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/raid1/www/Hosts/bankrupt/TCR_Public/120704.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 4, 2012, Vol. 16, No. 184 Headlines 1555 WABASH: In Talks for Plan Funding, Wants Exclusivity Extended 4TH STREET EAST: Ocean II Wins Relief From Automatic Stay AK STEEL: S&P Cuts Corporate Credit Rating to 'B+' on Weak Results ALPHA NATURAL: S&P Alters Outlook to Negative, Keeps 'BB-' CCR ALTEGRITY INC: S&P Lowers Corporate Credit Rating to 'B-' AMERICAN AIRLINES: Seeks Exclusivity Extension Until Dec. 27 AMERICAN AIRLINES: Wins Approval of New TWU CBAs AMERICAN AIRLINES: Asks Court for Permission to Buy Boeing Planes AMERICAN AIRLINES: Proposes to Buy 10 Leased Aircraft From HNB ARLIN GEOPHYSICAL: U.S. Trustee Dismissal or Ch. 7 Conversion BCM ENERGY: Posts $369,000 Net Loss in Q1 2011 BEHRINGER HARVARD: Vernon Healy Questions Money Move BEHRINGER HARVARD: Wants to Employ Munsch Hardt as Attorneys BIONEUTRAL GROUP: Posts $520,900 Net Loss in April 30 Quarter BROOKWATER VENTURES: Brazilian Unit Receives Notice of Default CASTLEVIEW LLC: Files for Chapter 11 With Plan CAVIATA ATTACHED: 9th Cir. BAP Affirms Chapter 22 Case Dismissal CBS I LLC: Wants to Continue Hiring Dmitri Dalacas as Attorney CBS I LLC: Wants to Employ Marquis Aurbach as Attorneys CEMEX SAB: Presents Refinancing Proposal to Lenders CF INDUSTRIES: S&P Raises Corporate Credit Rating From 'BB+' CHINA HYDROELECTRIC: Reports $785,000 Net Income in Q1 2012 CHINA TEL GROUP: To Issue 49.9 Million Shares to Contractors COMARCO INC: To Issue 1.8MM Shares Under 2011 Incentive Plan COMBIMATRIX CORP: Share Bid Price Below Nasdaq Minimum COMSTOCK RESOURCES: Moody's Issues Summary Credit Opinion CONCHO RESOURCES: Moody's Issues Summary Credit Opinion CONE CONSTRUCTORS: Officer Fails in Bid to Reduce 15-Yr Sentence CONQUEST PETROLEUM: Settles McGowan Lawsuit for $3 Million CONSTELLATION BRANDS: S&P Keeps 'BB+' CCR Over Imports Acquisition CORMEDIX INC: Has Until Aug. 22 to Regain NYSE Amex Compliance CREEKSIDE SENIOR: 6th BAP Affirms Valuation of LIHTC Properties DANNY'S DIGGIN': Iowa Appeals Court Affirms Foreclosure Ruling DOUG LARSEN: Minute Entry Does Not Constitute Proper Order DYNEGY HOLDINGS: Disclosure Statement Being Approved EASTMAN KODAK: Wins Approval to Auction Digital Imaging Patents EASTMAN KODAK: D&Os Win OK for XL to Pay Defense Costs EASTMAN KODAK: Court Approves Carestream Supply Agreement EASTMAN KODAK: Seeks to Reject Agreement With Schneider EASTMAN KODAK: States Arguments Against Apple's Patent Claims EDISON MISSION: S&P Downgrades CCR to 'CCC' on Refinancing Risk ELITE PHARMACEUTICALS: Incurs $15-Mil. Net Loss in Fiscal 2012 ELO TOUCH: S&P Assigns 'B' Corporate Credit Rating EVERGRANDE REAL: S&P Alters Outlook to Negative; Affirms 'BB' CCR FERTITTA MORTON: S&P Withdraws 'B' CCR Over Landry Consolidation FILENE'S BASEMENT: Syms Reaches Deal With Committees FIRST MIDWEST: Moody's Lowers Preferred Stock Rating to 'Ba1' FIRST WIND: S&P Removes 'B-' Corp. Credit Rating From CreditWatch FRANK LEVESQUE: BAP Affirms Order Denying Chapter 11 Conversion FREMONT GENERAL: Signature Asks Shareholders to Avoid McIntyre GAMETECH INT'L: Files for Chapter 11 as Rival Buys Debt GRANITE SHOALS: S&P Cuts Rating on GO Bonds to 'BB+' HAWKER BEECHCRAFT: Files Plan by June 30 Deadline GAMETECH INT'L: Files for Chapter 11 as Rival Buys Debt GAYLE JENKINS: La. Appeals Court Affirms $1.5MM Arbitration Award GREAT CHINA MANIA: Posts $20,100 Net Loss in Q1 2012 HERON LAKE: Posts $1.36 Million Net Loss in April 30 Quarter HOLLY SEAY: Proposal for Wells Fargo Claim Required by Friday HOLLYFRONTIER CORP: Moody's Issues Summary Credit Opinion HOMER CITY: S&P Affirms 'CC' Issue Rating on Senior Secured Notes HONDO MINERALS: Posts $556,300 Net Loss in April 30 Quarter INTEGRATED BIOPHARMA: Closes $11.7-Mil. Credit Facility with PNC INTEGRATED BIOPHARMA: Refinances Defaulted Sub. Conv. Note JEWISH COMMUNITY: Taps Atlantic Insurance as Insurance Adjuster JOHN D. OIL: Posts $3 Million Net Loss in 2011 K-V PHARMACEUTICAL: Ave. Closing Price Below NYSE Minimum LEHMAN BROTHERS: Completes Sale of Aurora Bank Assets LIBERTY STATE: Combs Family Trust's Action Remanded to State Court LIQUIDMETAL TECHNOLOGIES: VPC Acquires 10 Million Common Shares METROGAS SA: Posts ARS18 Million Net Loss in Q1 2012 NANA DEVELOPMENT: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative NATIONAL BANK OF GREECE: Auditors Raise Going Concern Doubt NEBRASKA BOOK: Completes Restructuring, Emerges from Chapter 11 NEOMEDIA TECHNOLOGIES: Murray Ceases to Hold 5% Equity Stake NEWPAGE CORP: Bondholders Talking With Verso on Possible Merger NORTH CAROLINA UNIV.: S&P Lowers Rating on Obligation Bonds to BB NORTHWESTERN STONE: Seeks Court OK to Use MSB Cash Collateral NYTEX ENERGY: Proposes Amendments to Preferred Stock Terms OLSEN AGRICULTURAL: Settles With Members and Rabo Under Plan OLSEN AGRICULTURAL: Can Access $3 Million Rabo Exit Facility PEMCO WORLD: Creditors' Settlement With Sun Capital Approved POLYPORE INT'L: S&P Raises Rating on $365MM Senior Notes to 'B+' PRIMARY ENERGY: S&P Withdraws 'BB' Corporate Credit Rating PRIMEDIA INC: S&P Affirms 'B' CCR Over Rent.com Acquisition QUIGLEY CO: Sets Aug. 15 Disclosure Hearing for New Plan REPOSITORY TECH: 7th Cir. Turns Down Shareholder's Appeal RESIDENTIAL CAPITAL: Fortress, Berkshire-Led Auctions Okayed RESIDENTIAL CAPITAL: Retired Judge Gonzalez Named as Examiner RESIDENTIAL CAPITAL: Wants Until July 20 to File Schedules RESIDENTIAL CAPITAL: Allowed to Continue Loan Servicing Activities RG STEEL: Proposes Bonuses Linked to Sale Before Dec. 31 ROOMSTORE INC: Going Out of Business Sale at 20 Locations SAND TECHNOLOGY: Delays Filing of Interim Financial Report SANKO STEAMSHIP: Seeks Creditor Protection in Tokyo & New York SANTA YSABEL RESORT: Files for Bankruptcy in San Diego SILVER SPRING: S&P Corrects Rating on 2004 Bonds to 'NR' STEREOTAXIS INC: Fails to Comply with Nasdaq's Market Value Rule STOCKTON, CA: Judge Christopher Klein to Oversee Case SUPERTEL HOSPITALITY: Bid Price for 30 Days Below Nasdaq Minimum TERRA-GEN FINANCE: S&P Places 'BB-' CCR on Watch Negative THORNBURG MORTGAGE: Chapter 11 Trustee, Banks in Settlement Talks TRAINOR GLASS: Court Approves Black as North Carolina Counsel TRIPLE POINT: S&P Rates $185MM Sr. Secured Credit Facility 'B+' VALEANT PHARMACEUTICALS: S&P Affirms 'BB' Corporate Credit Rating W.R. GRACE: To Release Q2 Financial Results July 25 W.R. GRACE: Prepares to Emerge From Bankruptcy Protection W.R. GRACE: Dist. Court Rejects Garlock's Bid to Stay Plan Order W.R. GRACE: Opposes Anderson Plea for Relief From Plan Order * Chadbourne & Parke Expands Project Finance Practice * Mintz Levin's Jeffry Davis Among San Diego Super Lawyers * Upcoming Meetings, Conferences and Seminars ********* 1555 WABASH: In Talks for Plan Funding, Wants Exclusivity Extended ------------------------------------------------------------------ 1555 Wabash LLC, asks the Bankruptcy Court to extend the exclusive periods set forth in Sections 1121(b) and 1121(c) of the Bankruptcy Code through and including September 28, 2012, and November 28, 2012, respectively. The Debtor has been diligently pursuing the administration of this Chapter 11 case with a view toward formulating a prompt exit strategy. However, given the general overall economic concerns especially facing the real estate markets, it is impossible for the Debtor to propose a Plan and implement a Chapter 11 exit strategy within the existing Exclusive Periods. Furthermore, the Debtor has had discussions with third parties relating to a transaction that would involve the funding of a Plan. These third parties have conducted due diligence regarding the Debtor, the Property and the related financial issues and are in the process of formulating offers that could be utilized in the implementation of the exit strategy from the Chapter 11 case. The Debtor requires further time for discussions with third parties to be completed. The Debtor has cooperated with the various professionals retained by the Senior Lender in their inspections and analyses of the Property. This cooperation has taken substantial time and effort by the Debtor since the entry of the prior Order extending the Exclusive Periods. Importantly, the Senior Lender's agent has just begun to conduct and manage settlement negotiations among the Debtor, guarantors and Senior Lender. In fact, a meeting at the California offices of the Senior Lender is in the process of being scheduled. If these settlement negotiations are successful, all issues in this Chapter 11 case and with respect to the Property can be resolved. Extending the Exclusive Periods will also facilitate these settlement efforts. About 1555 Wabash 1555 Wabash LLC owns and operates a 14-story mixed use building located at 1555 South Wabash, in Chicago, Illinois. The property is comprised of 176 residential units plus 11,000 square feet of commercial space located on the first floor of the building. The property was originally developed as condominium units to be sold at designated sale prices to qualified buyers. Construction was generally completed as of the middle of 2009. Only 36 of the 100 sale contracts closed. As of the Petition Date, 1555 Wabash leased 115 of the remaining 140 residential apartment units -- roughly 82% -- to qualified tenants, while the commercial space is presently vacant. 1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the property. Judge Jacqueline P. Cox oversees the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's counsel. The Debtor scheduled $90,055 in personal property and said the current value if its condo building is unknown. The Debtor disclosed $51.6 million in liabilities. The petition was signed by Theodore Mazola, president of New West Realty Development Corp, sole member and manager of the Debtor. 4TH STREET EAST: Ocean II Wins Relief From Automatic Stay --------------------------------------------------------- Bankruptcy Judge Nail W. Bason granted Ocean II LLC in rem relief from the automatic stay in the Chapter 11 case of 4th Street East Investors, Inc., saying Ocean II has presented sufficient evidence to establish that a purported transfer of interest in a disputed property, in violation of loan documents, was part of a "scheme" to delay or hinder Ocean II's remedies against the property by implicating the automatic stay of 11 U.S.C. Sec. 362(a) in the Debtor's bankruptcy case. A copy of the Court's June 29, 2012 Memorandum Decision is available at http://is.gd/d8kBllfrom Leagle.com. 4th Street East Investors, Inc., owns and operates a storage facility consisting of 5 buildings with 240 rentable storage units, an office, and a residence for an on-site manager. 4th Street filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-17951) on March 5, 2012, disclosing $1.02 million in assets and $1.47 million in liabilities. Judge Neil W. Bason oversees the case. Craig G. Margulies, Esq., at The Margulies Law Firm, APLC, serves as the Debtor's counsel. The petition was signed by Kim Holmes, president. AK STEEL: S&P Cuts Corporate Credit Rating to 'B+' on Weak Results ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on AK Steel Holding Corp. to 'B+' from 'BB-'. The rating outlook is stable. "The downgrade reflects our assessment that AK Steel will continue to have weak financial metrics stemming from continuing difficult competitive conditions, including uneven demand, excess capacity, declining prices, and relatively high raw material costs," said Standard & Poor's credit analyst Marie Shmaruk. "We are also concerned that weaker markets globally, mainly a result of eurozone uncertainties and slowing growth in China, will limit the growth in the U.S. economy and weigh on pricing in the steel markets. Given the relatively fixed cost nature of the company's business, we expect that lower prices will keep margins low and result in weak operating performance," S&P said. "We expect 2012 EBITDA -- although better than last year -- to be below $300 million and debt to EBITDA to be above 8x. We also expect funds from operations (FFO) to total debt to be below 10%. This is well below our previous expectations of between $350 million and $400 million of EBITDA and debt to EBITDA of about 6x (adjusted for post retirement benefit obligations, operating leases, and asset retirement obligations). Moreover, our expectations for 2013 are now less optimistic, with demand remaining sluggish, although we still expect improvement over 2012. Based on our expectations, which include moderating raw material costs and continuing slow economic growth in the U.S. that results in modest pricing and volume gains, debt to EBITDA should decline but remain above 6x in 2013, but approaching levels that, in our view, are more appropriate for a 'B+' rating. For the rating, we expect total adjusted debt to EBITDA of about 5x and FFO to total adjusted debt of 15% to 20%," S&P said. The corporate credit rating and outlook reflect the combination of the company's "fair" business risk profile and "aggressive" financial risk profile. The ratings also reflect its good market positions in a number of value-added steel products and its "strong" liquidity. Its relatively small size, high fixed costs as an integrated steelmaker, lack of backward integration, limited diversity with high exposure to the automotive market, significant legacy costs, and weak credit metrics somewhat offset the strengths. "Although AK Steel has become somewhat more cost-competitive compared with its peers and has taken steps to reduce its other postretirement employee benefit (OPEB) liabilities, we believe it remains disadvantaged because of its lack of backward integration. The company is exposed to higher procurement costs because it doesn't own or control any iron ore or metallurgical coal (met coal) assets. High iron ore and met coal prices, which have increased significantly since 2009, have been a drag on operating performance during the past few years. The company has recently made two acquisitions to address a portion of its raw material needs, but we do not expect them to affect financial performance for several years," S&P said. AK Steel manufactures flat-rolled carbon, and stainless and electrical steel, which compete in cyclical and capital-intensive markets. The company has a somewhat higher value-added product mix than many of its peers, with less than 20% of shipments coming from commodity steel products. "Still, it has limited diversity. Sales to the automotive industry account for more than 35%. The outlook is stable, reflecting our expectation that the company's strong liquidity will support its operations through this weak period. The company's results will likely slowly improve along with the economy, in our view, as pricing improves modestly and raw material costs moderate. Still, we expect credit measures to remain elevated during the next year or so, with adjusted debt to EBITDA between 6x and 7x by the end of 2013 and FFO to debt of about 10%," S&P said. "We could lower the corporate credit rating further if industry conditions and AK Steel's financial performance during the next several quarters are weaker than we expect and liquidity deteriorates. We would consider a downgrade if EBITDA continues to be below $300 million, debt to EBITDA remains above 6x, and total liquidity (cash and availability on its revolver) falls below $300 million," S&P said. "We could raise the rating if markets and pricing markedly improve and we believe the company will be able to strengthen and maintain its adjusted leverage at or below 5x. This could happen if the U.S. economy grows faster than we expect, leading to a resurgence in construction that raises steel prices and causes the company's EBITDA to exceed $400 million. We may also consider raising the rating if the company is able to realize sustainably lower costs and higher EBITDA through its investment in iron ore and met coal," S&P said. ALPHA NATURAL: S&P Alters Outlook to Negative, Keeps 'BB-' CCR -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'BB-' corporate credit rating, on Alpha Natural Resources Inc. "At the same time, we revised the outlook to negative from stable," S&P said. "The rating affirmation and negative rating outlook reflect our expectations that the domestic steam coal market will remain challenged with the possibility of additional production cuts, while 2013 metallurgical (met) coal prices will likely improve as the global economy improves, benefitting from strong global demand and limited supply," said Standard & Poor's credit analyst Maurice Austin. "Our corporate credit rating on Alpha reflects what we consider to be the company's "fair" business risk and its "aggressive" financial risk," S&P said. Risks include meaningful operations in Central Appalachia (CAPP), where coal producers face significant regulatory and environmental constraints, depleting coal seams, rising costs, and high debt. Strengths include the potential for higher met coal prices next year, the company's significant reserve base, and its strong liquidity. "Our baseline scenario assumes that Alpha's 2012 production is about 110 million tons, down from our previous expectations of about 118 million tons. Consequently, our expectation for cash costs increases to about $50 per ton from our previous assumptions of about $47 per ton, resulting in EBITDA of below $1 billion. We now estimate debt to EBITDA of about 5x and funds from operations (FFO) to debt of about 17%," S&P said. "We expect 2013 production to decline further to about 90 million tons because of the continuing challenges facing the domestic steam coal market. Although we believe met coal prices will improve, we expect 2013 EBITDA to decline to $750 million to $850 million. Given these assumptions, we expect Alpha's leverage to weaken in 2013 to about 5.5x and FFO to debt of about 15%, levels we believe are still appropriate for our aggressive financial risk profile," S&P said. "It is our opinion that Alpha's large and diverse coal reserves, its position as a leading provider of met coal, and its strong export position will enable the company to benefit from an eventual recovery in coal demand," S&P said. Alpha is America's third largest coal producer as measured by production. It is the nation's largest supplier of met coal, which is used in steel-making, and is a major supplier of thermal coal to electric utilities and manufacturing industries. "The negative rating outlook reflects our view that 2013 operating performance could deteriorate more than we expect if the company lowers its production guidance further because of continued weak coal markets, resulting in weaker credit metrics than we currently expect," S&P said. "We could lower our rating if coal demand deteriorates further, if a disruption were to occur at one of its key coal operations, or if costs increase meaningfully, resulting in further production curtailments and weaker credit measures. We would consider a lower rating if debt to EBITDA rose to more than 6x and FFO to total debt fell below 15%, and if these measures were likely to remain for an extended period. We would also consider a downgrade if liquidity, in our view, becomes "adequate," which could occur if Alpha draws more than $600 million against its revolver. Although a positive rating action seems less likely in the near term given the operating environment, one could occur if domestic coal demand improves and exports increase such that leverage strengthened to below 5x and FFO to debt above 15%," S&P said. ALTEGRITY INC: S&P Lowers Corporate Credit Rating to 'B-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Falls Church, Va.-based Altegrity Inc. to 'B-' from 'B'. The outlook is stable. "At the same time, we lowered our issue- level ratings on the company's senior secured credit facilities to 'B' from 'B+'. The '2' recovery ratings, which indicate our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default or bankruptcy, remain unchanged," S&P said. "We also lowered the issue-level ratings on the company's $210 million senior unsecured notes due 2015, $290 million senior unsecured notes due 2015, and $150 million senior subordinated notes due 2016 to 'CCC' from 'CCC+'. The '6' recovery ratings, which indicate our expectation for negligible (0% to 10%) recovery for creditors in the event of a payment default or bankruptcy, remain unchanged," S&P said. "The downgrade is due to operating performance falling below our expectations, largely owing to weakness at its USIS segment amid reduced government spending," said Standard & Poor's credit analyst Brian Milligan. "Given the government's significant budget deficit, we believe Altegrity's business risk profile will remain "weak" and its financial risk profile will remain "highly leveraged" for the foreseeable future. We also believe the company can maintain an "adequate" liquidity profile. Our business risk assessment reflects our analysis that the company is highly dependent on U.S. government spending, client engagements with limited visibility, and employee turnover trends. The company operates through four business segments: USIS, Kroll Advisory, Screening, and Kroll Ontrack," S&P said. "Our financial risk assessment incorporates our expectation for financial policies to remain very aggressive and our forecast for key financial ratios to remain indicative of a "highly leveraged" financial risk profile. Through the end of fiscal 2013, we forecast the ratio of adjusted total debt to EBITDA will remain high at between 7x and 8x, funds from operations (FFO) to total debt will remain low at between 5% and 7%, and EBITDA interest coverage will remain thin at between 1.4x and 1.6x. Financial ratios indicative of a "highly leveraged" financial risk profile include adjusted total debt to EBITDA above 5x and FFO to total debt below 12%. We believe Altegrity's USIS business segment will remain under pressure for the foreseeable future. USIS provides security-related background investigative services, primarily with the Office of Personnel Management (OPM). The multiyear contract with the OPM was renewed last year at less favorable terms than the prior contract," S&P said. "It is normal for contracts to renew at less favorable terms initially, but the contract value over the total period typically improves," said Mr. Milligan. "The stable outlook reflects our forecast for weak growth in its USIS business because of reduced government spending, for financial ratios to remain well within levels indicative of a highly leveraged financial risk profile, and for liquidity to remain adequate," S&P said. AMERICAN AIRLINES: Seeks Exclusivity Extension Until Dec. 27 ------------------------------------------------------------ AMR Corporation and the Official Committee of Unsecured Creditors (UCC) have agreed to jointly request that the U.S. Bankruptcy Court for the Southern District of New York extend exclusivity for AMR to file its Plan of Reorganization to Dec. 27, 2012, according to a statement by AMR. American Airlines parent AMR Corp. will seek a three-month extension to its exclusive right to file bankruptcy reorganization plan as a pilots union vote pushes back the timetable for winning labor savings, Jeffrey McCracken and Mary Schlangenstein of Bloomberg News reported on June 30. AMR's exclusive plan filing period is currently scheduled to expire on Sept. 28. Extension of the period to Dec. 27 would delay any formal merger proposal to creditors from US Airways Group Inc., which is weighing a takeover, Bloomberg pointed out. Further extension of the exclusive period may also mean missing Chief Executive Officer Tom Horton's goal of a 2012 bankruptcy exit as he works to keep Fort Worth, Texas-based American independent while the airline restructures, Bloomberg further pointed out. "More time does not mean we will slow down," Missy Cousino, an airline spokeswoman, said in a separate e-mailed statement, without giving details of AMR's plans, Bloomberg quoted. "We have one chance to get this restructuring right, so it's important we approach this process in a methodical and disciplined manner." According to Bloomberg, extension of AMR's exclusive period makes sense because pilot union leaders agreed to let members vote on $315 million in givebacks and balloting of those votes won't end until Aug. 8. Bankruptcy judge Sean Lane has delayed until Aug. 15, after the pilots vote, a ruling on whether American can reject the contracts of flight attendants, mechanics and stock clerks if agreements aren't reached before that deadline. 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 Approval of New TWU CBAs ------------------------------------------------ The Bankruptcy Court approved the new collective bargaining agreements entered by AMR Corp. and its affiliates with the Transport Workers Union of America, AFL-CIO, on behalf of five employee groups: (1) Flight Dispatchers and Dispatchers' Assistants; (2) Fleet Service Employees and Ground Service Employees; (3) Ground School and Pilot Simulator Instructors; (4) Maintenance Control Technician Employees; and (5) Flight Simulator Technicians, Associate Simulator Technicians, Technical Coordinators. A full-text copy of the TWU CBA is available for free at: http://bankrupt.com/misc/amr_TWUCBA.pdf As reported in AMERICAN AIRLINES BANKRUPTCY NEWS, Issue No. 18, Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, says the new CBAs were reached after extensive arm's-length negotiations. To ensure that the employees covered by the new CBAs are treated fairly and equitably with all other employee groups -- both union and non-union -- the parties have agreed that the new CBAs will take effect only if American secures the ability to modify the labor contracts covering the other unionized employees that are reasonably projected to produce the targets for labor cost savings specified in this motion, either by consensual agreements with the unions or by rejection of the CBAs in the Section 1113 process, he states. By means of so-called "me too" provisions included in a side letter to each of the new CBAs, American and TWU have agreed that if American and the non-TWU-represented work groups reach consensual agreements which provide labor cost savings less than the targeted savings, American and TWU will agree to proportionate reductions in the targeted labor cost savings in the new CBAs, Mr. Miller notes. In February, American presented its Business Plan that provided for labor cost reductions from all of American's unionized and non-union employees, including management and support staff. American then presented proposals pursuant to Section 1113 to the TWU for each of the seven work groups that met the Company's labor cost reduction goals. The cost reductions sought from each TWU-represented work group are as follows: TWU Contract Group Annual Cost Reductions Needed ------------------ ----------------------------- M&R $212 million Fleet Service $152.4 million MCT $3.4 million Instructors $2.154 million Stock Clerks $20 million Sim Techs $1.7 million Dispatch $3.239 million TWU and American thereafter engaged in extensive bargaining regarding these Section 1113 Proposals. In March, American filed a motion to reject its CBAs with its three unions: the Allied Pilots Association, Association of Professional Flight Attendants, and TWU. American and TWU then continued to negotiate as required by Section 1113(b)(2), and continued to negotiate even after the hearing on the Sec. 1113 Motion began on April 23, 2012. On May 10, 2012, TWU sent out for a vote on ratification settlement proposals from American in the form of new CBAs for each work group. On May 15, 2012, TWU reported that five of the seven employee groups had ratified the proposed CBAs: Fleet Service, Dispatch, MCTs, Instructors and Sim Techs. The current status of the CBAs with all seven TWU groups is set forth: TWU Contract Effective date of Amendable date Ratified Group Current CBA of Current CBA Agreement ------------ ----------------- -------------- --------- M&R April 15, 2003 April 30, 2008 No Fleet Service April 15, 2003 April 30, 2008 Yes MCT May 5, 2010 May 5, 2013 Yes Instructors October 1, 2011 April 1, 2015 Yes Stock Clerks April 15, 2003 April 30, 2008 No Sim Techs April 15, 2003 April 30, 2008 Yes Dispatch April 15, 2003 April 30, 2008 Yes Ratified CBAs "The five ratified CBAs contain modifications that meet the proposed labor cost reductions that are necessary for the success of American's restructuring," Mr. Miller says. Each CBA is summarized as follows: (A) The Dispatch CBA provides for work rule changes, including: (1) elimination of restrictions on regional flying; (2) elimination of system and station job protections that currently limit the Company's ability to lay off protected employees; (3) reduction of annual vacation accrual and elimination of paid personal vacation days; (4) modification of the work schedule; and (5) elimination of the special moving allowance given to employees who are laid off. It provides for structural pay increases and continues the current performance-base pay program. (B) The Sim Tech CBA provides for work rule changes, including: (1) elimination of restrictions on regional flying; (2) elimination of system and station job protections currently limit the Company's ability to lay off protected employees; (3) elimination of paid holidays in exchange for five paid days off to be approved at management discretion; (4) elimination of paid personal vacation days; and (5) changes to the per diem allowance. It also provides for structural pay increases. (C) The Instructors CBA provides for work rule changes, including: (1) elimination of system and station job protections that currently limit the Company's ability to lay off protected employees; (2) modification of procedures for filling flight simulator seats; (3) reduction of overtime pay rate; (4) modifications to monthly work schedule; (5) reduction of paid holidays; and (6) elimination of paid personal vacation days. It also provides for structural pay increases. (D) The Fleet Service CBA provides for work rule changes, including: (1) outsourcing dayline cabin cleaning, cargo handling at most stations, mail handling, interline cargo, fueling, bus driving, and American Eagle bag transfer work and reassigning some work currently done by Fleet Service Clerks in Tulsa to TWU-represented M&R employees; (2) elimination of system and station job protections that currently limit the Company's ability to lay off protected employees; (3) elimination of restrictions on regional flying; (4) reduction of longevity pay premium; (5) modification of station staffing departure threshold governing which stations must be staffed with TWU-represented employees; (6) modification of holiday pay procedures so that employee is paid for a holiday only when working on that holiday; (7) reduction in maximum annual vacation accrual and elimination of paid personal vacation days; and (8) eliminating the special moving allowance given to laid off employees. It also provides for an initial reduction in base pay scales, followed by structural pay increases to those current levels. (E) The MCT CBA provides for work rule changes, including: (1) elimination of restrictions on regional flying; (2) elimination of system and station job protections that currently limit the Company's ability to lay off protected employees; (3) giving the Company the ability to relocate work groups; (4) reduction of the overtime and holiday pay premiums; (5) reduction of maximum annual vacation accrual; (6) reduction of the number of years that furloughed employees retain recall rights; and elimination of paid holidays; and (7) elimination of the special moving allowance given to laid off employees. In addition to the work rule changes specific to each CBA, these CBAs contain common provisions that are identical across all union-represented groups. These include a freeze of the current defined benefit pension plan and implementation of a 401(k) plan; universal changes to active and retiree medical benefits; implementation of a profit-sharing plan; and a six-year duration from the effective date. Clean and blacklined copies of the new CBAs are available for free at http://bankrupt.com/misc/AmAir_0614TWUCBAs.pdf 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: Asks Court for Permission to Buy Boeing Planes ----------------------------------------------------------------- AMR Corp. and its affiliates seek the Bankruptcy Court's authority to exercise certain option rights to purchase additional aircraft from The Boeing Company in accordance with certain proposed procedures. From the Petition Date to June 2012, the Debtors have arrangements to purchase 32 aircraft from time to time from Boeing pursuant to certain prepetition purchase agreements. In addition to the 32 Boeing aircraft, the Debtors, pursuant to a 1997 purchase agreement, may exercise the right to purchase additional Model 777 aircraft from Boeing at various times, depending on their business needs. Once a Purchase Right is exercised, the Debtors will make periodic payments prior to delivery, and a final cash payment upon delivery. The Debtors said they are considering whether or not to exercise their Purchase Rights with respect to the manufacturing of some or all of approximately 14 additional Boeing Aircraft through year end 2013. The Debtors propose to notify the Official Committee of Unsecured Creditors of any intent to exercise their Purchase Rights and give the Committee a period to review or object to the proposed Purchase Rights. 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: Proposes to Buy 10 Leased Aircraft From HNB -------------------------------------------------------------- AMR Corp. and its affiliates seek the Bankruptcy Court's authority to terminate the lease transactions for 10 MD-82 aircraft and purchase the aircraft for an undisclosed price from HNB Investment Corp., as owner participant in respect of the Aircraft, Wilmington Trust Company, as owner trustee under certain aircraft agreements, and The Bank of New York Mellon, as indenture trustee or loan trustee under certain of aircraft agreements. According to the Debtors, the aircraft are useful in the operation of their business but they think the lease rates under the existing leases substantially exceed market rates for comparable aircraft. The Debtors also ask the Court for an extension of the 60-day period under Section 1110 of the Bankruptcy Code with respect to each Aircraft and to allow general unsecured non-priority prepetition claims against the estate of American Airline Corp. as damages for any breach, termination, rejection or modification of the Existing Leases and any other Operative Document in these amounts: -- $9,429,682 for N552AA; -- $9,429,162 for N553AA; -- $9,431,194 for N554AA; -- $9,429,162 for N555AN; -- $9,426,672 for N7546A; -- $9,429,682 for N7547A; -- $9,429,162 for N7548A; -- $9,429,162 for N7549A; -- $9,429,162 for N7550; and -- $9,429,682 for N14551. The Debtors also sought permission from the Court to file the motion under seal because it discusses confidential and proprietary information, which, when disclosed, will put the Debtors under competitive disadvantage. 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). ARLIN GEOPHYSICAL: U.S. Trustee Dismissal or Ch. 7 Conversion ------------------------------------------------------------- The U.S. Trustee asks the Bankruptcy Court to dismiss the Chapter 11 case of Arlin Geophysical Company, Inc., or in alternative convert the case to one under Chapter 7. On June 1, 2012, the Court entered an order to (1) disclose single asset real estate; (2) file status report; (3) attend preliminary status conference on July 2, 2012; and (4) file monthly operating reports. The U.S. Trustee asserts that the Debtor has defaulted under the requirements of the Order by failing to file any of the documents, as ordered by the Court. "Based upon the Debtor's actions and/or lack of action in the present case, the Debtor has failed to timely proceed with its duties in this reorganization case and failed to abide by an Order of the Court," says Peter J. Kuhn, Esq., attorney for the U.S. Trustee. "The Debtor's failure to timely file the Statements & Schedules precludes creditors from being able to make fully informed decisions concerning their rights and interests. The Debtor's unexcused failure to timely file the required documents thwarts the United States Trustee's duties to assess the viability of the Debtor and the prospects for reorganization," he relates. Mr. Kuhn mantains that based on the Debtor's failure to comply with the requirements of the Bankruptcy Rules and Code, the Debtor's failure to comply with the Order of the Court and the existence of potential assets, the circumstances of this Case strongly favors conversion, rather than dismissal. Park City-based Arlin Geophysical Company, Inc., filed a Chapter 11 petition (Bankr. D. Utah Case No. 12-26735) on May 23, 2012, in Salt Lake City, Utah. The Debtor estimated assets and debts of $10 million to $50 million. Judge William T. Thurman presides over the case. Perry Alan Bsharah, Esq., at Bsharah Law Group serves as the Debtor's bankruptcy counsel. This is the second time Arlin filed for Chapter 11 protection. It previously sought creditor relief (Case No. 09-3391) on Dec. 9, 2009. No application to employ Perry Alan Bsharah has been filed with the Court in this case. An unsecured Creditors' Committee has not been appointed in the Debtor's bankruptcy case. BCM ENERGY: Posts $369,000 Net Loss in Q1 2011 ---------------------------------------------- BCM Energy Partners, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $369,006 on $212,361 of revenues for the three months ended March 31, 2011. This net loss was an increase in net loss of $369,006 from zero net income for the three months ended March 31, 2010. The Company did not generate any revenue for the three months ended March 31, 2010. The Company's balance sheet at March 31, 2011, showed $2,341,208 in total assets, $2,833,124 in total liabilities, and a stockholders' deficit of $491,916. As reported in the TCR on July 3, 2012, Anton & Chia, LLP, in Newport Beach, California, expressed substantial doubt about BCM Energy's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditors noted that the Company has experienced recurring operating losses and negative operating cash flows since inception. A copy of the Form 10-Q is available for free at: http://is.gd/KhJFXe New Orleans, La.