decision that any party who wish to assert an administrative expense to file an appropriate motion or application no later than June 29. According to the report, Mr. Angello said he wants his share before the attorneys "gorged themselves with wanton and excessive fees for filing needless claims and counter claims and useless Chapter 11 bankruptcy petitions and subsequent motions to explain why they file needless petitions and claims and motions explaining prior motions to keep the litigious meter running." The report notes lawyers have sought the payment of roughly $1.2 million in fees to be deposited into an escrow account. This does not include the already disbursed and expended advance retainer of $250,000 to Brown Rudnick LLP and $20,000 to The Law Office of Braddock J. Huesman. About NMI Retirement Fund The Northern Mariana Islands Retirement Fund -- http://www.nmiretirement.com/-- is a public corporation of the Commonwealth of the Northern Mariana Islands that receives and invests retirement contributions and pays certain benefits to or on account of certain retirees of the Commonwealth government, their survivors, and certain disabled persons. The Fund, through its administrator Richard Villagomez, filed a Chapter 11 bankruptcy petition in the U.S. District Court for the Northern District of Mariana Islands in Saipan (Case No. 12-00003) on April 17, 2012. The Fund is represented by Brown Rudnick LLP and the Law Office of Braddock J. Huesman, LLC. The Fund said in court papers that the Chapter 11 filing was precipitated by the discrepancy between the Debtor's current ability to pay benefits to beneficiaries and the Debtor's current obligations to those same beneficiaries. The Fund said it would exhaust its cash by July 2014. It has been unable to collect a $325 million judgment against the islands' government, and the commonwealth decided to reduce contributions toward workers' pensions. As a result of continuous underfunding, which necessitated withdrawing from its portfolio to cover funding shortfalls, the value of the Fund's assets has fallen from $353,475,412 in 2009 to its current level of $268,448,997, the Debtor's counsel has said. The counsel also said the Fund is subject to liabilities (both current and actuarial) totaling about $911 million. An official committee of unsecured creditors, consisting of Fund members, has been appointed in the case. U.S. Bankruptcy Judge Robert J. Faris held a hearing on June 1, 2012, where he said from the bench that the fund isn't eligible for Chapter 11 because it's an agent of the commonwealth government. The judge, however, said he won't formally dismiss the case until July or August. MARIANA RETIREMENT FUND: Can Continue Paying Benefits ----------------------------------------------------- Marianas Variety reports that U.S. Bankruptcy Judge Robert J. Faris granted the NMI Retirement Fund's revised motion for continued payment of benefits. According to the report, Judge Faris noted that there were no objections from other parties. Judge Faris asked the Fund's lawyers to prepare a proposed order for the court's approval. Aside from the Fund's counsel, also present in the hearing were Curtis Ching of the U.S. Trustee's office and Creditors Committee's counsel Don Jeffrey Gelber. The report notes the Fund on June 19 filed a motion seeking the Court's authorization for continued payment of benefits, saying its interim funding subsidiary, the Pension Holdings Corp., was already depleted. The subsidiary was pre-funded with two months of full pension and two months of health and life insurance premiums. That subsidiary account has now been exhausted with the issuance of benefits payments on June 15, leaving the Fund no longer able to satisfy its semi-monthly payment obligations. The report notes the Fund sought the Court's approval to grant the pension agency limited authority to resume benefits payments beginning with the July 1 payment until the written order is entered. According to the report, the Fund also filed a motion in Court stating its intent to sell an 868 sq. m. San Vicente property for $125,000. About NMI Retirement Fund The Northern Mariana Islands Retirement Fund -- http://www.nmiretirement.com/-- is a public corporation of the Commonwealth of the Northern Mariana Islands that receives and invests retirement contributions and pays certain benefits to or on account of certain retirees of the Commonwealth government, their survivors, and certain disabled persons. The Fund, through its administrator Richard Villagomez, filed a Chapter 11 bankruptcy petition in the U.S. District Court for the Northern District of Mariana Islands in Saipan (Case No. 12-00003) on April 17, 2012. The Fund is represented by Brown Rudnick LLP and the Law Office of Braddock J. Huesman, LLC. The Fund said in court papers that the Chapter 11 filing was precipitated by the discrepancy between the Debtor's current ability to pay benefits to beneficiaries and the Debtor's current obligations to those same beneficiaries. The Fund said it would exhaust its cash by July 2014. It has been unable to collect a $325 million judgment against the islands' government, and the commonwealth decided to reduce contributions toward workers' pensions. As a result of continuous underfunding, which necessitated withdrawing from its portfolio to cover funding shortfalls, the value of the Fund's assets has fallen from $353,475,412 in 2009 to its current level of $268,448,997, the Debtor's counsel has said. The counsel also said the Fund is subject to liabilities (both current and actuarial) totaling about $911 million. An official committee of unsecured creditors, consisting of Fund members, has been appointed in the case. U.S. Bankruptcy Judge Robert J. Faris held a hearing on June 1, 2012, where he said from the bench that the fund isn't eligible for Chapter 11 because it's an agent of the commonwealth government. The judge, however, said he won't formally dismiss the case until July or August. MARIANA RETIREMENT FUND: Member Wants Court to Deny Lawyers' Fees ----------------------------------------------------------------- Marianas Variety reports that a member of the NMI Retirement Fund defined benefit plan is asking the Court to deny the request for payment of professionals. According to the report, the lawyer previously engaged in the Jane Roe and John Roe case in the district court, David L. Price, sent a letter to U.S. Bankruptcy Judge Robert J. Faris on June 26 asking him to reject the request made by the lawyers for the court to pay the professionals. The report relates Mr. Price told Judge Faris that he is concerned with the amount set aside to pay certain professionals in the Fund's bankruptcy case. Mr. Price pointed to the amounts claimed by Jeremy Coffey and the law firm of Brown and Rudnick over $750,000. The report also relates Mr. Price said the decision to file for bankruptcy should have been reviewed by attorneys disinterested in the outcome. He also pointed out that majority of his readings -- with the exception of a law school professor -- concluded that the Fund is a governmental unit and is ineligible to file for Chapter 11. "Any competent, independent attorney would have reached the same decision and saved the NMIRF and its beneficiaries a very large sum of money," Mr. Price said in his letter. According to the report, Mr. Price still maintains that the retirees' best shot at collecting from the government is to join the federal lawsuit now being handled by Attorneys Bruce Jorgensen, Margery Bronster, Robert Hatch and Stephen Woodruff. About NMI Retirement Fund The Northern Mariana Islands Retirement Fund -- http://www.nmiretirement.com/-- is a public corporation of the Commonwealth of the Northern Mariana Islands that receives and invests retirement contributions and pays certain benefits to or on account of certain retirees of the Commonwealth government, their survivors, and certain disabled persons. The Fund, through its administrator Richard Villagomez, filed a Chapter 11 bankruptcy petition in the U.S. District Court for the Northern District of Mariana Islands in Saipan (Case No. 12-00003) on April 17, 2012. The Fund is represented by Brown Rudnick LLP and the Law Office of Braddock J. Huesman, LLC. The Fund said in court papers that the Chapter 11 filing was precipitated by the discrepancy between the Debtor's current ability to pay benefits to beneficiaries and the Debtor's current obligations to those same beneficiaries. The Fund said it would exhaust its cash by July 2014. It has been unable to collect a $325 million judgment against the islands' government, and the commonwealth decided to reduce contributions toward workers' pensions. As a result of continuous underfunding, which necessitated withdrawing from its portfolio to cover funding shortfalls, the value of the Fund's assets has fallen from $353,475,412 in 2009 to its current level of $268,448,997, the Debtor's counsel has said. The counsel also said the Fund is subject to liabilities (both current and actuarial) totaling about $911 million. An official committee of unsecured creditors, consisting of Fund members, has been appointed in the case. U.S. Bankruptcy Judge Robert J. Faris held a hearing on June 1, 2012, where he said from the bench that the fund isn't eligible for Chapter 11 because it's an agent of the commonwealth government. The judge, however, said he won't formally dismiss the case until July or August. MCCLATCHY COMPANY: Maturity of BOA Credit Extended to 2015 ---------------------------------------------------------- The McClatchy Company, on June 22, 2012, entered into a Second Amended and Restated Credit Agreement, among the Company, the lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent and L/C Issuer, and JPMorgan Chase Bank, N.A., as Syndication Agent. The Second Amended Credit Agreement amends and restates in its entirety the Amended and Restated Credit Agreement entered into as of Feb. 11, 2010, among the Company, the lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, JP Morgan Chase Bank, N.A., as Syndication Agent, and Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Book Managers. Under the Second Amended Credit Agreement, certain lenders agreed to extend the maturity of their commitments to Jan. 31, 2015. The commitments of the lenders who chose not to extend the term of their commitments were reduced to zero and any indebtedness and fees owed to those lenders pursuant to the Original Credit Agreement paid upon the effectiveness of the Second Amended Credit Agreement. Pursuant to the Second Amended Credit Agreement, the commitments under the credit facility will only be available for the issuance of standby letters of credit in an aggregate amount of up to $36.1 million. The Company can request the issuance of letters of credit until Jan. 24, 2015. In addition, the Second Amended Credit Agreement modified the Original Credit Agreement by (i) removing the requirement for mandatory prepayments of loans with any excess cash, (ii) modifying the limitation on the Company's ability to declare and pay cash dividends or repurchase equity interests by permitting those payments or repurchases so long as they are permitted under the indenture governing the Company's 11.50% Senior Secured Notes due Feb. 15, 2017, and (iii) reducing the minimum liquidity covenant to maintenance of not less than $10.0 million of cash and cash equivalents as of the end of each fiscal quarter. In connection with the Second Amended Credit Agreement, the Company paid amendment fees to the extending lenders, as well as arrangement fees and facility fees. A copy of the Second Amendment is available for free at: http://is.gd/34ytT4 About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at March 25, 2012, showed $2.91 billion in total assets, $2.74 billion in total liabilities and $173.68 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MOUNTAIN PROVINCE: Plan of Arrangement Has July 5 Record Date ------------------------------------------------------------- Mountain Province Diamonds Inc. has established July 5, 2012, as the record date in respect of its plan of arrangement. The Effective Date has been set as July 6, 2012. Subject to final approval of the TSX Venture Exchange, it is anticipated that the shares of Kennady Diamonds Inc. will commence regular trading on the TSX-V on July 10, 2012. Mountain Province will transfer the Kennady North property and working capital of C$3M to Kennady Diamonds and distribute the shares of Kennady Diamonds to Mountain Province shareholders on the basis of one Kennady Diamonds share for every five shares of Mountain Province held by shareholders. Mountain Province shareholders voted in favor of the special resolution on April 25, 2012, approving the Arrangement. The Court issued a final order approving the Arrangement on April 30, 2012. The Arrangement also received conditional approval of the Toronto Stock Exchange on May 25, 2012. The TSX-V conditionally approved the listing of the Kennady Diamonds shares on June 8, 2012. No action is required by Mountain Province shareholders in order to receive shares of Kennady Diamonds, and Mountain Province shareholders will retain their Mountain Province share certificates. Shareholders entitled to receive Kennady Diamonds' shares will receive evidence of the electronic registration of ownership of the Kennady Diamonds shares under the Direct Registration System adopted by the Transfer Agent, as soon as practicable following the Effective Date. Once Kennady Diamonds is listed on the TSX-V, the company intends to pursue a listing on the OTCQX in the United States. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling shares of Mountain Province on or before the record date of July 5, 2012. About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit known as the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. The Company's balance sheet at March 31, 2012, showed C$66.84 million in total assets, C$13.13 million in total liabilities, and C$53.70 million in total shareholders' equity. The Company reported a net loss of C$11.53 million for the year ended Dec. 31, 2011, compared with a net loss of C$14.53 million during the prior year. After auditing the financial statements for the year ended Dec. 31, 2011, KPMG LLP, in Toronto, Canada, noted that the Company has incurred a net loss in 2011 and expects to require additional capital resources to meet planned expenditures in 2012 that raise substantial doubt about the Company's ability to continue as a going concern. NAVISTAR INTERNATIONAL: Mark Rachesky Owns 13.6% of Shares ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Mark H. Rachesky, M.D., and his affiliates disclosed that, as of June 21, 2012, they beneficially own 9,335,837 shares of common stock of Navistar International Corporation representing 13.6% of the shares outstanding. A copy of the filing is available at http://is.gd/uFCQKs About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Jan. 31, 2012, showed $11.50 billion in total assets, $11.69 billion in total liabilities, and a $195 million total stockholders' deficit. * * * Navistar has '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. As reported by the TCR on June 13, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B+', from 'BB-'. "The downgrade and CreditWatch placement reflect the company's operational and financial setbacks in recent months," said Standard & Poor's credit analyst Sol Samson. NEDAK ETHANOL: T. Shane Named Principal Financial Officer --------------------------------------------------------- Tim Borer resigned from his positions as Principal Financial Officer, Principal Accounting Officer, Secretary and Treasurer of NEDAK Ethanol, LLC. Mr. Borer will continue to serve as a member of the Company's Board of Directors and his current term provides that he will serve as a director until the Company's 2015 Annual Meeting of Members. Mr. Borer's resignation from his officer positions was effective June 20, 2012, and was not a result of any disagreement with the Company relating to its operations, policies or practices. On June 20, 2012, the Board of Directors appointed Todd Shane to serve as the Company's Principal Financial Officer, Principal Accounting Officer, Secretary and Treasurer. Mr. Shane has served as a director of the Company since 2005 and he is currently serving as a member of the Company's Board of Directors until the Company's 2013 Annual Meeting of Members. Mr. Shane has been a farmer and rancher with HBK Land & Cattle Co. since 1985 and is the brother of Kirk Shane, a member of the Company's Board of Directors currently serving as a director until the Company's 2013 Annual Meeting of Members. Mr. Shane did not enter into any agreements or arrangements with the Company in connection with his appointment to the officer positions. During the fiscal year ended Dec. 31, 2011, Mr. Shane sold grain to the Company for the aggregate amount of $108,187. All grains purchased by the Company from directors and officers, including the grains purchased from Mr. Shane, were at market prices, in accordance with the Company's Related Party Policy. The Company's Related Party Policy excludes from the definition of "Related Party Transaction" any transaction involving purchases of grain and sales of distillers grains by the Company from or to a director if that purchase or sale is at the posted price or the price generally offered by the Company to non-director grain producers and cattle feeders. At that annual meeting of members held on June 20, 2012, the members elected Timothy Borer, Steve Dennis, Jeff Lieswald and Kenneth Osborne to the Board of Directors to hold office until the 2015 Annual Meeting of Members. 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: Richardson Whitman Okayed as Special Counsel ------------------------------------------------------------------ New England Building Materials LLC sought and obtained approval from the U.S. Bankruptcy Court to employ the firm Richardson, Whitman, Large and Badger and Thomas R. McKeon, Esq., as special legal counsel. Prior to the Petition Date, the Debtor employed Richardson Whitman to assist with the placement and maintenance of mechanics liens, as well as related collections efforts. As of the Petition Date, Richardson Whitman was representing the Debtor in several collection matters. Mr. McKeon attests that Richardson Whitman is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Richardson Whitman is owed $11,861 by the Debtor for legal services rendered prior to the Filing Date; this claim is unsecured. Richardson Whitman does not believe that the Prepetition Claim constitutes an interest adverse to the Debtor with respect to the matters on which Richardson Whitman is to be employed. The Debtor concurs with this assessment and believes that the existence of the Prepetition Claim will in no way prevent Richardson Whitman from providing unbiased and professional legal services to the Debtor to the best of Richardson Whitman's abilities. Aside from the Prepetition Claim, to best of the Debtor's knowledge, Richardson Whitman has no connection with the Debtor, its creditors, or any other party in interest, or their respective attorneys and accountants, the United States Trustee, or any person employed in the United States Trustee's Office. The firm's rates are: Professional Rates ------------ ----- Thomas R. McKeon $220/hour Joseph L. Cahoon Jr. $180/hour Michelle Seacord $90/hour 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 Spinglass as Financial Advisor -------------------------------------------------------------- The Official Creditors Committee of New England Building Materials LLC, fka Lavalley Lumber Company LLC, sought and obtained approval from the U.S. Bankruptcy Court to retain Spinglass Management Group, LLC as a financial advisor. Mark F. Stickney, Managing Member of Spinglass, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. In accordance with D. Me. LBR 2014-3 and subject to approval by the Bankruptcy Court's approval, Spinglass will be paid its customary hourly rates in effect from time to time. 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 Marcus Clegg as Counsel ------------------------------------------------------------ New England Building Materials LLC, fka Lavalley Lumber Company LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ Marcus, Clegg & Mistretta, P.A. as counsel. The firm's rates are: Personnel Rates --------- ----- George J. Marcus $500 Jennie L. Clegg $330 David C. Johnson $260 Allison M. McLaughlin $175 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: Warren Brodie Approved as Special Counsel --------------------------------------------------------------- New England Building Materials LLC, fka Lavalley Lumber Company LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ Warren H. Brodie, Esq., John G. Gallager, Esq., and the Law Offices of Warren H. Brodie, P.C. as special counsel. The base hourly rate charged by the Special Counsel is $185. In addition, Brodie agreed to additional retention terms designed to incentivize prompt and efficient collection efforts to support the Debtor's reorganization efforts: A. For any collection actions, including mechanic's liens asserted on behalf of the Debtor that do not go to suit, where the amount recovered in a particular matter is greater than 50% of the face value of the amount sought to be collected in that very same matter, then Special Counsel will be entitled to a $65 per hour premium, for a total hourly rate of $250; B. For each new matter, the Debtor and Special Counsel shall agree, before collection efforts commence, on the face value of the amount sought to be collected; and C. For pre-existing matters, the Debtor and Special Counsel shall agree on the face value of the amount sought to be collected before collection efforts continue. Brodie is owed $12,523.75 by the Debtor for legal services rendered prior to the Filing Date; this claim is unsecured. Brodie does not believe that this Pre-Petition Claim constitutes an interest adverse to the Debtor with respect to the matters on which Special Counsel is to be employed. The Debtor concurs with this assessment and believes that the existence of the Pre- Petition Claim will in no way prevent Special Counsel from providing unbiased and professional legal services to the Debtor to the best of Special Counsel's abilities. Warren Brodie, 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. NEWPAGE CORP: Creditors File Motion to Prosecute Certain Claims --------------------------------------------------------------- BankruptcyData.com reports that NewPage's official committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion for an order authorizing the committee to commence and prosecute certain claims on behalf of the Debtors' estates against (a) Cerberus Operations and Advisory Company and Cerberus Capital Management and Wilmington Trust Company. According to the committee, immediately prior to filing Chapter 11, NewPage paid to Cerberus more than $2 million of fees and expenses accrued under an advisory agreement, and during the year prior to the bankruptcy filing, NewPage paid another $1 million to Cerberus for purported management fees. The Committee asserts, "These payments to Cerberus are avoidable as preferential and/or fraudulent transfers. The Committee has requested that the Debtors seek the return of these payments. The Debtors, however, have thrown up delay after delay, and ultimately failed to respond to the Committee's demands. Since these are colorable causes of action that would, if successful, benefit the estates, the Committee is requesting that the Court grant it standing to commence and prosecute causes of action to avoid these payments to Cerberus." About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & LeBoeuf LLP, in New York, serve as counsel in the Chapter 11 case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co- counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NORTHSTAR AEROSPACE: Versa Seeks Info on Rival's Bid ---------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that planning a bid for Northstar Aerospace (USA) Inc., Versa Capital Management demanded details on Tuesday about a rival private equity firm's $70 million offer for the helicopter parts manufacturer. In an objection filed in Delaware bankruptcy court, Versa said that Wynnchurch Capital Ltd.'s stalking horse bid for Northstar USA and its Canadian parent appears to be predicated on modified contracts with the debtors' top customer, Boeing Co., but the terms of the new deal have not been disclosed, according to Bankruptcy Law360. 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. OLD REPUBLIC: Fitch Puts Rating on $550-Mil. Sr. Notes at 'BB-' --------------------------------------------------------------- Fitch Ratings has revised the Rating Watch status for Old Republic International Corporation (ORI) and its insurance company subsidiaries to Negative from Positive, following the company's announcement to withdraw the spin-off of Republic Financial Indemnity Group, Inc. (RFIG). Fitch had most recently placed the ratings on Rating Watch Positive on March 23, 2012 after ORI's announced plan to spin off of its wholly owned subsidiary, RFIG. RFIG was formed to combine ORI's troubled mortgage insurance unit and its consumer credit indemnity (CCI) lines. The spin-off was withdrawn due to what management reported as 'objections raised by certain stakeholders.' A successful spin-off would have mitigated Fitch's concern regarding a potential subsidiary collateral covenant breach under ORI's debt obligations and eliminated any future cash drain related to RFIG. ORI's debt is subject to acceleration if any of its significant subsidiaries experience bankruptcy, insolvency, rehabilitation or reorganization. Renewed uncertainty regarding the ultimate long-term solution for the mortgage insurance business, as well as the renewed potential for a debt covenant breach, supports the latest Fitch rating action. On Jan. 30, 2012, Fitch had downgraded ORI's senior debt rating by three notches and placed the ratings on Rating Watch Negative when the agency's concerns first surfaced as to a possible future covenant breach. The action effectively returns the Rating Watch status to that in effect prior to the March 2012 RFIG formation announcement. Fitch has placed the following ratings on Rating Watch Negative: Old Republic International Corp. -- IDR 'BB'; -- $550 million 3.75% senior notes due March 15, 2018 'BB-'. Bituminous Casualty Corp. Bituminous Fire & Marine Insurance Co. Great West Casualty Co. Old Republic Insurance Co. Old Republic Lloyds of Texas Old Republic General Insurance Co. Old Republic Surety Co. Manufacturers Alliance Insurance Co. Pennsylvania Manufacturers' Association Insurance Co. Pennsylvania Manufacturers Indemnity Co. American Guaranty Title Insurance Co. Mississippi Valley Title Insurance Co. Old Republic National Title Insurance Co. -- Insurer Financial Strength 'A-'. OMEGA NAVIGATION: Has Until Aug. 3 to File Plan of Reorganization ----------------------------------------------------------------- The Hon. Karen K. Brown of the U.S. Bankruptcy Court for the Southern District of Texas signed a fourth amended agreed scheduling order on order to show cause and agreed order extending the exclusive period of Baytown Navigation Inc., et al. The agreement provides for, among other things: 1. HSH Nordbank, AG, as senior facilities agent, the senior lenders, White & Case LLP, the junior lenders, and the Official Committee of Unsecured Creditors will file their respective responses and briefs to the show cause order by July 2, 2012. 2. The Debtors may file a response to the briefs of the Responding Parties on or before July 9. 3. The Responding Parties may file any briefs responding to the brief of the Debtors on or before July 16. 4. The Court will set a hearing on the order to show cause by separate order. 