/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120711.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 11, 2012, Vol. 16, No. 191 Headlines 17 WEST: Case Summary & 6 Largest Unsecured Creditors 1701 COMMERCE: Can Use Dougherty Cash Collateral Until Aug. 31 444 NORTH: Case Summary & 6 Largest Unsecured Creditors 44 CP I LOAN: Files for Chapter 11 in Phoenix ACCREDITED MEMBERS: Had $156,200 Net Loss in 1st Quarter AACE LLC: Voluntary Chapter 11 Case Summary AMC ENTERTAINMENT: Debt Document Waivers No Effect on Fitch Rating AMERICAN AIRLINES: Asks for Authority to Modify Retiree Benefits AMERICAN AIRLINES: July 19 Hearing on More Plan Exclusivity AMERICAN AIRLINES: Wins OK to Buy 4 Aircraft from Boeing AMERICAN AIRLINES: To Reach Out for Potential Deals This Month AMERICAN NANO: Had $926,800 Net Loss in First Quarter AMERICAN INT'L: Sues U.S. Over Alleged $30.2MM Tax Overpayment AMERICAN PETRO-HUNTER: Posts $904,300 Net Loss in Q1 AMERIGROUP CORP: Moody's Reviews 'Ba2' CFR for Upgrade AMERIGROUP CORP: S&P Places 'BB+' CCR Rating on Watch Positive AMERITYRE CORP: Posts $218,100 Net Loss in March 31 Quarter ANOINTED WORD: Case Summary & 7 Largest Unsecured Creditors APPS GENIUS: Posts $278,000 Net Loss in Q1 2012 ARTE SENIOR LIVING: Voluntary Chapter 11 Case Summary ASPEN GROUP: Posts $1.6 Million Net Loss in Q1 2012 ATC VENTURE: Posts $598,900 Net Loss in March 31 Quarter BAJA MINING: Posts $30.2 Million Net Loss in 1st Quarter BANK OF THE CAROLINAS: Had $2.5 Million Net Loss in Q1 BDRC LOFTS: Case Summary & 13 Largest Unsecured Creditors BE AEROSPACE: Moody's Rates 10-Yr. Sr. Unsecured Notes 'Ba2' BE AEROSPACE: S&P Affirms 'BB+' Corporate Credit Rating BITZIO INC: Had $2 Million Net Loss in First Quarter CANTELLO LLC: Involuntary Chapter 11 Case Summary CAPE FEAR: Case Summary & 20 Largest Unsecured Creditors CBS I LLC: Has Interim Access to Cash Collateral Until Aug. 2 CENVEO INC: Moody's Affirms 'B3' CFR/PDR; Outlook Negative CHINA DIGITAL: Had $7.0 Million Net Loss in March 31 Quarter CHINA GREEN: Reports $339,100 Net Income in First Quarter CHINA MARKETING: Had $522,700 Net Loss in First Quarter COCOPAH NURSERIES: Files for Chapter 11 Without DIP Financing COMMUNITY HEALTH: Fitch Rates New $1BB Sr. Unsecured Notes 'B/RR5' COMMUNITY HEALTH: Moody's Rates $1-Bil. Sr. Unsecured Notes 'B3' COMMUNITY HEALTH: S&P Rates $1-Bil. Senior Notes Due 2020 'B' COPPER FIELDS: Case Summary & 2 Largest Unsecured Creditors CORD BLOOD: Refinances JMJ Debt From Securities Sale to Tonaquint DELTA PETROLEUM: Committee Objects to Navigant Consulting Hiring DEWEY & LEBOEUF: Allowed to Break Most of Its Leases DGSE COMPANIES: Glancy Binkow & Goldberg Probes Firm DYNEGY INC: Seeks Joint Administration With Dynegy Holdings DYNEGY INC: Proposes Aug. 1 as Claims Bar Date DYNEGY INC: Files Statement of Financial Affairs DYNEGY INC: Voluntary Chapter 11 Case Summary DYNEGY INC: Bankruptcy Filing Cues Fitch to Lower Rating to 'D' DYNEGY INC: NYSE Suspends Trading After Chapter 11 Filing DYNEGY POWER: Moody's Confirms 'B2' CFR; Outlook Stable DZ.EYE.N STUDIOS: Petitioner Wants Chapter 11 Trustee EASTMAN KODAK: Retirees File Suit Over Benefits ESP RESOURCES: Incurred $395,400 Net Loss in First Quarter EZENIA! INC: Settles 2 Former Executives' Severance Claims