-based BCM Energy Partners, Inc., is an acquisition and development company focused on distressed or "off- the-radar" oil and gas assets in known reservoirs, consisting of producing and shut-in reserves with significant in-field potential. The Company is currently focused on oil assets in Louisiana and Texas with plans to expand nationwide through joint ventures and strategic partnerships. As of Dec. 31, 2010, the Company owned one hundred percent (100%) of the working interests in one producing oil and gas property, University Field, located in Baton Rouge, Louisiana. BEHRINGER HARVARD: Vernon Healy Questions Money Move ---------------------------------------------------- In a detailed analysis of Behringer Harvard, the Vernon Healy investors advocacy law firm is raising concerns about Berhinger Harvard's disclosure that suggests it is moving investors' money between two of its financially faltering non-traded REITs. Behringer Harvard Opportunity REIT I announced earlier in June that it had opted to place some of its subsidiaries under Chapter 11 bankruptcy protection in the wake of its inability to restructure the debt it has accumulated in the past few years. However, Vernon Healy believes that a March 30, 2012 quarterly Securities and Exchange Commission filing by Behringer Harvard REIT Opportunity I regarding a Dallas office building known as Bent Tree Green raises conflict of interest questions and concerns for investors about Behringer Harvard's movement of investors' money between two of its financially faltering REITs. Specifically, Behringer Harvard Opportunity REIT I disclosed that it had leased 14,500 square foot of space at Bent Tree Green to another troubled Berhinger Harvard non-traded REIT -- Behringer Harvard REIT I, Inc. "We have clients who remain trapped in Behringer Harvard REIT I and who've been unable to withdraw their money since 2009. Now we learn that Beheringer Harvard is using investors' money to pay another failing Behringer Harvard non-traded REIT," said investor attorney Chris Vernon. "This represents another conflict of interest and the disclosures by Behringer Harvard about this deal to the SEC are inadequate. For example, how much Behringer Harvard REIT I is paying for the space is not disclosed." Further, Vernon Healy's analysis, a full copy of which is posted on Vernon Healy's blog here at http://www.reitattorneys.com, points out that Behringer Harvard Opportunity REIT I has approximately $70 million in loans coming due in the next 12 months. This includes one loan on a London property on which Behringer Harvard is paying a 15 percent fixed interest rate on $6.2 million. "As of March 31, 2012, the date of its latest quarterly report, Behringer Harvard Opportunity REIT I was approximately $264.9 million in debt... To put this in context, Behringer Harvard disclosed in its quarterly report that it only had a tangible net worth of approximately $209 million," the Vernon Healy report notes. In its annual report filed with the SEC on Dec. 31, 2011, Behringer Harvard Opportunity REIT I disclosed a value per share of $4.12, a decline in value of almost 60 percent of its original $10 per share. "The Behringer Harvard Opportunity REIT I has been a nightmare for investors who have been trapped in this non-traded REIT since Jan. 10, 2011 when Behringer Harvard suspended all redemption requests until further notice," securities attorney Vernon says. The Vernon Healy law firm has been investigating non-traded REITs for more than three years on behalf of investors and has filed more than $5 million in arbitration claims on behalf of investors before the Financial Industry Regulatory Authority against broker dealers selling non-traded REITs. About Behringer Harvard Addison, Tex.-based Behringer Harvard is a limited partnership formed in Texas on July 30, 2002. The Company's general partners are Behringer Harvard Advisors II LP and Robert M. Behringer. As of Sept. 30, 2011, seven of the twelve properties the Company acquired remain in the Company's portfolio. The Company's Agreement of Limited Partnership, as amended, provides that the Company will continue in existence until the earlier of Dec. 31, 2017, or termination of the Partnership pursuant to the dissolution and termination provisions of the Partnership Agreement. For the year ended Dec. 31 2011, Deloitte & Touche LLP, in Dallas, Texas, noted that the uncertainty surrounding the ultimate outcome of settling unpaid debt and its effect on the Partnership, as well as the Partnership's operating losses at its subsidiaries, raise substantial doubt about its ability to continue as a going concern. The Partnership is facing a significant amount of debt maturities in the near future and debt which has matured but remains unpaid, which is recourse to the Partnership. Behringer reported a net loss of $50.15 million in 2011, a net loss of $18.71 million in 2010, and a net loss of $15.47 million in 2009. The Company's balance sheet at March 31, 2012, showed $112.45 million in total assets, $135.77 million in total liabilities and a $23.32 million total deficit. Debtor Entities Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13, 2012, in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BEHRINGER HARVARD: Wants to Employ Munsch Hardt as Attorneys ------------------------------------------------------------ BHFS I, LLC, et al., seek permission from the Bankruptcy Court to employ Munsch Hardt Kopf & Harr, P.C., as their attorneys. Munsch Hardt will, among other things: (a) serve as attorneys of record for the Debtors in all aspects, to include any adversary proceedings commenced in connection with the Bankruptcy Case and to provide representation and legal advice to the Debtors throughout the Bankruptcy Case; (b) assist the Debtors in carrying out their duties under the Bankruptcy Code, including advising the Debtors of those duties, their obligations, and their legal rights; (c) consult with the United States Trustee, any statutory committee that may be formed, and all other creditors and parties-in-interest concerning administration of the Bankruptcy Case; (d) assist in potential sales of the Debtors' assets; and (e) prepare on behalf of the Debtors all motions, applications, answers, orders, reports, and other legal papers and documents to further the Debtors' interests and objectives, and to assist the Debtors in the preparation of their schedules, statements, and reports, and to represent the Debtors at all related hearings and at all related meetings of creditors, U.S. Trustee interviews, and the like. Munsch Hardt's hourly rates for the attorneys and paraprofessionals who will most likely be working on the Bankruptcy Case are: Joseph J. Wielebinski, Shareholder $600 per hour Davor Rukavina, Shareholder $375 per hour(reduced) Zachery Annable, Associate $315 per hour Jonathan L. Howell, Associate $300 per hour Audrey Monlezun, Paralegal $180 per hour(reduced) The Debtors have also agreed to the reimbursement of Munsch Hardt for all out-of-pocket expenses including, but are not limited to, costs for long-distance telephone charges, facsimile charges, photocopying, travel, business meals, computerized research, messengers, couriers, postage, filing fees and other fees related to trials and hearings. To the best of the Debtors' knowledge, shareholders and associates of Munsch Hardt are "disinterested persons," as that term is defined in Section 101(14) of the Bankruptcy Code. On March 13, 2012, Munsch Hardt received a retainer in the amount of $350,000 from Behringer Harvard Opportunity OP I, L.P., for the benefit of, and the use by, the Debtors. The firm can be reached at: Davor Rukavina, Esq. MUNSCH HARDT KOPF & HARR, P.C. 3800 Lincoln Plaza, 500 North Akard Street Dallas, TX 75201-6659 Tel: (214) 855-7587 Fax: (214) 978-5359 - and - Jonathan Lindley Howell, Esq. MUNSCH HARDT KOPF & HARR, P.C. 3800 Lincoln Plaza, 500 North Akard Street Dallas, TX 75201 Tel: (214) 855-7501 Fax: (214) 855-7584 A hearing on this matter will be held on July 19, 2012, at 1:30 p.m. About BHFS Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13 in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BIONEUTRAL GROUP: Posts $520,900 Net Loss in April 30 Quarter ------------------------------------------------------------- BioNeutral Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $520,954 on $338 of revenues for the three months ended April 30, 2012, compared with a net loss of $1.00 million on $16,612 of revenues for the three months ended April 30, 2011. For the six months ended April 30, 2012, the Company had a net loss of $1.40 million on $1,502 of revenues, compared with a net loss of $1.55 million on $17,926 of revenues for the six months ended April 30, 2011. The Company's balance sheet at April 30, 2012, showed $10.49 million in total assets, $1.72 million in total liabilities, and stockholders' equity of $8.77 million. Marcum, LLP, in New York City, expressed substantial doubt about BioNeutral Group's ability to continue as a going concern, following the Company's results for the fiscal year ended Oct. 31, 2011. The independent auditors noted that the Company has recurring losses, had a working capital deficiency of $2.9 million and an accumulated deficit of $53 million as of Oct. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/92tKWP Morristown, N.J.-based BioNeutral Group, Inc. is a life science specialty technology corporation that has developed a novel combinational chemistry-based technology which the Company believes can, in certain circumstances, neutralize harmful environmental contaminants, toxins and dangerous micro-organisms including bacteria, viruses and spores. The Company is focused on developing and commercializing two classes of product formulations: (1) antimicrobials, which are formulations designed to kill certain harmful microscopic living organisms, and (2) bioneutralizers, which are formulations designed to destroy certain agents that are noxious and harmful to health and/or the environment. The Company has not marketed any of its products and has not generated any meaningful product revenue to date. BROOKWATER VENTURES: Brazilian Unit Receives Notice of Default -------------------------------------------------------------- Brookwater Ventures Inc. disclosed that its wholly owned subsidiary, Agua Grande Exploracao e Producao de Petroleo Ltda., has been issued a notice of default from the operator of Block 166 in the Reconcavo Basin in Brazil for its failure to pay outstanding cash calls related to the farmout agreement and joint operating agreement within the period of time specified under the JOA. Under the terms of the JOA, Brookwater has 60 days to remedy the default by paying the full amount of the outstanding balance to the operator. In the event that the default continues for more than 60 days, the operator has the option to require that Brookwater withdraw its interest in the JOA and Block 166. Brookwater is working with the operator to resolve the default and satisfy the outstanding cash calls. Brookwater Ventures Inc. is a Canadian independent oil exploration company focused on growing its asset base primarily in Brazil. The Company believes that a tremendous opportunity exists in Brazil, where only approximately 6% of the sedimentary basins have been titled for exploration and development. The country remains underexploited and the Company believes that to capitalize on these opportunities requires investing in and leveraging a domestic team with basin knowledge, technical expertise and a network of relationships to optimize risk adjusted returns. CASTLEVIEW LLC: Files for Chapter 11 With Plan ---------------------------------------------- Castleview, LLC, filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-23954) on July 2, 2012, with a plan that intends to pay creditors in full. The Debtor disclosed $14.53 million in assets and $3.218 million in liabilities in its schedules. The Debtor owns a 252-acre residential development site located in Southeastern Castle Rock, Colorado, which property includes 245 residential lots. The property is worth $10.2 million and secures a $3.21 million debt. The Debtor is also entitled to bond proceeds from the Castleview Metropolitan District appraised at $6,248,724. CV2011, LLC, the Debtor's major secured creditor, commenced a state court proceeding in the Arapahoe County District Court to collect on its promissory note. This litigation has been stayed by the filing of the Debtor's Chapter 11 petition. The Debtor has sought an expedited confirmation hearing and the valuation of Debtor's property. The Debtor does not dispute that amounts are due under the note which may be calculated by reference to the note terms. Including principal, interest, costs and fees, the Debtor estimates the total due at approximately $3.2 million. Under the Plan, the secured claim of CV2011 will be paid by the Reorganized Debtor transferring ownership of a sufficient number of lots plus a proportionate share of Bond Proceeds to which the Debtor will become entitled to pay the allowed secured claim of the Class 2 creditor in full with accrued interest, costs and fees as provided for in the note and deed of trust. The Debtor estimates that if the secured claim of the Class 2 creditor is allowed at $3.2 million, which includes late fees, default interest at 17% and attorneys' fees, it will transfer approximately 35 to 40 of its Castleview Estate Lots plus an appropriate percentage of its Bond Proceeds to pay the claim of the Class 2 creditor in full. Total unsecured claims are estimated at $12,176. Unsecured creditors with allowed unsecured claims will be paid in full with interest at the current Federal Judgment Interest Rate with one- half of the allowed unsecured claims paid on the Effective Date and the remaining balance paid no later than six months following the Effective Date. Holders of equitable interests in the Debtors will be paid the allowed amount of their respective equitable interests in the Debtor after all creditor claims and Chapter 11 administrative expenses are paid in full. Upon payment to all creditors and holders of equitable interest, the Debtor shall cease operations. The Debtor has tapped Weinman & Associates, P.C, as bankruptcy counsel, and Allen & Vellone, P.C as special counsel. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/Castleview_Plan_Outline.pdf CAVIATA ATTACHED: 9th Cir. BAP Affirms Chapter 22 Case Dismissal ---------------------------------------------------------------- The U.S. Bankruptcy Appellate Panel for the Ninth Circuit affirmed a bankruptcy court's order dismissing the second chapter 11 case of Caviata Attached Homes, LLC, due to Caviata's inability to show that an extraordinary change in circumstances substantially impaired its performance under its confirmed plan to warrant the second chapter 11 filing. "In addressing this issue of first impression within the Ninth Circuit, we affirm," the BAP said. Reno, Nevada-based Caviata Attached Homes LLC was formed in July 2005 for the purpose of real estate development. The sole owner of Caviata is Caviata 184, LLC, a Nevada limited liability company. William Pennington and Dane Hillyard are Caviata's managers. Caviata owns and operates a 184-unit apartment complex located in Sparks, Nevada. The Property was initially developed by Caviata as a condominium project, but due to downturns in the real estate market, it was converted to rental apartments. To develop the Property, in September 2005, Caviata obtained a construction loan for $40,700,000 on a recourse basis from California National Bank. In exchange for the loan, Caviata executed a promissory note and deed of trust in favor of CNB, which assigned Caviata's right, title and interest in the Property, including all rents, income and profits. The parties agreed to an interest rate of prime plus .25% and a maturity date of Sept. 20, 2007. Guarantors on the loan included Caviata 184, LLC, Pennington, and Hillyard. Caviata defaulted on the loan. In April 2007, Caviata and CNB entered into a forbearance agreement whereby CNB agreed to forbear from exercising its rights under the loan documents. The forbearance agreement was thereafter amended six times, with the most recent amendment dated Jan. 15, 2009. In connection with the sixth amendment, Caviata and CNB executed an amended note under which Caviata agreed to pay CNB the remaining principal balance on the note of $27,476,632.88, plus 7% interest, by no later than April 15, 2009. Caviata again defaulted on the loan, and on April 24, 2009, CNB sued Caviata and the loan guarantors in state court. On Occt. 30, 2009, the FDIC closed CNB, and its assets were assigned to U.S. Bank, N.A. Trial against the guarantors was initially set for March 15, 2010. The guarantors filed a motion to continue trial, contending they had no assets to satisfy a judgment. Caviata's First Chapter 11 Case Caviata filed its first chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 09-52786) on Aug. 18, 2009, estimating $10 million to $50 million in both assets and debts. The case was ultimately assigned to the Hon. John L. Peterson, sitting by designation. As of the petition date, U.S. Bank claimed it was owed $29,564,308. Just prior to Caviata's filing, U.S. Bank had obtained an appraisal on the Property on June 29, 2009, from its appraiser William Kimmel, which valued the Property at $23,100,000. Caviata filed its chapter 11 plan and disclosure statement on Nov. 16, 2009, followed by a first amended plan and disclosure statement on Jan. 28, 2010. Pursuant to the First Plan, Caviata proposed to pay U.S. Bank 4.25% interest on its allowed secured claim of $27,476,632 for three years, or approximately $4,338,019. After three years, Caviata committed to sell the Property or refinance the loan to pay U.S. Bank in full. If Caviata defaulted under the First Plan, U.S. Bank was entitled to enforce its rights and foreclose. U.S. Bank objected to confirmation of the First Plan contending, inter alia, that it was not feasible. U.S. Bank offered a declaration from Kimmel appraising the Property at $20 million. U.S. Bank argued that Caviata failed to submit any evidence showing its ability to sell or refinance the Property in the next three years to pay off the note. In fact, argued U.S. Bank, although Pennington asserted that Caviata could sell the Property for $34 million in three years, Pennington and Hillyard had admitted they had not marketed the Property to test its worth or sought any refinancing. U.S. Bank further objected to Caviata's proposed 4.25% interest rate, contending that its expert, Richard Zelle, who also brokers commercial real estate loans, believed no efficient market existed for a loan on the Property and that 9.25% was a more appropriate rate. The bankruptcy court held a confirmation hearing on the First Plan on March 3, 2010. On April 12, 2010, the bankruptcy court entered its Memorandum Decision, Findings of Fact and Conclusions of Law and Order overruling U.S. Bank's objections and confirming the First Plan. The court rejected U.S. Bank's tardy amended proof of claim, determining that it improperly included the accrual of postpetition interest in violation of United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., 484 U.S. 365 (1988), as well as unreasonable (and unrequested) attorney's fees. The court also rejected and struck from the record Kimmel's January 2010 Appraisal as a "devious tactic" by U.S. Bank to increase the amount of its unsecured claim in order to defeat Class 4 acceptance of the First Plan. The Court accepted Kimmel's June 2009 Appraisal of the Property for $23,100,000, which Caviata had accepted as its own, and determined that U.S. Bank held a secured claim in that amount. The Court also adopted the proposed interest rate of 4.75%. Finally, as to feasibility, the bankruptcy court found Pennington's testimony credible that Caviata should be able to sell the Property for at least $34 million within three years, when the cycle of downturn would improve. Per the First Plan, Caviata began making monthly payments of $120,500.53 to U.S. Bank in June 2010. To date, Caviata's plan payments are current. Caviata's Second Chapter 11 Case Approximately 15 months after confirming the First Plan and almost two years after its first chapter 11 filing, Caviata filed its second chapter 11 case on Aug. 1, 2011 (Bankr. D. Nev. Case No. 11-52458). Caviata valued the Property at $23,420,928 in its schedules filed on Aug. 23, 2011. U.S. Bank's appraiser, Scott Beebe, conducted an appraisal of the Property as of Aug. 23, 2011, and he asserted that the Property's value had decreased to $20,900,000. On Sept. 9, 2011, U.S. Bank moved to dismiss Caviata's second bankruptcy case, contending the second filing was a bad faith filing and a backdoor attempt to circumvent the prohibition on modifying a substantially consummated plan under 11 U.S.C. Sec. 1127. U.S. Bank said Caviata failed to demonstrate that an extraordinary change in circumstances occurred after substantial consummation of the First Plan, which substantially impaired its performance under the First Plan. U.S. Bank argued that" extraordinary circumstances" did not include decreased income, increased expenses, or reasonably foreseeable changes in debtor's operations, the market or the economy. U.S. Bank noted that in Caviata's first quarter report filed on April 25, 2011, Caviata represented that it did not foresee any circumstances that would affect its ability to perform under the First Plan. Caviata opposed dismissal, contending that substantial and fundamental changes had seriously impacted the finance and real estate markets beyond any level that could have been foreseen, and, at the time of confirmation, Caviata did not and could not have known that recovery from the 2007-2009 recession would not occur as predicted, but, rather, the economy would suffer a relapse. Although it was not yet in default under the First Plan, Caviata contended that modifications were necessary or it would be unable to fully perform its confirmed plan. Caviata filed a proposed second plan and disclosure statement on Sept. 27, 2011, which extended the time within which it was required to sell or refinance the Property from three years to ten years, reduced the amount paid to U.S. Bank from $29,564,308.77 to $22,420,928.00, and reduced the interest rate on U.S. Bank's secured claim from 4.75 to 4.00%. In its reply, U.S. Bank contended that from the beginning of the first bankruptcy case its experts had warned Caviata that the First Plan was a pipe dream, but, instead of heeding these warnings, Caviata essentially stuck its head in the sand and went forward with its First Plan. According to U.S. Bank, Caviata's opposition failed to explain how a recession that was present during the first bankruptcy case and was still present during the second bankruptcy case was "unforeseeable," or how it was a" changed" market condition when the market was just as bad now as it was then. U.S. Bank further argued that mere opinion of public figures on the improved state of the economy in early 2010 was not evidence that the recession was an unforeseeable circumstance or a changed market condition. U.S. Bank opposed an evidentiary hearing as a waste of the court's time; it was common knowledge that the economy was bad in both 2010 and 2011. At a hearing Oct. 7, 2011, the Hon. Bruce T. Beesley orally granted U.S. Bank's motion to dismiss. As a result of the dismissal, Caviata was still operating under the First Plan. Caviata's request for an evidentiary hearing was denied. A formal order dismissing the second chapter 11 case was issued Oct. 27, 2011. The appellate case is CAVIATA ATTACHED HOMES, LLC, Appellant, v. U.S. BANK, NATIONAL ASSOCIATION, Appellee, BAP No. NV-11-1620 (9th Cir. BAP). A copy of the Ninth Circuit's June 29, 2012 opinion is available at http://is.gd/a9UF8Jfrom Leagle.com. CBS I LLC: Wants to Continue Hiring Dmitri Dalacas as Attorney -------------------------------------------------------------- CBS I, LLC, seeks permission from the Bankruptcy Court to employ Flangas McMillan Law Group as its special counsel to allow Dmitri Dalacas, a member of the firm, to continue his representation of the Debtor. Mr. Dalacas has previously represented the Debtor in prepetition state court action, as well as its counsel on corporate and landlord/tenant related matters. Mr. Dalacas has also represented the Debtors' members in other litigation and transactional amtters, but will not be representing these members in their personal capacities in this case. Mr. Dalacas will: (a) advise the Debtor of its state court rights and obligatiohns, if any, and performance of its duties during the administration of the bankruptcy cases; (b) represent the Debtor in all complex civil cases and related landlord/tenant litigation proceedings before the Bankruptcy Court or before other courts with jurisdiction over the cases; (c) assist the Debtor in the performance of its duties; (d) assist the Debtor in developing legal positions and strategies with respect to all facets of these proceddings; and (e) provide other counsel and advice as the Debtor may require in connection with the Debtor's case. Mr. Dalaca's hourly billing rate for for 2012 is $295. Time devoted by paralegals for the 2012 calendar year is charged at $125 per hour. Flangas will also be reimbursed for all costs it incurred with respect to its representation. To the best of the Debtor's knowledge, Mr. Dala0cas is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. As reported by the TCR on June 13, 2012, the bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24 in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. According to the report, CBS' bankruptcy filing will likely at least temporarily block efforts by U.S. Bank to install a receiver and foreclose on the property. CBS I LLC: Wants to Employ Marquis Aurbach as Attorneys ------------------------------------------------------- CBS I, LLC, seeks permission from the Bankruptcy Court to employ Marquis Aurbach Coffing as its attorneys. Marquis Aurbach will: (a) prepare schedules, statements, applications, and reports for which the services of any attorney is necessary; (b) advise the Debtor of its rights and obligations and performance of its duties during administration of the Chapter 11 case; (c) assist the Debtor in formulating a plan of reorganization and disclosure statemens and to obtain approval and confirmation thereof; (d) represent the Debtor in all proceedings before the Bankruptcy Court or other courts with jurisdiction of the Chapter 11 case; and (e) assist the Debtor in the performance of its duties as set forth in Sections 1107 and 1108 of the Bankruptcy Code. The Debtor seeks to retain Marquis Aurbach on an hourly basis, and to reimburse the firm for its actual and necessary expenses. The current hourly rates charged by Marquis Aurbach professionals are: -- Not exceeding $450 per hour for attorneys; -- Not exceeding $175 per hour for law clerk/paralegal; -- Not exceeding $70 per hour for legal assistants. Marquis Aurbach received a $25,000 retainer prior to the Petition Date. To the best of the Debtor's knowledge, Marquis Aurbach is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. As reported by the TCR on June 13, 2012, the bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24 in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. According to the report, CBS' bankruptcy filing will likely at least temporarily block efforts by U.S. Bank to install a receiver and foreclose on the property. CEMEX SAB: Presents Refinancing Proposal to Lenders --------------------------------------------------- CEMEX, S.A.B. de C.V. disclosed that during the meetings with its lenders to be held in New York and in Madrid on July 2, 2012, CEMEX will outline a refinancing proposal to its full syndicate of lenders under the Financing Agreement, dated as of August 14, 2009, as amended. The Proposed Transaction had been previously discussed and negotiated with a number of CEMEX's banks which hold approximately 50% of the existing exposures under the Existing Financing Agreement. The principal terms of the Proposed Transaction, which includes an exchange offer and a consent request, are as follows: Exchange Offer and Exchanging Participating Creditor Fee: CEMEX is proposing that creditors exchange their existing exposures under the Existing Financing Agreement into one or a combination of the following: (a) new loans (the "New Loans") or, for private placement notes, new private placement notes (the "New USPP Notes"), or (b) up to U.S.$500 million in new high yield notes (the "New HY Notes") to be issued by CEMEX, bearing interest at an annual rate of 9.5% and maturing in June 2018, having terms substantially similar to those of senior secured notes previously issued by CEMEX and/or its subsidiaries. The New HY Notes will be callable in 2016 and will be guaranteed by CEMEX Mexico, S.A. de C.V., CEMEX Espana, S.A., CEMEX Corp., CEMEX Concretos, S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., New Sunward Holding B.V. and the New Guarantors referred to below. In the case of over- subscription, New HY Notes will be allocated pro rata, and the remaining balance of any subscription would be re-allocated to New Loans or New USPP Notes, as applicable. There will be priority allocation for tenders received within a 10 business day early tender period, and if, as a result of over-subscription due to tenders submitted during the early tender period, a tendering holder was not allocated at least 75% of its requested subscription to the New HY Notes, it will have the option to revoke its tender. The Exchange Offer will remain open for 30 business days. Creditors that participate in the Exchange Offer will receive an exchange fee of 80 basis points calculated on the amount of their existing exposures under the Existing Financing Agreement exchanged for New Loans or New USPP Notes. New Maturity, Initial Paydown, Springing Maturities and Intermediate Amortizations: The Proposed Transaction effectively treats the exposures of accepting participating creditors who elect to receive New Loans or New USPP Notes as being extended from Feb. 14, 2014 to February 14, 2017 under a new facilities agreement. In addition, the New Facilities Agreement will have the following required amortization payments: (i) U.S.$500 million on February 14, 2014, (ii) U.S.$250 million on June 30, 2016 and (iii) U.S.$250 million on Dec. 16, 2016. If CEMEX does not paydown U.S.$1.0 billion by March 31, 2013, the maturity date of the New Facilities Agreement will revert to February 14, 2014. CEMEX may, with a..." participating creditor approval under the New Facilities Agreement, obtain a 90-day extension of the March 31, 2013 milestone date. In addition, the Feb. 14, 2017 maturity date will be reset to earlier dates if any capital markets debt of CEMEX and/or its subsidiaries maturing prior to February 14, 2017 is not entirely refinanced prior to the maturity of such capital markets debt. CEMEX has stated that sources for the initial U.S.$1.0 billion paydown may include select asset sales. CEMEX has identified a number of assets that could be sold for this purpose, including the potential sales of: (i) a minority stake in CEMEX operations in select countries; (ii) selected U.S. assets; (iii) selected European assets; and/or (iv) other non-core assets. The option to engage in any of these potential asset sales will be at the sole discretion of CEMEX. In addition, if at any date after April 1, 2015 the volume weighted average closing sale price of CEMEX's ADS's listed on the New York Stock Exchange exceeds U.S.$14.50 during the preceding 90-day period, the holders of the New Loans and the New USPP Notes will be entitled to an additional cash fee, payable 120 days after such date and at the end of each quarter thereafter, equal to 0.50% of the new exposures under the New Facilities Agreement held by them at the time. If the New Facilities Agreement Exposures have been repaid in an aggregate amount equal to (or exceeding) U.S.$2.0 billion and up to U.S.$3.0 billion prior to the date of payment, such fee will be reduced pro rata based on the amount between U.S.$2.0 billion and U.S.$3.0 billion by which the New Facilities Agreement Exposures have been repaid, with no fee being payable at any time total exposures have been reduced by at least U.S.$3.0 billion. New Guarantors and Security Package: The New Facilities Agreement will benefit from guarantees on the same terms and from the same CEMEX companies as under the Existing Financing Agreement, which guarantees will remain in place, and, in addition, will also receive (together with the New HY Notes and all other senior capital markets debt issued or guaranteed by CEMEX other than the notes issued in connection with the perpetual securities) guarantees from the following subsidiaries (the "New Guarantors") owned directly or indirectly by CEMEX Espana, S.A.: CEMEX Research Group AG, CEMEX Shipping B.V., CEMEX Asia B.V., CEMEX France Gestion, CEMEX UK and CEMEX Egyptian Investments B.V. The 2014 Eurobonds and the Existing Financing Agreement will not benefit from guarantees from the New Guarantors. The New Facilities Agreement and the New HY Notes (together with all other senior capital markets debt issued or guaranteed by CEMEX, the notes issued in connection with the perpetual securities and long-term Certificados Bursatiles) will also benefit from a security package consisting of a first-priority security interest in (a) substantially all the shares of CEMEX Mexico, S.A. de C.V.; Centro Distribuidor de Cemento, S.A. de C.V.; Corporacion Gouda, S.A. de C.V.; Mexcement Holdings, S.A. de C.V.; New Sunward Holding B.V.; CEMEX Trademarks Holding Ltd. and CEMEX Espana, S.A. (the "Collateral"), and (b) all proceeds of such Collateral. Intercompany Claims: In the event of any insolvency or similar proceeding in relation to CEMEX, any amount payable under any intercompany claim by an obligor under the New Facilities Agreement will be subordinated to claims under the New Facilities Agreement and all other senior debt of such obligors. In addition, the New Facilities Agreement will also benefit from a Mexican-law regulated voting trust mechanism, whereby intercompany claims of CEMEX entities incorporated in Mexico at any time would be voted in a concurso mercantil proceeding by a trustee instructed by the lenders under the New Facilities Agreement (the "New Facilities Agreement Lenders"). Prepayments: The New Facilities Agreement will contain different prepayment provisions from those contained in the Existing Financing Agreement. CEMEX will be permitted to refinance debt maturing prior to Feb. 14, 2017 or after such date by issuing new indebtedness that has the same security and obligors (including 2014 Eurobond refinancing with senior secured debt) as the debt being refinanced and will be permitted to refinance its subordinated optional convertibles with similar securities or equity-like instruments. After $1.5 billion is paid under the New Facilities Agreement, certain proceeds from asset sales, debt and equity issuances, securitizations and excess cash flows can be used to reduce capital markets debt of CEMEX and/or its subsidiaries maturing prior to February 14, 2017. After such indebtedness has been repaid or refinanced, certain of such funds may be used to reduce indebtedness maturing after February 14, 2017 or for other purposes as permitted under the New Financing Agreement. Revised financial and other covenants: The New Facilities Agreement will contain revised financial covenants, including the requirement that CEMEX maintain a consolidated leverage ratio not to exceed 7.00x through Dec. 31, 2013, reducing to 4.25x by Dec. 31, 2016 and a consolidated coverage ratio of at least 1.50x through June 30, 2014, increasing to 2.25x by December 31, 2016. With respect to other covenants, the New Facilities Agreement will generally contain the same covenants and exceptions as the Existing Financing Agreement, with some amendments, including amendments to accommodate the potential sale of minority stakes mentioned above and the refinancing of all capital markets debt of CEMEX and/or its subsidiaries maturing prior to February 14, 2017. Consent Request and Participating Creditor Amendment Fee: The proposed Consent Request includes: (A) the consent of the majority participating creditors (under the Existing Financing Agreement) (66.67%) to certain amendments to the Existing Financing Agreement, including deletion of all mandatory prepayment provisions, representations, information and general undertakings, financial covenants and covenant reset date provisions, and events of default other than payment, insolvency and insolvency proceedings; and (B) the consent of the super majority participating creditors (under the Existing Financing Agreement) (85%) and the super majority instructing group (under the existing intercreditor agreement) (85%) to release, on the date of closing of the Proposed Transaction, all of the security created or granted in favor of the secured parties under the Existing Financing Agreement documentation. Participating creditors that consent to the proposed amendments in the Consent Request will receive a consent fee equal to 20 basis points calculated on the amount of their existing exposures under the Existing Financing Agreement. In the event that at least one holder of existing private placement notes provides the consent to the proposed amendments in the Consent Request, all holders of existing private placement notes will receive the Participating Creditor Amendment Fee as required under the Existing USPP Note Purchase Agreement. Conditions to the Proposed Transaction: Completion of the Proposed Transaction will be subject to the satisfaction or waiver of, among others, the following conditions: (A) the requisite consent levels for the proposed amendments under the Consent Request being obtained from the participating creditors; and (B) participating creditors representing at least 95% of existing exposures accepting the Exchange Offer. The Proposed Transaction includes an offering of securities that is being conducted pursuant to Section 4(2) of the U.S. Securities Act of 1933, as amended (the "Securities Act"), and applicable exemptions under the laws of foreign jurisdictions. Participation in the Proposed Transaction is limited: (a) in the United States, to persons who are "qualified institutional buyers" (as defined in Rule 144A under the Securities Act or institutional "accredited investors" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, and (b) outside the United States, to persons other than "U.S. persons" in reliance upon Regulation S under the Securities Act and who are "qualified investors" (within the meaning given at Article 2 of Directive 2003/71/EC (the Prospectus Directive)) or hold an equivalent status under applicable local laws and regulations. The securities to be offered have not been and will not be registered under the Securities Act and may not be offered or sold in the United States About CEMEX SAB CEMEX, S.A.B. de C.V. is a Mexican corporation, a holding company of entities which main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX is a public stock corporation with variable capital (S.A.B. de C.V.) organized under the laws of the United Mexican States, or Mexico. CF INDUSTRIES: S&P Raises Corporate Credit Rating From 'BB+' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Deerfield, Ill.