5. The exclusive period during which only the Debtors may file a plan of reorganization is extended to Aug. 3, 2012. If the Debtors file plans of reorganization by Aug. 3, 2012, then the period under which only the Debtors may solicit votes on the plans is extended to Oct. 4, 2012. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. PHOENIX COS: Improvement in GAAP Cues Fitch to Affirm 'B' Rating ---------------------------------------------------------------- Fitch Ratings has affirmed Phoenix Companies, Inc.'s (PNX) 'B' holding company Issuer Default Rating (IDR) with a Positive Outlook. At the same time, Fitch has affirmed the 'BB+' Insurer Financial Strength (IFS) ratings of the group's primary insurance subsidiaries with a Stable Outlook. These rating actions reflect continued improvement in PNX's GAAP interest coverage as well as good investment results, adequate statutory capitalization and stable financial leverage. PNX's debt servicing capabilities improved substantially in 2011, and GAAP coverage continued to strengthen in the first quarter of 2012. GAAP EBIT coverage was 3.1x and 2.5 times (x) as of March 31, 2012 and Dec. 31, 2011 respectively compared to about 0.6x in 2010. Statutory interest coverage is 3.6x in 2012 based on maximum dividend capacity of $72 million in 2012 and holding company interest expense of $20 million. PNX's financial leverage ratio (FLR) remains well within expectations for the rating level at 31% and 28% as March 31, 2012 and Dec. 31, 2011. The increase in the first quarter was due to lower equity related to the new DAC accounting rules. There was no increase in debt. The group's total financing and commitments ratio remains at about 0.4x. PNX's surplus notes in relation to total adjusted capital (TAC) was 18% at year-end and as of March 31, 2012 compared to Fitch's maximum guideline of 15%. For this reason, the surplus notes are rated one notch below standard notching. Fitch views Phoenix's statutory capitalization as adequate. A significant improvement in 2011 was due in large part to the reinsurance of one-third of the closed block, which resulted in a 53-point increase in the risk-based capital (RBC) ratio. The RBC was 363% as of Dec. 31, 2011, in line with expectations. The RBC is estimated at 371% as of March 31, 2012. First quarter 2012 statutory earnings improved compared to first quarter 2011 due to a reduction in the policyholder dividend scale and general improvement in policy profitability. Fitch notes the heightened sales levels of annuity products over the past five quarters and believes the company will need to balance top line growth against growing statutory earnings and capital, which in turn affects the company's ability to pay dividends. Credit-related investment impairments increased modestly in the first quarter, although the trend has generally been favorable. Derivative mark-to-market movements were the biggest component of realized gains and losses in the first quarter. Gross unrealized losses in the fixed income portfolio declined in the first quarter, and the portfolio was in a net unrealized gain position of over $600 million as of March 31, 2012. Fitch's concerns include an underfunded pension liability of $187 million at year-end 2011 and the holding company's need to make annual contributions to keep it 80% funded. Phoenix contributed $25 million and $17 million to the pension plan in 2010 and 2011 respectively, and is expected to contribute $16 million in 2012. There is also a supplemental plan with $141 million in unfunded obligations as of year-end 2011. The company would have to fully fund the supplemental plans under any change of control. The holding company IDR could be upgraded one notch based on the following triggers: -- GAAP interest coverage of 3x or greater on a sustained basis; -- Financial leverage maintained at or below 25%; -- Statutory coverage of holding company interest expense maintained at or above 3x; The surplus note rating could be upgraded one notch to standard notching if the ratio of surplus notes to TAC declines to 15% or lower; Other upgrade triggers include: -- GAAP ROE at or above 5%; -- Sustained statutory capital generation resulting in an RBC position at or above 350%. -- No significant deterioration in the funded status of the pension liability. The key rating drivers that could result in a downgrade include: -- An RBC position below 200%; -- Investment losses higher than anticipated, particularly within the structured portfolio; -- Financial leverage above 30%. -- Significant deterioration in the funded status of the pension liability PNX is a life and annuity insurance holding company and ultimate parent of Phoenix Life Insurance Company and PHL Variable Insurance Company. It is headquartered in Hartford, Connecticut. PNX had $22 billion in GAAP assets and $948 billion in equity as of March 31, 2012. Fitch affirms the following rating with a Positive Outlook: Phoenix Companies, Inc -- IDR at 'B'. Fitch affirms the following ratings with a Stable Outlook: Phoenix Life Insurance Company -- IFS at 'BB+'; -- IDR at 'BB'; -- $174 million Surplus note 7.15% due Dec. 2034 at 'B+'. PHL Variable Insurance Company -- IFS at 'BB+'. PINNACLE AIRLINES: Colgan Crash Victims Seek Punitive Damages ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that three years before Pinnacle Airlines Corp. filed for Chapter 11 protection, its Colgan Air Inc. flight 3407 crashed near Clarence Center, New York, on Feb. 12, 2009 during an ice storm. The crash has been blamed on crew fatigue, pilot error, inclement weather and inadequate training. Ensuing lawsuits were halted by Pinnacle's filing for bankruptcy reorganization. Pinnacle and the victims' families are now fighting over whether the lawsuits can continue and on what terms. Mr. Rochelle relates that Colgan offered to allow the suits to go forward seeking punitive damages, so long as the plaintiffs would collect only from insurance. The plaintiffs refused the offer, seeking to have punitive damages assessed against the bankrupt company in the event insurance was exhausted or not available. The airline, according to the Bloomberg report, was due in bankruptcy court June 27 opposing the plaintiffs' request for modification of the so-called automatic stay allowing the suits to go ahead seeking punitive damages. Colgan argues that punitive damage awards could be "among the largest unsecured claims in these cases" if not payable by insurance companies. The plaintiffs also want the judge to require Colgan to turn the insurance policies over to them. Colgan allowed some suits to go ahead and settled when the plaintiffs agreed to collect only from insurance. 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. RG STEEL: Kurtzman Carson OK'd to Provide Administrative Services ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized WP Steel Venture LLC, et al., to employ Kurtzman Carson Consultants LLC to provide administrative services. As reported in the Troubled Company Reporter on June 6, 2012, the Debtors also won bankruptcy court permission to employ KCC as their claims and noticing agent. In the 90 days prior to the Petition Date, KCC also received retainers and payments totaling $27,268 for services performed for the Debtors. Albert Kass, vice president of Corporate Restructuring Services at KCC, attests that his firm is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14). Kurtto file schedules of assets and liabilities and statements of financial affairs. The Debtors requested an extension through July 30. 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. RG STEEL: U.S. Trustee Forms Seven-Member Creditors Committee ------------------------------------------------------------- Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of WP Steel Venture LLC, et al. The Committee comprises of: 1. Cliffs Natural Resources Inc. Attn: Matthew Zajac 1100 Superior Avenue Cleveland, OH 44114 Tel: (216) 694-5260 Fax: (216) 694-5385 2. Metal Services, LLC dba Phoenix Services LLC Attn: John Hilbert 148 W. State Street, Suite 801 Kennett Square, PA 19348 Tel: (610) 347-0444 Fax: (610) 347-0443 3. Siemens Industry Inc. Attn: Alan Helgerman & Darryl Peake 501 Technology Drive, Suite 1000 Cannonsburg, PA 15317 Tel: (724) 514-8453 Fax: (724) 514-8401 4. United Steelworkers Attn: David Jury Five Gateway Center, Room 807 Pittsburgh, PA 15222 Tel: (412) 562-2545 Fax: (412) 562-2574 5. Pension Benefit Guaranty Corporation Attn: Jack Butler 1200 K Street, N.W. Washington, DC 20005 Tel: (202) 326-4000 ext. 3471 Fax: (202) 842-2643 6. Mingo Junction Energy Center, LLC Attn: Thomas Shepard 444 North Michigan Avenue, Suite 1200 Chicago, IL 60611 Tel: (312) 327-1112 Fax: (312) 327-1101 7. Balli Steel PLC and Balli Group PLC Attn: Britt Gustawsson 5 Stanhope Gate London W1K 1AH, UK Tel: 44-207-306-2000 Fax: 44-207-306-2000 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. RG STEEL: Willkie Farr Approved as Bankruptcy Co-Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized WP Steel Venture LLC, et al., to employ Willkie Farr & Gallagher LLP under a general retainer as bankruptcy co-counsel. About WP 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. RITE AID: 10 Directors Elected at 2012 Annual Meeting ----------------------------------------------------- Rite Aid held its 2012 annual meeting of stockholders on June 21, 2012. The stockholders elected Rite Aid's nominees to the Board of Directors. The persons elected to the Board of Directors were: (1) Joseph B. Anderson, Jr.; (2) Fran‡ois J. Coutu; (3) Michel Coutu; (4) James L. Donald; (5) David R. Jessick; (6) Michael N. Regan; (7) Mary F. Sammons; (8) John T. Standley; and (9) Marcy Syms. In addition, the holders of the 7% Series G Cumulative Convertible Pay-in-Kind Preferred Stock and 6% Series H Cumulative Convertible Pay-in-Kind Preferred Stock, voting together as a single class, separately from the holders of Common Stock, elected John M. Baumer to the Board of Directors. The stockholders ratified the appointment of Deloitte & Touche LLP as Rite Aid's independent registered public accounting firm. The stockholders approved on an advisory basis, the compensation of Rite Aid's named executive officers and the adoption of the 2012 Plan. The stockholders did not approve (a) a stockholder proposal relating to a policy on gross-up payments, (b) a stockholder proposal relating to performance award metrics, (c) a stockholder proposal relating to performance award metrics, (d) a stockholder proposal relating to the relationships of the directors, and (e) a stockholder proposal relating to a compensation clawback policy introduced from the floor by Mr. Steven Krol. The Rite Aid Corporation 2012 Omnibus Equity Plan was previously approved by Rite Aid's Compensation Committee and Board of Directors. The 2012 Plan provides for the issuance of a maximum of 28,500,000 shares of Rite Aid common stock in connection with the grant of stock options, stock appreciation rights, restricted stock, phantom units, stock bonus awards, and other equity-based awards valued in whole or in part by reference to, or otherwise based on, Rite Aid's Common Stock. The Company filed with the U.S. Securities and Exchange Commission a Form S-8 registering 28.5 million shares of common stock issuable pursuant to the 2012 Omnibus Equity Plan. The proposed maximum aggregate offering price is $33.7 million. A copy of the filing is available for free at http://is.gd/IUjycS About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. Rite Aid reported a net loss of $368.57 million for the fiscal year ended March 3, 2012, a net loss of $555.42 million for the year ended Feb. 26, 2011, and a net loss of $506.67 million for the year ended Feb. 27, 2010. The Company's balance sheet at June 2, 2012, showed $7.07 billion in total assets, $9.68 billion in total liabilities and a $2.61 billion total stockholders' deficit. * * * In February 2012, S&P affirmed Rite Aid's 'B-' corporate credit rating. During that time, Moody's Investors Service also affirmed its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. "The ratings reflect our expectation that Camp Hill, Pa.-based retail drugstore chain Rite Aid Corp.'s financial risk profile will remain 'highly leveraged', despite improving sales trends, due to its significant debt," said Standard & Poor's credit analyst Ana Lai. Moody's said in February that Rite Aid's Caa2 Corporate Family Rating reflects its weak credit metrics and unsustainable capital structure with debt to EBITDA of 8.8 times and EBITA to interest expense of 0.8 times. Although Moody's believes that Rite Aid earnings will benefit from Walgreen's dispute with Express Scripts as well as from the strong generic pipeline, Moody's anticipates that lower reimbursement rates will offset some of this positive earnings pressure. Thus, Moody's forecasts that Rite Aid's credit metrics will remain weak. In addition, Rite Aid faces a tradeoff between the need to address its sizable 2014 and 2015 debt maturities against the likelihood that any refinancing will be at a higher interest rate. Should Rite Aid successfully refinance its 2014 and 2015 debt maturities, its borrowing costs will likely increase further weakening Rite Aid's interest coverage. Consequently, Moody's is concerned that Rite Aid may choose to voluntarily restructure its debt over the medium term. RITZ CAMERA: Meeting to Form Panel Set on July 2 ------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on July 2, 2012, at 11:00 a.m. in the bankruptcy case of Ritz Camera & Image, L.L.C.. The meeting will be held at: The DoubleTree Hotel 700 King Street Wilmington DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. 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. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz listed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. ROSETTA GENOMICS: Amends Annual Report for Reverse Stock Split -------------------------------------------------------------- Rosetta Genomics Ltd. filed with the U.S. Securities and Exchange Commission an amended annual report to reflect the 1-for-15 reverse split of the Company's ordinary shares effected on May 14, 2012. The Company reported a net loss after discontinued operations of US$8.83 million on US$103,000 of revenue in 2011, a net loss after discontinued operations of US$14.75 million on US$279,000 of revenue in 2010, and a net loss after discontinued operations of US$16.50 million on US$150,000 of revenue in 2009. The Company's balance sheet at Dec. 31, 2011, showed US$2.04 million assets, US$2.40 million in total liabilities and a US$356,000 total shareholders' deficiency. Kost Forer Gabbay & Kasierer issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and generated negative cash flows from operating activities in each of the three years in the period ended Dec. 31, 2011. The Company's ts ability to continue to operate is dependent upon obtaining additional financial support, which raise substantial doubt about the Company's ability to continue as a going concern. A copy of the annual report, as amended, is available for free at: http://is.gd/9eeeRK About Rosetta Located in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, "We have used substantial funds to discover, develop and protect our microRNA tests and technologies and will require substantial additional funds to continue our operations. Based on our current operations, our existing funds, including the proceeds from the January 2012 debt financing, will only be sufficient to fund operations until late May, 2012. We intend to seek funding through collaborative arrangements and public or private equity offerings and debt financings. Additional funds may not be available to us when needed on acceptable terms, or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then-existing shareholders may result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our research or development programs. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development or approved tests or products that we would otherwise pursue on our own. Our failure to raise capital when needed will materially harm our business, financial condition and results of operations, and may require us to seek protection under the bankruptcy laws of Israel and the United States." RUDEN MCCLOSKY: Buyer Objects to Chapter 7 Switch ------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that Greenspoon Marder PA -- the sole bidder for Ruden McClosky PA -- on Tuesday objected to a conversion to a Chapter 7 bankruptcy, saying the move would disrupt the proceedings and incur unnecessary administrative costs. In an objection filed in Florida bankruptcy court, Greenspoon Marder said converting the Chapter 11 proceedings to a Chapter 7 liquidation would disrupt the flow of information between the prospective buyer and Ruden McClosky's chief restructuring officer Joseph Luzinski, Bankruptcy Law360 relates. About Ruden McClosky Founded in 1959, Ruden McClosky P.A., fdba Ruden, McClosky, Smith, Schuster & Russell, P.A. -- http://www.ruden.com/-- was a full- service law firm serving the legal needs of clients throughout Florida, the U.S., and internationally. It had eight offices in Florida. In August 2011, the firm was reportedly in merger talks with Cleveland, Ohio-based Benesch firm. In September 2011, founder Donald McClosky died after a long battle with cancer. Ruden McClosky filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-40603) on Nov. 1, 2011, in its hometown of Fort Lauderdale, with a plan to sell a substantial portion of its assets for $7.6 million to Fort Lauderdale-based Greenspoon Marder, subject to higher and better offers at an auction. Judge Raymond B. Ray oversees the case. Leslie Gern Cloyd, Esq., and Paul Steven Singerman, Esq. -- lcloyd@bergersingerman.com and singerman@bergersingerman.com -- at Berger Singerman, P.A., serve as the Debtor's counsel. Development Specialists, Inc., serves as the Debtor's restructuring advisors. The Debtor tapped Steven J. Gutter, P.A., as its special litigation counsel in connection with collection of accounts receivable, and authorization to settle accounts receivable claims in the ordinary course of business. The petition was signed by DSI's Joseph J. Luzinski, who serves as chief restructuring officer. Kurtzman Carson Consultants LLC serves as the Debtor's claims and noticing agent. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. An official committee of unsecured creditors has been appointed in the case, and is represented by Segall Gordich, P.A. The Committee tapped Soneet Kapila, CPA, and the firm of Kapila & Company as its financial advisor. Counsel to the Debtor's lender, Wells Fargo Bank, N.A., is Jonathan Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Counsel to Greenspoon Marder, the proposed purchaser, is R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP. SAINT CATHERINE INDIANA: Has Interim Approval of First Day Motions ------------------------------------------------------------------ Bradden Lamers at News and Tribune reports an emergency hearing was held in the bankruptcy case of Saint Catherine Hospital of Indiana LLC via telephone and several motions were granted on an interim basis to allow the hospital to remain open. The motions granted included a motion to use emergency cash collateral, a motion to provide continued utility service, a motion to pay prepetition employee wage claims, and a motion to obtain credit under bankruptcy restructuring. The report says the next hearing in the Chapter 11 proceedings has been set for July 23. The report relates Bob Hall, mayor of Charlestown, Indiana, who also serves as board member for St. Catherine Hospital, said the economy is affecting a lot of institutions, including the hospital. The report notes St. Catherine is the second hospital in Clark County to declare for bankruptcy protection recently, as Kentuckiana Medical Center filed for Chapter 11 bankruptcy protection in September 2010, but recently announced it has secured $40 million in funding which will bring it out of bankruptcy. The report notes Uric Dufrene, Sanders Chair in Business at Indiana University Southeast, said the recession has had an impact, especially on smaller hospitals. The report relates there have been no discussions between the hospital and city officials on purchasing or floating bonds for St. Catherine. About Saint Catherine Hospitals Saint Catherine Hospital of Indiana LLC -- http://www.saintcatherinehospital.com-- an acute-care hospital in Charlestown, Indiana, filed for Chapter 11 protection June 19 in New Albany, Indiana (Bankr. S.D. Ind. Case No. 12-91316). Saint Catherine Hospital of Indiana is a regional facility that performs weight-loss surgery and other procedures. The Debtor estimated assets worth less than $10 million and debt exceeding $10 million. A buyer has been located to purchase the operation while in Chapter 11, according to a report by Bill Rochelle, the bankruptcy columnist for Bloomberg News. Mr. Rochelle also reports that, in addition to losses from operations, bankruptcy was the result of a lawsuit begun by the trustee for Saint Catherine Hospital of Pennsylvania, which filed for bankruptcy reorganization in April in Wilkes-Barre, Pennsylvania. The Chapter 11 trustee in the Pennsylvania hospital's case filed a lawsuit to recover $300,000 allegedly transferred to the Indiana institution. Saint Catherine Hospital of Pennsylvania, LLC, dba Saint Catherine Medical Center of Fountain Springs, filed a Chapter 11 petition (Bankr. M.D. Pa. Case No. 12-02073) on April 9, 2012, estimating under $50,000 in assets and debts. It is a non-operating 107-bed hospital in Ashland, Pennsylvania. John H. Doran, Esq., at Doran & Doran, P.C., in Wilkes-Barre, Pennsylvania, served as counsel. Nine days after the bankruptcy filing, U.S. Bankruptcy Judge John J. Thomas granted the request of the Chapter 11 trustee to convert the Chapter 11 case of Saint Catherine Hospital of Pennsylvania to a liquidation in Chapter 7. SLS CAPITAL: Chapter 15 Case Summary ------------------------------------ Chapter 15 Petitioner: Yann Baden, as liquidator Chapter 15 Debtor: SLS Capital S.A. c/o Baden & Baden 27, rue J-B. Esch L-1473 Luxembourg Chapter 15 Case No.: 12-12707 Chapter 15 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Shelley C. Chapman About the Debtor: Liquidators of Luxembourg based SLS Capital filed 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". 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. 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. Foreign Representative's Counsel: Carollynn H.G. Callari, Esq. VENABLE LLP 1270 Avenue of the Americas New York, NY 10020 Tel: (212) 370-6267 Fax: (212) 307-5598 E-mail: ccallari@venable.com Estimated Assets: $100,000,001 to $500 million Estimated Debts: $100,000,001 to $500 million SBA COMMS: Moody's Alters Ratings Outlook to Neg. on TowerCo Deal ----------------------------------------------------------------- Moody's Investors Service has changed outlook on the ratings of SBA Communications Corp. debt to negative from stable following the company's announcement that it will acquire peer tower operator, TowerCo II Holdings LLC (B1 Stable) for $1.45 billion in cash and stock. SBAC will pay $1.2 billion in cash and issue $250 million in shares of SBA stock to acquire TowerCo. A portion of the cash consideration will be used to repay TowerCo's $400 million term loan. At closing, Moody's will withdraw TowerCo's standalone ratings. The acquisition will increase SBAC's base of towers in the US, Canada and Central America by approximately 25%. As part of the rating action, Moody's downgraded SBAC's speculative grade liquidity rating to SGL-3 from SGL-2, as the company's liquidity position will become more strained over the coming 12 month period with the pending maturities of the $400 million Mobilitie bridge loan and the $535 million convertible notes, both due in second quarter 2013. The negative outlook reflects the additional risk that SBAC will face in restoring its financial profile that supports its Ba3 corporate family rating. Coming on the heels of the acquisition of Mobilitie in April, the purchase of TowerCo will raise SBAC's adjusted Debt/EBITDA leverage above 9.0x. In addition, as the recently acquired properties have a lower tenancy ratio, the company's cash generation relative to debt will remain near the downgrade triggers until SBAC is able to add more wireless carriers on the newly acquired towers. In addition, Moody's is concerned that the company may be exposed to financing and market risks given the company's significant near- to intermediate-term debt maturities, which total approximately $2 billion over the next two years. The company's upcoming maturities include $400 million Mobilitie 364-Day Term Loan maturing in Q2 2013, $535 million of the 1.875% convertible notes due May 2013, $500 million of the 4% Convertible Notes due October 2014 and the proposed TowerCo 24-Month bridge loan in 2014. Issuer: SBA Communications Corporation Downgrades: Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Outlook, Changed To Negative From Stable Issuer: SBA Senior Finance II, LLC Outlook Actions: Outlook, Changed To Negative From Stable Issuer: SBA Telecommunications, Inc. Outlook Actions: Outlook, Changed To Negative From Stable Ratings Rationale SBAC's Ba3 CFR reflects the company's high adjusted Debt/EBITDA leverage relative to peers, which is due in large part to debt- financed acquisitions, capital expenditures and increasing stock buy-backs. The rating does consider the company's scale as well as the stability of much of its revenues and cash flow generation, which are predominantly derived from contractual relationships with the largest wireless operators in the U.S. Moody's believes that the fundamentals of the wireless tower sector will remain favorable through the next several years. Finally, the rating reflects Moody's view that SBAC will likely temper its acquisition activity for the near term, as it takes time to integrate the two large acquisitions of Mobilitie and TowerCo. Moody's expects SBAC's adjusted Debt/EBITDA leverage to remain above 9.0x (Moody's adjusted) levels at the end of 2012 due to the additional debt taken on as part of the TowerCo acquisition, before reducing to the low 8x range by 2014 through a combination of EBITDA growth and debt repayment. In addition, TowerCo has high exposure to the Sprint iDen towers which are scheduled to be decommissioned in 2015 and 2018. As a result, future revenue growth could be hampered if the company cannot offset the iDen revenue losses with revenues from new tenants or carriers augmenting their cell site equipment as they upgrade to fourth generation (4G) wireless networks. Moody's also notes that the individual debt instruments are subject to potential near-term variability especially if they are in close proximity to the expected loss assumptions underlying the rating breakpoints in Moody's Loss Given Default ("LGD") rating framework for high-yield corporates, as well as dependent on the specific levels of debt at various legal entities. In rating SBAC's debt instruments, Moody's has taken a forward look with respect to the composition of the company's debt obligations. As the TowerCo bridge loan is not permanent financing, it is probable that traditional debt financing may be used to refinance this debt, which may cause further changes in the capital structure and lead to near-term ratings volatility among the individual instruments. The senior secured debt of SBA Senior Finance II ("SBAF") are rated Ba2 (LGD3-41%) and the senior unsecured notes at SBA Telecommunications, Inc ("SBAT") are rated B1 (LGD5-81%) reflecting the perceived collateral coverage of these debt obligations relative to the overall waterfall of debts, including the securitizations. The SGL-3 liquidity rating reflects Moody's view that SBAC will have adequate liquidity over the next 12-18 months. SBAC's worsened liquidity position is