FILENE'S BASEMENT: Plan Outline Hearing Continued to July 13 FILENE'S BASEMENT: Jacob Renick Appointed as Fee Examiner FILENE'S BASEMENT: Equity Panel Taps Houlihan as Investment Banker FILENE'S BASEMENT: Equity Panel Can Hire PWC as Financial Advisor FIFTH SEASON INTERNATIONAL: Posts $3.3 Million Net Loss in Q1 2012 FLORIDA EUROPEAN: Case Summary & 20 Largest Unsecured Creditors FOODMART INTERNATIONAL: Case Summary & Creditors List FOREVERGREEN WORLDWIDE: Had $126,900 Net Loss in 1st Quarter FRESH START PRIVATE: Wilson Morgan Raises Going Concern Doubt GENELINK INC: Posts $105,700 Net Loss in Q1 2012 GETTY PETROLEUM: Committee Reviewing ConocoPhillips Claim GH DANIELS: Case Summary & 20 Largest Unsecured Creditors GLYECO INC: Posts $311,900 Net Loss in Q1 2012 GOLDEN OAK: Case Summary & 8 Largest Unsecured Creditors GREAT CANADIAN: Moody's Affirms Ba3 CFR, Rates C$400MM Notes B1 GREAT CANADIAN: S&P Rates C$400-Mil. Unsecured Notes at 'BB+ GREAT CHINA INTERNATIONAL: Posts $626,300 Net Loss in 1st Qtr. GREGORIO'S LLC: Case Summary & 3 Largest Unsecured Creditors HANAR LLC: Case Summary & 12 Largest Unsecured Creditors HAWKER BEECHCRAFT: Sale to Chinese Firm Raises Political Concerns HANOVER PORTFOLIO: Had $430,800 Net Loss in First Quarter HORIYOSHI WORLDWIDE: Had $590,200 Net Loss in 1st Quarter HORSEHEAD HOLDING: Moody's Assigns 'B2' CFR/PDR; Outlook Stable IMPERIAL CAPITAL: FDIC Objects to $1.6-Mil. Administrators Fee INAMED CORP: 11th Cir. Bars Individual Suit Over Breast Implants INDIANAPOLIS DOWNS: CEO Seeks Probe of Creditor's Links to Rival INDYMAC BANCORP: Trustee Takes Insurers' $80MM Win to 9th Circ. INFRAX SYSTEMS: Posts $599,800 Net Loss in March 31 Quarter INNER CITY: Wins OK for Meyer Suozzi as Counsel for Unit's IP Case INT'L BEVERAGES: Case Summary & 15 Largest Unsecured Creditors IRONSTONE GROUP: Had $13,800 Net Loss in First Quarter JAYHAWK ENERGY: Incurred $983,300 Net Loss in March 31 Quarter JBI INC: Had $2.8 Million Net Loss in First Quarter K.C. & MCKINZIE: Case Summary & 4 Largest Unsecured Creditors LARSS TRUST: Case Summary & 6 Largest Unsecured Creditors LANTERN PARTNERS: Wants to Employ Frost Brown as Attorney LEAGUE NOW: Had $24,900 Profit in First Quarter LIGHTSQUARED INC: Reaches Termination Deal With Former CEO LUPER ENTERPRISES: Case Summary & 4 Largest Unsecured Creditors MAMMOTH LAKES, CA: Outline & Summary of Plan; July 12 Hearing Set MARLOW MANOR: Case Summary & 3 Largest Unsecured Creditors MASZERA CORPORATION: Voluntary Chapter 11 Case Summary MELK LOFTS: Case Summary & 13 Largest Unsecured Creditors MERRILL CORP: Moody's Confirms 'Caa3' Corporate Family Rating MF GLOBAL: CRT Offers Sellers Guaranteed Recoveries MONTECITO AT MIRABEL: Voluntary Chapter 11 Case Summary NAVISTAR INT'L: Liquidity Concerns Cue Fitch to Lower IDR to 'B+' NERIUM BIOTECHNOLOGY: Posts $1.5 Million Net Loss in 1st Quarter NETWORK CN: Had $623,400 Net Loss in First Quarter NEW SALEM: Case Summary & 6 Largest Unsecured Creditors NUSTAR LOGISTICS: Moody's Reviews Ratings for Possible Downgrade PARADISE DREAM: Case Summary & 2 Largest Unsecured Creditors PARAMJEET MALHOTRA: Judge Dismisses FCA Kickback Claims PARTY CITY: S&P Assigns 'B' Corporate Credit Rating PATRIOT COAL: Receives Court OK of $802 Million DIP Financing PEGASUS RURAL: To