-based CF Industries Inc. (CF) to 'BBB-' from 'BB+'. "At the same time, we raised our ratings on the company's unsecured debt to 'BBB-' from 'BB+'. The outlook is stable," S&P said. "The upgrade reflects strength in recent operating performance, prospects for ongoing improvements despite the cyclical nature of the sector, and our expectation that leverage and cash flow- related credit metrics will support a financial profile consistent with the current ratings," said Standard & Poor's credit analyst Paul Kurias. "We expect that the company will continue to benefit from the availability of competitively priced natural gas arising out of shale gas production that has improved the cost position of U.S.- based nitrogen fertilizer producers relative to imports, and that favorable supply and demand for domestic nitrogen-based fertilizer producers will continue to benefit operating performance. The company's EBITDA increased to a record of more than $3 billion as of March 31, 2012, on a 12-month basis from about $1.9 billion for a similar period a year ago," S&P said. The full benefits of 12 months of EBITDA from the acquisition of the former Terra Industries and a run up in product prices, combined with low cost natural gas prices, have contributed to the improvement as of March 31, 2012. "Although our view is that record-high product prices are not sustainable in the long run, we expect the demand for the company's products will remain healthy and support sustainable operating profits," S&P said. "Still, we expect operating performance in CF's commodity business will remain susceptible to weather-related risks and business cycles, but the strength of the company's credit metrics provides some cushion against these risks. The key ratio of funds from operations to total debt was more than 100% as of March 31, 2012-- well above our expectation of 40% to 45% for the rating and above our expectation of 30% at trough levels. The strong credit measures also provide a cushion for unexpected potential debt- funded growth or shareholder reward initiatives, beyond those already announced. We believe the company can undertake the remaining portion of its announced share-buyback plan and its capital spending plan, totaling approximately $2 billion, over the next several years, and meet our expectations for the rating. A key assumption in our analysis is our view that management will approach growth and investments in a manner that reflects its commitment to credit quality," S&P said. "Our base case scenario reflects our expectation that 2012 and 2013 operating performance will remain strong relative to historical levels, despite weakening from 2011. Key elements in our base case include: A decline in product pricing, which we expect to remain favorable but lower than record levels in recent quarters. A modest decline from the very high EBITDA margins of more than 50% in 2011, though we expect margins in 2012 to remain high. The absence of significant unfavorable weather- related events that could drive down volumes more than five percentage points compared with 2011," S&P said. "Continued favorable natural gas pricing, though we expect prices will rise above the low levels in the fourth quarter of 2011. The ratings on CF reflect what Standard & Poor's considers to be its "intermediate" financial risk profile -- including our expectation for moderate financial policies -- and a "fair" business risk profile that incorporates the company's leadership in a narrowly focused commodity fertilizer market, where we generally expect demand to exceed domestic supply," S&P said. "CF's 2010 acquisition of Terra Industries Inc. made CF into North America's largest nitrogen fertilizer company, and we expect CF will maintain this strengthened competitive position. The combination expanded its regional production in key locations in the U.S. and Canada, though a significant amount of production is still concentrated in a few large production facilities. We believe CF will continue to benefit from its distribution and storage infrastructure in the freight-intensive commodity product sector. We expect the company to continue to benefit from favorable market conditions, including a favorable North American supply and demand balance, which has arisen as a result of U.S. nitrogen capacity closures over the past 15 years, the absence of large new domestic capacity to meet recent demand increases, and improved demand for reasons including significant corn (a large consumer of nitrogen) consumption to support ethanol production. We do not anticipate that recently announced capacity increases in the sector will alter the favorable supply and demand in the near to medium term. The situation in the long term is less clear, and beyond 2017 new capacity increases could begin to tilt the balance unfavorably. The stable outlook reflects our expectation that CF will continue to benefit from a favorable operating environment over the next several quarters," S&P said. "Our base case assumes that EBITDA will remain above $2 billion and that liquidity will remain adequate. We view the 2010 meaningful debt reduction at CF as contributing to credit quality and expect that management will continue to adopt policies relating to the deployment of surplus cash in a manner that supports credit quality. We could lower the ratings if operating performance weakened unexpectedly or debt rose so that the ratio of funds from operations to total debt declined below 30% with no prospect for immediate improvement. This could happen if revenue declines sharply by more than 20% and EBITDA margins decline to below 30%. Although this is unlikely and does not form part of our base case, we believe that the sector remains susceptible to unexpected event risks, including weather-related risks. If management, against our expectation, stretched the financial profile to pursue growth objectives or shareholder rewards it could exacerbate an operating setback. We believe the company's business risk profile constrains the ratings, and we do not expect to raise the ratings over the next 12 to 24 months," S&P said. CHINA HYDROELECTRIC: Reports $785,000 Net Income in Q1 2012 ---------------------------------------------------------- China Hydroelectric Corporation announced on June 14, 2012, its financial results for the three months ended March 31, 2012. "Net income attributable to China Hydroelectric Corporation shareholders and ordinary shareholders was $785,000 in the first quarter of 2012, compared to net loss of $5.6 million in the same period in 2011 principally due to gain from sale of Yuanping and more favorable hydrological factors," the Company said in the press release. "Revenues, net of value added taxes, from continuing operations for the three months ended March 31, 2012, were $22.5 million, an increase of 105%, or $11.5 million, from $11.0 million for the three months ended March 31, 2011. This increase was due principally to better than average hydrological conditions in Zhejiang and Fujian provinces in the current quarter compared to the prior year quarter and a higher effective tariff rate due to the mix of revenue from the respective provinces." Mr. John D. Kuhns, Chairman and Chief Executive Officer, said, "The Company's consolidated net revenue, gross profit, operating income and EBITDA for the first quarter of 2012, each of which represent record amounts, were positively impacted by above average precipitation experienced in the two eastern provinces of Fujian and Zhejiang. This is in stark contrast to our financial results for the first quarter of 2011 when precipitation in all four provinces where we have power projects fell well below historical average levels. Since year-to-year variations in hydrological conditions are a fundamental part of the hydroelectric power generation business, it is important to keep historical averages in mind when assessing our results of operations." The Company's balance sheet at March 31, 2012, showed $807.7 million in total assets, $412.5 million in total liabilities, and stockholders' equity of $395.2 million. A complete text of the press release is available for free at: http://is.gd/kgUuGx Ernst & Young Hua Ming, in Beijing, People's Republic of China, expressed substantial doubt about China Hydroelectric's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 20112. The independent auditors noted that the Company has a net working capital deficiency which raises substantial doubt about its ability to continue as a going concern. About China Hydroelectric China Hydroelectric Corporation (NYSE: CHC, CHCWS) is an owner and operator of small hydroelectric power projects in the People's Republic of China. Through its geographically diverse portfolio of operating assets, the Company generates and sells electric power to local power grids. The Company currently owns 26 operating hydropower stations in China with total installed capacity of 547.8 MW, of which it acquired 22 operating stations and constructed four. These hydroelectric power projects are located in four provinces: Zhejiang, Fujian, Yunnan and Sichuan. CHINA TEL GROUP: To Issue 49.9 Million Shares to Contractors ------------------------------------------------------------ VelaTel Global Communications, Inc., formerly known as China Tel Group Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registering 49,908,203 shares of common stock issuable to independent contractors. The proposed maximum offering price is $573,944. A copy of the filing is available for free at http://is.gd/WiPqZb About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. After auditing the 2011 results, Kabani & Company, Inc., in Los Angeles, California, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred a net loss for the year ended Dec. 31, 2011, cumulative losses of $254 million since inception, a negative working capital of $16.4 million and a stockholders' deficiency of $9.93 million. The Company reported a net loss of $21.79 million in 2011, compared with a net loss of $66.62 million in 2010. The Company's balance sheet at March 31, 2012, showed $13.57 million in total assets, $19.53 million in total liabilities and a $5.95 million total stockholders' deficiency. COMARCO INC: To Issue 1.8MM Shares Under 2011 Incentive Plan ------------------------------------------------------------ Comarco, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registering 1,832,700 shares of common stock issuable under the Company's 2011 Equity Incentive Plan. The proposed maximum offering price is $366,540. A copy of the filing is available for free at http://is.gd/E7kwhu At the annual meeting of shareholders of Comarco held on July 21, 2011, the Company's shareholders approved the Company's 2011 Equity Incentive Plan. About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco reported a net loss of $5.31 million for the year ended Jan. 31, 2012, compared with a net loss of $5.97 million during the prior year. After auditing the fiscal 2012 financial results, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, 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 and negative cashflow from operations, has had declining working capital and uncertainties surrounding the Company's ability to raise additional funds. The Company's balance sheet at April 30, 2012, showed $4.88 million in total assets, $6.89 million in total liabilities and a $2.01 million total stockholders' deficit. COMBIMATRIX CORP: Share Bid Price Below Nasdaq Minimum ------------------------------------------------------ CombiMatrix Corporation received a notification dated June 26, 2012 from the Listing Qualifications department of The Nasdaq Stock Market indicating that the Company is not in compliance with the $1.00 Minimum Bid Price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market. The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets this requirement. The Nasdaq notice indicated that the Company will be provided 180 calendar days in which to regain compliance. If at any time during this period the bid price of the Company's common stock closes at or above $1.00 per share for a minimum of ten consecutive business days, the Nasdaq Staff will provide the Company with a written confirmation of compliance and the matter will be closed. In the event the Company does not regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, Nasdaq Staff will provide the Company with written notification that its securities are subject to delisting from The Nasdaq Capital Market. At that time, the Company may appeal the delisting determination to a Hearing's Panel. Alternatively, if the Company fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, but meets the continued listing requirement for market value of publicly held shares and all of the other applicable standards for initial listing on the Nasdaq Capital Market, with the exception of the minimum bid price, and provides written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then the Company will have an additional 180 calendar days to regain compliance with Rule 5550(a)(2). About CombiMatrix Corporation CombiMatrix Corporation -- http://www.cmdiagnostics.com/-- through its wholly owned subsidiary, CombiMatrix Molecular Diagnostics, Inc. (CMDX), is a molecular diagnostics laboratory which offers DNA-based testing services to the prenatal, pediatric and oncology markets. The Company performs genetic testing utilizing Microarray, FISH, PCR and G-Band Chromosome Analysis. CMDX offers prenatal and pediatric testing services for the detection of abnormalities of genes at the DNA level beyond what can be identified through traditional technologies. CMDX was also the first commercial clinical laboratory in the United States to make comprehensive DNA-based genomic analysis of solid tumors, including breast, colon, lung, prostate and brain tumors, available to oncology patients and medical professionals. After auditing the financial statements for the year ended Dec. 31, 2011, Haskell & White LLP, in Irvine, Calif., expressed substantial doubt about CombiMatrix's ability to continue as a going concern. The independent auditors noted that the Company has a history of incurring net losses and net operating cash flow deficits. The Company reported a net loss of $7.6 million on $4.6 million of revenue for 2011, compared with a net loss of $13.1 million on $3.6 million of revenue for 2009. The Company's balance sheet at Dec. 31, 2011, showed $9.4 million in total assets, $1.3 million in total liabilities, and stockholders' equity of $8.1 million. COMSTOCK RESOURCES: Moody's Issues Summary Credit Opinion --------------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Comstock Resources, Inc. and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for Comstock Resources, Inc. Moody's current ratings on Comstock Resources, Inc are: LT Corporate Family Ratings (domestic currency) Rating of B2 Probability of Default Rating of B2 Speculative Grade Liquidity Rating of SGL-3 Senior Unsecured (domestic currency) Rating of B3 Senior Unsec. Shelf (domestic currency) Rating of (P)B3 Subordinate Shelf (domestic currency) Rating of (P)B3 Preferred Shelf (domestic currency) Rating of (P)B3 LGD Senior Unsecured (domestic currency) Assessment of 71 - LGD5 LGD Senior Unsec. Shelf (domestic currency) Assessment of 71 - LGD5 LGD Subordinate Shelf (domestic currency) Assessment of 99 - LGD6 LGD Preferred Shelf (domestic currency) Assessment of 99 - LGD6 Rating Rationale Comstock's B2 corporate family rating (CFR) reflects the company's high proportion of natural gas production in a low gas price environment, its relatively early stage operations in the Permian and Eagle Ford plays where the majority of capital spending will be focused, and the significant amount of liquidity needed to fund its transition to becoming a more oil-focused E&P company. The rating is supported by the growing proportion of liquids production with good results so far in the Eagle Ford and Permian, a property base which has the potential to provide additional liquidity through joint ventures or sales of non-core assets, a flexible capital expenditure budget, and modest diversification provided by two liquids producing basins. The stable outlook reflects Moody's expectation that Comstock will maintain adequate liquidity as it funds the transition to becoming a more oil focused company, and will achieve reasonable operational success with increasing the proportion of oil production. Moody's could downgrade the CFR if liquidity deteriorates, if returns do not continue to benefit from increasing liquids production, or if Moody's expects RCF / debt to be maintained below 25%. Longer term, Moody's could upgrade the CFR if Moody's expects the company's leveraged full cycle ratio (LFCR) to be maintained at or above 1.7x with RCF / debt of at least 40%. The principal methodology used in rating Comstock Resources was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CONCHO RESOURCES: Moody's Issues Summary Credit Opinion ------------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Concho Resources Inc. and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for Concho Resources Inc. Moody's current ratings on Concho Resources Inc. are: LT Corporate Family Ratings (domestic currency) Rating of Ba3 on watch for upgrade Probability of Default Rating of Ba3 on watch for upgrade Senior Unsecured (domestic currency) Rating of B1 on watch for upgrade Senior Unsec. Shelf (domestic currency) Rating of (P)B1 on watch for upgrade Subordinate Shelf (domestic currency) Rating of (P)Caa1 on watch for upgrade Preferred Shelf (domestic currency) Rating of (P)Caa2 on watch for upgrade Speculative Grade Liquidity Rating of SGL-2 LGD Senior Unsecured (domestic currency) Assessment of 71 - LGD5 Rating Rationale Concho is one of a number of companies identified by Moody's as being well positioned to benefit from sustained high oil prices. Concho is well-positioned to enjoy robust cash flow generation for at least the next few years based on Moody's expectation for a sustained high oil price environment. The review for upgrade is expected to be concluded within the next month. Any change in ratings will likely be limited to a one notch upgrade. The principal methodology used in rating Concho Resources Inc. 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. CONE CONSTRUCTORS: Officer Fails in Bid to Reduce 15-Yr Sentence ---------------------------------------------------------------- Michael L. Cone, who was sentenced in 2008 for 15 years imprisonment for bankruptcy fraud, among others, failed to convince a district court judge in Tampa, Florida, to "vacate, set aside, or correct an allegedly illegal sentence pursuant to 28 U.S.C. Sec. 2255." Mr. Cone was the president of Cone Constructors, Inc., a Florida corporation engaged in the business of road construction. CCI filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 00-_____) on July 7, 2000, in Tampa. In connection with the filing of that petition, Mr. Cone -- in complicity with his wife, Joanne Cone, Patricia Rankin Grable, and others -- devised a scheme to fraudulently transfer CCI property to other persons or entities to fraudulently conceal the ownership or location of the property. Mr. Cone used various corporate entities to further the scheme to defraud, including Doyle Mines, Inc. Mr. Cone and his co-conspirators created and used fraudulent documents, including bogus articles of incorporation, fraudulent sales agreements, and fraudulent UCC-1 Financing Statements and UCC-3 Statements of Change, to accomplish the scheme to defraud others about the ownership and/or location of property. On Oct. 17, 2006, a grand jury returned an indictment against Mr. Cone charging him with conspiracy to violate federal bankruptcy laws, wire fraud affecting a financial institution, false statements, and two counts of bankruptcy fraud. On May 2, 2008, Mr. Cone was sentenced to five years' incarceration on each of the three counts, all to run consecutively, for a total sentence of 15 years followed by 36 months of supervised release. Mr. Cone had pled guilty. But in his request to set aside the sentence, he argued that his stand-in counsel, Marcelino Huerta, had a conflict of interest at his first plea hearing, and that his waiver of that conflict was involuntary, such that the counsel was ineffective. He also argued that there was no factual basis for his pleas to bankruptcy fraud at his second plea hearing and therefore the plea was in violation of his due process. He also said he was denied effective assistance of counsel following his second plea hearing and prior to appointment of counsel for his sentencing hearing, such that he was not able to cooperate with the U.S. government and was unable to have his state court sentencing continued until after his federal court sentencing. The case is, MICHAEL L. CONE v. UNITED STATES OF AMERICA, Case Nos. 8:10-cv-1975-T-24 MAP, No. 8:06-cr-43-T-24 MAP (M.D. Fla.). A copy of District Judge Susan C. Bucklew's June 28, 2012 Order is available at http://is.gd/GbWSxjfrom Leagle.com. CONQUEST PETROLEUM: Settles McGowan Lawsuit for $3 Million ---------------------------------------------------------- The Delhi Field had previously been subject to an environmental lawsuit filed by certain landowners on the property. That suit was settled in June 2009 and Conquest Petroleum Incorporated paid its share of the settlement and attorneys' fees. When the property was purchased in September 2006, Conquest indemnified all previous owners against any environmental claims. Conquest purchased the properties from McGowan Working Partners who had indemnified its previous owner and against similar claims. The owner from whom McGowan purchased the property sought reimbursement from McGowan for its share of payments. McGowan vigorously arbitrated the claim to no avail. McGowan then asserted the claim against Conquest in the amount of $3,020,000 and filed a lawsuit to collect these funds. Conquest agreed to the settlement in the amount of $3,020,000. McGowan agreed to drop claims for interest, attorneys' fees, and the nullification of the conveyance from McGowan to Conquest. About Conquest Petroleum Spring, Tex.-based Conquest Petroleum Incorporated (OTC BB: CQPT) -- http://www.conquestpetroleum.com/-- is an independent oil and natural gas company engaged in the production, acquisition and exploitation of oil and natural gas properties geographically focused on the onshore United States. The Company's areas of operation include Louisiana and Kentucky. The Company reported a net loss of $14.49 million in 2010 and a net loss of $23.26 million in 2009. The Company reported a net loss of $4.77 million for the nine months ending Sept. 30, 2011. The Company's balance sheet as of Sept. 30, 2011, showed $1.99 million in total assets, $32.56 million in total liabilities, and a $30.57 million total stockholders' deficit. As reported by the TCR on April 21, 2011, M&K CPAS, PLLC, in Houston, Texas, noted that Conquest Petroleum has insufficient working capital and reoccurring losses from operations, all of which raises substantial doubt about its ability to continue as a going concern. CONSTELLATION BRANDS: S&P Keeps 'BB+' CCR Over Imports Acquisition ------------------------------------------------------------------ Standard & Poor's Rating Services affirmed its 'BB+' corporate credit and senior unsecured debt ratings on Constellation Brands. The outlook is stable. The rating affirmation follows Victor, N.Y.-based Constellation Brands' announcement that it has signed a definitive agreement with Anheuser-Busch InBev (ABI) to purchase the remaining 50% interest in Crown Imports LLC for $1.85 billion (representing about 8.5x multiple of 50% of Crown's EBIT) when ABI completes its proposed acquisition of Grupo Modelo S.A.B. de C.V. Constellation Brands currently owns 50% of Crown, a 50-50 joint venture with Grupo Modelo. Crown, is a leading marketer of imported beer in the U.S., primarily Modelo beer brands. Constellation Brands has disclosed it has fully committed bridge financing in place to complete this transaction, but expects permanent financing to consist of a combination of revolver borrowings, a new term loan under its current senior credit facility (unrated), and the issuance of senior notes. Constellation Brands expects to complete the transaction, subject to regulatory approval, during the first quarter of calendar 2013. In addition, the company announced it is purchasing Mark West, a California pinot noir brand. Constellation Brands expects this acquisition to close in July. "While we believe the transactions will strengthen Constellation Brands' position as the largest multicategory supplier of beverage alcohol in the U.S., almost doubling its reported sales base, the company will finance the Crown transaction with debt," said Standard & Poor's credit analyst Jean Stout. "We estimate that pro forma for both transactions, fiscal year-to-date share repurchase activity, and recent debt refinancing, key credit ratios will weaken from fiscal 2012 year-end levels." According to Constellation Brands, it is the world's leading premium wine company, with leading positions within its primary markets of the U.S. and Canada, which are highly competitive and fragmented. In fiscal 2012, wine accounted for a significant portion of Constellation Brands' sales. Its wine portfolio is complemented by select premium spirits brands and other select beverage alcohol products, including imported beer through its Crown joint venture. The outlook on Constellation Brands is stable. We expect Constellation Brands to maintain its financial performance despite lingering weak macroeconomic conditions. While we expect pro forma credit measures will be weak for a "significant" financial profile following the Crown acquisition, we believe the company will forego shareholder-friendly initiatives in the near-to- intermediate term and apply discretionary cash flows to debt in order to strengthen credit ratios within one year of closing of the Crown transaction. This will include reducing and sustaining leverage close to 4x and FFO-to-debt in the high-teens percentage area. CORMEDIX INC: Has Until Aug. 22 to Regain NYSE Amex Compliance -------------------------------------------------------------- CorMedix Inc. received notice on June 27, 2012 from the NYSE Amex LLC that the NYSE-Amex has accepted the CorMedix's plan to regain compliance with continued listing standards of the NYSE-Amex. CorMedix's plan was submitted on May 17, 2012 in response to a letter from the NYSE-Amex which informed CorMedix it was below certain of the NYSE-Amex's continued listing standards due to financial impairment as set forth in Section 1003(a)(iv) of the NYSE-Amex Company Guide. CorMedix was afforded the opportunity to submit a plan of compliance to the NYSE-Amex and on May 17, 2012 presented its plan to the NYSE-Amex. On June 27, 2012 the NYSE- Amex notified CorMedix that it accepted the plan of compliance and granted CorMedix an extension until Aug. 22, 2012 to regain compliance with the continued listing standards. CorMedix will be subject to periodic review by the NYSE-Amex Staff during the extension period. Failure to make progress consistent with the plan or to regain compliance with continued listing standards by the end of the extension period could result in CorMedix being delisted from the NYSE-Amex. About CorMedix CorMedix Inc. -- http://www.cormedix.com/-- is a pharmaceutical company that seeks to in-license, develop and commercialize therapeutic products for the prevention and treatment of cardiac and renal dysfunction, also known as cardiorenal disease. CorMedix most advanced product candidate: CRMD003 (Neutrolin(R)) for the prevention of catheter related bloodstream infections and maintenance of catheter patency in tunneled, cuffed, central venous catheters used for vascular access in hemodialysis patients. CREEKSIDE SENIOR: 6th BAP Affirms Valuation of LIHTC Properties --------------------------------------------------------------- The U.S. Bankruptcy Appellate Panel for the Sixth Circuit affirmed a bankruptcy court's orders setting the market value of five Kentucky limited partnership debtors' low-income housing tax credit properties and overruling the Debtors' and their general partners' objection to valuation. The bankruptcy court concluded that, for purposes of determining the value of the secured portion of the claims of Bank of America, N.A., pursuant to 11 U.S.C. Sec. 506(a), a determination of the fair market value of various apartment complexes included consideration of the remaining federal low-income housing tax credits. In determining the value of the real property, the bankruptcy court also concluded that various rates or figures used by BofA's appraiser were more accurate. The bankruptcy court set these values for the Debtors' real properties: Low-Income Housing Tax Credit Value of Value of Properties Real Estate Tax Credits Total Value ----------- ----------- ----------- ----------- Creekside Senior $708,718 $350,000 $1,058,718 Apartments Nicholasville $307,475 $160,000 $467,475 Greens Townhomes Franklin Place $371,244 $445,000 $816,244 Senior Apartments Pennyrile Senior $446,188 $755,000 $1,201,188 Apartments Park Row Senior $727,427 $865,000 $1,592,427 Apartments A copy of the June 29, 2012 Opinion written by Bankruptcy Appellate Panel Judge Arthur I. Harris is available at http://is.gd/5QmejYfrom Leagle.com. Five single-asset real estate entities, as defined in 11 U.S.C. Sec. 101(51B), filed separate Chapter 11 bankruptcy petitions in September and October 2010: Creekside Senior Apartments, Limited Partnership (Bankr. E.D. Ky. Case No. 10-53019); Nicholasville Greens, Limited Partnership (Bankr. E.D. Ky. Case No. 10-53298); Franklin Place Senior Apartments, Limited Partnership (Bankr. E.D. Ky. Case No. 10-53300); Pennyrile Senior Apartments, Limited Partnership (Bankr. E.D. Ky. Case No. 10-53301); and Park Row Senior Apartments, Limited Partnership (Bankr. E.D. Ky. Case No. 10-53346). The cases are jointly administered. Douglas T. Logsdon, Esq. -- dlogsdon@mmlk.com -- serves as counsel to Creekside. In its petition, Creekside estimated $500,001 to $1 million in assets and $1 million to $10 million in debts. The petition was signed by Brian Doran, president of sole member of general partner. Each of the Debtors is a Kentucky limited partnership with a corresponding general partner, an administrative limited partner, and an investor limited partner. By virtue of the partnership agreements, the General Partners hold 0.01% of the corresponding limited partnership's equity interests, the administrative limited partners hold 0.01% of the corresponding limited partnership's equity interests, and the investor limited partners hold the remaining 99.98% of the corresponding limited partnership's equity interests. Each of the Debtors owns a parcel of real property on which it operates a low-incoming housing apartment complex. To finance the acquisition and construction/rehabilitation of their properties, the Debtors obtained construction loan financing from BofA. Each construction loan automatically converted into permanent financing upon various terms and conditions. Pursuant to the agreements, the Bank loaned: Creekside Senior Apartments, LP $1,390,000 Nicholasville Greens, LP $760,234 Franklin Place, LP $793,345 Pennyrile Senior Apartments, LP $534,242 Park Row Senior Apartments, LP $1,034,222 As security for these loans, the Bank took a first mortgage lien upon the Debtors' real properties. All five notes matured prior to the filing of the Debtors' bankruptcy cases. Each of the Debtors' real property complexes was developed in conjunction with the federal Low-Income Housing Tax Credit Program enacted by Congress in 1986 to encourage private market investment in low-income housing. In exchange for agreeing to rent restrictions, the owners or investors in the property get a dollar-for-dollar credit against their federal income tax obligations over a period of 10 years, provided that the property remains in compliance with the low-income housing tax credit program requirements. The Treasury Department administers the program while state agencies distribute the credits on a competitive basis. On Jan. 10, 2011, the Bank filed proofs of claim as to each Debtor: Creekside $1,272,589 Nicholasville Greens $714,857 Franklin Place $863,467 Pennyrile $466,294 Park Row $1,037,461 In each proof of claim, the Bank asserted that its claim was fully secured. On March 4, 2011, the Debtors and the General Partners filed a motion for a hearing to determine the value of the Bank's secured claims pursuant to 11 U.S.C. Sec. 506(a). The Debtors and the General Partners disputed the Bank's assertion that each claim was fully secured and instead alleged that the claims were substantially undersecured. The Debtors and the General Partners further asserted that a valuation hearing was vital because "[t]he treatment of the secured and unsecured portions of the [Bank's] Claims will be a critical component of the Debtors' and the General Partners' prospective plan." The Debtors filed their disclosure statement and plan on March 17, 2011. The plan states that the Bank will have an allowed secured claim "equal to the fair market value of [the Bank's] interest in the Estate's interest in such Debtor's Property as determined by the Court at the Valuation Hearing." Class 3 of the Debtors' plan is comprised solely of the Bank's allowed unsecured deficiency balance. The Debtors proposed to pay the Bank the "full principal amount of each of its Allowed Unsecured Claims" unless the Bank timely elected to be treated in accordance with the "Alternative Unsecured Claim Treatment." The Debtors and General Partners filed their First Amended Plan on Aug. 11, 2011, which provided for the same treatment of the Bank's claims as the original plan. On March 28, 2011, the bankruptcy court granted the Debtors' request to schedule a valuation hearing. The bankruptcy court also set forth various deadlines for identifying expert witnesses, submission of written reports and/or appraisals, filing a list of witnesses, submission of testimony by affidavit, and other various pretrial issues. DANNY'S DIGGIN': Iowa Appeals Court Affirms Foreclosure Ruling -------------------------------------------------------------- The Court of Appeals of Iowa affirmed a district court's declaratory ruling and issuance of a decree of foreclosure, which allowed Libertyville Savings Bank to foreclose on the farm mortgages of Daniel and Jill McKee. Libertyville was a lender to Danny's Diggin' N Dozin', Inc., an excavation business operated by Daniel "Danny" McKee and his wife, Jill. Danny's Diggin' N Dozin', Inc., based in Bloomfield, Iowa, filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 05-00596) on Feb. 8, 2005. Judge Lee M. Jackwig presided over the case. Jerrold Wanek, Esq., at Garten & Wanek, served as the Debtor's counsel. In its petition, the Debtor listed $647,675 in assets and $2,099,953 in debts. Danny's Diggin' N Dozin' emerged from the reorganization with a plan, a $1,400,000 consolidated debt to Libertyville, and the security agreements and the McKees' 2003 guaranty still in place. Under a new promissory note, Danny's Diggin' N Dozin' was to make monthly payments of $15,000 during the months of the construction season. The company later defaulted on the debt. The case is LIBERTYVILLE SAVINGS BANK, Plaintiff-Appellee, v. DANIEL M. McKEE and JILL L. MCKEE, Defendants-Appellants, No. 2-331/11-0831 (Iowa App. Ct.). A copy of the Court's June 27, 2012 decision is available at http://is.gd/HC332wfrom Leagle.com. David Morse, Esq. -- morse@rosenbergmorse.com -- at Rosenberg & Morse, argues for the McKees. Paul Zingg, Esq., at Kiple, Denefe, Beaver, Gardner & Zingg, L.L.P., argues for the bank. DOUG LARSEN: Minute Entry