largely due to the $535 million 1.875% convertible notes maturing in May 2013 and the company's need to refinance the $400 million bridge loan taken on with the Mobilitie acquisition. SBAC's projected liquidity position, coupled with the expected revolver draw to close the TowerCo acquisition necessitates further capital raising activity over the next twelve months. On the other hand, if the convertible notes are converted into equity, SBAC should have sufficient capacity to pay down the bridge loan with the revolver and cash generated over the next 12 months. Moody's notes that if SBAC addresses the refinancing issues over the next twelve months, its liquidity rating could be upgraded. Moody's also expects the company to have ample head room in its maintenance covenants. Moody's could stabilize the outlook if the company could demonstrate a path to delevering below 8x while maintaining strong revenue growth which could lead to higher free cash flow than expected. The ratings may face downward ratings pressure if weakening industry fundamentals or the Company's aggressive expansion plans result in the following adjusted key credit metrics on a sustained basis: Debt/ EBITDA over 8.5x, (EBITDA-Capex)/ Interest coverage remaining in the 1.0x range and Free Cash Flow/ Debt in the low single digits on a sustained basis. The principal methodology used in rating SBA Communication Corp was the Global Communications Infrastructure Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SM ENERGY: Moody's Rates Proposed $300-Mil. Senior Notes 'B1' ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to SM Energy Company's proposed offering of $300 million senior notes due 2023. Moody's also raised SM Energy's Speculative Grade Liquidity rating to SGL-2 from SGL-3. The proceeds of the offering will be used to repay revolver borrowings and for general corporate purposes. The rating outlook is positive. Ratings Rationale "This senior notes offering enhances SM Energy's liquidity by refinancing its revolver borrowings on a long-term basis," commented Pete Speer, Moody's Vice President. "The company will have almost full availability on its revolving credit facility to fund its growth capital expenditures well into 2013." The SGL-2 rating is based on Moody's expectation that SM Energy will have good liquidity through the middle of 2013. The company has a $1 billion committed senior secured revolving credit facility with a borrowing base in excess of the commitment levels, that is almost fully available pro forma for the senior notes offering. This gives ample liquidity for the company's planned capital expenditures in excess of cash flows over the remainder of 2012 and into 2013. The company has significant covenant compliance headroom that Moody's expects to continue. Although the majority of the company's oil and gas properties are encumbered by the credit facility, the substantial excess of the borrowing base above the committed facility provides significant flexibility to execute asset sales to raise cash for its capital investment. The B1 rating on the proposed $300 million senior notes reflects both the overall probability of default of SM Energy, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD 5 (70%). The company has a committed $1 billion senior secured credit facility that matures in May 2016, $350 million senior notes due 2019 and $350 million senior notes due 2021. Both the new and existing senior notes are unsecured and have no subsidiary guarantees. Therefore the senior notes are subordinate to the senior secured credit facility's potential priority claim to the company's assets. The large amount of the potential senior secured claims relative to the unsecured notes outstanding results in the senior notes being notched one rating beneath the Ba3 Corporate Family Rating (CFR) under Moody's Loss Given Default Methodology. SM Energy's Ba3 CFR and positive outlook are supported by its sizable production and proved reserve scale, significant and growing exposure to oil and natural gas liquids production, and leverage metrics that are among the lowest of the Ba3 peer group. The company is achieving strong production growth in the Eagle Ford shale, where it holds sizable operated and non-operated acreage positions. SM Energy also owns acreage in the Bakken shale and Granite Wash where it is also increasing capital spending to boost its oil and natural gas liquids production. The company is able to reduce its capital spending in the Haynesville shale to minimal levels while retaining most of its acreage there if natural gas prices improve. The CFR could be upgraded to Ba2 in 2013 if SM Energy increases its reserve and production scale, boosts its investment returns and maintains its low financial leverage. Proved developed (PD) reserves approaching 175 million boe, leveraged full-cycle returns above 1.5x with leverage on production and PD reserves under $15,000/boe and $8/boe would be supportive of a Ba2 rating. In contrast, if the production and proved reserve response from the large capital investments is weaker than expected, then leverage could increase significantly and pressure the ratings. Debt/average daily production sustained above $20,000/boe or Debt/PD above $10/boe could result in a ratings downgrade. The principal methodology used in rating SM Energy Company 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. SM Energy Company is an independent exploration and production company based in Denver, Colorado. SON CORPORATION: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Son Corporation 8306 Wilshire Boulvevard #843 Beverly Hills, CA 90211 Bankruptcy Case No.: 12-15759 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Raymond H. Aver, Esq. LAW OFFICES OF RAYMOND H AVER APC 1950 Sawtelle Blvd., Suite 120 Los Angeles, CA 90025 Tel: (310) 473-3511 Fax: (310) 473-3512 E-mail: ray@averlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-15759.pdf The petition was signed by Orlando Armaswalker, vice president/treasurer. SONIC AUTOMOTIVE: S&P Rates Proposed $200MM Subordinated Debt 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' issue rating to Sonic Automotive Inc.'s proposed $200 million senior subordinated debt offering. "We assigned this debt a recovery rating of '5', reflecting our expectation that lenders would receive modest (10%-30%) recovery of principal in a default. The proposed notes will mature in June 2022," S&P said. "At the same time, we raised the issue rating on the company's outstanding $210 million, 9% senior subordinated notes due 2018 to 'B+' from 'B' and revised the recovery rating to '5' from '6'. The rating revision results from our expectation that the company will redeem its convertible senior notes due 2029 with proceeds from the offering, thereby increasing likely recovery for the subordinated lenders. We will withdraw the rating on the convertible senior notes following their redemption," S&P said. "The debt issuance does not affect the corporate credit rating on the auto retailer, although we expect cash interest and leverage to increase slightly," S&P said. "Sonic will use proceeds of the proposed debt issuance, in part, to repay the $135 million cash portion of its 5% convertible senior notes due 2029 and to fund share repurchases for the variable portion above par. The proceeds of the offering will be deposited into an escrow accounts until the acceptance for exchange of at least $80 million principal amount of the convertible notes," S&P said. "Our long-term rating outlook on Charlotte, N.C.-based Sonic is stable, reflecting our assumption that Sonic's improved performance through operating efficiencies, in combination with its diverse revenue stream and brand mix, will enable the company to generate discretionary free cash flow (i.e., after dividends). We assume Sonic will be able to grow EBITDA in the year ahead, even if the U.S. economy remains lackluster. We assume Sonic will pursue a financial policy that will balance business expansion and shareholder returns against the need to achieve and maintain leverage of 4.5x or better for the 'BB-' rating," S&P said. RATINGS LIST Sonic Automotive Inc. Corporate credit rating BB-/Stable/-- Senior unsecured B+ Recovery rating 5 Rating raised; Recovery ratings revised To From Sonic Automotive Inc. Senior subordinated $210 mil. notes due 2018 B+ B Recovery rating 5 6 New ratings Sonic Automotive Inc. Senior subordinated $200 mil. notes due 2022 B+ Recovery rating 5 SOUP KITCHEN: Court-Appointed Trustee Goes After Former Owners -------------------------------------------------------------- Kaja Whitehouse at New York Post reports that Robert Geltzer, Soup Kitchen International Inc.'s court-appointed trustee, has sued a group of the owners who formed a new outfit and purchased at low prices the key rights and assets from the original concern, including New York soup maker Al Yeganeh's recipes. According to NY Post, SKI creditors claim that they were forced out of business by the group. Sebastian "Seb" Rametta, who now helps run "The Original Soup Man" chain, convinced Mr. Yeganeh in 2004 to license the brand to SKI, NY Post relates, citing Mr. Geltzer. Mr. Geltzer, according to NY Post, accuses Mr. Rametta of mismanaging SKI and improperly dominating and controlling the company. NY Post relates that Mr. Geltzer alleges that Mr. Rametta improperly seized the licensing deal from SKI in 2009. According to court documents, the transfer was made without the knowledge of some SKI shareholders. NY Post states that Mr. Rametta denies the accusations. SKI shareholders received $100,000 cash for the licensing agreement, which is deemed sufficient "for a company that had negative cash flow," NY Post quoted Soup Man chief financial officer Bob Bertrand, who is also a defendant in the case, as saying. Mr. Bertrand added that the new company also took on $3.6 million in SKI debt and gave SKI the licensing rights to Mexico, NY Post relates. Staten Island, New York-based Soup Kitchen International Inc is the business that grew out of the "Soup Nazi" character on the television sitcom "Seinfeld." The Company, which also has done business as the Original SoupMan, was founded in 1984. Soup Kitchen filed for bankruptcy liquidation in 2010, according to Melanie Cohen at Bankruptcy Beat. STOCKTON, CA: May File for Chapter 9 This Week; Budget Okayed ------------------------------------------------------------- The city council of Stockton, California, voted 6-1 on Tuesday to adopt a budget for operating in bankruptcy. Bill Rochelle, the bankruptcy columnist for Bloomberg News, relates that the budget calls for defaulting on $10.2 million in debt payments and cutting $11.2 million in employee pay and benefits under union contracts. The city council previously voted to authorize the city manager to file for Chapter 9 municipal bankruptcy absent concessions from creditors. Jim Christie, writing for Reuters, reports that a Chapter 9 bankruptcy by the city could come as early as Wednesday, and would make Stockton the largest U.S. city to seek protection from its creditors. Reuters relates the voting came after a contentious five-hour meeting where angry retired city workers pressed council members to reject the $155 million spending plan. It proposes eliminating retirees' medical benefits to help fill a $26 million budget deficit. Reuters notes the council's vote followed three months of confidential talks between Stockton and its creditors aimed at averting bankruptcy. The negotiations ended on Monday with the city failing to win enough concessions to help close its shortfall for the fiscal year starting on July 1. That left bankruptcy as the only way for Stockton to balance its budget in the near term while maintaining its current level of services and bringing stability to its battered finances, Mayor Ann Johnston said. Reuters notes lawyers representing Stockton also worked for Vallejo, California, when it filed for bankruptcy in 2008. The report says Stockton officials have been considering bankruptcy since February and calling for the kind of drastic action in its budget. It suspends $10.2 million in debt payments, a move likely to trigger further downgrades of Stockton by ratings agencies. Stockton also has already defaulted on about $2 million in debt since February, allowing the trustee for one of its bond insurers to seize a building once slated to be its future city hall and three parking garages. Moody's has cut its issuer rating for Stockton to a junk level Ba2 from Baa1 while S&P has cut its issuer rating on the city from BB to SD, one notch above its D default rating. About Stockton, California Stockton, California, the seat of San Joaquin County, is the fourth-largest city in the Central Valley of the U.S. state of California. With a population of 291,707 at the 2010 census, Stockton ranks as the state's 13th largest city. Stockton was sued by the indenture trustee after failing to make a payment of about $780,000 due Feb. 25 on $32.8 million in parking garage revenue bonds. The city council voted in February 2012 to default on about $2 million in bond payments as a prelude under state law for conducting workout negotiations with bondholders. Stockton is taking advantage of a new California law that lets municipalities in financial distress confidentially mediate with creditors or "interested parties" with $5 million or more in obligations or debt. Ralph Mabey, a former U.S. bankruptcy judge, was selected as mediator to conduct negotiations between the city and its creditors. Reuters notes Stockton's economy has been hit hard by the housing market's steep downturn in inland California, slashing the city's revenue. Mayor Ann Johnston noted that only 150 new homes were built in the city last year compared with 3,000 in 2007 and that the city has cut $90 million in spending over the last three years, the report says. SYMS CORP: Creditors Want Exclusivity Termination ------------------------------------------------- BankruptcyData.com reports that Filene's Basement's official committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion for an order terminating the periods during which the Debtors have the exclusive right to file a Chapter 11 plan and solicit acceptances thereof. The committee asserts, "The terms of this insider-driven, equity- dominated joint plan are totally unacceptable to the Committee and will be soundly rejected by the creditors it represents. The issue for the Court to decide is whether the Debtors acting as a front for Marcy Syms should be permitted to continue to maintain exclusive control over the plan process in these cases even though Ms. Syms will have no continuing role or stake in the Reorganized Debtors, while the creditors, who have by far the largest economic stake at risk in the Reorganized Debtors, are precluded from putting forth their own plan of reorganization." The Court scheduled a July 9, 2012 hearing on the matter. About Filene's Basement & 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 disclosed assets of $236 million, including real estate of $97.7 million, and liabilities of $94 million, including $31.1 million owing on a revolving credit with Bank of America NA as agent. In addition, there were $11.1 million in letters of credit outstanding on the revolver. 