Does Not Constitute Proper Order ---------------------------------------------------------- Doug Larsen Construction, a small business debtor, filed a disclosure statement and chapter 11 plan on Feb. 26, 2012. The following day, it filed a motion requesting the Court to extend the deadline for confirming the plan to July 2, 2012. The United States Trustee objected to the disclosure statement. At the hearing on April 9, the Court ruled it would deny approval of the disclosure statement and grant the extension motion. The minute entry, reflecting the proceedings at the April 9 hearing, stated that "An order is forthcoming." A proposed order denying approval of the disclosure statement was submitted by the U.S. Trustee and entered by the Court on April 16. No order was ever submitted on the Extension Motion, and none was entered. On May 24, 2012, the Debtor filed the Amended Disclosure Statement along with an amended chapter 11 plan. The U.S. Trustee objected to the Amended Disclosure Statement, citing, among other grounds, that the deadline for the Debtor to confirm a plan had lapsed because no order was ever entered on the Extension Motion and, therefore, the case was subject to dismissal or conversion under the Court's decision in In re Roots Rents, Inc., 420 B.R. 28 (Bankr. D. Idaho 2009). The U.S. Trustee also argued that even if the Debtor had successfully extended the deadline for confirming its plan to July 2, there was insufficient time, given the applicable noticing requirements, for the Debtor to confirm a plan by that date. On June 23, as part of its response to the U.S. Trustee's objection, the Debtor filed a Second Extension Motion, in which it requested a further extension of time for confirming its plan to Aug. 31. The Debtor also filed a motion to shorten time so that the Second Extension Motion could be heard on June 25 in conjunction with the hearing on the Amended Disclosure Statement. The Court granted the Debtor's motion to shorten time, and at the June 25 hearing entertained argument on both the Amended Disclosure Statement and the Second Extension Motion. In a June 29, 2012 Memorandum of Decision available at http://is.gd/epTyODfrom Leagle.com, Chief Bankruptcy Judge Terry L. Myers denied approval of the Debtor's Second Extension Motion -- and the Amended Disclosure Statement. Judge Myers said the April 9 minute entry did not constitute an order for purposes of 11 U.S.C. Sec. 1121(e)(3), as it was not intended to be the Court's final act on the Debtor's Extension Motion. "The minute entry on its face contemplated the subsequent entry of a separate order on the Court's ruling. Further, the Court can, with confidence, state that it was not its intention that the minute entry be the final act on the Extension Motion," Judge Myers said. The Court noted that, while expiration of the time for confirming a plan under 11 U.S.C. Sec. 1129(e) may create cause for dismissal or conversion under Sec. 1112(b) -- an issue alluded to in the briefs of both the U.S. Trustee and the Debtor -- there is no motion for conversion or dismissal currently pending before the Court. Issues regarding conversion or dismissal of the case will be addressed if and when such a motion is properly brought, the Court said. In the Debtor's response to the U.S. Trustee's objection to the Amended Disclosure Statement, the Debtor made a qualified or contingent request to dismiss the case should the Court find a violation of Sections 1121(e) and 1129(e). Judge Myers said the Debtor's request is denied. The Debtor can file a proper motion to dismiss and provide notice of the same should it choose. Doug Larsen Construction, Inc. filed a Chapter 11 petition (Bankr. D. Idaho Case No. 11-02567) on Aug. 22, 2011, estimating under $1 million in assets and debts. DYNEGY HOLDINGS: Disclosure Statement Being Approved ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Dynegy Inc. was told by the bankruptcy judge at a hearing July 2 that she will approve disclosure materials explaining the revised reorganization plan for subsidiary Dynegy Holdings LLC. Disclosure statement approval means creditors soon will be voting on the Chapter 11 plan. According to the report, the disclosure statement tells unsecured creditors with claims totaling about $4.2 billion why they can expect a recovery between 59% and 89%. The newest disclosure statement still doesn't say for sure whether the Dynegy parent will file its own Chapter 11 petition and if so when. The report relates that the current version of the plan is the latest iteration of a reorganization for Dynegy Holdings first worked out before filing under Chapter 11 in November. Creditor objection resulted in appointment of an examiner who issued a report saying a restructuring last year involved fraudulent transfers with actual intent to hinder and delay creditors. Two settlements followed before there was global agreement on a new plan structure. According to the report, the plan gives $200 million cash and 99% of the merged companies' stock to holders of $4.2 billion of unsecured claims against Dynegy Holdings. The claims include about $3.5 billion on six issues of notes, $110 million for a tax- indemnity claim, $540 million on lease guaranty claims, and $55 million to holders of $222 million in subordinated debt. The other 1% of the merged companies' stock plus warrants for 13.5% more will go to a trust in satisfaction of the Dynegy parent's claim deemed to arise as an expense of the Dynegy Holdings Chapter 11 case. The five-year warrants will have an exercise price based on a $4 billion net equity value for the reorganized company. The $1.05 billion in 8.375% senior unsecured notes of Dynegy Holdings LLC last traded July 2 for 66.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. As a result of the examiner's March 9 report, the Dynegy stock lost almost 60% of its value in two days' trading. The stock fell less than 1 cent on July 2 to 58.1 cents in New York Stock Exchange trading. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. EASTMAN KODAK: Wins Approval to Auction Digital Imaging Patents --------------------------------------------------------------- Eastman Kodak Company obtained approval from the Bankruptcy Court to conduct an auction to sell its Digital Capture and Kodak Imaging Systems and Services (KISS) patent portfolios. Kodak's motion was contested by Apple, Inc. and FlashPoint Technologies, Inc. which have asserted "ownership" interests in a small number of the 1,100 patents in the portfolios. The Bankruptcy Court, over Apple and Flashpoint's objections, found that all of the patents in the Digital Capture and KISS patent portfolios are property of Kodak's estate. Accordingly, the Court granted Kodak the right to sell these patents free and clear of Apple and FlashPoint's claims at the auction, subject to the applicable provisions of the U.S. Bankruptcy Code. "We are gratified that the Court has enabled us to move ahead with our patent auction in a timely manner and with clarity on ownership for the winning buyer," said Timothy Lynch, Kodak Vice President and Chief Intellectual Property Officer. As previously announced, interested buyers will be able to submit bids on a confidential basis, subject to review by Kodak, certain of its creditors and the Bankruptcy Court. The auction is expected to be held in early August. Kodak is selling the patents under section 363 of the U.S. Bankruptcy Code which permits a sale free and clear of any adverse claim or interest. The patents will be sold in a fair, competitive process overseen by the Bankruptcy Court. At closing, the winning bidder can obtain an order of the Bankruptcy Court that protects it against any third-party ownership claims. The Bankruptcy Court's ruling provides a path to separate the auction process from continuing litigation about the Apple and Flashpoint claims. Kodak believes these claims are without merit, and is also seeking a determination on summary judgment, expected to be heard in July, that the claims are time-barred. Lynch said: "The Apple and FlashPoint claims are baseless and Kodak will still seek dismissal on summary judgment in July. However, today's ruling provides a Court-approved process allowing buyers to acquire the patents free and clear of all ownership allegations, regardless of the status of the dispute with Apple and Flashpoint at the time of closing." Even if the dispute with Apple and FlashPoint has not been fully resolved by the time of closing of the patent sale, Kodak may still sell the patents free and clear of Apple and FlashPoint's claims by establishing "adequate protection" under the Bankruptcy Code for Apple and Flashpoint at the time of sale. Kodak's adequate protection could take many forms depending on the value of any remaining alleged interests, the amount of the sale proceeds, and other factors. Alternatively, the Bankruptcy Court also authorized Kodak to sell the patents subject to Apple and FlashPoint's claims, if mutually agreed between Kodak and the winning bidder. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: D&Os Win OK for XL to Pay Defense Costs ------------------------------------------------------ A group of current and former officers, directors and employees of Eastman Kodak Co. obtained a court order authorizing XL Specialty Insurance Company to pay their defense costs. The defense costs are covered by the insurance policy of XL Specialty, which provide up to $25 million in coverage for the May 31, 2011-May 31, 2012 policy year. The policy provides insurance for Kodak officers, directors and employees who are involved in securities class actions. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: Court Approves Carestream Supply Agreement --------------------------------------------------------- Eastman Kodak Co. obtained a court order on June 25 approving its new supply agreement with Carestream Health, Inc. The supply agreement replaces a 2008 contract between the companies, which expired on April 30. The new agreement will ensure that Eastman Kodak will be able to obtain toll coating for its film products through December 31, 2014, according to court papers. It requires Eastman Kodak to renew another contract with Carestream, which allows the latter to lease the company's facilities in Eastman Business Park for its toll coating operations until December 31, 2014. The new agreements are not available for public disclosure because they reportedly contain confidential information. Earlier, Eastman Kodak was granted approval by the bankruptcy court to file the agreements under seal. The June 25 order also gave Carestream a go-signal to set off its accounts payable claim in the sum of $2,109,888 against Eastman Kodak's claim in the sum of $1,726,291. The balance of the accounts payable claim will be allowed as a "general unsecured, non-priority claim" against Eastman Kodak's estate. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: Seeks to Reject Agreement With Schneider ------------------------------------------------------- Eastman Kodak Co. and its affiliated debtors filed a motion seeking court approval to end a license agreement with Jos. Schneider Optische Werke GmbH, citing significant savings from the termination. The agreement dated January 28, 2008, provides Eastman Kodak rights to use the "Schneider Kreuznach" brand name on digital camera lens systems. The contract provides "no further value" to the company since it has already exited the digital camera business, according to its lawyer, Pauline Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in New York. A court hearing to consider termination of the license agreement is scheduled for July 18. Objections are due by July 11. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: States Arguments Against Apple's Patent Claims ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co. made arguments to the bankruptcy judge explaining why claims of Apple Inc. to ownership of 10 patents can be discarded without even holding a trial. There are no disputed issues of fact barring summary dismissal of Apple's ownership claims, Kodak contends. According to the report, the papers were filed at the end of last week in the lawsuit Kodak initiated last month in U.S. Bankruptcy Court at the behest of the bankruptcy judge who said that claims to patent ownership couldn't be thrown out short of filing a complaint. Apple is simultaneously asking a U.S. district judge to remove the suit from bankruptcy court. The issue on removal of the suit won't be heard in district court until July 26, when Kodak hopes the bankruptcy judge will rule against Apple at a July 23 hearing. The report relates that at issue is ownership of 10 patents claimed by Apple and the same 10 plus three others that FlashPoint Technology Inc. claims to own. FlashPoint was spun off from Apple in 1996. Kodak contends that Apple's ownership claims are based on breach of a 1994 contract where the two companies jointly developed technology. Kodak, the report discloses, argues that the ownership claim is barred because Apple and Flashpoint didn't make their claims within four years of 2001 when Kodak began publicizing the licensing of the technology. Kodak's second theory relies on the so-called laches doctrine. Laches bars claims to ownership, under Kodak's theory because the ownership claims weren't made within six years. Opposition papers by Apple and FlashPoint are due July 16. Kodak has been contending that Apple is making ownership claims to frustrate the process of selling technology. At a hearing July 2, the bankruptcy judge said he would approve procedures leading up to an auction in August. The lawsuit in bankruptcy court with Apple is Eastman Kodak Co. v. Apple Inc., 12-01720, U.S. Bankruptcy Court, Southern District of New York (Manhattan). Apple's motion to remove the new lawsuit from bankruptcy court is Eastman Kodak Co. v. Apple Inc., 12-04881, U.S. District Court, Southern District of New York (Manhattan). About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EDISON MISSION: S&P Downgrades CCR to 'CCC' on Refinancing Risk --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Edison Mission Energy (EME) and its subsidiaries Midwest Generation LLC (Midwest Gen) and Edison Mission Marketing & Trading Inc. (EMMT), to 'CCC' from 'CCC+' based on greater refinance risk in 2013 due to lower cash flow over the medium term and reduced liquidity and greater potential for corporate restructuring. The outlook is negative. "We affirmed our 'CC' issue rating on Homer City Funding LLC's senior secured notes. The rating still has a negative outlook due to high potential for capital restructuring in the next few months that we would view equal to a payment default," S&P said. EME did not renew its $500 million revolving credit facility at Midwest Gen that matured this month. No balance was outstanding. Liquidity is available now only from unrestricted cash balances at EME, Midwest Gen, and other subsidiaries, totaling $1.3 billion as of March 31, 2012. Debt of $500 million is due in June 2013. Because of the high required capital spending and weak operating cash flows, there is significant risk that the company will not be able to successfully refinance the 2013 debt maturity. Capital spending at Midwest Gen will run about $520 million in 2012-2014. Cash flow from key subsidiary Midwest Gen is depressed due to low power prices. Furthermore, EME expects to pay $185 million to parent Edison International (BBB-/Stable/--) in 2012 under their tax-allocation agreement. The negative outlook on EME, Midwest Gen, and EMMT reflects higher refinancing risk due to the tightening liquidity situation and financial performance that remains weak during a period of low power prices, and greater prospects for some type of corporate restructuring. Developments that could lead to a rating decline include further deterioration in financial performance, or increased uncertainty about EME's ability to roll over its $500 million notes maturing in June 2013, or greater expectations on our part of debt restructuring that may be unfavorable to lenders or that may be viewed as a default under our corporate rating criteria. While unlikely, we could raise the ratings if we believe EME will likely have the ability to refinance the 2013 bonds without entering into a restructuring or distressed debt exchange. ELITE PHARMACEUTICALS: Incurs $15-Mil. Net Loss in Fiscal 2012 -------------------------------------------------------------- Elite Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss attributable to common shareholders of $15.05 million on $2.42 million of total revenues for the year ended March 31, 2012, compared with a net loss attributable to common shareholders of $13.58 million on $4.26 million of total revenues during the prior year. The Company's balance sheet at March 31, 2012, showed $10.31 million in total assets, $25.29 million in total liabilities and a $14.98 million total stockholders' deficit. Demetrius & Company, L.L.C., in Wayne, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2012, citing significant losses resulting in a working capital deficiency and shareholders' deficit, which raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/fmqymY About Elite Pharmaceuticals Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary technology and the development and manufacture of generic pharmaceuticals. The Company has one product, Phentermine 37.5mg tablets, currently being sold commercially. ELO TOUCH: S&P Assigns 'B' Corporate Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services said it assigned a corporate credit rating of 'B' to Menlo Park, Calif.-based Elo Touch Solutions Inc. The outlook is stable. "At the same time, we assigned an issue-level rating of 'B+' to the company's $175 million senior secured first-lien term loan due 2018 and $15 million revolving credit facility due 2017 with a recovery rating of '2', indicating our expectation of substantial (70%-90%) recovery in the event of default. We also assigned a rating of 'CCC+' to the company's $85 million senior secured second-lien term loan due 2018 with a recovery rating of '6', indicating our expectation of negligible (0%-10%) recovery in the event of default," S&P said. "The company reduced its first-lien term loan to $175 million from the proposed $180 million and increased pricing to LIBOR plus 650 from the proposed LIBOR plus 525. It also reduced its second-lien term loan to $85 million from the proposed $90 million and increased pricing to LIBOR plus 1025 from the proposed LIBOR plus 925. These changes do not affect our ratings on the company," S&P said. Elo used the proceeds to fund The Gores Group's acquisition of the company from TE Connectivity. The ratings on Elo reflect its "vulnerable" business risk profile based on its narrow market focus in the fragmented and competitive touch-screen solutions industry, its concentrated customer base and retail end market, and its lack of a track record operating as a stand-alone company. Partially offsetting these factors are its strong presence in the retailer segment and its relationships with distributors and original equipment manufacturers (OEMs). "The company has an "aggressive" financial risk profile, reflecting its leveraged capital structure, with pro forma Standard & Poor's adjusted leverage that we expect will remain near 5x over the medium term. Elo is a supplier of touch-screen products and components to distributors and OEMs serving commercial end users. Retailers, who use Elo's products at the point-of-sale, are the company's largest end market, followed by health care providers who require specific designs to satisfy FDA regulations," S&P said. "The company's products are also used in transportation, gaming, and industrial markets. The market for touch-screen solutions is fragmented, with competition coming from OEMs, as well as smaller foreign manufacturers. "In our view," said Standard & Poor's credit analyst Christian Frank, "Elo has a vulnerable business risk profile resulting from its niche market position within the touch-screen solutions industry and its concentrated retail end market and customer base, with its top few distributors making up a significant portion of revenue." However, the company has built a defensible position in its niche serving the retailer end market based on solid relationships with distributors, value- added resellers (VARs), and OEMs," S&P said. "Nonetheless, it is in a more mature segment of the overall touch- screen market and could face challenges from new technologies or form factors. The stable outlook reflects our expectation that Elo will generate modest growth and successfully transition to a stand-alone company. We anticipate that it will not de-lever materially over the intermediate term as it uses cash flow for investing in its stand-alone infrastructure and generates limited EBITDA growth, and therefore an upgrade is unlikely. We could lower the rating if stand-alone transition challenges, increased competition, or a large customer loss cause EBITDA to decline and leverage to increase to the mid-5x area," S&P said. EVERGRANDE REAL: S&P Alters Outlook to Negative; Affirms 'BB' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the rating outlook on Chinese property developer Evergrande Real Estate Group Ltd. to negative from stable. "At the same time, we affirmed the 'BB' long-term corporate credit rating on Evergrande and the 'BB-' issue rating on the company's outstanding senior unsecured notes. As a result of the outlook revision, we lowered our Greater China credit scale rating on Evergrande to 'cnBB+' from 'cnBBB-' and that on the notes to 'cnBB' from 'cnBB+'," S&P said. "We revised the outlook to reflect our view that Evergrande may face a tougher refinancing environment following allegations of frauds by a U.S.-based investment research company," said Standard & Poor's credit analyst Christopher Lee. "In our opinion, Evergrande's corporate governance assessment could deteriorate if the company continues to materially invest in non-core businesses and pursues a high-growth strategy." "Evergrande's funding costs may have increased due to the fraud allegations by Citron Research. Our view is reflected in Evergrande's equity and bond prices, which have weakened since Citron's report was made public. Confidence in Evergrande may take time to recover, and lenders and investors may demand higher funding costs until the company can achieve good financial performances. Evergrande may be diverting resources away from its core business in property development by increasing its investments in non-property businesses," S&P said. "In our view, the synergy of these businesses with property development is limited and profitability is uncertain. According to the company, its total investments in sports and entertainment could increase to Chinese renminbi (RMB) 800 million in 2012 from RMB450 million a year earlier, with losses of about RMB200 million," S&P said. "We affirmed the ratings because of Evergrande's good execution and its large, geographically diversified, low-cost land bank. These factors support our view that the company's business risk profile is "fair". After a slow start, the company is on track to meet its full-year property sales target. Margins are likely to have declined compared with last year. They should, however, stay in line with our expectation of a 10% drop in property prices for the sector in 2012," said Mr. Lee," S&P said. "We stand by our base-case scenario for Evergrande, which supports credit ratios appropriate for a "significant" financial risk profile. We have assumed RMB80 billion in property sales for 2012, sales revenue of about RMB70 billion-RMB75 billion, and an EBITDA margin of about 25%, down 2 percentage points from a year earlier. Borrowings may be higher than our base case, but we expect the company's debt-to-EBITDA ratio and EBITDA interest coverage to each hover around 3x-4x," S&P said. "We may lower the rating if Evergrande materially deviates from its non-core business, its sales and profitability are much lower than we expect, and its debt-funded expansion is more aggressive than we anticipate. We could also downgrade the company if we believe market confidence has had a detrimental impact on Evergrande's funding costs and if further allegations of impropriety surface. Downgrade triggers could be a debt-to-EBITDA ratio of more than 5x, EBITDA interest coverage of less than 3x, and unrestricted cash of less than RMB10 billion," S&P said. "We may revise the outlook back to stable if market confidence in the company recovers, as reflected in securities prices and funding costs, and there are no further negative developments alleging fraud or misrepresentations for the next 12 months. We may also revise the outlook to stable if the company's financial performances are good and it maintains leverage in line with our base-case scenario for the next 12 months," S&P said. FERTITTA MORTON: S&P Withdraws 'B' CCR Over Landry Consolidation ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all of its ratings, including the 'B' corporate credit rating, on Fertitta Morton's Restaurants Inc. The withdrawal of the ratings follows the recent consolidation of Fertitta Morton's into Landry's Inc. Debt at Fertitta Morton's was repaid as part of that transaction. FILENE'S BASEMENT: Syms Reaches Deal With Committees ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Syms Corp. and subsidiary Filene's Basement LLC reached a settlement with official committees representing creditors and shareholders. The agreement will lead to filing a modified reorganization plan that will be "fully consensual," the discount retailers said in a court filing. The revised plan will pay claims against Syms in full within "agreed upon time frames," the filing states. The new plan, which has yet to be written, will be filed "in coming days," with the aim of exiting Chapter 11 "as quickly as possible." According to the report, the court filing shows that trade and supplier claims against Filene's will also be paid in full. Claims arising from terminated leases not guaranteed by Syms will receive 75% payment, also within specified time frames. The settlement provides that Marcy Syms will sell her stock back to the company for $2.49 a share. The plan will be financed in part with a rights offering available to existing shareholders to buy about 10 million shares of new stock for $2.49 a share. Proceeds will be used in part to purchase existing stock from Marcy Syms. The report relates that members of the shareholders' committee are committed to purchase any stock not bought by other shareholders. The shareholders backstopping the rights offering won't receive backstop fees other than payment of counsel fees. Sales of real estate will also be used to repurchase existing stock from Marcy Syms. The bankruptcy court called for a hearing on July 9 for approval of the agreement underlying the newly-negotiated plan. The agreement was reached in mediation conducted by U.S. Bankruptcy Judge James M. Peck from New York. 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. FIRST MIDWEST: Moody's Lowers Preferred Stock Rating to 'Ba1' ------------------------------------------------------------- Moody's Investors Service downgraded the long-term ratings of First Midwest Bancorp, Inc. and its subsidiaries. First Midwest Bancorp, Inc.'s senior debt rating was downgraded to Baa2 from Baa1. The lead bank, First Midwest Bank, had its standalone bank financial strength rating (BFSR)/baseline credit assessment (BCA) downgraded to C-/baa1 from C/a3, and its long-term deposit rating downgraded to Baa1 from A3. The bank's Prime-2 short-term rating was affirmed. Following the rating action, the outlook on all ratings is stable. First Midwest Bancorp, Inc. and its subsidiaries are collectively referred to hereafter as 'First Midwest'. Ratings Rationale The one-notch downgrade of First Midwest's long-term ratings reflects the bank's weaker asset quality and profitability performance relative to similarly-rated peers. Moody's said this is largely a function of First Midwest's commercial real estate (CRE) concentration. At March 31, 2012, First Midwest's non-owner occupied CRE exposure was a high 295% of Tier 1 common. Moody's added that the CRE portfolio is geographically concentrated in the comparatively weak suburban Chicago market. At March 31, 2012, First Midwest's nonperforming assets (NPAs), which include accruing restructured loans but exclude FDIC-covered assets, represented 4.7% of loans plus other real estate owned compared to 3.1% for the C/a3 rating peer group median. Management recently indicated that the aggressive remediation of problem assets remains a strategic priority. Moody's views this strategy positively, especially given the bank's strong capital position. Moody's also noted the ongoing improvement in First Midwest's CRE loan composition, with riskier construction and land loans now accounting for about 5% of total loans. Nonetheless, given First Midwest's concentrated exposure to the soft Chicago CRE market, its rating is better positioned at its new level. First Midwest's core profitability is another area of relative weakness, with pre-provision income to risk-weighted assets of less than 2% in 2011 and the first quarter of 2012. Given the low interest rate environment, lackluster loan demand, and a highly competitive Chicago market, Moody's does not expect significant improvement in First Midwest's profitability metrics in the near term. Moody's noted that the stable outlook on First Midwest's ratings is supported by several key areas of strength. First, its capital position is strong with a Tier 1 common ratio of 10.4% at March 31, 2012. The bank's capital position was bolstered by a common equity raise in early 2010 and internal capital generation through earnings since the first quarter of 2011. Additionally, the bank benefits from its solid core deposit base in suburban Chicago. Finally, First Midwest maintains a sound holding company liquidity profile. First Midwest Bancorp, Inc. is headquartered in Itasca, Illinois and reported assets of $8 billion at March 31, 2012. The methodology used in these ratings was Moody's Consolidated Global Bank Rating Methodology published in June 2012. Downgrades: Issuer: First Midwest Bancorp, Inc. Issuer Rating, Downgraded to Baa2 from Baa1 Subordinate Regular Bond/Debenture, Downgraded to Baa3 from Baa2 Issuer: First Midwest Bank Bank Financial Strength Rating, Downgraded to C- from C Issuer Rating, Downgraded to Baa1 from A3 Senior Unsecured Deposit Rating, Downgraded to Baa1 from A3 OSO Senior Unsecured OSO Rating, Downgraded to Baa1 from A3 Issuer: First Midwest Capital Trust I Pref. Stock Preferred Stock, Downgraded to Ba1 from Baa3 Outlook Actions: Issuer: First Midwest Bancorp, Inc. Outlook, Changed To Stable From Rating Under Review Issuer: First Midwest Bank Outlook, Changed To Stable From Rating Under Review Issuer: First Midwest Capital Trust I Outlook, Changed To Stable From Rating Under Review FIRST WIND: S&P Removes 'B-' Corp. Credit Rating From CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on First Wind Capital LLC and removed the rating from CreditWatch with negative implications. The outlook is stable. The recovery rating on the senior secured notes remains '1', indicating a high expectation of recovery. The issue rating on First Wind Capital's $200 million senior secured notes is 'B+'. "On June 15, 2012, FW Capital announced that it closed an agreement with power and utilities company Emera Inc. to jointly build, own, and operate wind energy projects in the Northeast U.S.," said Standard & Poor's credit analyst Grace Drinker. "FW Capital used the $174 million net proceeds from this transaction for various distributions, and held the remaining $24 million a liquidity buffer. Given that note proceeds are going to cover most of the equity portion of the near-term projects, we view this liquidity buffer as a key contribution to the portfolio's credit quality," Ms. Drinker added. Any deterioration in liquidity would likely lead to a lowered rating. FRANK LEVESQUE: BAP Affirms Order Denying Chapter 11 Conversion --------------------------------------------------------------- The U.S. Bankruptcy Appellate Panel for the Ninth Circuit affirmed the bankruptcy court's order granting the request of Frank and Bonnie Levesque to reopen their chapter 7 bankruptcy case but denying their request to convert the case to chapter 11. "Based on the record presented in this appeal, we can discern no error, let alone clear error, of fact that would lead us to conclude that the bankruptcy court abused its discretion in denying the Levesques' motion to convert," the BAP said. On Sept. 15, 2009, the Levesques were involved in a motor vehicle accident that apparently resulted in substantial personal injuries to both Mr. and Ms. Levesque. The Levesques already had fallen behind on their mortgage payments, and their financial problems worsened after the Accident. The Levesques filed a chapter 7 bankruptcy petition on June 24, 2010. Their bankruptcy counsel was Shawn Christopher of the Christopher Legal Group. On June 24, 2010, Brian D. Shapiro was appointed as the chapter 7 trustee in the Levesques' bankruptcy case. In their schedules, the Levesques confirmed under penalty of perjury that they did not have any unliquidated claims against any third parties. The Levesques received their discharge by order entered on Oct. 4, 2010. The Chapter 7 Trustee was discharged and the Levesques' chapter 7 case was closed by Final Decree entered on Oct. 7. Sometime prior to Oct. 18, 2010, the Levesques retained the Law Office of Henness & Haight to pursue recovery of damages from Falcon Industries, Inc. based on their injuries resulting from the Accident. On Oct. 18, 2010, the Henness Firm made demand on Falcon for $750,000. On Jan. 5, 2011, the Levesques filed a lawsuit against Falcon to assert the Claim. During a deposition of the Levesques taken in the Lawsuit, counsel for Falcon questioned the Levesques and asked them why they had not listed the Claim in their bankruptcy, intimating that they "had committed some fraud." Thereafter, on Nov. 11, 2011, the Levesques, through new counsel, Edward S. Coleman, filed the Motions. In the combined Motions, the Levesques disclosed the Claim to the bankruptcy court for the first time. The Chapter 7 Trustee joined the Levesques' motion to reopen their bankruptcy case but opposed their motion to convert it to chapter 11, based on their prior failures to disclose the Claim. The bankruptcy court entered an order reopening the Levesques' bankruptcy case and denying their motion to convert the case to chapter 11 on Dec. 19, 2011. The Levesques timely appealed. At oral argument, the Chapter 7 Trustee advised that he had been reappointed as the trustee in the Levesques' reopened chapter 7 case. The appeal is FRANK J. LEVESQUE; BONNIE R. LEVESQUE, Appellants, v. BRIAN D. SHAPIRO, Chapter 7 Trustee, Appellee, BAP No. NV-11- 1742 (9th Cir. BAP). A copy of the BAP's June 25, 2012 opinion is available at http://is.gd/IufPHPfrom Leagle.com. FREMONT GENERAL: Signature Asks Shareholders to Avoid McIntyre -------------------------------------------------------------- Signature Group Holdings, Inc., said in a statement that it met with Institutional Shareholder Services to discuss the Company's director nominees and other proposals on the WHITE proxy card to be voted on at the Company's upcoming annual meeting to be held on July 24, 2012. The Company's presentation to ISS was filed with the Securities and Exchange Commission on June 28, 2012 and is available on its website. "Our highly credible and capable director nominees support - and can contribute to -- a business plan that will enhance value for all stockholders," said Craig Noell, Chief Executive Officer of Signature. In addressing the limited business strategy proposed by James McIntyre, the former Chairman and CEO of the Company when it operated prior to bankruptcy as Fremont General Corporation, Mr. Noell stated, "Mr. McIntyre's simplistic and limited approach for the Company's business strategy, underscores why it is so important that stockholders vote FOR our nominees on the WHITE proxy card. Mr. McIntyre's latest letter to stockholders fails to present a comprehensive and coordinated plan. This letter demonstrates a fundamental misunderstanding of the challenges the Company continues to face, a significant number of which are associated with his prior tenure when Fremont recorded net losses of $202.3 million and $1.0 billion in 2006 and 2007, respectively." Stockholders should ask, "Should the person, whose past performance as Chairman of the Company led it to bankruptcy, accumulating approximately $900 million in Net Operating Losses (NOLs), now be entrusted to maximize the value of these NOLs?" Mr. McIntyre's letter fails to disclose pertinent facts: "Mr. McIntyre's approach calls for outsourcing deal identification to an investment banker. This is an effective admission that there are insufficient deal-sourcing capabilities among his nominees and would place the future of your Company in the hands of a financial agent whose interests are not necessarily aligned with yours. Additionally, this strategy would subject the Company to paying huge investment banking fees and competing in auction processes where purchase price multiples can lead to overpaying for a target company. In contrast, our approach is opportunistic, yet disciplined, giving the Company the latitude to pursue transactions that serve the best interests of all stockholders. Mr. McIntyre's approach could take years to execute and prove very costly. We are aware of other companies with large NOLs that have business plans in place looking for that single, well-priced acquisition target and these companies have waited years for "the big one" to materialize. Our approach gives the Company flexibility to not only pursue larger