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. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. TRAINOR GLASS: Can Hire Thomas Feldman as Local Texas Counsel ------------------------------------------------------------- Trainor Glass Company sought and obtained permission from the U.S. Bankruptcy Court to employ Thomas, Feldman & Wilshusen LLC as local Texas counsel. The Debtor requires TF&W to render lien-related services for these construction projects: (a) Encana Gas and Oil (Plano, Texas); (b) New Parkland Hospital (Dallas, Texas); (c) Austin Energy (Austin, Texas); (d) Museum of Science and Nature (Dallas, Texas); (e) Lakeway Medical Center (Lakeway, Texas); (f) Baylor Medical Center (McKinney, Texas); (g) Bull Creek Residences (Austin, Texas); and (h) all other legal services for the Debtor related to the review, preparation and recording of liens on the construction projects. The firm's rates are: Personnel Rates --------- ------ Richard G. Thomas $375 per hour Robert Feldman $295 per hour Jason R. Kennedy $290 per hour Misty Gutierrez $250 per hour Richard G. Thomas, a partner of TF&W, 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. TRAINOR GLASS: Court Approves Pollice as Local Michigan Counsel --------------------------------------------------------------- Trainor Glass Company sought and obtained permission from the U.S. Bankruptcy Court to employ The Pollice Law Group as local Michigan counsel. The Debtor requires Pollice to render lien-related services for these construction projects: (a) BAE Systems Land & Armament, LP (Sterling Heights, MI); and (b) all other legal services for the Debtor related to the review, preparation and recording of liens on the construction project. Robert A. Pollice, Esq., a partner at the firm, charges $250 per hour for his services. He attests his 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. TRAINOR GLASS: Court OKs Kasimer & Annino as Virginia Counsel ------------------------------------------------------------- Trainor Glass Company sought and obtained permission from the U.S. Bankruptcy Court to employ Kasimer & Annino, P.C. as local Virginia counsel. The Debtor requires Pollice to render lien-related services for these construction projects: a. Inova South Patient Tower (Falls Church, Virginia; and b. all other legal services for the Debtor related to the review, preparation and recording of liens on the construction project. The firm's rates are: Personnel Rates --------- ----- Stephen J. Annino $385/hour Joseph H. Kasimer $385/hour Gina Schaecher $330/hour Stephen J. Annino, a partner of K&A, 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. TRAVELCLICK INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on New York City-based TravelClick Inc., including its 'B' corporate credit rating. "At the same time, we revised the outlook to negative from stable," S&P said. "We also affirmed our 'B' issue-level ratings on the company's $195 million term loan due 2016 and $20 million revolving credit facility due 2016. The '4' recovery rating on the company's senior secured debt reflects our expectation of average (30%-50%) recovery in the event of default," S&P said. "The ratings on TravelClick reflect the company's 'weak' business risk profile deriving from its narrow market focus partly offset by its relatively high recurring revenue base, and its 'aggressive' financial risk profile with pro forma leverage in the high-4x area and an acquisitive growth strategy," S&P said. "We expect the company to generate good organic revenue growth in fiscal 2012," said Standard & Poor's credit analyst Christian Frank, "but with lower free operating cash flow as a result of increased investment in product development and sales and marketing." "The negative outlook reflects our uncertainty that the company will maintain adequate headroom under its leverage covenant given recent performance, upcoming step-downs, and a weak economic backdrop. We could lower the rating if we expect covenant headroom to drop below 10% for an extended period or if a downturn in the travel industry or debt-financed acquisitions lead to adjusted leverage above the mid-6x area on a sustained basis," S&P said. "We could revise the outlook to stable if the company's business prospects, cost structure, or leverage profile provides greater certainty of maintaining an adequate covenant cushion in light of upcoming step-downs," S&P said. TRAINOR GLASS: Taps Arnold & Arnold as Local Colorado Counsel ------------------------------------------------------------- Trainor Glass Company, asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to employ Jean Arnold and the partners, associates and paralegals of the law firm of Arnold & Arnold, LLP as local Colorado counsel. The Debtor requires the services of A&A to represent and assist the Debtor in connection with reviewing lien notices, preparing lien notices and recording affidavits of lien, preparing claims and bond claims for construction projects in Colorado -- both private and public. The Debtor requires A&A to render such lien related services for these construction projects: a) Park Central Plaza (Denver, Colorado); b) Ralph Carr Judicial Center (Denver, Colorado); c) Colorado History Museum (Denver, Colorado); and d) all other legal services for the Debtor related to the review, preparation and recording of liens on the aforementioned construction projects and any future construction projects agreed to between the Debtor and A&A. The Debtor believes that the amount of outstanding claims to be served with lien notices may total nearly $1,220,000 with a net balance to the Debtor of approximately $815,000. The hourly rates of A&A's personnel working on the case are: Jean Arnold $290 Attorneys $200 - $300 Paralegals $100 ? $175 A&A has requested a $5,000 security retainer from the Debtor. The security retainer will be held in one of A&A's trust accounts and will not be applied to postpetition fees and costs until further order of the Court. To the best of the Debtor's knowledge, A&A is a "disinterested person" as that 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. TRAWOOD LANCERS: U.S. Trustee Wants Case Converted to Chapter 7 --------------------------------------------------------------- Robert Gray at El Paso Inc. reports that U.S. trustee Judy Robbins has asked the bankruptcy judge to convert the case of Trawood Lancers Club aka Lancers Club-Trawood from Chapter 11 to Chapter 7 proceeding. According to El Paso Inc., the company's plan for reorganization was approved in May 2011. Under an amended plan, Lancers was to pay creditors in monthly installments, paying InterNational Bank $7,822 per month and the Small Business Administration $954. The report relates the company owed McAllen-based InterNational Bank almost $1.2 million and the SBA almost $350,000. Lancers also owed the city of El Paso more than $85,000 and the IRS more than $10,000 in delinquent taxes and penalties. The report notes the company failed to make some payments required by the plan, or to file the most recent quarterly financial disclosure report, court documents show. The financial report, which is required under the bankruptcy reorganization plan, was due April 20. The report says the Company has disclosed, among other things, payments made to creditors. But in the last financial report, filed on Dec. 31, 2011, Lancers said it fell behind in payments to InterNational Bank and the IRS due to "cash flow challenges." Based in El Paso, Texas, Trawood Lancers Club, Inc., filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 10-30937) on May 3, 2010. Judge Leif M. Clark presides over the case. E.P. Bud Kirk, Esq., at Terrace Gardens, represents the Debtor. The Debtor estimated between $1 million and $10 million in both assets and debts. TRI STATE: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Tri State Warehousing & Distribution LLC aka IHS aka IHS/Tri State aka Tri State Warehouse and Distribution, LLC aka Tri State Warehouse aka Christian Service Mission 2801 Cotton Street Mobile, AL 36607 Bankruptcy Case No.: 12-02161 Chapter 11 Petition Date: June 22, 2012 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Judge: William S. Shulman Debtor's Counsel: James A. Johnson, Esq. JAMES A. JOHNSON, P.C. 21 North Florida Street Mobile, AL 36607-3134 Tel: (251) 473-1800 Fax: (251) 473-1805 E-mail: jjohnson@jamesajohnsonpc.com Scheduled Assets: $689,741 Scheduled Liabilities: $1,080,475 A copy of the Company's list of its four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/alsb12-02161.pdf The petition was signed by David A. Richards, president. Related entity that previously sought bankruptcy protection: Petition Debtor Case No. Date ------ -------- ---- David A. Richards, Sr. 11-02928 07/20/11 TRIDENT MICROSYSTEMS: Seeks to Expand PwC Employment Scope ---------------------------------------------------------- BankruptcyData.com reports that Trident Microsystems filed with the U.S. Bankruptcy Court a motion to expand the scope of employment for PricewaterhouseCoopers (Contact: Johan Furstenberg)to include deduction analysis services at these hourly rates: partner at $650, senior managing director at $650, director at $550, manager at $475, senior associate a $375 and associate at $275. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TRU-EMAAN LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tru-Emaan, LLC aka Baskin Robbins #16/PC 360012 aka Baskin Robbins #4770/PC 33816 603 East University Drive, Space A Carson, CA 90746 Bankruptcy Case No.: 12-31984 Chapter 11 Petition Date: June 25, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Robert N. Kwan Debtor's Counsel: M Jonathan Hayes, Esq. LAW OFFICE OF M JONATHAN HAYES 9700 Reseda Bl, Suite 201 Northridge, CA 91324 Tel: (818) 882-5600 Fax: (818) 882-5610 E-mail: jhayes@hayesbklaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-31984.pdf The petition was signed by Ishtiaq I. Khan, managing member. VOLKSWAGEN-SPRINGFIELD: Wants to Hire Wiley Rein LLP as Counsel --------------------------------------------------------------- Volkswagen-Springfield, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Virginia for permission to employ Wiley Rein LLP as counsel. Dylan G. Trache, a partner at Wiley Rein LLP, tells the Court that prior to the Petition Date, Wiley Rein received a $100,00 retainer from the Debtor. Prior to the filing of the Petition, Wiley Rein withdrew the sum of $33,957 from the retainer and applied it against prepetition services well as the filing fee for the Chapter 11 case. As of the filing of the Chapter 11 case, $66,043 remained available for application to postpetition services. The hourly rates of Wiley Rein's personnel are: Legal Support Personnel $150 - $305 Associates $305 - $520 Of Counsel, and Consultants $220 - $690 Partners $530 - $920 To the best of the Debtor's knowledge, Wiley Rein is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Trache can be reached at: Dylan G. Trache, Esq. 7925 Jones Branch Drive, Suite 6200 McLean, VA 22102 Tel: (703) 905-2800 Fax: (703) 905-2820 E-mail: dtrache@wileyrein.com About Volkswagen-Springfield Springfield, Virginia-based Volkswagen-Springfield, Inc., filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 12-12905) in Alexandria on May 7, 2012. The Debtor operates one of the largest Volkswagen franchised dealerships in the Mid-Atlantic region. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Judge Robert G. Mayer oversees the case. The Debtor is represented by Dylan G. Trache, Esq., and John T. Farnum, Esq., at Wiley Rein LLP, in McLean, Virginia. Pursuant to recent default notices, Branch Banking and Trust Company has asserted that it is owed $19.6 million. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, represents BB&T. No creditors' committee has yet been appointed in the case. WASHINGTON MUTUAL: D&O Suit is in Wrong Court, Insurers Say ----------------------------------------------------------- Bibeka Shrestha at Bankruptcy Law360 reports that XL Specialty Insurance Co. and 10 other insurers sought Monday to nix a coverage fight with Washington Mutual Inc.'s liquidation trust over a $500 million claim against former WaMu directors and officers, arguing a Delaware bankruptcy court lacks jurisdiction over the suit. 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. WOONSOCKET, RI: Facing Possible Receivership --------------------------------------------- Patrick Anderson at pbn.com reports that the city of Woonsocket, in Rhode Island, is facing possible receivership after state lawmakers and Gov. Lincoln D. Chafee failed to agree on a supplemental tax package to repair the city's finances before the end of this year's legislative session Tuesday night. Woonsocket's three-member House delegation blamed the impasse on Chafee's refusal to cut a 13.8% tax increase approved by the Woonsocket City Council earlier in the year down to an 8.5% hike, according to pbn.com. "We cannot force our residents to pay a 13.8% supplemental tax. . . . We originally started with a five-point plan and narrowed it down to a two-point compromise for the governor. But in the end, he said our proposal for an 8.5 percent tax, which would not have been added to the base, was not large enough," the report quoted Rep. Lisa Baldelli Hunt, a democrat, as saying." However, the report notes that the Chafee administration argued that the full supplemental tax was necessary and a statement issued after last-minute talks broke down Tuesday, Department of Revenue Director Rosemary Booth Gallogly accused the lawmakers lacking the "courage" to do what was necessary to keep the city solvent. The 13.8% tax hike was projected to raise $6.6 million, an amount Woonsocket leaders said they need to pay the city's bills, the report notes. In addition to lowering the tax increase, the Woonsocket delegation's proposed compromise would have had the state push back the date the city would have to start building a new sewer treatment plant, the report says. The report adds that Woonsocket's finances are already under the oversight of a state budget commission appointed last month and the next step open to governor would be to appoint a receiver. ZAYO GROUP: Term Loan Add-On No Impact on Moody's 'B2' CFR ---------------------------------------------------------- Moody's Investors Service said the B2 corporate family rating of Zayo Group LLC is unchanged following the company's proposed offering to upsize its recently launched term loan to $1.62 billion from $1.50 billion. The additional proceeds will be used for general corporate purposes or future acquisitions. The principal methodology used in rating Zayo Group was the Global Communications Infrastructure Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. * Fitch Completes Peer Review of 6 Rated Business Development Cos. ------------------------------------------------------------------ Fitch Ratings has completed a peer review of six rated Business Development Companies (BDCs) in concert with its publication of an industry report, titled 'Business Development Companies. Based on this review, Fitch has affirmed the long-term Issuer Default Ratings (IDRs) of American Capital, Ltd. (ACAS), Apollo Investment Corporation (Apollo), Ares Capital Corporation, Fifth Street Finance Corp., PennantPark Investment Corporation, and Solar Capital, Ltd. The IDRs of the all of the affected BDCs are in the 'BBB' rating category with the exception of ACAS which is rated 'B+'. The Rating Outlook for ACAS has been revised to Positive from Stable; the Rating Outlook for Apollo has been maintained at Negative; and the Rating Outlook for the remaining BDCs has been maintained at Stable. The rating affirmations reflect relative stability in the industry in terms of core operating performance and asset quality, and the maintenance of leverage levels below management's targeted range. Portfolio growth has slowed from 2010 levels, as more recent market entrants mature and gain scale, but remains relatively robust. Still, BDCs' investment focus has centered on more senior positions in the capital structure of underlying companies, given reduced competition in the space, while equity exposures have generally declined. Valuation volatility remains, as evidenced by the meaningful unrealized portfolio depreciation recognized in the third quarter of 2011 (3Q'11), but Fitch believes quarterly movements have been more digestible given reduced leverage ratios. Net realized losses on portfolio investments have been meaningful since the start of the crisis, as BDCs have recognized declines in value, participated in portfolio company recapitalizations, or exited underperforming investments in an effort to redeploy proceeds into higher-yielding securities. Portfolio losses have declined over the past five quarters, and several BDCs recognized modest gains in early 2012. Over time, Fitch does not expect realized gains and losses to be a meaningful component of net income, given declines in portfolio equity holdings and improvements in asset quality. Funding flexibility has improved in recent quarters, with several BDCs accessing the unsecured debt markets via the issuance of convertible notes and/or retail notes. Fitch views an unsecured funding component favorably as it provides funding diversity, as well as flexibility to encumber assets if necessary for liquidity purposes. Debt maturity profiles have also been improved, with many BDCs amending and extending bank facilities to allow for three year revolving periods followed by one-year of amortization. This term debt structure provides for better matching with the three-to-four year average life of portfolio investments. Public equity issuance in early 2012 is close to surpassing all of 2011, as share prices have generally moved closer to net asset values. BDCs are expected to continue to access the markets opportunistically for growth capital and Fitch expects additional issuance over the balance of 2012. On the downside, portfolio concentrations have generally ticked-up across the industry, despite declines in leverage, given follow-on investments in existing companies and larger positions in new portfolio investments. Fitch believes portfolio diversity is critical, as the underperformance of one or more large investments can have an outsized impact on leverage. As a result, BDCs with higher concentrations as a percent of book equity, are expected to manage leverage more conservatively, all else equal. Another point of focus for Fitch is net investment coverage of dividends, given the regulatory requirement that BDCs distribute 90% of taxable income on an annual basis. While several BDCs instituted dividend cuts in the past several years to better match core earnings and distributions, coverage of dividends remains weaker than expected for some, particularly when adjusting for non-cash income accruals. Fitch would view core cash earnings coverage at or near 100% on a consistent basis favorably. Fitch believes positive rating momentum for the industry is limited to the 'BBB' category given the relative illiquidity of portfolio investments, limited funding flexibility, an inability for BDCs to retain capital due to distribution requirements, and the impact that fair value accounting has on leverage. However, negative rating action for any one issuer could be driven by deterioration in asset quality or core operating performance, increases in equity holdings without commensurate reductions in leverage, weakening cash income coverage of dividends, and the recognition of sizeable unrealized portfolio depreciation which forces leverage above management targets for extended periods or reduces cushions on debt covenants. The Positive Outlook assigned to ACAS' ratings reflects the reduction in non-accrual levels, improved core operating performance, and reduced leverage. While exposures to equity investments remain large relative to peer BDCs, Fitch expects leverage will remain well-below the peer average for some time. Additionally, about half of the equity exposure is attributable to the relatively diverse portfolio of European Capital, Ltd. and the asset manager, American Capital, LLC; the valuation of which is driven largely by management fees received from funds with permanent capital. Fitch has also revised the recovery ratings for ACAS' secured debt to 'RR1' from 'RR2' and upgraded the debt and recovery ratings for its unsecured debt to 'B+/RR1' from 'B-/RR6' to reflect improved recovery prospects for creditors given an increase in available collateral, reduced balance sheet leverage, and in shortened risk horizon to maturity. Fitch expects remaining unsecured debt of $11 million will be repaid with balance sheet cash when it comes due in August 2012. The Negative Outlook for Apollo's ratings continues to reflect recent corporate announcements, including the replacement of the firm's Chief Investment Officer and Chief Financial Officer and the expansion of the investment mandate beyond a focus on subordinated/mezzanine financing. Fitch will assess the impact of these announcements over the next 12-18 months. Still, negative rating action could occur more quickly should there be an inability to deploy investment capital into accretive middle market investments, an extended increase in leverage above the targeted range, resulting from increased borrowings or material unrealized depreciation, deterioration in portfolio asset quality, and/or a decline in cash income coverage of the current dividend. Fitch has affirmed the following: American Capital, Ltd. -- Long-term IDR at 'B+'. Apollo Investment Corporation -- Long-term IDR at 'BBB'; -- Secured debt at 'BBB'; and -- Unsecured debt at 'BBB-'. Ares Capital Corporation -- Long-term IDR at 'BBB'; -- Secured debt at 'BBB'; and -- Unsecured debt at 'BBB'. Allied Capital Corporation -- Unsecured debt at 'BBB'. Fifth Street Finance Corp. -- Long-term IDR at 'BBB-'; -- Secured debt at 'BBB-'; and -- Unsecured debt at 'BBB-'. PennantPark Investment Corporation -- Long-term IDR at 'BBB-'; and -- Secured debt at 'BBB-'. Solar Capital, Ltd. -- Long-term IDR at 'BBB-'; and -- Secured debt at 'BBB-'. Fitch has also taken the following rating actions: American Capital, Ltd. -- Secured debt revised to 'BB/RR1' from 'BB/RR2'; and -- Unsecured debt upgraded to 'B+/RR1' from 'B-/RR6'. * Moody's Says Media Firms' Dividends Won't Harm Credit Quality --------------------------------------------------------------- North American media and entertainment companies are increasing dividend payouts and share repurchases as high cash balances persist, but these shareholder-friendly moves are unlikely to harm credit quality, says Moody's Investors Service in a new special comment "North American Media and Entertainment: An Arms Race: Limited Growth Spurs Rising Equity Returns Amid High Cash Levels." "Companies are increasingly using their large cash balances to boost dividends and share repurchases to attract investors, since growth and M&A opportunities have become limited or less desirable from an equity standpoint," said Neil Begley, a Moody's Senior Vice President, and author of the report. Funding these initiatives with excess cash and free cash flow instead of debt means credit quality among the media and entertainment industry will be mostly unaffected. However, cash balances will likely decline to pre-recession levels if the economy remains stable. But dividends can erode credit quality if companies keep increasing already high payout rates as a percentage of pre-dividend free cash flow, especially if they have high exposure to cyclical revenue or have upcoming debt maturities which they may not be able to fund with annual free cash flow, says Moody's. A number of companies such as Shaw Communications and Time Warner Inc. paid dividends in 2011 that exceeded a third of their free cash flow, says the report. That means their credit quality is at risk if these high payout rates continue to trend upward without other credit improvements, unless risk related to high payouts is already reflected in their ratings, says Moody's. Companies that simultaneously decrease leverage, maintain large cash balances or boost free cash flow such as CBS and News Corp may be less exposed to risk from high dividend payouts, says the rating agency. Companies which retain flexibility by using share buybacks - which companies can halt at any time instead of dividends, are also less exposed as long as they maintain healthy liquidity and fund the repurchases with cash flow, says Moody's. Still, Moody's expects shareholder-friendly initiatives to continue as companies compete for investors throughout the ongoing tepid recovery and beyond. * U.S. High-Yield Companies Remain Stables Despite EU Debt Crisis ----------------------------------------------------------------- High-yield companies remain stable despite ongoing pressure from the European debt crisis and uncertainty about the direction of the US economy, according to Moody's latest quarterly report on its B3 Negative and Lower Corporate Ratings List. "Our list of lower-rated companies and other Moody's indicators of credit quality suggest benign conditions for US high-yield companies," said David Keisman, a Moody's Senior Vice President. "Relatively few rated US companies have weak liquidity, as shown by record-low readings on Moody's Liquidity-Stress Index, and our default rate forecast remains below the historical average. Robust refinancing activity has strengthened corporate balance sheets." Companies are removed from the B3 Negative and Lower List if they default, have their ratings withdrawn, or receive a rating upgrade to B3 stable or higher. Companies join the list upon a rating downgrade to B3 negative or lower. The list has shrunk since earlier this year, with only 166 companies on the list as of June 1, 2012, compared to 176 at the end of March. By way of comparison, the list spiked to nearly 300 companies at the peak of the credit crisis. Another positive note is that most companies have left the list in recent months through upgrades rather than defaults or rating withdrawals, says Moody's. Still, the average tenure of companies on the list is 22 months, says Moody's, suggesting there is a core group of companies with weak business fundamentals, high leverage and elevated risk of default. "These companies have either tapped the capital markets to refinance looming debt maturities, or they lack near-term maturities that could push them into default," Mr. Keisman said. * Junk Defaults to Remain Benign, Moody's Predicts -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the decline in the stock market since early May and the turmoil in Europe aren't reflected in statistics predicting bankruptcy among junk-rated