acquisitions, but middle- market acquisitions that would be accretive to earnings, growth and positive cash flow. Why should we wait? Our executive compensation is directly aligned with our stockholders' interests. The majority of our management team's compensation is in stock options that only pay out if the stock price rises. Contrary to Mr. McIntyre's claims, we are clearly incentivized to deliver value for our stockholders. This is in direct contrast to Mr. McIntyre's compensation when he was Chairman and CEO of Fremont, where he received tens of millions of dollars in cash and common stock compensation while Fremont's stockholders saw the value of their investment plunge. Mr. McIntyre incorrectly overstates the level of annual compensation for our executives and appears to add equity grants that encompass the next several years into one annual number. We have made significant progress in repairing the Company, addressing many of the problems created during Mr. McIntyre's regime, including reducing the net loss by 89% since emerging from bankruptcy. We resolved over 200 legal proceedings associated with the McIntyre-led Fremont operations. We rebuilt an experienced accounting and finance team and made significant progress in remediating the Company's "Material Weakness," stemming from the McIntyre regime, in internal control surrounding financial reporting." Mr. Noell further added, "Our accomplishments have put the Company in a position to take full advantage of our comprehensive business strategy. In order to have full access to the capital markets and be able to execute on our plan, the Company needed to be compliant with its SEC reporting requirements and able to disclose its financial position. In a focused effort, we cleared a backlog of over five years of delinquent reporting and accounting practices in an 18 month period. We now have flexibility and the availability of resources that did not exist while we were clearing up the mess created in the McIntyre era." "We urge stockholders to examine the facts. We believe that when stockholders look at the progress under the current Board and its plans to enhance shareholder value, and then consider the value- destroying record of McIntyre and his lack of a credible business plan, they will recognize that they cannot entrust the future of the Company to Mr. McIntyre and his hand-picked nominees," Mr. Noell concluded. About Signature Group Signature Group Holdings, Inc. -- http://www.signaturegroupholdings.com/-- is a diversified0 business and financial services enterprise with principal activities in industrial distribution and special situations debt. Signature has significant capital resources and is actively seeking acquisitions as well as growth opportunities for its existing businesses. The Company was formerly a $9 billion in assets industrial bank and financial services business that reorganized during a two year bankruptcy period. The reorganization provided for Signature to maintain Federal net operating loss tax carryforwards in excess of $850 million. Fremont General Corp. filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represented the Debtor as counsel. Kurtzman Carson Consultants LLC was the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represented the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. Fremont General emerged from bankruptcy and filed Amended and Restated Articles of Incorporation with the Secretary of State of Nevada on June 11, 2010, which, among other things, changed the Debtor's name to Signature Group Holdings, Inc. Signature's plan of reorganization became effective on June 11, 2010. The name change also took effect as of that date. GAMETECH INT'L: Files for Chapter 11 as Rival Buys Debt ------------------------------------------------------- GameTech International, Inc. and its wholly owned subsidiaries have filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11964) to effect a restructuring of the company's debt obligations. GameTech, which filed the petition on July 2, disclosed total assets of $27.22 million and total liabilities of $22.88 million as of Jan. 29, 2012. Judge Peter J. Walsh convened a hearing on the first day motions on July 3. Motions filed include request to use cash collateral, pay employee wages, maintain bank accounts and pay sales and gaming taxes. The bankruptcy judge granted interim approval to the Debtors' request to use cash collateral. A final hearing is scheduled for July 18, 2012 at 10:30 a.m. The Debtors tapped Greenberg Traurig LLP as bankruptcy counsel and Kinetic Advisors LLC as financial advisor. The Company noted that it intends to operate as usual during the restructuring process and that it does not expect any interruptions in providing service to its customers and distributors. Rival Bought Secured Loan The Company entered into an Amended and Restated Loan Agreement with U.S. Bank N.A. and Bank of West, on June 15, 2011, which amended the terms of the Company's then-existing senior secured credit facility with the Lenders. Since May 7, 2012, the Company has been operating under a Forbearance Agreement with the Lenders, pursuant to which, the Lenders agreed to refrain from exercising certain rights and remedies available under the Loan Agreement. The Forbearance Agreement expired on June 30, 2012, and, under the terms of the Loan Agreement, the outstanding principal balance of approximately $16 million, together with accrued but unpaid interest, also matured on June 30, 2012. On June 27, 2012, the Company received notice that the Lenders had sold their rights and obligations under the Loan Agreement to the Yuri Itkis Gaming Trust of 1993, which is also the owner of one of the Company's competitors in the bingo industry. GameTech hoped to address the debt restructuring in a consensual and negotiated process with the Trust during a proposed extended forbearance period, and worked earnestly to accomplish that objective. However, it was unable to negotiate the necessary forbearance period with the Trust, and was left with little alternative to Chapter 11 as the Trust had demanded immediate repayment in full of the secured loan. Andrew E. Robinson, the senior vice president, said in a court filing that Yuri Itkis has attempted to use the loan to force a merger transaction on the Debtors. The Debtors believe that alternative transactions exist which would provide more value for the Debtors' stakeholders than the suggested merger. Business as Usual In its filing, GameTech stated that, despite some operational challenges facing their business, the Company believes its business has significant competitive advantages that make it an attractive candidate for investment. GameTech and its affiliates have a leading market share of the electronic bingo market and have a broad national platform with bingo systems installed in 38 states and have systems in Ontario Canada, Japan and the Philippines. GameTech also has VLT terminals and Class III gaming devices in seven states, with leading market positions in Louisiana and Montana. The Company believes that better marketing and technological innovation will improve operations and increase its market share in both the bingo and VLT businesses. GameTech is committed to communicating with its stakeholders throughout this process. In order to assure ordinary course operations and no interruption in service for the Company's customers and distributors, the Company is seeking approval from the court for a variety of "First Day Motions" including use of cash of collateral, authority to pay employees and distributors in the ordinary course, authority to maintain bank accounts, and other customary relief. Additionally, the Company intends to pay providers of goods and services delivered post-petition in the ordinary course of business. No assurance can be given that the "First Day Motions" will be granted or that a successful restructuring will be finalized. However the Company fully expects to continue normal operations throughout these proceedings. All GameTech distribution partners and customers can continue to rely on GameTech products, support and service for their business critical operations. The Debtors say they indent to use the Chapter 11 cases to continue to implement their turnaround plan and pursue sales or licenses of certain assets. About Gametech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million for the 52 weeks ended Nov. 1, 2009. GRANITE SHOALS: S&P Cuts Rating on GO Bonds to 'BB+' ---------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term and underlying rating to 'BB+' from 'BBB-' on Granite Shoals, Texas' outstanding general obligation (GO) bonds. The outlook is stable. "The lowered rating reflects our view of the growing risk that the city willbe unable to structurally balance its finances," said Standard & Poor's credit analyst Todd Helman. "We view the city's continued use of loans from the debt service fund to support cash shortfalls for operations along with rising transfers from the city's utility fund for additional support as a major credit weakness," Mr. Helman added. Officials report that the city currently does not have any major capital needs and does not plan to issue additional bonds in the near future. HAWKER BEECHCRAFT: Files Plan by June 30 Deadline ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hawker Beechcraft Inc. complied with a deadline by filing a reorganization plan and explanatory disclosure materials on June 30. Negotiated before bankruptcy on April 3, the plan converts secured and unsecured debt to equity while reducing debt by $2.55 billion. The plan is supported by holders of 68% of the secured credit and 72.5% of the senior unsecured noteholders, according to the disclosure statement. According to the report, the plan would give 81.9% of the new stock to holders of $1.829 billion of secured debt, reserving 18.9% for unsecured creditors. The restructuring support agreement stated that the $780.9 million in unsecured deficiency claims of secured lenders are to participate in the pool of unsecured claims to share in 18.9% of the new equity. The unsecured recovery that otherwise would go to holders of $308 million in subordinated note claims will be directed to senior unsecured noteholders. The report notes that the draft disclosure statement has blanks where creditors eventually will be told the projected percentage recovery. About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee tapped FTI Consulting, Inc., as its financial advisor. GAMETECH INT'L: Files for Chapter 11 as Rival Buys Debt ------------------------------------------------------- GameTech International, Inc. and its wholly owned subsidiaries have filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11964) to effect a restructuring of the company's debt obligations. GameTech, which filed the petition on July 2, disclosed total assets of $27.22 million and total liabilities of $22.88 million as of Jan. 29, 2012. Judge Peter J. Walsh convened a hearing on the first day motions on July 3. Motions filed include request to use cash collateral, pay employee wages, maintain bank accounts and pay sales and gaming taxes. The bankruptcy judge granted interim approval to the Debtors' request to use cash collateral. A final hearing is scheduled for July 18, 2012 at 10:30 a.m. The Debtors tapped Greenberg Traurig LLP as bankruptcy counsel and Kinetic Advisors LLC as financial advisor. The Company noted that it intends to operate as usual during the restructuring process and that it does not expect any interruptions in providing service to its customers and distributors. Rival Bought Secured Loan The Company entered into an Amended and Restated Loan Agreement with U.S. Bank N.A. and Bank of West, on June 15, 2011, which amended the terms of the Company's then-existing senior secured credit facility with the Lenders. Since May 7, 2012, the Company has been operating under a Forbearance Agreement with the Lenders, pursuant to which, the Lenders agreed to refrain from exercising certain rights and remedies available under the Loan Agreement. The Forbearance Agreement expired on June 30, 2012, and, under the terms of the Loan Agreement, the outstanding principal balance of approximately $16 million, together with accrued but unpaid interest, also matured on June 30, 2012. On June 27, 2012, the Company received notice that the Lenders had sold their rights and obligations under the Loan Agreement to the Yuri Itkis Gaming Trust of 1993, which is also the owner of one of the Company's competitors in the bingo industry. GameTech hoped to address the debt restructuring in a consensual and negotiated process with the Trust during a proposed extended forbearance period, and worked earnestly to accomplish that objective. However, it was unable to negotiate the necessary forbearance period with the Trust, and was left with little alternative to Chapter 11 as the Trust had demanded immediate repayment in full of the secured loan. Andrew E. Robinson, the senior vice president, said in a court filing that Yuri Itkis has attempted to use the loan to force a merger transaction on the Debtors. The Debtors believe that alternative transactions exist which would provide more value for the Debtors' stakeholders than the suggested merger. Business as Usual In its filing, GameTech stated that, despite some operational challenges facing their business, the Company believes its business has significant competitive advantages that make it an attractive candidate for investment. GameTech and its affiliates have a leading market share of the electronic bingo market and have a broad national platform with bingo systems installed in 38 states and have systems in Ontario Canada, Japan and the Philippines. GameTech also has VLT terminals and Class III gaming devices in seven states, with leading market positions in Louisiana and Montana. The Company believes that better marketing and technological innovation will improve operations and increase its market share in both the bingo and VLT businesses. GameTech is committed to communicating with its stakeholders throughout this process. In order to assure ordinary course operations and no interruption in service for the Company's customers and distributors, the Company is seeking approval from the court for a variety of "First Day Motions" including use of cash of collateral, authority to pay employees and distributors in the ordinary course, authority to maintain bank accounts, and other customary relief. Additionally, the Company intends to pay providers of goods and services delivered post-petition in the ordinary course of business. No assurance can be given that the "First Day Motions" will be granted or that a successful restructuring will be finalized. However the Company fully expects to continue normal operations throughout these proceedings. All GameTech distribution partners and customers can continue to rely on GameTech products, support and service for their business critical operations. The Debtors say they indent to use the Chapter 11 cases to continue to implement their turnaround plan and pursue sales or licenses of certain assets. About Gametech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million for the 52 weeks ended Nov. 1, 2009. GAYLE JENKINS: La. Appeals Court Affirms $1.5MM Arbitration Award ----------------------------------------------------------------- Chief Judge Marion F. Edwards of the Court of Appeals of Louisiana, Fifth Circuit, upheld a judgment of the Twenty-Fourth Judicial District Court confirming an arbitration award in favor of ConstructionSouth, Inc., and against Gayle O. Jenkins. The panel is composed of Judges Marion F. Edwards, Clarence E. McManus, and Walter J. Rothschild. On March 24, 2004, CSI entered into a construction contract with 3901 Ridgelake, LLC, to build Pontchartrain Caye Condominiums, a condominium project at 3901 Ridgelake Drive in Metairie, Louisiana. Ms. Jenkins is the managing member of Ridgelake. CSI and Ridgelake entered into a contract, a standard form AIA Document "for Construction Projects of Limited Scope where the basis of payment is a STIPULATED SUM." The contract contains the standard AIA arbitration provision. The contract showed the name of the owner as Ridgelake, underneath which was Ms. Jenkins' signature, absent a title or other designation. CSI sought to recover damages under the contract for failure of Ridgelake to pay sums due under the contract. According to the record, in December 2007, CSI initiated an arbitration proceeding against Ridgelake with the American Arbitration Association. While the arbitration proceeding was still pending in January 2009, CSI filed a petition in the Twenty-Fourth Judicial District Court against Ms. Jenkins personally, alleging that she made certain misrepresentations and diverted proceeds from insurance, as well as advances on a construction loan, and that she failed to pay particular applications for payment made by CSI. Ms. Jenkins filed an Exception of Prematurity and Motion to Stay, averring that the dispute in question was the subject of the arbitration proceedings and that the claims against her were required to be decided in that forum. In April 2009, the court ordered the parties to the lawsuit, including Ms. Jenkins, to proceed to arbitration and granted the Motion to Stay, finding the Exception of Prematurity to be moot. On Jan. 14, 2011, the arbitrator entered his Final Award, finding that CSI substantially performed the construction contract with Ridgelake and that the unpaid balance owed by Ridgelake was $1,040,550, plus interest. It was also determined that Ridgelake's failure to pay constituted an unexcused material failure to perform its obligations and was a breach of contract. The arbitrator also found that Ms. Jenkins, as the managing member of Ridgelake, was personally liable for its obligations to CSI because she disregarded the corporate formalities and conducted the business in such a manner that she and Ridgelake were alter egos of one another. She co-mingled corporate and personal funds, undercapitalized the company, and made preferential payments out of company funds to herself in lieu of outstanding obligations to CSI. CSI was not liable for bad faith or intentional misconduct. Ridgelake and Ms. Jenkins were ordered to pay the amount of $1,499,725, as well as the administrative fees and expenses of the arbitrator, within 30 days. On Jan. 28, 2011, CSI moved to confirm the arbitration award, but learned that Ms. Jenkins had filed a voluntary Chapter 11 bankruptcy petition on Jan. 18. In February 2011, CSI moved the Bankruptcy Court for relief from the automatic stay to resume and complete the confirmation of the arbitration award in state court. Counsel for Ms. Jenkins had no opposition to the motion, which was then granted by the Bankruptcy Court. Six days prior to the confirmation hearing, Ms. Jenkins filed a notice of removal of the matter to federal court. In turn, CSI moved to remand the matter back to state court, which motion was granted. In so doing, the federal court further assessed reasonable attorney's fees and costs against Ms. Jenkins. Prior to the confirmation hearing re-set in state court, Ms. Jenkins requested the award be vacated, urging that the arbitrator exceeded his authority in rendering an award against her, a non- party; that the award was not based on contract; and that the findings constituted a manifest disregard of the law. Following a hearing, the trial court found that Ms. Jenkins consented to and voluntarily joined in the arbitration between Ridgelake and CSI; that the arbitrator did not exceed the authority granted him by the parties; and that statutory grounds for vacatur were not established. In the transcript, the court also found that the motion to vacate was untimely. The court confirmed the award in the amount of $1,538,610 plus legal interest. Ms. Jenkins appeals. The case is CONSTRUCTIONSOUTH, INC. v. GAYLE O. JENKINS, No. 12-CA-63 (La App. Ct.). A copy of the Court's June 28, 2012 decision is available at http://is.gd/8iqQYwfrom Leagle.com. R. Patrick Vance, Esq., and Richard J. Tyler, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., and William W. Hall, Esq., Attorney at Law, represent ConstructionSouth. Ms. Jenkins is represented by: David L. Neeb, Esq. Ann Neeb, Esq. 3501 North Causeway Boulevard, Suite 300 Metairie, LA 70002 Gayle Jenkins filed for Chapter 11 bankruptcy (Bankr. E.D. La. Case No. 11-10156) on Jan. 18, 2011. GREAT CHINA MANIA: Posts $20,100 Net Loss in Q1 2012 ---------------------------------------------------- Great China Mania Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $20,094 on $1,454,156 of revenues for the three months ended March 31, 2012, compared with net income of $873,976 on $878,853 of revenues for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1,498,535 in total assets, $1,389,333 in total liabilities, and stockholders' equity of $109,202. Madsen & Associates CPA's, Inc., in Salt Lake City, Utah, expressed substantial doubt about Great China Mania's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company does not have the necessary working capital to service its debt and for its planned activity. A copy of the Form 10-Q is available for free at: http://is.gd/3eQeiq The Company also amended its annual report for the fiscal year ended Dec. 31, 2010, to file corrected financial data. The financial statements and notes in the Form 10-K for the year ended Dec. 31, 2010 (filed April 15, 2011) inadvertently contained erroneous financial information. The Company has restated certain amounts of the consolidated financial statements to reflect the loss on disposal of GEBD BVI. Additional paid-in capital and accumulated deficit as of Dec. 31, 2010 increased by $5,223,073, respectively. The net results from discontinued operations for the year ended Dec. 31, 2010, decreased by $5,223,073. Also, the net income and comprehensive income for the year ended Dec. 31, 2010 increased by $5,223,073, respectively. There is no change in net assets as of Dec. 31, 2010. A copy of the Form 10-K/A is available for free at: http://is.gd/nuTQGw Hong Kong-based Great China Mania Holdings, Inc., operates three 100% owned subsidiaries: 1) Great China Media Limited GCM, which specialized in provision of electronic content; 2) GME Holdings Limited, which specialized in artist management services; and 3) Great China Games Limited, which specialized in retail sales of video games and accessories. HERON LAKE: Posts $1.36 Million Net Loss in April 30 Quarter ------------------------------------------------------------ Heron Lake BioEnergy, LLC, filed its quarterly report on Form 10-Q, reporting a net loss of $1.36 million on $41.19 million of revenues for the three months ended April 30, 2012, compared with net income of $438,674 on $38.02 million of revenues for the same period of the prior fiscal year. For the six months ended April 30, 2012, the Company reported a net loss of $2.50 million on $80.05 million of revenues, compared with net income of $2.12 million on $77.22 million of revenues for the six months ended April 30, 2011. The Company's balance sheet at April 30, 2012, showed $96.31 million in total assets, $48.78 million in total liabilities, and members' equity of $47.53 million. As reported in the Troubled Company Reporter on Feb. 7, 2012, Boulay, Heutmaker, Zibell & Co. P.L.L.P., in Minneapolis, Minn., expressed substantial doubt about Heron Lake BioEnergy's ability to continue as a going concern, following the Company's results for the fiscal year ended Oct. 31, 2011. The independent auditors noted that the Company previously incurred operating losses related to difficult market conditions and operating performance. The Company was previously out of compliance with its master loan agreement and had a lower level of working capital than was desired. A copy of the Form 10-Q is available for free at: http://is.gd/6ouMyo Heron Lake, Minnesota-based Heron Lake BioEnergy, LLC, owns and operates a dry mill corn-based, natural gas fired ethanol plant near Heron Lake, Minnesota. The plant has a stated capacity to produce 50 million gallons of denatured fuel grade ethanol and 160,000 tons of dried distillers' grains (DDGS) per year. HOLLY SEAY: Proposal for Wells Fargo Claim Required by Friday ------------------------------------------------------------- Bankruptcy Judge Mark A. Neal signed off on a stipulation and consent order wherein the U.S. Trustee agrees to withdraw, without prejudice, its request to have Holly Seay's Chapter 11 case dismissed or converted to Chapter 7. The U.S. Trustee understands that the case is primarily a two-party dispute that requires a resolution of the claim asserted against the Debtor by Wells Fargo Bank, N.A., as trustee for RMAC-REMIC Trust, Series 90009-9. The Debtor will provide and submit to Wells Fargo a proposal for the treatment of Wells Fargo's claim by July 5, 2012. If the Proposal is acceptable to Wells Fargo: (a) the Debtor will have to and through Sept. 1, 2012, to consummate a resolution of Wells Fargo's claim and seek a dismissal or conversion of her case to one under chapter 7; (b) if the Debtor fails to consummate a resolution of Wells Fargo's claim and seek dismissal or conversion of her case to chapter 7 on or before Sept. 1, 2012, the Debtor unconditionally -- and does -- consent to the conversion of her case to one under chapter 7; and (c) to the extent the Debtor and Wells Fargo request that the Sept. 1, 2012 deadline for consummation of a resolution of Wells Fargo's claim be extended, the U.S. Trustee agrees to not unreasonably withhold consent to extensions of the deadline. If the Debtor's Proposal is not completely acceptable to Wells Fargo, in Wells Fargo's sole discretion, or is not submitted to Wells Fargo by the July 5 deadline, Wells Fargo will provide timely notice of that fact to the U.S. Trustee and the Debtor's counsel, and the Debtor will automatically consent to: (a) the dismissal with prejudice of the adversary proceeding Holly Seay v. Jeffrey Nadel, et al., AP Case No. 11-00682, and counsel for Wells Fargo is authorized to file the consent dismissal with prejudice on behalf of the Debtor; (b) the entry of an order unconditionally granting Wells Fargo's Motion for Relief from Stay; and (c) the conversion of her case to one under chapter 7. A copy of the Stipulation and Consent Order approved June 29, 2012, is available at http://is.gd/6S7JEFfrom Leagle.com. Holly Seay filed for chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-22898) in 2011. Diana L. Klein, Esq., at Klein & Associates, in Annapolis, serves as the Debtor's counsel. HOLLYFRONTIER CORP: Moody's Issues Summary Credit Opinion --------------------------------------------------------- Moody's Investors Service issued a summary credit opinion on HollyFrontier Corp. and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for HollyFrontier Corp. Moody's current ratings on HollyFrontier Corp. and its affiliates are: HollyFrontier Corp. Long Term Corporate Family Ratings (domestic currency) Rating of Ba1 Probability of Default Rating of Ba1 Senior Unsecured (domestic currency) Rating of Ba2 Speculative Grade Liquidity Rating of SGL-1 LGD Senior Unsecured (domestic currency) Assessment of 71 - LGD5 Frontier Oil Corporation Senior Unsec. Shelf (domestic currency) Rating of (P)Ba2 Subordinate Shelf (domestic currency) Rating of (P)Ba2 Preferred Shelf (domestic currency) Rating of (P)Ba2 Preferred shelf -- PS2 (domestic currency) Rating of (P)Ba2 LGD Preferred Shelf (domestic currency) Assessment of 97 - LGD6 BACKED Senior Unsecured (domestic currency) Rating of Ba2 LGD BACKED Senior Unsecured (domestic currency) Assessment of 76 - LGD5 Holly Energy Partners, L.P. Long Term Corporate Family Ratings (domestic currency) Rating of Ba3 Probability of Default Rating of Ba3 Senior Unsecured (domestic currency) Rating of B1 BACKED Senior Unsecured (domestic currency) Rating of B1 Speculative Grade Liquidity Rating of SGL-3 LGD Senior Unsecured (domestic currency) Assessment of 66 - LGD4 LGD BACKED Senior Unsecured (domestic currency) Assessment of 66 - LGD4 Rating Rationale HollyFrontier Corp.'s (HFC) Ba1 CFR reflects the scale and diversification of the combined company. The predecessor companies were managed conservatively and Moody's expects the new HollyFrontier will continue to have low financial risk. HFC has an advantaged geographic position which allows for access to heavily discounted crudes in the current commodity price environment and an ability to process a high proportion of heavy crude. The rating also considers the operational risks inherent in the pending integration of the two Tulsa refineries. The outlook is stable. An upgrade could result if HFC were to establish a longer track record in its post-merger configuration, successfully complete the integration of the two Tulsa refineries, increase its scale with crude distillation capacity above 600 mbbls/d, and maintain debt / complexity barrels below $200/bbl (excluding the debt at Holly Energy Partners). Any upgrade would be contingent upon a review of the quality of the asset base if growth were achieved through acquisitions. A downgrade could result if debt / complexity barrels were to increase to $300/bbl (excluding the debt at Holly Energy Partners), if HFC were to experience material and sustained operational issues, or if HFC's strategy and financial policies were to become significantly less conservative than those of the predecessor companies. The principal methodology used in rating HollyFrontier Corp. was the Global Refining and Marketing Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. HOMER CITY: S&P Affirms 'CC' Issue Rating on Senior Secured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CC' issue rating on Homer City Funding LLC's senior secured notes. "The rating still has a negative outlook due to high potential for capital restructuring in the next few months that we would view equal to a payment default," said Standard & Poor's credit analyst Terry Pratt. Also, on June 29, 2012, Standard & Poor's also lowered its corporate credit rating on Edison Mission Energy (EME) and its subsidiaries Midwest Generation LLC (Midwest Gen) and Edison Mission Marketing & Trading Inc. (EMMT), to 'CCC' from 'CCC+' based on greater refinance risk in 2013 due to lower cash flow over the medium term and reduced liquidity and greater potential for corporate restructuring. The outlook is negative. EME is in the process of transferring control of the Homer City plant to its equity owner, GE Capital. EME has written off its investment in the plant. GE Capital is spending an approximate $750 million to install pollution-control equipment at the plant. Part of this plan involves a restructuring of the debt by a proposed agreement between GE Capital and certain lenders. EME is not involved in the restructuring efforts. This agreement would result in deferral of debt repayments, which we view as the same as default. "We would lower the Homer City debt rating to 'D' upon consummation of any such agreement," S&P said. The Homer City debt rating still has a negative outlook due to high potential for capital restructuring under the proposed agreement between GE and certain lenders. "This agreement would result in deferral of debt repayments, which we view as the same as default. We would lower the Homer City debt rating to 'D' upon consummation of any such agreement," S&P said. HONDO MINERALS: Posts $556,300 Net Loss in April 30 Quarter ----------------------------------------------------------- Hondo Minerals Corporation, filed its quarterly report on Form 10-Q, reporting a net loss of $556,316 for the three months ended April 30, 2012, compared with a net loss of $376,835 for the three months ended April 30, 2011. For the nine months ended April 30, 2012, the Company reported a net loss of $2.38 million, compared with a net loss of $711,568 for the nine months ended April 30, 2011. From the period of Sept. 25, 2007 (inception) to April 30, 2012, the Company recorded no revenues. The Company's balance sheet at April 30, 2012, showed $13.89 million in total assets, $772,929 in total current liabilities, and stockholders' equity of $13.12 million. As reported in the TCR on Nov. 7, 2011, KWCO, PC, in Odessa, Texas, expressed substantial doubt about Hondo Minerals' ability to continue as a going concern, following the Company results for the fiscal year ended July 31, 2011. The independent auditors noted that the Company has limited cash, no revenues, and limited capital resources. A copy of the Form 10-Q is available for free at: http://is.gd/rd9EtE Addison, Tex.