companies. The list of non-financial companies with junk ratings of B3 or below and with negative outlooks includes 166 names, compared with 176 three months ago and 174 a year ago, according to a June 25 report from Moody's Investors Service. There are 1,250 companies with junk ratings from Moody's. According to the report, the current default rate is 11.7% for companies with B3 negative or lower ratings. During the height of the recession, in 2009, the comparable default rate was 47% and 300 companies were on the list of lowest-rated junk companies. Moody's continues predicting that the default rate will remain benign for junk-rated companies. Currently at 3.1%, the junk default rate will rise to 4% in October before declining to 3% a year from now, Moody's predicts. The average junk default rate since 1992 is 4.6%, * Weil Gotshal Named No. 1 Bankruptcy Law Firm by Vault.com ----------------------------------------------------------- On June 27, 2012, Vault.com, the source of ratings, rankings and insight for law students and lawyers, released its Practice Area Rankings for 2013. This year, as has been the case for the previous three years, Weil, Gotshal & Manges was the firm rated strongest in bankruptcy law by associates. The firm once again beat out Kirkland & Ellis to claim its fourth straight title. According to survey respondents, Weil is "one of the big guys" and a "powerhouse," whose attorneys are "bankruptcy masters." Weil; Kirkland & Ellis; and Skadden Arps remained in the same positions as last year -- No. 1, No. 2, and No. 3, respectively -- but the rest of the Top 10 saw some significant movement this year. Among the changes, Jones Day jumped one spot to No. 4, pushing Akin Gump Strauss Hauer & Feld down one spot to No. 5. White & Case also moved up one notch to No. 9, while Latham & Watkins returned to the Top 10 -- after a two-year hiatus -- at No. 8 in a tie with Wachtell Lipton. Pachulski Stang Ziehl & Jones debuted on the list at No. 7, making it the only bankruptcy boutique voted onto the Top 10. In order to determine the Vault Practice Area Rankings, nearly 17,000 associates were asked to vote for up to three firms they consider strongest in their own practice area, but were not permitted to vote for their own firm. Vault's rankings indicate the top firms in each area, as well the total percentage of votes, offering law students and associates a tool to aid in their career search. The Top 10 Bankruptcy Law Firms Are: 1. Weil, Gotshal & Manges 2. Kirkland & Ellis 3. Skadden, Arps, Slate, Meagher & Flom 4. Jones Day 5. Akin Gump Strauss Hauer & Feld 6. Milbank, Tweed, Hadley & McCloy 7. Pachulski Stang Ziehl & Jones 8. Latham & Watkins / Wachtell Lipton (tie) 9. White & Case 10. Cleary Gottlieb Steen & Hamilton "Bankruptcy practices saw a big boom in business after the economy tanked in 2008," said Rachel Marx, law editor at Vault.com. "These firms stepped up to the plate and continue to be the go-to counsel for creditors and debtors going through reorganization or restructuring." The Vault Practice Area Rankings were released as part of a summer rollout of the Vault.com Top 100 Law Firm Rankings. On June 27, 2012, in addition to practice rankings, Vault.com has also released its Regional Law Firm Rankings, examining how law firms ranked in regions from New York to California and all areas in between. Next week, Vault will release its Quality of Life Rankings, determining which law firms go beyond prestige and provide the best overall working experience, in categories ranging from firm culture and work hours to compensation and training opportunities. In addition to rankings, Vault.com also features individual profiles of each law firm that provide readers with an insider's perspective, revealing information on compensation, culture, training, diversity, and other pros and cons of associate life, as well as "The Buzz," external perceptions of each firm. About Vault Vault.com is the source of employer and university rankings, ratings and reconnaissance for highly-credentialed, in-demand candidates. Vault.com is organized by profession, industry, company and school. Vault profiles, rankings and assessment tools deliver the insider perspective and career research candidates need to successfully match themselves to the best available jobs, employers and career opportunities. The Vault.com Web site features profiles on more than 4,500 employers, 4,000 universities and hundreds of industries and professions including the law, finance, accounting and consulting sectors. Founded in 1996, Vault.com is the only career resource of its kind and attracts more than 1000 employer and recruiter advertisers, more than 1200 school and institutional subscribers and millions of individual visitors and members. * Great American Group Hires Bryan Seeley as Appraisal Director --------------------------------------------------------------- Great American Group, LLC has hired Bryan Seeley as director of appraisal for the company's Machinery & Equipment (M&E) Appraisal Division. "With over 20 years of experience, much of which managing complex machinery & equipment appraisals, Bryan will be a valuable asset in continuing to make tactical and strategic improvements in our M&E Division," said Lester M. Friedman, CEO of Great American Group's Valuation & Appraisal Services Division. In his new role, Mr. Seeley will be responsible for managing Great American Group's M&E appraisers and providing oversight and accountability for quality control and client consultation. Seeley will also be a welcomed addition to Great American Group's senior management team, assisting with long-range strategic and organizational planning for the M&E Appraisal Division. Marc Musitano, COO of Great American Group's M&E Division added: "Bryan is a fantastic addition from all angles. His experience, leadership, industry knowledge and physical presence in New York, one of our most active sales regions, are sure to help us continue to advance our mission of providing the very highest quality of service and professionalism in the industry." Mr. Seeley has more than 20 years of experience in the liquidation and appraisal industry. Prior to joining Great American Group, he served as a senior manager for a nationally recognized appraisal firm. He began his appraisal career in 1989 and has served in several capacities, including senior appraiser, manager and senior manager. Mr. Seeley will be located in Great American Group's office in Long Island, New York. From heavy machinery to retail inventory, industrial or intellectual property, and real estate, Great American Group appraises billions of dollars in assets annually, including wholesale and industrial inventories, machinery and equipment, intellectual property, heavy machinery, construction equipment and real estate. The company conducted more than 2,000 appraisals last year representing assets of more than $190 billion. About Great American Group, LLC Great American Group, LLC -- http://www.greatamerican.com-- is a provider of asset disposition solutions and valuation and appraisal services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group has offices in Atlanta, Boston, Charlotte, North Carolina, Chicago, Dallas, London, Los Angeles, New York, and San Francisco. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Clarence Ungerank Bankr. E.D. Ark. Case No. 12-13581 Chapter 11 Petition filed June 19, 2012 In re Juan Garcia Bankr. E.D. Calif. Case No. 12-91720 Chapter 11 Petition filed June 19, 2012 In re Florina Sierra Bankr. N.D. Calif. Case No. 12-11689 Chapter 11 Petition filed June 19, 2012 In re Elzaida's Caring Hands, Inc. Bankr. M.D. Fla. Case No. 12-09428 Chapter 11 Petition filed June 19, 2012 See http://bankrupt.com/misc/flmb12-09428.pdf represented by: John E. Kassos, Esq. JOHN E. KASSOS, P.A. E-mail: jekpa@aol.com In re Greg Ferris Bankr. D. Idaho Case No. 12-40869 Chapter 11 Petition filed June 19, 2012 In re MCK Millennium Parking LLC Bankr. N.D. Ill. Case No. 12-24676 Chapter 11 Petition filed June 19, 2012 See http://bankrupt.com/misc/ilnb12-24676.pdf represented by: Jonathan D. Golding, Esq. THE GOLDING LAW OFFICES, P.C. E-mail: jgolding@goldinglaw.net In re Shirly Mirly LLC Bankr. E.D.N.Y. Case No. 12-44494 Chapter 11 Petition filed June 19, 2012 See http://bankrupt.com/misc/nyeb12-44494.pdf represented by: Alexander Karasik, Esq. KARASIK LAW GROUP, PC E-mail: alex@karasiklawyers.com In re John Friend Bankr. S.D.N.Y. Case No. 12-36555 Chapter 11 Petition filed June 19, 2012 In re Janet Stackhouse Bankr. N.D. Ohio Case No. 12-61728 Chapter 11 Petition filed June 19, 2012 In re Jerry Stackhouse Bankr. N.D. Ohio Case No. 12-61728 Chapter 11 Petition filed June 19, 2012 In re Mark Oliphant Bankr. M.D. Tenn. Case No. 12-05658 Chapter 11 Petition filed June 19, 2012 In re James Payer Bankr. M.D. Tenn. Case No. 12-05656 Chapter 11 Petition filed June 19, 2012 In re Gary Bodiford Bankr. W.D. Ark. Case No. 12-72415 Chapter 11 Petition filed June 20, 2012 In re Edwin Moore Bankr. C.D. Calif. Case No. 12-15669 Chapter 11 Petition filed June 20, 2012 In re Hortensia Carmona Bankr. S.D. Calif. Case No. 12-08679 Chapter 11 Petition filed June 20, 2012 In re Laura Bianchi Bankr. S.D. Calif. Case No. 12-08674 Chapter 11 Petition filed June 20, 2012 In re Cardiac Diagnostics, Inc. Bankr. N.D. Ill. Case No. 12-24849 Chapter 11 Petition filed June 20, 2012 See http://bankrupt.com/misc/ilnb12-24849.pdf represented by: Jonathan D. Golding, Esq. The Golding Law Offices, P.C. E-mail: jgolding@goldinglaw.net In re Randy Wientjes Bankr. S.D. Ill. Case No. 12-40779 Chapter 11 Petition filed June 20, 2012 In re Wiltfong Real Estate Corp. Bankr. N.D. Ind. Case No. 12-32227 Chapter 11 Petition filed June 20, 2012 See http://bankrupt.com/misc/innb12-32227.pdf represented by: Adam L. Hand, Esq. Beckman Lawson, LLP E-mail: alh@beckmanlawson.com In re Dallias Wilcoxon Bankr. E.D. Mich. Case No. 12-54943 Chapter 11 Petition filed June 20, 2012 In re Bernards of Marlton, LLC Bankr. D.N.J. Case No. 12-25751 Chapter 11 Petition filed June 20, 2012 See http://bankrupt.com/misc/njb12-25751p.pdf See http://bankrupt.com/misc/njb12-25751c.pdf represented by: Albert A. Ciardi, III, Esq. Jennifer E. Cranston, Esq. Ciardi Ciardi & Astin, P.C. E-mail: aciardi@ciardilaw.com jcranston@ciardilaw.com In re Midtown Tavern, LLC Bankr. D.N.J. Case No. 12-25736 Chapter 11 Petition filed June 20, 2012 See http://bankrupt.com/misc/njb12-25736.pdf represented by: Timothy P. Neumann, Esq. Broege, Neumann, Fischer & Shaver E-mail: tneumann@bnfsbankruptcy.com In re Caribbean Tan Inc. Bankr. S.D. Ohio Case No. 12-55309 Chapter 11 Petition filed June 20, 2012 See http://bankrupt.com/misc/ohsb12-55309.pdf represented by: Robert E. Bardwell, Esq. E-mail: rbardwell@ohiobankruptlaw.com In re Anita Zelechiwsky Bankr. E.D. Pa. Case No. 12-15941 Chapter 11 Petition filed June 20, 2012 In re Stephen Christensen Bankr. D. Utah Case No. 12-28010 Chapter 11 Petition filed June 20, 2012 In re Arthur Hoffman Bankr. W.D. Wash. Case No. 12-16421 Chapter 11 Petition filed June 20, 2012 In re Mir Sekandari Bankr. D. Ariz. Case No. 12-13899 Chapter 11 Petition filed June 21, 2012 In re Michael Rulifson Bankr. C.D. Calif. Case No. 12-24905 Chapter 11 Petition filed June 21, 2012 In re Craig Cranston Bankr. M.D. Fla. Case No. 12-09571 Chapter 11 Petition filed June 21, 2012 In re James Lovely Bankr. D. Idaho Case No. 12-40883 Chapter 11 Petition filed June 21, 2012 In re Top Shelf Restaurant, LLC Bankr. D. Mass. Case No. 12-15344 Chapter 11 Petition filed June 21, 2012 See http://bankrupt.com/misc/mab12-15344.pdf represented by: John O. Desmond, Esq. E-mail: john.desmond@jdesmond.com In re Como III Apartments, L.L.C. Bankr. N.D. Miss. Case No. 12-12524 Chapter 11 Petition filed June 21, 2012 See http://bankrupt.com/misc/msnb12-12524p.pdf http://bankrupt.com/misc/msnb12-12524c.pdf represented by: Craig M. Geno, Esq. CRAIG M. GENO, PLLC E-mail: cmgeno@cmgenolaw.com In re Anthony Clark Bankr. D. Nev. Case No. 12-17359 Chapter 11 Petition filed June 21, 2012 In re Paul Maguire Bankr. D. Nev. Case No. 12-17364 Chapter 11 Petition filed June 21, 2012 In re Bruno Malorni Bankr. D. Nev. Case No. 12-17406 Chapter 11 Petition filed June 21, 2012 In re Family Home Builders of New Hampshire, LLC Bankr. D. N.H. Case No. 12-12005 Chapter 11 Petition filed June 21, 2012 See http://bankrupt.com/misc/nhb12-12005.pdf represented by: Robert L. O'Brien, Esq. O'BRIEN LAW E-mail: robjd@mail2firm.com In re Fortuna Corporation, New Mexico Domestic Profit dba Molly Maid of Sandia and Rio Rancho Molly Maid of Rio Rancho and West Side Fish Window Cleaning/656 All 4 One Bankr. D. N.M. Case No. 12-12375 Chapter 11 Petition filed June 21, 2012 See http://bankrupt.com/misc/nmb12-12375p.pdf http://bankrupt.com/misc/nmb12-12375c.pdf represented by: William F. Davis, Esq. WILLIAM F. DAVIS & ASSOCIATES, P.C. E-mail: daviswf@nmbankruptcy.com In re Anthony Farino Bankr. E.D.N.Y. Case No. 12-73869 Chapter 11 Petition filed June 21, 2012 In re Ira Podlofsky Bankr. E.D.N.Y. Case No. 12-73871 Chapter 11 Petition filed June 21, 2012 In re Transylvania Realty LLC Bankr. E.D.N.Y. Case No. 12-44537 Chapter 11 Petition filed June 21, 2012 Filed pro se In re Donald Davis Bankr. N.D. Tex. Case No. 12-33982 Chapter 11 Petition filed June 21, 2012 In re Yee Hwa, Inc. dba Bistro, Bistro Bankr. E.D. Va. Case No. 12-13906 Chapter 11 Petition filed June 21, 2012 See http://bankrupt.com/misc/vaeb12-13906.pdf represented by: Donald Park, Esq. SHIN LAW GROUP, LLC E-mail: dpark13317@msn.com In re Gurpreet Kaur Bankr. W.D. Wash. Case No. 12-16490 Chapter 11 Petition filed June 21, 2012 In re Daybreak IV Fishing LLC dba Towne Square Bankr. E.D. Wis. Case No. 12-29456 Chapter 11 Petition filed June 21, 2012 See http://bankrupt.com/misc/wieb12-29456.pdf represented by: Richard A. Check, Esq. BANKRUPTCY LAW OFFICE OF RICHARD A. CHECK E-mail: rickchecklaw@aol.com ********* 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 ***