-based Hondo Minerals, Inc., is engaged in the acquisition of mines, mining claims and mining real estate in the United States, Canada and Mexico with mineral reserves consisting of precious metals or non-ferrous metals. Hondo owns the Tennessee and Schuylkill Mines in the Wallapai Mining District near Chloride, Mohave County, Arizona. INTEGRATED BIOPHARMA: Closes $11.7-Mil. Credit Facility with PNC ---------------------------------------------------------------- Integrated BioPharma, Inc., closed on a new five year $11.7 million revolving credit and term facility with PNC Bank, National Association on June 27, 2012, and the refinancing of INBP's subordinated debt. The PNC Bank credit facility consists of a $8,000,000 revolving line of credit and a $3,727,000 term loan, secured by all assets of INBP and its active subsidiaries. INBP borrowed an initial revolving advance of approximately $2,679,000. Revolving credit line advances bear interest at PNC's Base Rate or the Eurodollar Rate, at INBP's option, plus 2.75%. The term loan bears interest at PNC's Base Rate or the Eurodollar Rate, at INBP's option, plus 3.25%. On June 27, 2012, the Company completed a refinancing of its defaulted subordinated convertible note in the original principal amount of $4,500,000 held by CD Financial, LLC, an affiliate of two of INBP's directors, and a second promissory note in the original principal amount of $300,000 held by CD Financial, LLC. As part of this refinancing, INBP issued to CD Financial, LLC, two promissory notes, in the original principal amounts of $5,300,000 and $1,714,000. The notes are also secured by all assets of INBP and its active subsidiaries, bear a per annum interest rate of 6% and mature on July 7, 2017. The lien of CD Financial and its payment rights in respect of the notes are subordinated to PNC Bank. The $5,300,000 promissory note is convertible at the option of CD Financial, LLC, into common stock of INBP at a conversion price of $0.65 per share, subject to customary adjustments. The proceeds of the initial PNC Bank advances and the refinancing of INBP's subordinated convertible debt with CD Financial, LLC, provided INBP with the capital necessary to repay its defaulted notes payable in the aggregate original principal amount of $7,000,000 held by Imperium Master Fund, LTD, and three other parties, a $1,000,000 forbearance fee under the Forbearance Agreement, dated as of Oct. 14, 2012, as well as interest and expenses owed to the Imperium Parties and $805,000 representing an 11.5% premium owed on the original maturity date of the defaulted notes payable, Nov. 15, 2009. E. Gerald Kay, Chief Executive Officer, stated, "We are delighted to establish this relationship with PNC Bank which has allowed us to strengthen our financial condition and facilitate the growth of core business focused now in the manufacturing of tablets and capsules of nutritional supplements and the sale and distribution and sale of our branded liquid nutraceutical products. The credit facility provides us with a flexible economic tool to assist us in managing our cash flows and to help us mitigate potential cash flow impediments to our planned growth." A copy of the Credit Agreement is available for free at: http://is.gd/MkgoOm About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/ -- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. In the auditors' report accompanying the financial statements for fiscal year ended June 30, 2011, Friedman, LLP, in East Hanover, NJ, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficiency, recurring net losses and has defaulted on its debt obligations. The Company reported a net loss of $2.28 million in fiscal 2011 and a net loss of $5.53 million during the prior fiscal year. The Company's balance sheet at March 31, 2012, showed $10.75 million in total assets, $19.58 million in total liabilities, all current, and a $8.83 million total stockholders' deficiency. INTEGRATED BIOPHARMA: Refinances Defaulted Sub. Conv. Note ---------------------------------------------------------- Integrated BioPharma, Inc. disclosed the closing of a new five year $11.7 million revolving credit and term facility with PNC Bank, National Association on June 27, 2012 and the refinancing of INBP's subordinated debt. The PNC Bank credit facility consists of a $8,000,000 revolving line of credit and a $3,727,000 term loan, secured by all assets of INBP and its active subsidiaries. INBP borrowed an initial revolving advance of approximately $2,679,000. Revolving credit line advances bear interest at PNC's Base Rate or the Eurodollar Rate, at INBP's option, plus 2.75%. The term loan bears interest at PNC's Base Rate or the Eurodollar Rate, at INBP's option, plus 3.25%. INBP also announced that on June 27, 2012 it completed a refinancing of its defaulted subordinated convertible note in the original principal amount of $4,500,000 held by CD Financial, LLC, an affiliate of two of INBP's directors, and a second promissory note in the original principal amount of $300,000 held by CD Financial, LLC. As part of this refinancing, INBP issued to CD Financial, LLC two promissory notes, in the original principal amounts of $5,300,000 and $1,714,000. The notes are also secured by all assets of INBP and its active subsidiaries, bear a per annum interest rate of 6% and mature on July 7, 2017. The lien of CD Financial and its payment rights in respect of the notes are subordinated to PNC Bank. The $5,300,000 promissory note is convertible at the option of CD Financial, LLC into common stock of INBP at a conversion price of $0.65 per share, subject to customary adjustments. The proceeds of the initial PNC Bank advances and the refinancing of INBP's subordinated convertible debt with CD Financial, LLC provided INBP with the capital necessary to repay its defaulted notes payable in the aggregate original principal amount of $7,000,000 held by Imperium Master Fund, LTD and three other parties, a $1,000,000 forbearance fee under the Forbearance Agreement, dated as of Oct. 14, 2012, as well as interest and expenses owed to the Imperium Parties and $805,000 representing an 11.5% premium owed on the original maturity date of the defaulted notes payable, Nov. 15, 2009. E. Gerald Kay, Chief Executive Officer, stated, "We are delighted to establish this relationship with PNC Bank which has allowed us to strengthen our financial condition and facilitate the growth of core business focused now in the manufacturing of tablets and capsules of nutritional supplements and the sale and distribution and sale of our branded liquid nutraceutical products. The credit facility provides us with a flexible economic tool to assist us in managing our cash flows and to help us mitigate potential cash flow impediments to our planned growth." About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/-- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. Following the fiscal 2011 results, Friedman, LLP, in East Hanover, NJ, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficiency, recurring net losses and has defaulted on its debt obligations. The Company reported a net loss of $1.15 million on $28.97 million of net sales for the nine months ended March 31, 2012, compared with a net loss of $1.30 million on $30.77 million of net sales for the same period a year ago. The Company reported a net loss of $2.28 million in fiscal 2011 and a net loss of $5.53 million during the prior fiscal year. The Company's balance sheet at March 31, 2012, showed $10.75 million in total assets, $19.58 million in total liabilities, all current, and a $8.83 million total stockholders' deficiency. JEWISH COMMUNITY: Taps Atlantic Insurance as Insurance Adjuster --------------------------------------------------------------- Jewish Community Center Of Greater Monmouth County sought and obtained authorization from the U.S. Bankruptcy Court for the District of New Jersey to employ Atlantic Insurance Adjusters, Inc., as insurance adjuster. The Debtor said that the employment of the professional is necessary because the Debtor has suffered a loss that caused the collapse on Dec. 29, 2010. Atlantic Insurance will negotiate, preserve, prepare and adjust with the insurance carrier on the loss suffered on Dec. 29, 2010. The arrangement for compensation is: 6% of the amount as adjusted or otherwise recovered on account of loss by collapse of the Dec. 29, 2010. To the best of Debtor's knowledge, Atlantic Insurance is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Atlantic Insurance can be reached at: 3500 Sunset Avenue Ocean Twp. NJ 07712 About Jewish Community Headquartered in Deal Park, New Jersey, Jewish Community Center Of Greater Monmouth County, A Not-For-Profit Corporation -- http://jccmonmouth.org/-- offers services, programs, events, activities, and facilities to Jewish families and individuals in Monmouth County. Jewish Community filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 11-44738) on Dec. 5, 2011. Judge Michael B. Kaplan presides over the case. Timothy P. Neumann, Esq., at Broege, Neumann, Fischer & Shaver, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million. JOHN D. OIL: Posts $3 Million Net Loss in 2011 ---------------------------------------------- John D. Oil and Gas Company filed its annual report on Form 10-K, reporting a net loss of $3.00 million on $1.43 million of revenues for the fiscal year ended Dec. 31, 2011, compared with a net loss of $1.38 million on $2.64 million of revenues for the fiscal year ended Dec. 31, 2010. The increase in the net loss was a result of the large reduction in natural gas production revenue in 2011, the impairment recorded for the joint venture, and the write-off of one well. The Company's balance sheet at Dec. 31, 2011, showed $6.98 million in total assets, $13.26 million in total liabilities, and a stockholders' deficit of $6.28 million. Due to on-going issues relating to the loan with RBS Citizens, N.A. dba Charter One, the Company is currently undergoing a re- organization process after filing for bankruptcy under Chapter 11 on Jan. 13, 2012. A copy of the Form 10-K is available for free at: http://is.gd/0krCf3 About John D. Oil, Great Plains Exploration and Oz Gas Mentor, Ohio-based John D. Oil & Gas Co., is in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. The Company has 58 producing wells. The Company also has one self storage facility located in Painesville, Ohio. The self-storage facility is operated through a partnership agreement between Liberty Self-Stor Ltd. and the Company. John D. Oil's affiliated entities -- Oz Gas, LTD. and Great Plains Exploration LLC -- filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. Two days later, John D. Oil filed its own Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063). On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A., dba Charter One, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089-CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Receivership Order was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011 and the appeal is currently pending. Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. John D. Oil's balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. The petitions were signed by Richard M. Osborne, CEO. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. K-V PHARMACEUTICAL: Ave. Closing Price Below NYSE Minimum --------------------------------------------------------- K-V Pharmaceutical Company was notified by the New York Stock Exchange Regulation, Inc., that its Class A common shares is below criteria for the average closing price of a security of less than $1.00 over a consecutive 30 day trading period. This notification pertains to the Class A Common Stock but also affects the Class B Common Stock. The Company will have a six-month period from the date of the NYSE notification to cure this deficiency. Per NYSE procedures, K-V intends to notify the NYSE within 10 business days from the receipt of the NYSE notification of its intent to cure this deficiency within the six-month cure period. During this six-month cure period, the Company's shares will continue to be listed and traded on the NYSE, subject to its compliance with other NYSE continued listing standards. However, starting on July 3, 2012 the Company's Class A common shares and Class B common shares will trade under the symbols "KVa.BC" and "KVb.BC," respectively. About KV Pharmaceutical Company KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. KV Pharmaceutical has not timely filed its Form 10-K for the year ended March 31, 2010 and its Form 10-Qs for the subsequent quarterly periods. The Company's independent accounting firm, KPMG, resigned on June 25, 2010, and the Company has tapped BDO USA, LLP, to audit the fiscal 2010 financial statements. The Form 10-Q for the quarter ended June 30, 2010, was only filed March 10, 2011. The Company's balance sheet at Dec. 31, 2010, showed $296.21 million in total assets, $529.66 million in total liabilities, and a $233.45 million shareholders' deficit. There is substantial doubt about the Company's ability to continue as a going concern. The report of the Company's independent registered public accountants BDO USA, LLP, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2010, includes an explanatory paragraph related to the Company's ability to continue as a going concern. The Company incurred a net loss of $283.61 million on $152.22 million of net revenue for 12 months ended March 31, 2010, compared with a net loss of $313.63 million on $312.33 million of revenue in the same period in fiscal 2009. The Company reported a net loss of $34.60 million on $3.38 million of net revenue for three months ended June 30, 2010, compared with a net loss of $53.95 million on $6.30 million of revenue in the same period in 2009. LEHMAN BROTHERS: Completes Sale of Aurora Bank Assets ----------------------------------------------------- Lehman Brothers Holdings Inc. disclosed the completion of the sale of substantially all of the assets and transfer of substantially all of the insured deposits of its indirectly wholly-owned multi- billion dollar subsidiary, Aurora Bank, FSB, concluding a process that successfully avoided a potentially costly government resolution process of Lehman's two banks and that will ultimately yield significant recovery value for the Lehman creditors. Shortly after Lehman filed for bankruptcy in 2008, Aurora and Lehman's other multi-billion dollar subsidiary bank, Woodlands Commercial Bank, were at risk of being seized and placed into receivership by the FDIC. Instead, with the support of its creditors and the consent of the U.S. Bankruptcy Court, and working cooperatively with the Federal and state bank regulatory agencies, Lehman made a series of capital and liquidity injections to initially stabilize and ultimately recapitalize the banks, positioning them for this more favorable outcome. Doug Lambert, Managing Director with Alvarez & Marsal said: "In completing the sale of substantially all of Aurora through an open-door process, we have achieved something that has rarely been accomplished over the past few years. In December 2011, we completed the resolution process of Woodlands Bank at no loss or cost to the FDIC or taxpayers, and now with the completion today of the sales of Aurora's residential servicing assets to Nationstar Mortgage LLC and the transfer of all customer deposits to New York Community Bank, we have taken a significant step toward the successful resolution of Aurora. "During the past three and a half years, we successfully oversaw management of the two banks' resolution processes, restoring regulatory capital which allowed the time necessary for the overall financial markets to recover from the economic downturn, averting enormous liability to the Lehman estate and ultimately allowing us to pay off or transfer all customer deposits while preserving potential recovery value for Lehman creditors." After an extensive marketing process that began over a year ago with Aurora, it was determined that the best economic result could be achieved through the breakup of Aurora's business lines and individual disposition of Aurora's diverse asset portfolios through a series of sale transactions. Over the past several months, Aurora's residential loan portfolios were sold to three separate purchasers; the commercial loan portfolios were sold to a single purchaser; the commercial servicing assets were sold to Ocwen Financial; the residential servicing assets were sold to Nationstar; and its customers' deposits were transferred to New York Community Bank. The sale of the residential servicing assets included all of the mortgage servicing rights and related advances owned by Aurora Bank and its wholly owned subsidiary, Aurora Loan Services, LLC. It also included the sale of the servicing facility in Scottsbluff, Nebraska and the assignment of leases of the facilities in Indianapolis and Littleton, Colorado. Though not a required part of the transaction, Nationstar has said that many of Aurora's employees have taken positions with Nationstar, allowing continuity of the excellent service received by borrowers as well as minimizing, as much as possible, the significant personal impact to the employee base from the sale transaction. Following the closing of its insured deposit portfolio, Aurora will continue to exist as a federal savings bank as it seeks to comply with the terms of a consent order it entered into along with 13 other regulated institutions in April 2011. As a result of the sales announced today, Aurora will retain substantial liquid assets which will be used to comply with its obligations under the consent order and ultimately distribute its remaining proceeds to Lehman creditors. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LIBERTY STATE: Combs Family Trust's Action Remanded to State Court ------------------------------------------------------------------ District Judge Renee Marie Bumb in Camden, New Jersey, granted the request of Merle R. Combs, Jr. Family Special Needs Trust and Merle R. Combs, Jr. to remand to the Superior Court of New Jersey, Camden County -- Chancery Division, their lawsuit alleging that Michael W. Kwasnik and Kwasnik, Rodio, and Pikunis, P.C. were named as trustees of the SNT and abused their positions by making unauthorized transfers of funds from SNT to Liberty State Benefits of Pennsylvania, Inc., Liberty State Financial Holdings Corp., and Liberty State Benefits of Delaware, Inc. The Plaintiffs, however, failed to convince the District Court that they be paid attorney's fees. The case before the District Court is, MERLE R. COMBS, JR. and the MERLE R. COMBS, JR. FAMILY SPECIAL NEEDS TRUST, by and through its Trustee, Joseph A. Marrazzo, Jr., Esquire, Plaintiffs, v. MICHAEL W. KWASNIK, ESQUIRE, KWASNIK, RODIO & PIKUNIS, P.C., KWASNIK, RODIO, COHEN & PIKUNIS, P.C., KWASNIK, RODIO, KANOWITZ & BUCKLEY, P.C., KWASNIK, KANTOWITZ & ASSOCIATES, P.C., LIBERTY STATE BENEFITS OF PENNSYLVANIA, INC., LIBERTY STATE FINANCIAL HOLDINGS CORP., and LIBERTY STATE BENEFITS OF DELAWARE, INC., j/s/a, Defendants, No. 11-cv-6212 RMB/AMD (D. N.J.). According to the lawsuit, filed June 8, 2011, the Plaintiffs, upon learning of the mismanagement of the trust funds, demanded that the trust assets be returned and Mr. Kwasnik relinquish his role as Trustee. Just under two months after the Plaintiffs filed suit in Superior Court, on July 29, 2011, Liberty State Benefits of Pennsylvania, Inc., Liberty State Financial Holdings Corp., and Liberty State Benefits of Delaware, Inc. each filed voluntary Chapter 11 petitions. On Sept. 1, 2011, the Bankruptcy Court approved the appointment of Richard W. Barry as trustee of the Debtor Defendants' estate. On Oct. 17, 2011, the Chapter 11 Trustee filed an adversary proceeding against, among others, Mr. Kwasnik and his law firms. On Oct. 21, 2011, the Chapter 11 Trustee, on behalf of the Debtor Defendants, removed the State Court Action to the District Court under Federal Rule of Bankruptcy Procedure 9027 (a) (2) and 28 U.S.C. Sections 1452 and 1334, prompting the Plaintiffs to seek remand. A copy of the Court's June 27, 2012 Opinion is available at http://is.gd/82c7iffrom Leagle.com. Liberty State Financial Holdings Corp. and affiliates Liberty State Benefits of Delaware Inc. and affiliates Liberty State Benefits of Pennsylvania, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-12404 to 11-12406) on July 29, 2011. Garvan F. McDaniel, Esq., and Mary E. Augustine, Esq., at Bifferato Gentilotti LLC, serve as the Debtors' counsel. Judge Kevin Gross oversees the case. Liberty State Delaware estimated $1 million to $10 million in both assets and debts. The petitions were signed by Anthony R. Thompson, chairman of the board. In March 2011, the New Jersey Bureau of Securities sued Liberty State and an affiliate in state court, accusing them of violating state securities laws by failing to register the securities it sold -- stakes in irrevocable life insurance trusts. Liberty State officials wrongfully diverted millions of dollars of funds from "innocent investors," many of whom were "elderly and impaired individuals," for their personal benefit. As part of that action, Liberty State agreed to the appointment of a fiscal agent to investigate its use of investor funds as well as its financial condition. That agent filed a report in early July, describing securities violations, gross mismanagement and fraudulent acts by the company's controlling officials. The agent also recommended expanding his role to serve as receiver for the company and its assets. LIQUIDMETAL TECHNOLOGIES: VPC Acquires 10 Million Common Shares --------------------------------------------------------------- In accordance with the terms and conditions of the Subscription Agreement, on June 28, 2012, Visser Precision Cast, LLC, closed on its purchase of 10,000,000 shares of common stock and a warrant to purchase up to 3,750,000 shares of common stock of Liquidmetal Technologies, Inc. Barney D. Visser, Furniture Row, LLC, Norden, LLC, and Visser Precision Cast, beneficially own 52,870,307 shares of Class A common stock of Liquidmetal which represents 25.6% of the shares outstanding as of June 28, 2012. A copy of the amended filing is available for free at: http://is.gd/0g8w0J About Liquidmetal Technologies Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies, Inc. and its subsidiaries are in the business of developing, manufacturing, and marketing products made from amorphous alloys. Liquidmetal Technologies markets and sells Liquidmetal(R) alloy industrial coatings and also manufactures, markets and sells products and components from bulk Liquidmetal alloys that can be incorporated into the finished goods of its customers across a variety of industries. The Company also partners with third- party licensees and distributors to develop and commercialize Liquidmetal alloy products. After auditing the 2011 financial statements, Choi, Kim & Park, LLP, in Los Angeles, California, said that the Company's significant operating losses and working capital deficit raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2012, showed $2.02 million in total assets, $4.86 million in total liabilities, and a $2.84 million total shareholders' deficit. METROGAS SA: Posts ARS18 Million Net Loss in Q1 2012 ---------------------------------------------------- MetroGAS S.A. reported a net loss of ARS18.0 million on ARS256.6 million of sales for the three months ended March 31, 2012, compared with a net loss of ARS26.3 million on ARS233.3 million of sales for the same period of 2011. The Company's balance sheet at March 31, 2012, showed total assets of ARS2.533 billion, total liabilities of ARS1.796 billion, minority interest of ARS1.7 million, and shareholders' equity of ARS734.8 million. Going Concern Doubt Price Waterhouse & Co. S.R.L., in Buenos Aires, Argentina, expressed substantial doubt about MetroGas S.A.'s ability to continue as a going concern, following the Company's 2011 results. The independent auditors noted of the uncertainties related to the suspension of the original regime for tariff adjustments and the Company's petition for voluntary reorganization in an Argentine Court on June 17, 2010. In its limited review report to the shareholders, President and directors of the Company, Price Waterhouse cited, among other things, that the changes in the economic conditions in Argentina and the changes to the License under which the Company operates made by the Argentine National Government, mainly related to the suspension of the original regime for tariff adjustments, have affected the Company's economic and financial equation. Management is in the process of renegotiating certain terms of the License with the Argentine National Government to counteract the negative impact caused by the above mentioned circumstances. The adverse financial conditions that MetroGAS faces as a result of the situation mentioned above led to MetroGAS' Board of Directors to approve the Company's filing of a petition for voluntary reorganization (concurso preventivo) in an Argentine court on June 17, 2010, which was decreed by such court hearing the case on July 15, 2010. This circumstance generated an event of default under the Negotiable Obligation Issue Program of the Company which resulted in the automatic acceleration of the outstanding financial debt obligations. Nevertheless, upon the reorganization filing, an automatic stay was put into place on the payment of principal and interest on its outstanding debt obligations. A copy of the Company's unaudited consolidated interim financial statements for the three months ended March 31, 2012, is available for free at http://is.gd/cXvpK9 About MetroGas Buenos Aires, Argentina-based MetroGAS S.A., a gas distribution company, was incorporated on Nov. 24, 1992, and began operations on Dec. 29, 1992, when the privatization of Gas del Estado S.E. ("GdE") (an Argentine Government-owned enterprise) was completed. Through Executive Decree No. 2,459/92 dated Dec. 21, 1992, the Argentine Government granted MetroGAS an exclusive license to provide the public service of natural gas distribution in the area of the Federal Capital and southern and eastern Greater Buenos Aires, by operating the assets allocated to the Company by GdE for a 35 year period from the Takeover Date (Dec. 28, 1992). This period can be extended for an additional 10 year period under certain conditions. MetroGAS' controlling shareholder is Gas Argentino S.A. ("Gas Argentino") who holds 70% of the Common Stock of the Company. The 20%, which was originally owned by the National Government, was offered in public offering and the remaining 10% is under the Employee Stock Ownership Plan ("Programa de Propiedad Participada" or "PPP"). NANA DEVELOPMENT: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service has lowered the ratings of NANA Development Corporation ("NANA"), including the corporate family rating to B3 from B2, and changed the rating outlook to negative from stable. The rating downgrade reflects weaker credit metrics and cash flows than were anticipated when the ratings were initially assigned (July 2011), while the negative outlook considers about $25 million of debt amortization required near- term against tighter financial compliance test thresholds upcoming that pressure liquidity. Ratings are: Corporate Family, to B3 from B2 Probability of Default, to B3 from B2 $175 million first lien term loan due 2016, to B1, LGD3, 32% from Ba3, LGD3, 30% $260 million second lien term loan due 2016, to Caa1, LGD5, 70% from B3, LGD5, 70% Rating Outlook, to Negative from Stable Ratings Rationale The CFR downgrade reflects that the ratio of EBITDA less capex to interest expense was only just above 1x for the six months ended March 31, 2012, a level on par with the B3 rating. Although the company's revenue performance has been reasonably good since its acquisition of Grand Isle Shipyard ("GIS," a U.S. Gulf-based provider of offshore oil/gas maintenance, repair and overhaul services, acquired in July 2011 for $300 million), integration costs have been high, preventing margin levels that were expected to accompany the investment. Further, delayed commencement of some offshore energy projects within the northern Alaska waters that border NANA's region will delay some of the growth envisaged in the initial rating. Operational improvements being implemented at GIS should slightly raise near-term earnings. Also complicating the earnings outlook is US fiscal spending reductions that are pressuring margins across the defense services contracting sector -- a key business segment for NANA that comprises about 60% of its revenue base. Spot market prices of zinc and lead, which also affect cash flows of NANA, have softened in the past year, another unfavorable development for the credit. NANA Regional Corporation ("NRC"), NANA's ultimate parent but a non-guarantor of NANA's debts, receives royalty proceeds from its Red Dog Mine ownership. Those royalty proceeds are subsequently down-streamed to NANA through an equity contribution agreement. Zinc prices have fallen about 30% since July 2011. Unless spot prices meaningfully rise, cash inflows to NANA from the equity contribution arrangement may not be enough to help NANA cover its required annual debt amortization without relying on its revolving credit line to do so, even though the net royalty percentage that NRC receives from the mine operator will rise later in 2012 to 30% from 25%. Further, pre- funding of NRC's administrative spending accounts that occurred with the July 2011 origination of the term loan facilities was not meant to last more than a couple of years and administrative cost reimbursements to NRC are set to resume in Q4-FY2013, which will consume cash flow from NANA. Separately, NANA's credit agreements restrict the size of dividends up-streamed to NRC. The B3 CFR assumes minimal if any dividends paid near-term. The negative outlook considers that near-term free cash flow may not fully cover required annual debt amortizations (about $25 million) while liquidity could weaken in 2013 with the tighter financial covenant compliance thresholds. Slim covenant compliance headroom also limits borrowing availability under NANA's (unrated) asset-based revolving credit facility. Stabilization of the outlook would be contingent on improving financial performance sufficient to raise EBIT to interest above 1x, free cash flow to debt of 5% or more and an adequate liquidity profile. Upward rating momentum, not currently anticipated, would depend on EBIT to interest approaching the 1.5x range and free cash flow to debt in the high single digit percentage range. Downward rating momentum would develop with continued low free cash flow generation and/or weakening liquidity. NANA Development Corporation ("NANA") maintains an investment portfolio of various business segments including contract services, hospitality/tourism, management services and oilfield and mining services. One of NANA's main objectives is to invest in businesses that create long-term job growth for the Inupiat community. NANA's FY2011 revenues were approximately $1.6 billion. NANA is the business arm of NANA Regional Corporation ("NRC"). NRC was formed as one of the 13 Native Corporations that followed the Alaskan Native Claims Settlement Act. NRC has land surface and subsurface rights of 2.3 million acres in Northwest Alaska. NRC is owned by over 12,500 members of the Inupiat community. The principal methodology used in rating NANA Development Corporation 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. NATIONAL BANK OF GREECE: Auditors Raise Going Concern Doubt ----------------------------------------------------------- National Bank of Greece S.A. and subsidiaries filed its annual report on Form 20-F for the fiscal year ended Dec. 31, 2011. Deloitte Hadjipavlou, Sofianos & Cambanis S.A. expressed substantial doubt about National Bank of Greece and subsidiaries' ability to continue as a going concern. The independent auditors noted that the crisis in the Greek economy resulted in impairment losses recorded in several classes of assets, such as Greek government bonds and other loans in Greece. "These have adversely impacted the financial position, the results of operations, cash flows and regulatory ratios of the Bank, and consequently of the Group. Furthermore, the crisis has limited the Bank's access to liquidity from other financial institutions." The Group reported a net loss of Eur14.507 billion on net interest income before provision for loan losses of Eur3.648 billion for 2011, compared with a net loss of Eur308.0 million on net interest income before provision for loan losses of Eur4.084 billion for 2010. The Group's balance sheet at Dec. 31, 2011, showed Eur103.467 billion in total assets, Eur107.371 billion in total liabilities, $283.4 million of redeemable non-controlling interest, and a shareholders' deficit of Eur4.187 billion. A copy of the Form 20-F is available for free at: http://is.gd/4YvlgY National Bank of Greece S.A., along with subsidiaries, is the largest financial institution in Greece by market capitalization, holding a significant position in Greece's retail banking sector, with more than 11 million deposit accounts, more than three million lending accounts, 539 branches and 1,398 ATMs as at Dec. 31, 2011. The Group's core focus outside of Greece is in Turkey and SEE, where it currently operates in Bulgaria, Serbia, Romania, Albania, Cyprus and FYROM. The Bank is the Group's principal operating company, representing 67.5% of its total assets as at Dec. 31, 2011. NEBRASKA BOOK: Completes Restructuring, Emerges from Chapter 11 --------------------------------------------------------------- NBC Acquisition Corp. and its subsidiaries, including Nebraska Book Company, Inc., an industry leader in solutions for the college bookstore marketplace, today announced they successfully completed their restructuring and have emerged from chapter 11 with lower debt and a significantly stronger balance sheet. "This is an important day for Nebraska Book Company. We are emerging a stronger company aggressively focused on future growth," said Barry Major, the Company's CEO. "Throughout the process, our goal was to continue providing unparalleled customer service in the college bookstore marketplace and we never lost our focus over the past year. We were able to increase our on-campus footprint through the acquisition of 23 new stores, our latest being Portland State University Bookstore. We also dramatically expanded our industry-leading rental program with our commercial accounts," Major continued. "This speaks volumes about our business strategy and how we've consistently provided solutions for college and university partners to make college one of life's best experiences for our guests." "We're now well positioned for the future," Major added. "This can be seen in some of our recent leadership team changes. At Nebraska Book Company, our people are our greatest asset. Several new executives have come from Fortune 100 companies, including our President and COO Steve Clemente and our CFO Alexi Wellman. Both have brought innovative perspectives and proven leadership to our team. Never have we been more focused and energized--I'm confident in our direction and our ability to achieve our goals." "Today, our message is clear," said Steve Clemente, the Company's newly named President and COO. "We are back and stronger than ever. We've strengthened our position as the most innovative, welcoming and knowledgeable provider of collegiate products and services." "Over the last 12 months, we've been getting back in shape, so to speak," Clemente added. "We are again focused on growth, expanding brand awareness and building out new solutions for college retail. This would not be possible without the support of our dedicated partners and team members. We appreciate those committed to taking Nebraska Book Company to the next level," said Clemente. On June 27, 2011, the Company filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware to restructure approximately $450 million in loans and bonds. The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware confirmed the Company's Third Amended Joint Plan of Reorganization (the "Plan") on May 30, 2012. Through the Plan, the Company will reduce the debt on their balance sheet by approximately $240 million, in part by procuring a consensual conversion of $100 million of the Company's 10% senior secured notes due 2011 into equity in the reorganized Company. The Plan became effective on June 29, 2012. About Nebraska Book Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the Petition Date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. The Official Committee of Unsecured Creditors selected Lowenstein Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow Financial Inc. as financial advisers. Nebraska Book has been unable to confirm a pre-packaged Chapter 11 plan that would have swapped some of the existing debt for new debt, cash and the new stock, due to an inability to secure $250 million in exit financing. NEOMEDIA TECHNOLOGIES: Murray Ceases to Hold 5% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Murray Capital Management, LP, disclosed that, as of June 22, 2012, it beneficially owns 54,719,345 shares of common stock of NeoMedia Technologies, Inc., representing 4.97% based upon 1,100,236,551 outstanding shares as of May 7, 2012. Murray Capital previously reported beneficial ownership of 70,528,363 common shares or a 7.38% equity stake as of April 5, 2012. A copy of the amended filing is available for free at: http://is.gd/AwnYfs About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, 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 ongoing requirements for additional capital investment. The Company reported a net loss of $849,000 in 2011, compared with net income of $35.09 million in 2010. The Company's balance sheet at March 31, 2012, showed $7.88 million in total assets, $236.06 million in total liabilities, all current, $4.84 million series C convertible preferred stock, $989,000 series D preferred stock, and a $234 million total shareholders' deficit. NEWPAGE CORP: Bondholders Talking With Verso on Possible Merger --------------------------------------------------------------- Verso Paper Corp. said it has held discussions with certain holders of the 11.375% first-lien senior secured notes of NewPage Corporation in an effort to achieve a potential business combination involving Verso and NewPage as part of a consensual plan of reorganization in NewPage's Chapter 11 bankruptcy proceedings. The terms of Verso's proposed transaction would provide NewPage's first-lien noteholders with $1.425 billion of value, consisting of $1.075 billion of new Verso first-lien notes, $150 million of Verso common stock, and $200 million of cash. In addition, the proposed transaction would include a 100% recovery in cash to repay NewPage's debtor-in-possession financing, a 100% recovery in cash for the allowed priority and administrative claims in the bankruptcy proceedings, a to-be-determined amount of Verso common stock for the holders of NewPage's second-lien notes, and a to-be- determined recovery for NewPage's unsecured creditors. To facilitate the transaction, a $200 million cash equity investment in Verso was contemplated. The proposed transaction would be subject to customary conditions, including the satisfactory completion of due diligence and the completion of antitrust review. Verso believes that a combination with NewPage would create a stronger business in the global coated and supercalendered paper industry because of the material cost savings that would be achieved. Verso also believes that a combination with NewPage would provide a compelling option for a restructuring in that it would afford NewPage's first-lien noteholders a very attractive recovery, while at the same time treating fairly the other NewPage constituencies, including its employees, other creditor classes, and customers. Despite these advantages, Verso has been disappointed with the lack of progress in advancing its discussions with the first-lien noteholders. Verso continues to believe that its proposed transaction is the most sensible. The terms of Verso's proposal to NewPage's first-lien noteholders regarding the proposed transaction are included in the June 18, 2012 discussion materials attached as an exhibit to the current report on Form 8-K that Verso is filing with the Securities and Exchange Commission. Verso provided advance notice to NewPage of its presentation to the first-lien noteholders and delivered its presentation to the first-lien noteholders for discussion purposes only. Verso also is including a withdrawn May 30, 2012 term sheet previously presented to the first-lien noteholders as an exhibit to the current report on Form 8-K. This May 30 term sheet was superseded in its entirety by the term sheet included in the June 18, 2012 presentation, which was revised to reflect NewPage's updated earnings and cash balance. The Chapter 11 Plan Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Verso's plan would pay off financing for NewPage's bankruptcy in full. Second-lien noteholders would receive a number of Verso shares to be decided, and unsecured creditors would have a recovery to be determined. In addition, Verso would have a $200 million cash equity investment in paper maker NewPage. At a hearing in June, the bankruptcy court granted NewPage an extension until Sept. 1 of the exclusive right to propose a reorganization plan. In May Verso completed an exchange offer by repurchasing $157.5 million of the $300 million in 11.375% senior subordinated notes due 2016 for $104.7 million in 11.75% secured notes due 2019. In addition, holders of the subordinated debt also received $110 for each $1,000 for bonds tendered before May 8. The exchange reduced debt by about $53 million and extended maturity on some obligations to 2019. Verso also completed an exchange offer for its second-lien floating-rate notes. 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. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, 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, NewPage 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. NORTH CAROLINA UNIV.: S&P Lowers Rating on Obligation Bonds to BB ----------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term rating on the University of North Carolina at Pembroke's (UNCP) series 2010A and 2010B limited-obligation bonds to 'BB' from 'BBB+'. The downgrade reflects management's projection for fiscal year-end 2012 (June 30) debt service coverage that is below the 1.1x coverage required in the bond documents as well as lower-than- expected dormitory occupancy for the spring 2012 semester. The rating remains on CreditWatch with negative implications, where it was placed on Dec. 15, 2011. At the same time, Standard & Poor's revised the outlook on its issuer credit rating (ICR) on the university to negative from stable. The negative outlook reflects Standard & Poor's opinion of the potential for a downgrade over the two-year outlook horizon if enrollment does not stabilize and the financial operations of the university deteriorate as a result. Standard & Poor's affirmed the 'A' ICR. The negative outlook on the ICR reflects Standard & Poor's expectation that, over the next two years, the university will continue to face enrollment challenges. In addition, the negative outlook reflects Standard & Poor's view of challenges regarding both management's ability to navigate through this difficult enrollment environment and the transition the university is currently experiencing at a number of senior management positions, including the Vice Chancellor for Business Affairs, Vice Chancellor of Enrollment Management, and the Vice Chancellor of Student Affairs. "Consideration of a negative rating action during the outlook period could be triggered by university management's inability to effectively manage through current enrollment challenges. Additional credit factors that could, in our opinion, result in downward pressure on the rating could include deficit financial operations and the additional issuance of debt that further decreases financial resource ratios relative to the rating category," said Standard & Poor's credit analyst Jonathan Volkmann. "A return to a stable outlook on the ICR could reflect improvement in the university's demand and enrollment characteristics as well as continuity moving forward within the university's senior management team. In addition, we would expect university financial performance to be balanced on at least a cash basis and financial resource ratios to improve relative to the rating category," S&P said. NORTHWESTERN STONE: Seeks Court OK to Use MSB Cash Collateral ------------------------------------------------------------- Northwestern Stone, LLC, seeks permission from the Bankruptcy Court to use cash collateral in which McFarland State Bank has an interest. The Debtor's operations are conducted primarily at its real property consisting of land and improvements located at 4373 Pleasant View Road, Middletone, Wisconsin. MSB, successor of Evergreen State Bank, is the holder of various mortgages against real property owned by the Debtor and security interest against various personal property owned by the Debtor. At the time of the filing of the Debtor's bankruptcy petition, MSB was owed close to $9.5 million, which was secured by a lien against almost all of the Debtor's personal property. The Debtor relates that based on the outstanding debt to MSB, and the value of the collateral, MSB is greatly over-secured. The total claim of MSB is less than $4.5 million. The claim secured by collateral valued at not less than $17.41 million. In order to provide adequate protection to MSB for the Debtor's use of cash collateral, the Debtor proposes to: (a) provide MSB with a replacement lien on all post-petition accounts receivable pursuant to Section 361(2) of the Bankruptcy Code; (b) maintain adequate insurance coverage on all personal property and assets, and will adequately insure against any potential losss; (c) provide MSB with financial reports, including profit & loss statements and balance sheets on a monthly basis; (d) make monthly payments to MSB in the amount of $17,875 to pay all accruing interest on MSB's claim; (e) expend cash collateral pursuant to the Budget; (f) pay postpetition taxes; and (g) maintain all collateral in which MSB has an interest, in good condition and repair. MSB Objects MSB does not consent to the continued use of its cash collateral by the Debtor. According MSB, the Debtor relies upon appraisals that are stale in order to argue that it is "greatly over- secured." MSB asserts the Debtor should not be permitted to lose cash through ongoing operations ad infinitum when it has no intention of reorganizing. MSB believes that the Debtor's case should be dismissed, or converted to a case under Chapter 7, whichever is in the best interest of the creditors, in light of the "continuing loss or diminution of the estate and the absence of a reasonable likelihood of rehabilitation." About Northwestern Stone Middleton, Wisconsin-based Northwestern Stone, LLC, operates a gravel quarry business at four separate locations: one in Sauk County (Swiss Valley Road, Prairie de Sac), and three in Dane County (4373 Pleasant View Road, Middleton, 6166 Ramford Court, Springfield, and 3060 Getz Road, Springdale). It filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wis. Case No. 10- 19137) on Dec. 16, 2010. The Debtor disclosed $25,238,172 in assets and $12,080,628 in liabilities as of the Chapter 11 filing. Nicole I. Pellerin, Esq., and Timothy J. Peyton, Esq., at Kepler & Peyton, in Madison, Wisconsin, serve as the Debtor's bankruptcy counsel. Grobe & Associates, LLP, serves as the Debtor's accountants. On Jan. 26, 2011, the U.S. Trustee appointed the Official Committee of Unsecured Creditors. Claire Ann Resop, Esq., and Eliza M. Reyes, Esq., at von Briesen & Roper, s.c., in Madison, Wisconsin, represent the Committee as counsel. NYTEX ENERGY: Proposes Amendments to Preferred Stock Terms ---------------------------------------------------------- NYTEX Energy Holdings, Inc., said it was exploring the possible restructuring of certain of the terms and conditions of its outstanding shares of Series A Convertible Preferred Stock, including, among other things, restructuring the currently accrued and unpaid dividends with respect to the Series A Preferred Stock. In connection with the proposed Restructuring, the terms of the Series A Preferred Stock would be amended as follows: Dividends * The 9% dividend currently payable with respect to the shares of Series A Preferred Stock would cease to accrue as of June 15, 2012, and, thereafter, no dividends would be payable with respect to the Series A Preferred Stock unless declared by the Board. * In exchange for all accrued and unpaid dividends as of the Termination Date, each holder of Series A Preferred Stock as of the record date that would be set by the Board would be issued shares of Common Stock at a rate of one (1) share of Common Stock for each $1.00 of accrued and unpaid dividends due such holder. As a result, the Company would issue an aggregate of approximately 767,570 Dividend Common Shares to the Series A Holders. Liquidation Preference * Currently, in the event of the Company's liquidation, dissolution or winding up, the Series A Holders are entitled to be paid out of the Company's assets available therefore an amount in cash equal to $1.50 per share of Series A Preferred Stock, plus all accrued and unpaid dividends. As part of the Restructuring, the Base Liquidation Amount would be reduced from $1.50 to $1.00 per share. * In consideration for reducing the Base Liquidation Amount by $0.50 per share, each Series A Holder as of the record date that would be set by the Board would be issued shares of Common Stock at a rate of 0.42735 shares of Common Stock for each share of Series A Preferred Stock held by them. As a result, the Company would issue an aggregate of approximately 2,461,978 Liquidation Adjustment Common Shares to the Series A Holders. * Currently, at the election of the holders of a majority of the then outstanding shares of Series A Preferred Stock, certain consolidations, mergers and other business combinations involving the Company, as well as the sale of all or substantially all of its assets and a transfer of more than 50% of the voting power of the Company, may be deemed to be a Liquidation. As part of the Restructuring, the right of the Series A Holders to declare a Deemed Liquidation would be eliminated. In connection with the proposed Restructuring, the terms of the Series A Warrants would be amended as follows: Anti-Dilution * Currently, the Series A Warrants contain a Full-Ratchet Anti-Dilution Provision for a two-year period following their date of issuance, with respect to any issuances by the Company of any equity securities with a Common Stock equivalent purchase price of less than the then-applicable per-share exercise price of the Series A Warrants. In addition, currently, the foregoing anti-dilution protection becomes a "weighted average" anti-dilution provision following that two-year period. As part of the Restructuring, the Full-Ratchet Anti-Dilution Provision would be eliminated and "weighted average" anti-dilution protection would be in effect. In addition, the Company's issuance of the Dividend Common Shares and the Liquidation Adjustment Common Shares in connection with the Restructuring would be treated as excluded issuances, which would not result in any adjustment to the exercise price or the number of shares that may be purchased upon exercise of the Series A Warrants. A copy of the Form 8-K is available for free at: http://is.gd/W5EzlC About NYTEX Energy Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an energy holding company with operations centralized in two subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full- service provider of drilling, completion and specialized fluids and specialty additives; technical and environmental support services; industrial cleaning services; equipment rentals; and transportation, handling and storage of fluids and dry products for the oil and gas industry. NYTEX Petroleum, Inc., is an exploration and production company focusing on early stage development of minor oil and gas resource plays within the United States. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about Nytex Energy's ability to continue as a going concern. The independent auditors noted that the Company is not in compliance with certain loan covenants related to two debt agreements. The Company's balance sheet at March 31, 2012, showed $76.92 million in total assets, $68.30 million in total liabilities and $8.61 million in total equity. OLSEN AGRICULTURAL: Settles With Members and Rabo Under Plan ------------------------------------------------------------ Olsen Agricultural Enterprises LLC filed a disclosure statement in support of the second amended and restated plan of reorganization dated June 4, 2012. The Plan is the result of a global settlement between the Debtor and its largest creditor, Rabo Agrifinance, Inc. On April 2, 2012, the Debtor filed its First Amended and Restated Plan of Reorganization, which was based, in part, on that global settlement. On May 4, 2012, before a disclosure statement for that plan was approved, the Debtor's members reached a settlement that resolved their dispute over the final allocation and ownership of the equity ownership interests in the Debtor. Under the plan, the Reorganized Debtor will continue the Debtor's farming and viticultural operations on its owned and leased real property. Its business will be comprised principally of producing and selling grass seed, grains, peppermint, wine grapes, nursery stock, squash, hazelnuts and blueberries. The Plan will be funded by a combination of (i) the Debtor's cash on hand as of the Effective Date, (ii) cash that is collected or generated by the Reorganized Debtor after the Effective Date, and (iii) Cash advances received by the Reorganized Debtor under the Exit Facility. The Equity Interest Holders' Settlement will be approved as part of the Plan, under which the Debtor's existing members will own the Reorganized Debtor. During the Plan Period, the management and control of the Reorganized Debtor will be vested in a Board of Managers comprised of four individuals. The Board of Managers will be composed of Eleanor Ann Olsen or her nominee; Roger P. Olsen or his nominee; an individual to be appointed by James E. Olsen and Robin G. Olsen; and an individual to be appointed by majority vote of the Creditors that hold the three largest Allowed Class 11 Claims. About Olsen Agricultural Enterprises Based in Monmouth, Oregon, Olsen Agricultural Enterprises LLC is the surviving entity of a merger transaction that was consummated on June 1, 2011. In the merger transaction, Olsen Agricultural Company, Inc., an Oregon corporation, Jenks-Olsen Land Co., an Oregon general partnership, Olsen Vineyard Company, LLC, an Oregon limited liability company and The Olsen Farms Family Limited Partnership were merged with and into Olsen Agricultural Enterprises. Olsen Agricultural Enterprises filed for Chapter 11 bankrutpcy (Bankr. D. Ore. Case No. 11-62723) on June 1, 2011. Judge Frank R. Alley III presides over the case. Clyde A. Hamstreet & Associates, LLC, serves as the Debtor's restructuring consultant and financial advisor. The petition was signed by Robin G. Olsen, operations director. An official committee of unsecured creditors has been appointed in the case. OLSEN AGRICULTURAL: Can Access $3 Million Rabo Exit Facility ------------------------------------------------------------ Judge Frank R. Alley of the U.S. Bankruptcy Court for the District of Oregon has approved a $3 million exit loan facility between Olsen Agricultural Enterprises LLC and Rabo Agrifinance, Inc. The Exit Lender is granted an allowed superpriority administrative expense claim for all Loan Obligations, having priority over any and all other administrative expense claims, subordinate in priority only to the Carve-Out. All Loan Obligations will be due and payable, and repaid in full, in cash, on the first to occur of: (i) December 31, 2012; (ii) conversion or dismissal of this Chapter 11 case; (iii) appointment of a trustee in this Chapter 11 case; or (iv) the occurrence of an Event of Default under and as defined in this Order. Interest on the Loan Obligations will accrue at a fixed rate of 10% per annum and will be payable monthly in arrears. The default rate of interest will be 5% higher. About Olsen Agricultural Enterprises Based in Monmouth, Oregon, Olsen Agricultural Enterprises LLC is the surviving entity of a merger transaction that was consummated on June 1, 2011. In the merger transaction, Olsen Agricultural Company, Inc., an Oregon corporation, Jenks-Olsen Land Co., an Oregon general partnership, Olsen Vineyard Company, LLC, an Oregon limited liability company and The Olsen Farms Family Limited Partnership were merged with and into Olsen Agricultural Enterprises. Olsen Agricultural Enterprises filed for Chapter 11 bankrutpcy (Bankr. D. Ore. Case No. 11-62723) on June 1, 2011. Judge Frank R. Alley III presides over the case. Clyde A. Hamstreet & Associates, LLC, serves as the Debtor's restructuring consultant and financial advisor. The petition was signed by Robin G. Olsen, operations director. An official committee of unsecured creditors has been appointed in the case. PEMCO WORLD: Creditors' Settlement With Sun Capital Approved ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Pemco World Air Services Inc. creditors' committee received court approval at the end of last week for a settlement with secured lender Sun Capital Partners Inc. The official creditors' committee negotiated the settlement with Sun Capital while the company was preparing to auction the business. Sun Capital agreed as part of the settlement that it won't receive a distribution on account of the subordinated secured loan. According to the reprot, Pemco filed papers July 2 for a first expansion of the exclusive right to propose a liquidating Chapter 11 plan. Pemco will appear on Aug. 7 in U.S. Bankruptcy Court in Delaware requesting an enlargement until Oct. 31 of the exclusive right to propose a liquidating Chapter 11 plan. Pemco's papers don't give a hint about the contours of a plan aside from what's known from the settlement with Sun Capital. The bankruptcy court approved the sale last month for $41.9 million cash to an affiliate of VT Systems Inc. from Alexandria, Virginia. The sale has yet to be completed, the company said in a court filing July 2, according to the report. About Pemco World Air Services Headquartered in Tampa, Florida Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, AL (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) on March 5, 2012. Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. On March 14, 2012, the U.S. Trustee appointed an official committee of unsecured creditors. On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS Aviation Services Holding Corp., which in turn owns 100% of the stock of debtor WAS Aviation Services Inc., which itself owns 100% of the stock of Pemco World Air Services Inc. Pemco also owes Sun Aviation $5.6 million. As a result, Sun Aviation is seeking separate counsel. However, Sun Aviation obtained an order jointly administering its case with those of the Pemco debtors. On June 15 the bankruptcy court approved sale of Pemco's business for $41.9 million cash to an affiliate of VT Systems Inc. from Alexandria, Virginia. Boca Raton, Florida-based Sun Capital was under contract to make the first bid at auction for the provider of heavy maintenance and repair services for commercial jet aircraft. POLYPORE INT'L: S&P Raises Rating on $365MM Senior Notes to 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its issue rating on Polypore International Inc.'s $365 million senior notes due 2017 to 'B+' from 'B' and revised the recovery rating upward to '4', indicating its expectation of average (30%-50%) recovery in a payment default, from '5'. "We removed the issue rating from CreditWatch, where we had placed it with positive implications on June 7, 2012," S&P said. "The note upgrade and recovery rating revision reflect our expectation of improved recovery prospects for Polypore's unsecured debt," said Standard & Poor's credit analyst Carol Hom. The company recently obtained a new $450 million senior secured credit facility, comprising a $150 million revolving credit facility and a $300 million term loan, to refinance its debt. The ratings on Charlotte, N.C.-based Polypore reflect the filtration manufacturer's "aggressive" financial risk profile and its "weak" business risk profile. Polypore is one of three major manufacturers operating in the niche battery separator business. Polypore manufactures separators for lead-acid and lithium batteries (accounting for slightly more than two-thirds of revenues) primarily for transportation, industrial, and consumer applications. It also manufactures filtration membranes for various health care applications as well as industrial processes. PRIMARY ENERGY: S&P Withdraws 'BB' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB' corporate credit rating, 'BBB-' senior secured rating, and '1' recovery rating on Primary Energy Operations LLC at the issuer's request. PRIMEDIA INC: S&P Affirms 'B' CCR Over Rent.com Acquisition --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Norcross, Ga.-based PRIMEDIA Inc. "At the same time, we removed the rating from CreditWatch, where it was placed with negative implications on April 13, 2012. The rating outlook is stable. We also affirmed all issue-level ratings on the company's debt. The recovery ratings on the debt issues remain '4', reflecting our expectation of average (30%-50%) recovery for lenders in the event of a payment default," S&P said. The rating on PRIMEDIA reflects Standard & Poor's assessment of its business profile as "vulnerable" (based on our criteria) and its financial profile as "aggressive." "We expect core revenue to keep declining at a mid- to high- single-digit percentage rate over the near term as reduced ad spending by landlords in most markets pressure the apartment advertising segment," said Standard & Poor's credit analyst Chris Valentine. PRIMEDIA acquired Rent.com in May 2012 for $145 million with cash on hand, revolver borrowings, and common equity provided by financial sponsor TPG Capital L.P. Pro forma for the transaction as of March 31, 2012, the company had $7.6 million of cash and roughly $8 million of borrowing availability under the $40 million revolving credit facility. "We expect the cushion of compliance with its net debt leverage covenant will remain above 15% over the next 12 months because of the EBITDA contribution from the acquisition," S&P said. "We expect the company to generate moderate discretionary cash flow and maintain 'adequate' liquidity over the near term," added Mr. Valentine. Rent.com has a good competitive position in Internet apartment listing through a pay-for-performance business model, which we believe could complement and strengthen PRIMEDIA's ongoing online initiatives. "Our stable rating outlook reflects PRIMEDIA's adequate near-term liquidity and improved covenant headroom, despite continuing top- line pressure. We could lower the rating if discretionary cash flow declines below $10 million and we become convinced that the headroom against financial covenants could narrow to less than 15%. A downgrade scenario would likely involve deterioration in the apartment rental advertising business and unsuccessful integration of Rent.com. In our view, this outcome would reflect a significant falloff in EBITDA, as the company currently has roughly 30% headroom against covenants," S&P said. Factors that could lead to this scenario include increased competition in the online rental advertising space and worsening economic conditions that lower occupancy and effective rent metrics in the majority of markets served. Conversely, an upgrade would likely entail the company reversing operating trends in the apartment business -- a scenario we do not view as likely over the near term, based on our economic outlook. QUIGLEY CO: Sets Aug. 15 Disclosure Hearing for New Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Quigley Company Inc. filed a revised Chapter 11 plan at the end of last week and arranged an Aug. 15 hearing for bankruptcy court approval of the disclosure statement explaining the plan. The plan was modified as the result of an April opinion from the U.S. Court of Appeals. The report recounts that upholding the district court, the appeals court ruled that former parent Pfizer Inc. wasn't entitled to complete protection from asbestos claims under the umbrella of Quigley's Chapter 11 case. Pfizer increased its contribution under the plan to remedy the shortcoming identified by the appeals court. The report relates that as before, the plan will rid both Quigley and Pfizer of all asbestos liability. In addition to increasing its cash contribution, Pfizer is waiving a $95 million secured claim, a $19 million claim for financing the Chapter 11 case, and a $33 million unsecured claim. Pfizer is also providing real property for Quigley to own and operate after emerging from Chapter 11, to generate additional income that may be devoted to payment of asbestos claims. The appeal in the circuit court was Quigley Co. Inc. v. Law Offices of Peter G. Angelos (In re Quigley Co. Inc.), 11-2635, 2nd U.S. Circuit Court of Appeals (Manhattan). The appeal in district court was In re Quigley Co. Inc., 10-01573, U.S. District Court, Southern District of New York (Manhattan). About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a proposed global resolution of all pending and future asbestos- related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. In April 2011, the bankruptcy judge approved a plan-support agreement with Pfizer and an ad hoc committee representing 30,000 asbestors claimants. A May 20, 2011 opinion by District Judge Richard Holwell concluded that Pfizer was directly liable for some asbestos claims arising from products sold by its now non-operating subsidiary Quigley. REPOSITORY TECH: 7th Cir. Turns Down Shareholder's Appeal --------------------------------------------------------- The U.S. Court of Appeals for the Seventh Circuit dismissed the last of a series of lawsuits filed by William G. Nelson, a minority shareholder and major creditor of Repository Technologies, Inc., against RTI's majority shareholders and David K. Welch and his law firm Crane, Heyman, Simon, Welch & Clar, which handled RTI's bankruptcy, for inaction on Mr. Nelson's part. In 2007, Mr. Nelson sued Mr. Welch and Crane Heyman in state court alleging that they had (1) conspired with RTI's majority shareholders to use RTI's Chapter 11 bankruptcy to enrich themselves, (2) tortiously interfered with RTI's loan contract with Mr. Nelson, and (3) abused the bankruptcy process. The case before the Appeals Court is, WILLIAM G. NELSON, IV, Plaintiff-Appellant, v. DAVID K. WELCH and CRANE, HEYMAN, SIMON, WELCH & CLAR, Defendants-Appellees, No. 11-1792 (7th Cir.). A copy of the Seventh Circuit's June 29, 2012 decision is available at http://is.gd/3taTX5from Leagle.com. Based in Lisle, Illinois, Repository Technologies Inc. -- http://www.rti-software.com/-- develops and markets customer- support, problem-tracking and -resolution systems. It filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 06-04582) on April 25, 2006. Judge Jack B. Schmetterer presided over the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, served as the Debtor's counsel. In its petition, the Debtor estimated assets of $500,000 to $1 million and debts of $1 million to $10 million. RESIDENTIAL CAPITAL: Fortress, Berkshire-Led Auctions Okayed ------------------------------------------------------------ Judge Martin Glenn approved the procedures governing the sale of Residential Capital LLC, et al.'s mortgage origination and servicing businesses and their legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. The approved procedures are subject to the modifications necessary to substitute Berkshire Hathaway Inc. as stalking horse bidder for the Debtors' legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. Berkshire replaced Ally Financial Inc. Judge Glenn also approved the payment of a $24 million Break-Up Fee to Fortress Investment Group, LLC's Nationstar Mortgage LLC and a $10 million Break-Up Fee to Berkshire. Nationstar is the stalking horse bidder for the Debtors' mortgage origination and servicing businesses A full-text copy of the Amended and Restated Asset Purchase Agreement between Nationstar and ResCap, et al., dated June 28, 2012, is available for free at: http://bankrupt.com/misc/rescap_june28apa.pdf A full-text copy of the Asset Purchase Agreement between Berkshire and ResCap, et al., dated June 28, 2012, is available for free at: http://bankrupt.com/misc/rescap_june28bhapa.pdf Any party wishing to participate in the auction must submit a bid not later than October 19, 2012, at 5:00 p.m. (ET). If qualified competing bids are received, an auction will be conducted on October 23, at 10:00 a.m. (ET) at the offices of Morrison & Foerster LLP, in New York. A hearing to consider approval of the sale will be held before Judge Glenn on November 5, at 10:00 a.m. (ET). The Sale Hearing may be conducted in connection with, and as part of, a hearing to consider confirmation of a plan of reorganization. Objections to the sale must be filed on or before October 29. The objection raised by certain trustees for Residential Mortgage Backed Securities and the joinder of Wells Fargo Bank, N.A., as master servicer, are adjourned until July 10. The Frost National Bank's objection to the sale motion is preserved until the sale hearing. Digital Lewisville, LLC, retains all rights to object to the proposed assumption and assignment of its lease on or prior to the cure objection deadline. U.S. Bank National Association, in its capacity as Indenture Trustee with respect to certain 9.625% Junior Secured Guaranteed Notes Due 2015, is required to notify the Debtors by July 31, 2012, regarding whether it has received direction to credit bid all outstanding debt under the Junior Secured Notes in respect of any Bid Proposal. If the Indenture Trustee fails to provide that notice by July 31, 2012, credit bidding rights are waived. In the event (i) a majority of the Consenting Holders direct the Indenture Trustee to preserve credit bidding rights by July 31, 2012; or (ii) the Indenture Trustee has not received a direction by July 31, 2012, and the Indenture Trustee does not agree in the notice it gives to the Debtors to waive credit bidding rights, the Debtors reserve their rights to request a hearing before the Court to determine the credit bidding issue. The Debtors and the Indenture Trustee have agreed that upon either (i) the giving of notice of no direction; (ii) the waiving of credit bidding rights by failing to give notice by July 31, 2012; or (iii) a final order of the Court denying credit bidding rights, the Indenture Trustee will be deemed to be a consultation party to the same extent as the Official Committee of Unsecured Creditors pursuant to the Sale Procedures; provided that the Indenture Trustee will not, without the written consent of the Debtors share or disclose information regarding any Bid Proposal with any holder of the Junior Secured Notes. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Retired Judge Gonzalez Named as Examiner ------------------------------------------------------------- The U.S. Trustee for Region 2, Tracy Hope Davis, on Tuesday named former Bankruptcy Judge Arthur J. Gonzalez as independent examiner in the Chapter 11 case of Residential Capital LLC. Dow Jones Newswires relates Judge Gonzalez is a senior fellow at the New York University School of Law, where he teaches bankruptcy law. Judge Gonzalez spent 16 years as a bankruptcy judge, and retired earlier this year from the U.S. Bankruptcy Court for the Southern District of New York. He oversaw several large bankruptcy cases, including those of Enron, WorldCom and Chrysler Group LLC. Judge Martin Glenn granted Berkshire Hathaway, Inc.'s request and directed the U.S. Trustee to appoint an examiner in the Chapter 11 cases of Residential Capital LLC and its affiliates. Judge Glenn noted in his June 20 memorandum opinion and order that no party disputes that an investigation and report should be done in the cases. The only issue, he pointed out, was whether the Official Committee of Unsecured Creditors should perform the investigation, or whether an examiner must be appointed pursuant to Section 1104(c) of the Bankruptcy Code. Judge Glenn then concluded that a Chapter 11 examiner needs to be appointed. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wants Until July 20 to File Schedules ---------------------------------------------------------- Residential Capital LLC and its affiliates ask the Bankruptcy Court to extend until July 20, 2012, their deadline to submit schedules of assets and liabilities and statements of financial affairs. The Debtors related that the schedules and statements they filed on June 30 are substantially completed but there are certain portions of the Statements that were not completed, specifically SOFA Questions 3(b) and 3(c) because the Debtors must complete reconciliation of their books and records with their bank account statements. The Debtors believe an extension until July 20 will give them time to file fully completed Schedules and Statements. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Allowed to Continue Loan Servicing Activities ------------------------------------------------------------------ Judge Martin Glenn granted final authority for Residential Capital, LLC, et al., to continue to perform their governmental and non-governmental loan servicing activities. The final approval came despite objections raised by various parties, including the Government National Mortgage Association, the Federal National Mortgage Association, the National Association of Consumer Bankruptcy Attorneys, a group of plaintiffs, Green Planet Servicing, LLC, and the Official Committee of Unsecured Creditors. The objectors did not oppose the requests. Instead, Fannie Mae said the relief requested in the two motions should have been consolidated into a single action because they derive from a single integrated contract that provides for both loan origination and loan servicing. NACBA argued that the relief from the automatic stay sought by the Debtors is insufficient and would not allow for borrowers who are debtors in individual bankruptcy cases to adequately protect their rights under the Bankruptcy Code. Judge Glenn also authorized the Debtors to pay prepetition claims of critical servicing vendors, provided the payment does not exceed $19.6 million. The Debtors are also required to file monthly operating reports disclosing all Debtor-owned REO sales and Non-GA Foreclosure Sales of Debtor-owned property closed subsequent to the Petition Date and the associated costs. A full-text copy of the Final GA Loan Servicing Order is available for free at http://bankrupt.com/misc/rescap401.pdf A full-text copy of the Final Non-GA Loan Servicing Order is available for free at http://bankrupt.com/misc/rescap402.pdf Before approval of the requests, the Debtors said they engaged in talks and discussions with various parties-in-interest, including the Creditors' Committee, regarding their requests. AFI and Ally Bank maintained that the servicing agreement and the purchase and sale agreement were integral components of the Ally-ResCap Settlement Agreement to support the Debtors' operations to a going-concern sale. In support of their requests, the Debtors filed a declaration of Joseph A. Pensabene, executive vice president and chief servicing officer of Residential Capital, LLC, a full-text copy of which is available for free at http://is.gd/rVnKpeand Matthew Detwiler, senior vice president of Servicing Solutions for GMAC Mortgage, LLC, a full-text copy of which is available for free at http://is.gd/qmtnLr About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RG STEEL: Proposes Bonuses Linked to Sale Before Dec. 31 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that RG Steel LLC is proposing to pay bonuses to the 10 top executives if the business is sold before the year's end. The company doesn't yet have consent from second-lien lenders who in effect would pay the bulk of the bonuses. The report relates that assuming the bankruptcy judge gives approval at a July 18 hearing, the bonus pool would consist of 2.5% of the sale price for the assets in excess of the amount necessary to pay off funding for the Chapter 11 case and first- lien debt. In addition, managers would receive 5% of recoveries on subordinated debt owing to majority owner The Renco Group Inc. According to the report, RG said it hopes to have agreement on the bonuses with second-lien lenders before the approval hearing. An individual executive's bonus would range from 5% to 25% of the bonus pool. Under court-approved procedures, bids are due July 25. Assuming a prospective buyer signs a contract to be stalking-horse and submits the first bid at auction, the auction will take place Aug. 21, with a hearing to approve the sale on Aug. 23. If no buyer signs a contract, the auction will take place July 31, with a sale-approval hearing on Aug. 8. The auction includes the three main plants in Sparrows Point, Maryland; Warren, Ohio, and Wheeling, West Virginia. No buyer is yet under contract. Renco is allowed to bid secured debt rather than cash at auction. 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. An official committee of unsecured creditors has been appointed in the case. The bankruptcy court has approved the sale of a non-operating plant in Steubenville, Ohio, for $15 million. ROOMSTORE INC: Going Out of Business Sale at 20 Locations --------------------------------------------------------- After more than 20 years in business, a huge Going Out of Business Sale has now begun in 20 RoomStore, Inc. locations. A U.S. Bankruptcy Court approved an order authorizing joint venture partners Hilco Merchant Resources, LLC, Planned Furniture Promotions, Inc., SB Capital Group, LLC, and Tiger Capital Group, LLC, to conduct the total liquidation of merchandise and store fixtures in each location. Compelling discounts of 30% to 50% are being offered on all merchandise in RoomStore locations throughout Maryland and Virginia. Consumers will benefit from significant savings on RoomStore's entire stock of famous brand home furnishings including living rooms, dining rooms, bedrooms, leather and occasional furniture, kids' furniture, entertainment centers, home office, mattress sets, oriental rugs, lamps and decorative accessories. More than $20 Million of inventory will be liquidated. Store and warehouse fixtures and equipment are also available for sale. A spokesperson for the joint venture stated, "During its 20 years in business, RoomStore has become a well-known destination for furniture purchases in the many communities they serve. At a time when value means so much to so many people, this Going Out of Business Sale offers consumers an important opportunity to acquire fine quality furniture, bedding, rugs and accessories at very meaningful discounts. We believe that shoppers will react very positively to the Sale and will quickly take advantage of these outstanding savings." Going Out of Business Sales will be conducted in the following RoomStore locations: 150 L Jennifer Road Annapolis MD 21401 5 S. Belair Parkway, Suite 701 Bel Air MD 21015 6501-D Baltimore National Pike Catonsville MD 21228 6141 Columbia Crossing Circle Columbia MD 21045 7425 N. Ritchie Highway Glen Burnie MD 21061 7970 Annapolis Road Lanham MD 20706 201 Fort Meade Road (Bargain Depot) Laurel MD 20707 4350 Branch Avenue Marlow Heights MD 20748 1150 Rockville Pike Rockville MD 20852 3015 Festival Way Waldorf MD 20601 15 Engler Road Westminster MD 21157 13055A Lee Jackson Mem Highway Fairfax VA 22033 6230 Seven Corners Center Falls Church VA 22044 4040 Plank Road Fredericksburg VA 22407 11020 Bulloch Drive Manassas VA 20109 365 Chatham Drive Newport News VA 23602 47100 Community Plaza, # 140 Sterling VA 20164 5144 Virginia Beach Boulevard Virginia Beach VA 23462 150 Delco Plaza Winchester VA 22602 2542 Prince William Parkway Woodbridge VA 22192 About RoomStore Inc. Richmond, Virginia-based RoomStore, Inc., operates retail furniture stores and offers home furnishings through Furniture.com, a provider of Internet-based sales opportunities for regional furniture retailers. RoomStore was founded in 1992 in Dallas, Texas, with four retail furniture stores. With more than $300 million in net sales for its fiscal year ending 2010, RoomStore was one of the 30 largest furniture retailers in the United States. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. When it filed for bankruptcy, the Company operated a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also had five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. RoomStore also owns 65% of Mattress Discounters Group LLC, which operates 83 mattress stores (as of Aug. 31, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore acquired the Mattress Discounters stake after it filed its second bankruptcy in 2008. Mattress Discounters sought Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on March 14, 2003. Judge Douglas O. Tice, Jr., presides over RoomStore's case. Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. RoomStore's balance sheet at Aug. 31, 2011, showed $70.4 million in total assets, $60.3 million in total liabilities, and stockholders' equity of $10.1 million. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. SAND TECHNOLOGY: Delays Filing of Interim Financial Report ---------------------------------------------------------- SAND Technology Inc. disclosed that the filing of its interim financial report and related management's discussion and analysis for the interim period ended April 30, 2012, will be delayed beyond the filing deadline of June 29, 2012. In the context of the previously announced departure of the Chief Financial Officer in early June 2012, the Corporation is not in a position to file the Required Filings in a timely fashion. The Corporation is working to complete its Required Filings at the earliest possible date and expects to file same by no later than July 31, 2012. The Corporation has been advised by the Autorite des marches financiers that it intends, in accordance with the guidelines set out in Policy Statement 12-203 respecting Cease Trade Orders for Continuous Disclosure Defaults, to issue a cease trade order that will prohibit all trading of the securities of the Corporation. The cease trade order will remain in place until lifted by the AMF upon application by the Corporation following the filing of the Required Filings. About SAND Technology Westmount, Quebec-based SAND Technology Inc. (OTC BB: SNDTF) -- http://www.sand.com/-- provides Data Management Software and Best Practices for storing, accessing, and analyzing large amounts of data on-demand while lowering TCO, leveraging existing infrastructure and improving operational performance. SAND/DNA solutions include CRM analytics, and specialized applications for government, healthcare, financial services, telecommunications, retail, transportation, and other business sectors. SAND Technology has offices in the United States, Canada, the United Kingdom and Central Europe. In its annual report on Form 20-F for the fiscal year ended July 31, 2010, filed with the U.S. Securities and Exchange Commission, the Company noted it has incurred operating losses in the current and past years. The Company has also generated negative cash flows from operations and has a significant working capital deficiency. "The Company's uncertainty as to its ability to generate sufficient revenue and raise sufficient capital, raise significant doubt about the entity's ability to continue as a going concern," the Company said in the filing. The Company said it is in the process of seeking additional financing for its current operations. Raymond Chabot Grant Thornton LLP in Montreal, Quebec, audited the company's financials but did not issue an adverse going concern opinion in accordance with Canadian reporting standards. The Company reported a net loss and comprehensive loss of C$2.11 million on C$6.87 million of revenue for the fiscal year ended July 31, 2011, compared with a net loss and comprehensive loss of $745,549 on $6.56 million of revenue during the prior year. SAND Technology's balance sheet as at Jan. 31, 2012, showed C$5.89 million in total assets, C$3.11 million in total liabilities and C$2.78 million shareholders' equity. SANKO STEAMSHIP: Seeks Creditor Protection in Tokyo & New York -------------------------------------------------------------- Sanko Steamship Co. Ltd., the owner or operator of 156 vessels, filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 12-12815) in Manhattan on July 2 after commencing bankruptcy reorganization proceedings in Tokyo. Chiyoda-ku, Tokyo-based Sanko stated that assets on March 31 were about $1 billion while debt totaled $947 million, mostly unsecured. The debt total doesn't include liabilities on chartered vessels. Sanko commenced proceedings under the Corporate Reorganization Act of Japan before the Tokyo District Court, Civil Department No. 8 amid declining demand and creditor actions. Sanko is asking the Manhattan judge to recognize the Japanese proceeding as a "foreign main proceeding" under Section 1517 of the Bankruptcy Code. Based out of Tokyo, the company is mainly engaged in the marine transportation business concentrating on international routes and other incidental businesses and is specialized in the tramp shipping business among the international route marine transportation business. Prior to 2008, the Sanko Group actively sought to expand its business in anticipation of an increase in demand in the transportation market, especially in developing countries. However, since the beginning of the ongoing global recession in 2008, and especially over the past 18 to 24 months, the demand for these services has sharply declined. Coupled with a worldwide glut of shipping capacity and the high costs of maintaining its fleet, this has negatively impacted Sanko's business and resulted in a drastic deterioration in profitability. The company's latest financial statements recorded a consolidated cumulative operating loss of JPY26.9 billion in the financial year of 2011. Over the course of the past few months, Sanko has been working with its creditors to develop and finalize a rehabilitation plan in an attempt to restructure its liabilities outside of a formal court process. This has proven to be no small task given the worldwide nature of Sanko's operations and the sheer number of jurisdictions in which its creditors can be found. However, the May 9, 2012 arrest of one of Sanko's vessels in Baltimore, Maryland, as well as the June 14, 2012 commencement of lawsuits against the company in Florida, demonstrated the precarious state of Sanko's position and highlighted the risk that the Sanko Group could face irreparable harm to its operations at any given time in the absence of an injunction or stay. Absent formal insolvency and bankruptcy proceedings, Sanko risks piecemeal dismemberment from the actions of creditors commencing litigation against the company or arresting its assets. In order to provide Sanko with the protection needed to reorganize its financial affairs, a petition commencing a corporate reorganization under the JCRA was filed on July 2, 2012. During the pendency of the Japanese Proceeding and under the supervision of the Tokyo Court, Sanko intends to continue discussions with creditors and ultimately hopes to seek the approval and confirmation of a global debt restructuring plan. The company hopes thereby to achieve a substantial de-leveraging of its balance sheets and a return to profitability. In aid of such efforts, Hisashi Asafuji, as foreign representative, seeks, among other things, recognition of the Japanese Proceeding as a "foreign main proceeding," to stay execution against assets of Sanko within the territorial jurisdiction of the United States, and, both on a provisional basis and upon recognition, to apply section 362 of the Bankruptcy Code in this chapter 15 case to protect Sanko and its assets in the United States. SANTA YSABEL RESORT: Files for Bankruptcy in San Diego ------------------------------------------------------ The Iipay Nation of Santa Ysabel, a federally recognized Indian Tribe, filed a resolution authorizing the Chapter 11 bankruptcy filing of Santa Ysabel Resort and Casino (Bankr. S.D. Calif. Case No. 12-09415) in San Diego on July 2, 2012. The Debtor estimated assets of up to $50 million and liabilities of up to $100 million. According to the case docket, the schedules of assets and liabilities and the statement of financial affairs are due July 16, 2012. The Chapter 11 plan and disclosure statement are required to be filed by Oct. 30, 2012. Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles, serves as counsel. Santa Ysabel Resort & Casino -- http://www.santaysabelcasino.com/ --- is a casino located on the Santa Ysabel Indian Reservation in Santa Ysabel, California. The casino has 349 slot machines and six gaming tables as well as live poker and live blackjack. It is also in close proximity to Lake Henshaw, Julian and Warner Springs. The Santa Ysabel tribal Chairman is Virgil Perez. Mr. Perez signed the Chapter 11 petition. SILVER SPRING: S&P Corrects Rating on 2004 Bonds to 'NR' -------------------------------------------------------- Standard & Poor's Ratings Services corrected its rating on Silver Spring Township, Pa.'s series 2004 general obligation bonds to 'NR' from 'SD (selective default). STEREOTAXIS INC: Fails to Comply with Nasdaq's Market Value Rule ---------------------------------------------------------------- The Nasdaq Stock Market notified Stereotaxis, Inc., that it no longer complies with Rule 5450(b)(3)(C), the Market Value of Publicly Held Shares Rule, as the Company did not maintain a minimum MVPHS of $15,000,000 for the 30 consecutive business days prior to the date of the letter. In accordance with Rule 5810(c)(3)(D), the Company will be provided 180 calendar days, or until Dec. 24, 2012, to regain compliance with the MVPHS Rule. The Company may regain compliance with the MVPHS Rule if the Company's MVPHS closes at $15,000,000 or more for a minimum of 10 consecutive business days at any time before Dec. 24, 2012. The Nasdaq letter further states that if the Company does not regain compliance with the MVPHS Rule by Dec. 24, 2012, then Nasdaq will notify the Company that its common stock will be delisted. At that time, the Company may appeal Nasdaq's determination to delist the Common Stock. Alternatively, the Company may apply for a transfer to The Nasdaq Capital Market provided it satisfies the continued listing standards of the Capital Market set forth in Marketplace Rule 5505. About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32.0 million for 2011, compared with a net loss of $19.9 million for 2010. The Company's balance sheet at March 31, 2012, showed $36.79 million in total assets, $60.16 million in total liabilities, and a $23.36 million total stockholders' deficit. STOCKTON, CA: Judge Christopher Klein to Oversee Case ----------------------------------------------------- Bankruptcy Judge Christopher Klein has been designated to oversee the Chapter 9 case of the City of Stockton, California. Stockton, now the largest U.S. city to seek bankruptcy protection, has filed motions asking the Court: -- to set deadlines for parties-in-interest to file objections to the Chapter 9 petition; -- for permission to establish and maintain a publicly available Internet-accessed Web site in lieu of notice to certain parties; and -- for leave to introduce evidence relating to Neutral Evaluation Process under Government Code Section 53760.3(q). Several creditors have filed notices of appearance in the case: * National Public Finance Guarantee Corporation; * Kemper Sports Management, Inc.; * Assured Guaranty Municipal Corp., and Assured Guaranty Corp.; * Wells Fargo Bank, National Association; * Union Bank, N.A.; * Stockton Police Officers Association; and * Marina Towers LLC About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Calif. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Calif. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008. It estimated $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. SUPERTEL HOSPITALITY: Bid Price for 30 Days Below Nasdaq Minimum ---------------------------------------------------------------- Supertel Hospitality, Inc. received a notification letter from The Nasdaq Stock Market stating that for the previous 30 consecutive business days, the bid price of the Company's common stock closed below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Global Market pursuant to Nasdaq Marketplace Rule 5450(a)(1). The Nasdaq letter has no immediate effect on the listing of the Company's common stock. In accordance with Marketplace Rule 5810(c)(3)(A), Supertel will be provided with a grace period of 180 calendar days, or until Dec. 26, 2012, to regain compliance with the Minimum Bid Price Rule. If at any time before Dec. 26, 2012, the bid price of Supertel's stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will notify the Company that it has achieved compliance with the Minimum Bid Price Rule. If the Company does not regain compliance with the Minimum Bid Price Rule by Dec. 26, 2012, Nasdaq will notify the Company that its common stock will be delisted from The Nasdaq Global Market. In the event the Company receives notice that its common stock is being delisted from The Nasdaq Global Market, Nasdaq rules permit the Company to appeal any delisting determination by the Nasdaq staff to a Nasdaq Hearings Panel. Alternatively, Nasdaq may permit the Company to transfer its common stock to The Nasdaq Capital Market if it satisfies the requirements for initial inclusion set forth in Marketplace Rule 5505, except for the bid price requirement. If its application for transfer is approved, the Company would have an additional 180 calendar days to comply with the Minimum Bid Price Rule in order to remain on The Nasdaq Capital Market. About Supertel Hospitality Supertel Hospitality, Inc. -- http://www.supertelinc.com/-- is a self-administered real estate investment trust that specializes in the ownership of select-service hotels. As of Sept. 21, 2011, Supertel Hospitality, Inc. owns 101 hotels comprised of 8,856 rooms in 23 states. The company's hotel portfolio includes Baymont Inn, Comfort Inn/Comfort Suites, Days Inn, Guest House Inn, Hampton Inn, Holiday Inn Express, Key West Inns, Masters Inn, Quality Inn, Ramada Limited, Savannah Suites, Sleep Inn, Super 8 and Supertel Inn. This diversity enables the company to participate in the best practices of each of these respected hospitality partners. TERRA-GEN FINANCE: S&P Places 'BB-' CCR on Watch Negative --------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Terra-Gen Finance Co. LLC on CreditWatch with negative implications. "We also placed our 'BB' rating on TG Finance's $250 million secured term loan due 2017 and secured $60 million working capital facility due 2016 on CreditWatch with negative implications. The recovery rating on the term loan and working capital facility is '2', reflecting our anticipation of substantial (70% to 90%) recovery of principal if a payment default occurs," S&P said. "The CreditWatch listing reflects our view that the credit metrics have fallen below levels that support the current rating. This deterioration stems from an error in our original analysis and significant reductions in short-run avoided costs (SRACs) that dictate project payments under four of the power purchase agreements at TG Finance's portfolio of nine power projects," S&P said. "The error occurred in the development of our base case financial forecast. We did not use a P90 generation assumption for key assets -- out of accordance with our criteria -- and did not deduct subordinated debt payments from the distributions from one of the projects. As a result, our projections overstated power plant production and thus cash flows. In updating our projections, we are also incorporating changes in SRAC pricing under which four of the projects are paid," S&P said. "Management has presented a credible plan to address these weaknesses. We will resolve the CreditWatch listing after we complete our review of TG Finance's plans to strengthen the credit through such means as adding assets or reducing debt. If it is unable to execute on its plans within our CreditWatch horizon (typically no longer than 90 days), we would lower the ratings," S&P said. THORNBURG MORTGAGE: Chapter 11 Trustee, Banks in Settlement Talks ----------------------------------------------------------------- Bankruptcy Judge Duncan W. Keir approved a Stipulation and Consent Order resetting the deadline for banks to file objections to the motion of Joel I. Sher, the Chapter 11 Trustee of Thornburg Mortgage Inc., fka TMST Inc., for any costs and expenses that the Trustee seeks to recover against property determined in the adversary proceeding, in Credit Suisse Securities (USA) LLC, as Collateral Agent v. TMST, Inc., et al., AP No. 09-00574 (DWK) (Bankr. D. Md. Aug. 28, 2009), to be the collateral of Credit Suisse Securities (USA) LLC, Credit Suisse International, UBS AG, UBS Securities LLC, Citigroup Global Markets, Ltd., JPMorgan Chase Funding Inc., Bear Stearns Investment Products Inc., Royal Bank of Scotland plc, RBS Securities Inc. (f/k/a Greenwich Capital Markets, Inc.), and Greenwich Capital Derivatives. Credit Suisse initiated and prosecuted the Adversary Proceeding as Collateral Agent on behalf of the banks. The parties are discussing the terms of settlement of the Adversary Proceeding, including the terms pursuant to which the banks may file one or more objections to the Chapter 11 Trustee's Motion. Accordingly, the parties agree that the banks may have until July 16 to file objections. A copy of the June 29, 2012 Stipulation and Consent Order is available at http://is.gd/8wYCO5from Leagle.com. John F. Carlton, Esq., and Todd M. Brooks, Esq. -- jcarlton@wtplaw.com and tbrooks@wtplaw.com -- at WHITEFORD TAYLOR PRESTON LLP; and Douglas K. Mayer, Esq., David C. Bryan, Esq., and A.J. Martinez, Esq. -- dkmayer@wlrk.com , dcbryan@wlrk.com , ajmartinez@wlrk.com -- at WACHTELL, LIPTON, ROSEN & KATZ, in New York, represent Credit Suisse Securities (USA) LLC, as Collateral Agent. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by his firm, Shapiro Sher Guinot & Sandler. TRAINOR GLASS: Court Approves Black as North Carolina Counsel ------------------------------------------------------------- Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, sought and obtained permission from the Bankruptcy Court to employ William M. Black, Jr., and the law firm of William M. Black, Jr., as its North Carolina counsel. The Debtor requires Black to render all lien related services for the following construction projects: (a) Duke Cancer Quiet Room (Durham, North Carolina); (b) Project Green(Whitsett, North Carolina); and (c) all other legal services for the Debtor related to the review, preparation recording and perfection of liens on the aforementioned construction projects. The Debtor believes that the amount of outstanding claims to be served with lien notices may total nearly $500,000 with a net balance to the Debtor of approximately $230,000. The attorneys proposed to advise the Debtor and their current hourly rates are: William M. Black, Jr., $210 per hour and Pat A. Cook, $210 per hour. Black has requested a $5,000 security retainer. To the best of the Debtor's knowledge, Black is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. TRIPLE POINT: S&P Rates $185MM Sr. Secured Credit Facility 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '2' recovery rating to Westport, Conn.-based Triple Point Technology Inc.'s $165 million term loan due 2017 and its $20 million revolving credit facility due 2016. The '2' recovery rating indicates our expectation of substantial (70%-90%) recovery in the event of payment default. The company used the proceeds, along with new equity, roll-over equity, and mezzanine debt at the holding company, to fund Welsh, Carson, Anderson & Stowe's (WCAS) acquisition of a majority equity stake in Triple Point from Abry Partners, refinance existing debt, and fund the acquisition of QMASTOR, an Australian commodity management software company specializing in metals. "The ratings on Triple Point reflect its 'weak' business risk profile marked by its narrow market focus and limited track record operating at current levels," said Standard & Poor's credit analyst Christian Frank. Its "highly leveraged" financial profile reflects its pro forma leverage in the low-6x area and an acquisitive growth strategy. The company's relatively high recurring revenue base and solid profit margins partly offset these factors. "The stable outlook incorporates our expectation that Triple Point will continue to generate steady profitability and maintain adequate liquidity. A highly leveraged financial profile and moderate free cash flow limit its ability to de-lever materially over the coming year. However, EBITDA expansion, such that adjusted leverage declines to the mid-4x area could result in an upgrade," S&P said. The company's stable operating performance and good market position lessen the potential for credit deterioration. However, sustained adjusted leverage of over 7x due to an aggressive financial policy, including leveraged dividends to shareholders, or material debt-financed acquisitions could lead to lower ratings. VALEANT PHARMACEUTICALS: S&P Affirms 'BB' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating and '1' recovery rating to Montreal-based pharmaceutical company Valeant Pharmaceuticals International Inc.'s incremental $100 million term loan B due Feb. 13, 2019. All other ratings, including the 'BB' corporate credit rating, remain unchanged. The company intends to use the proceeds from this issuance for general corporate purposes. Although pro forma leverage increases to about 4x, this remains in line with our expectation. "The ratings on Valeant reflect Standard & Poor's view that the company will maintain a "significant" financial risk profile. Despite our expectation of acquisition activity, we believe the company will only commit to acquisitions that do not result in leverage consistently above 4x, in line with their stated financial policy. Our consideration of Valeant's business risk profile as "fair" reflects the benefits of a broader product portfolio, geographic diversification, and expanded pipeline it has achieved through multiple acquisitions over the past two years," S&P said. This is offset by the potential for integration issues, and the potential challenges of managing a very large portfolio of small products, given the high level of acquisition activity. Valeant Pharmaceuticals International Inc. Corporate Credit Rating BB/Stable/-- New Ratings Valeant Pharmaceuticals International Inc. Incremental $100 mil term loan B due 2019 BBB- Recovery Rating W.R. GRACE: To Release Q2 Financial Results July 25 --------------------------------------------------- W. R. Grace & Co. said it will release its second quarter 2012 financial results at 6:00 a.m. EDT on July 25. A company-hosted conference call and webcast will follow at 11:00 a.m. EDT that day. During the call, Fred Festa, Chairman and Chief Executive Officer, and Hudson La Force, Senior Vice President and Chief Financial Officer, will discuss the second quarter results. A question and answer session with analysts will follow the prepared remarks. Access to the live webcast and the accompanying slides will be available through the Investor Information section of the company's Web site, http://www.grace.com/ Those without access to the Internet can participate by dialing +1 866.362.5158 (U.S.) or +1 617.597.5397 (International). The participant passcode is 66121130. Investors are advised to dial into the call at least ten minutes early in order to register. An audio replay will be available at 1:00 p.m. EDT on July 25. The replay will be accessible by dialing +1 888.286.8010 (U.S.) or +1 617.801.6888 (International) and entering the participant passcode 58565857. The replay will be available for one week. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Prepares to Emerge From Bankruptcy Protection --------------------------------------------------------- Mark Hall of Asbestos.com reports that W.R. Grace & Co.'s bankruptcy status may finally come to an end in the coming days, citing recent reports. After being in bankruptcy for 11 years, the company with ties to America's most widespread asbestos contamination could potentially exit this legal protection soon, Mr. Hall said. On January 30, 2012, Judge Ronald L. Buckwalter of the U.S. District Court for the District of Delaware in Wilmington confirmed the company's reorganization plan. Under bankruptcy law, potential appeals regarding the judge's confirmation order can be made during a pre-determined 30-day window. The window opened on June 11. This means that appellants have until July 11 to file any considerations, at which point W.R. Grace will have an additional 30 days to respond. Then the 3rd Circuit Court of Appeals will make its decision. The company may actually be able to exit bankruptcy even before all they are all settled, depending on the details of the appeals, but first, the courts must receive all appeals, Mr. Hall pointed out. During its tumultuous history, bankruptcy has protected W.R. Grace from more than 100,000 personal injury claims, mostly centered on asbestos-related concerns. Unfortunately, bankruptcy did not product the countless victims affected by the company's products and actions. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Dist. Court Rejects Garlock's Bid to Stay Plan Order ---------------------------------------------------------------- District Judge Ronald L. Buckwalter denied the request of Garlock Sealing Technologies, LLC, for a stay, pending appeal, of his memorandum opinion and order overruling all objections and confirming W.R. Grace & Co. and its debtor-affiliates' Joint Plan of Reorganization in its entirety. The Court did grant Garlock's request for expedited consideration of the Motion to Stay. In his memorandum opinion, Judge Buckwalter notes that Grace's various creditors, including significantly ill victims of pleural disease and their families, have been awaiting payment for their claims since at least the time the Debtors filed for bankruptcy in 2001. "If the stay were issued, these creditors would once again be thwarted along their path to recovery from Grace. There comes a time when finality of litigation is needed. Having already been pending for eleven years, the time for finality has arrived in this case," Judge Buckwalter said. He opined that allowing otherwise would have detrimental effects for both Grace and its thousands of creditors, who at this point are more than entitled to take steps forward towards emergence from bankruptcy and obtaining payment of their long-awaited claims. In his June 11, 2012 decision, Judge Buckwalter ruled that Garlock lacked standing, and notwithstanding that ruling, also overruled Garlock's objections to the confirmation of the Joint Plan and the entry of channeling injunction. Brett D. Fallon, Esq., at Morris James LLP, in Wilmington, Delaware, contends that the June 11 decision is flawed on both its holdings because: (1) it strays from the Third Circuit's recent decision in In re Global Industrial Technologies, 645 F.3d 201 (3d Cir. 2011), which confers broad bankruptcy standing for partial participation in Chapter 11 cases; and (2) overlooks or misconstrues Garlock's substantive objections to confirmation of the Joint Plan and implementation of the channeling injunction and the trust distribution procedures. Mr. Fallon further asserts that the Joint Plan severely alters Garlock's rights against Grace, and underpays all claims, including claims for contribution from co-defendants like Garlock. In denying a stay, Judge Buckwalter also noted Garlock's failure to even acknowledge that a party seeking a stay under these circumstances may be required to post a supersedeas bond to preserve the status quo and protect the bankruptcy estate and its creditors from incurring costs incident to the stay. He said that in previously filed motions, the District Court was advised that the quantifiable costs of a stay in this case could range from $77 million to $107 million, depending on the length of time that the stay remains in place. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Opposes Anderson Plea for Relief From Plan Order ------------------------------------------------------------ The Appellees/Plan Proponents and Judge Alexander M. Sanders, Jr., the future claimants representative for asbestos-related property damage claims, filed separate responses asking the U.S. District Court for the District of Delaware to deny Anderson Memorial Hospital's request for relief from Judge Ronald L. Buckwalter's memorandum opinion and order affirming the confirmation of the Debtors' Joint Plan of Reorganization dated January 30, 2012. The Plan Proponents are the Debtors, Official Committee of Asbestos Personal Injury Claimants, Asbestos PI Future Claimants' Representative and Official Committee of Equity Security Holders. Judge Sanders is the legal representative for Future Asbestos- Related Property Damage Claimants and Holders of Demands. On behalf of the Plan Proponents, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, argues that setting aside a judgment or order under Rule 60(b) of the Federal Rules of Civil Procedure requires a showing of "exceptional" and "extraordinary" circumstances, like fraud, mistake or harm to the public interest. A mere purported change in the law fails to satisfy Anderson's heavy burden of establishing an extraordinary circumstance, she notes. Ms. Jones also contends, among other arguments, that the recent Third Circuit case on which Anderson relies, Wright v. Owens Corning, --- F.3d ---, 2012 WL 1759992 (3d Cir. May 18, 2012), does not create new law but is merely a routine application of the Third Circuit's 2010 holding in In re Grossman's, 607 F.3d 114 (3d Cir. 2010), which the District Court has already addressed in its Memorandum Opinion. Judge Sanders tells the District Court that he is in complete accord with each argument made by the Plan Proponents. He adds that the District Court lacks jurisdiction to grant Anderson's request unless and until the Third Circuit is asked to remand, and decides on the remand. Anderson Talks Back Anderson concedes that relief under Rule 60(b) is out of the ordinary. Even so, the circumstances here are not typical of those where that relief is usually sought, contends Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington, Delaware. Contrary to the District Court's conclusion that the Grossman's test has no effect on whether a claimant was given adequate notice, the Third Circuit in Wright made it clear that the Grossman's test, as applied to a case where the "claim" standard changed during the pendency of the case, does has a significant effect on whether a claimant was given adequate notice, Mr. Loizides argues. The Wright decision indicates that the notice would still be inadequate to discharge the claims of parties who, at the time they received the notice, had property that was exposed to Grace product, but had not yet had all elements of a cause of action accrue, since at the time the notice was received by those parties, they would have understood that under applicable law they did not hold "claims" that could be discharged by any Grace plan, Mr. Loizides asserts. Hence, Anderson asks the District Court to grant relief under Rule 60(b) and reconsider its memorandum opinion and order affirming the Bankruptcy Court's order confirming Grace's Joint Plan. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Chadbourne & Parke Expands Project Finance Practice ----------------------------------------------------- The international law firm of Chadbourne & Parke announced that project finance lawyers Paul J. Kaufman and Evelyn Lim will join the firm as partners on August 1 in the Los Angeles office, bolstering Chadbourne's West Coast project finance capabilities. Both are veteran renewable energy lawyers. Mr. Kaufman is currently executive vice president for transactions of enXco, the North American development arm of Electricite de France. He joined enXco as general counsel in 2008. Mr. Kaufman has been a well regarded energy lawyer since 1984. He began as a regulatory lawyer for the Public Power Council, a trade group of 118 public utility districts, municipal utilities and electric cooperatives and then practiced for 11 years as a lawyer with a firm in Oregon, where he acted for one of the two big coalitions of independent power companies active in California. He appeared in regulatory proceedings for a variety of clients before the Federal Energy Regulatory Commission and public utility commissions in the western US from Arizona to Alaska. In 1997, he moved to Enron where he directed government and regulatory affairs in the western US for five years. After Enron, he became general counsel of what was then PPM Energy, one of the top three US wind companies, headquartered in Portland. During Mr. Kaufman's tenure, PPM was owned initially by Scottish Power, the Scottish utility, and then by Iberdrola, a Spanish utility, at which time it changed its name to Iberdrola Renewables. During Mr. Kaufman's tenure as general counsel, the company not only developed wind farms, but also had active gas storage and gas and electricity trading businesses. Ms. Lim comes to Chadbourne from Element Power, a global renewable energy company headquartered in Oregon, where she served as senior vice president and general counsel. Before that, she was general counsel of First Wind, an independent North American wind development company. (Before becoming a lawyer, Ms. Lim danced with the New York City ballet.) She spent eight years as an associate with Milbank Tweed Hadley & McCloy in New York and Los Angeles, and then was a partner with McDermott Will & Emery in Los Angeles and London before being recruited to the general counsel position at First Wind where she helped raise more than $2 billion from various sources, including turbine, construction and term lenders, tax equity investors, financial sponsors and other investors. While at Milbank, Ms. Lim worked mainly for underwriters in private and public offerings of debt and equity securities, including Rule 144A and Reg. S, high-yield and structured debt offerings, monetizations of energy contracts and other structured products. She has also spent significant time on non-power infrastructure projects, including a submerged tunnel road project in Greece, the Monterrey-Cadereyta toll road project in Mexico and the Autopista Central toll road project in Chile. "We are very fortunate to have two such capable people join us," said Keith Martin, co-head of Chadbourne's project finance department. "The sort of experience they bring at leading renewable energy developers should make them stand out in the market. They understand the business at a deeper level than most outside counsel." "Both should fit seamlessly into what is already a huge renewable energy practice," added practice co-chair Rohit Chaudhry. "They will bring the headcount in our project finance group to 80 lawyers. Roughly 70% of the group's work is in the renewable energy sector. This work is increasingly outside the United States, particularly in Latin America and Africa." "The hiring of Mr. Kaufman and Ms. Lim puts us back on the ground in California in project finance. We expect to grow from there," remarked Robin Ball, managing partner of Chadbourne's L.A. office. "What particularly appealed to us about Paul and Evelyn is they are not just renewable energy lawyers, but they have also done other things: Paul with his work for Enron and on gas storage and electricity and gas trading, and Evelyn with her work on complicated capital markets and structured finance transactions and other types of infrastructure projects," said Chadbourne managing partner Andrew Giaccia. Mr. Kaufman earned a B.S. in natural resources from Cornell University and a J.D. from Northwestern School of Law. Ms. Lim received a B.S. in applied economics and business management from Cornell University and a J.D. from Fordham University School of Law. About Chadbourne & Parke Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, venture capital and emerging companies, energy/renewable energy, communications and technology, commercial and products liability litigation, arbitration/IDR, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, executive compensation and employee benefits, employment law, trusts and estates and government contract matters. * Mintz Levin's Jeffry Davis Among San Diego Super Lawyers ---------------------------------------------------------- Jeffry A. Davis and four other members of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. have been selected as San Diego Super Lawyers for 2012. The annual list identifies lawyers who have attained a high degree of peer recognition and professional achievement. Only five percent of area lawyers were named 2012 San Diego Super Lawyers. Jeff Davis is a Member of the firm's Bankruptcy, Restructuring and Commercial Law Section. His practice is focused on all aspects of bankruptcy (including debtors, creditors, and committees), out of court workouts, insolvency, receiverships, and debtor/creditor rights. He is also a commercial law litigator in areas such as contract and business disputes. Mr. Davis has represented clients in multiple industries including real estate, health care, telecommunications, software, agriculture, consumer products and food services. Mr. Davis has been included in Best Lawyers in America every year since 1995, and annually in the San Diego Super Lawyers list since 2007. He received his B.A. from the State University of New York and his J.D. from Boston University School of Law. Aside from Mr. Davis, Mintz's Super Lawyers are John Giust, Jeremy D. Glaser and Eddie Wang Rodriguez of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Nov. 28, 2011 BEARD GROUP, INC. 18th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-240-629-3300 Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800 ; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800 ; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***