Auction Spectrum Assets & Leases in August PJ FINANCE: Completes Chapter 11 Plan of Reorganization PORT WASHINGTON: Case Summary & 7 Largest Unsecured Creditors PREMIER GOLF: Disputed Assets Belong to Estate, Not Ostronics RACKWISE INC: Posts $2.2 Million Net Loss in Q1 2012 RG STEEL: To Face Air Pollution Suit From U.S. Government RIDGE VIEW: Case Summary & 3 Largest Unsecured Creditors RITZ CAMERA: Seeks to Sell Off Its Assets at Auction TAKE FLIGHT: Case Summary & 5 Largest Unsecured Creditors SECURE INTERNET: Case Summary & 20 Largest Unsecured Creditors SIGNATURE GROUP: J. McIntyre Faults Current Board for Woes SINCKLER INC: Voluntary Chapter 11 Case Summary SINO-FOREST: Creditors to Acquire Substantially All Assets SUPER CASEY: Voluntary Chapter 11 Case Summary TARGETED MEDICAL: Posts $975,900 Net Loss in 1st Quarter TRI-VALLEY CORP: Incurred $1.5 Million Net Loss in First Quarter U-SWIRL INC: Incurred $124,100 First Quarter Net Loss UNITED AMERICAN: Posts $1.2-Mil. Net Loss in March 31 Quarter US XPRESS: S&P Affirms B Corp. Credit Rating on Covenant Amendment WM BOLTHOUSE: Moody's Reviews B2 CFR for Upgrade on Campbell Deal VYSOTA ENTERPRISES: Case Summary & 8 Largest Unsecured Creditors WOLFGANG CANDY: Divine Offers to Acquire Assets $1.5 Million ZYTO CORP: Had $65,800 Profit in First Quarter ZOOM TELEPHONICS: Posts $114,300 Net Loss in Q1 2012 YUKON-NEVADA GOLD: Posts $7.8-Mil. Net Loss in First Quarter * Moody's Says US Tech Companies' Cash Piles Won't Affect Ratings * Moody's Says Student Loan Default Rate Stable But High in 2012 * Upcoming Meetings, Conferences and Seminars ********* 17 WEST: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------- Debtor: 17 West Pine Street, LLC 220 North Orange Blossom Trail Orlando, FL 32805 Bankruptcy Case No.: 12-09306 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: David R. McFarlin, Esq. WOLFF, HILL, MCFARLIN & HERRON, P.A 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 E-mail: dmcfarlin@whmh.com Scheduled Assets: $1,575,277 Scheduled Liabilities: $1,276,153 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-09306.pdf The petition was signed by Christopher T. Weising, managing member. 1701 COMMERCE: Can Use Dougherty Cash Collateral Until Aug. 31 -------------------------------------------------------------- The Bankruptcy Court signed a second amended agreed order authorizing 1701 Commerce, LLC, to continue using cash collateral of senior lender Dougherty Funding, LLC, through Aug. 31, 2012. During this interim period of May 24, 2012, through Aug. 31, 2012, continued interim use of cash collateral is conditioned on the senior lender's receipt of a monthly adequate protection payment from the Debtor for $241,000 no later than the last day of each month, which payments began in May 2012. The Debtor is not authorized, absent the senior lender's consent, to make any payment or disbursement to any insider, affiliate or otherwise related party of the Debtor. A copy of the Amended Cash Collateral Order is available at: http://bankrupt.com/misc/1701_Aug31CashOrd.pdf About 1701 Commerce 1701 Commerce LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 12-41748) on March 26, 2012. 1701 Commerce LLC was previously named Presidio Ft. Worth Hotel LLC, but changed its name to 1701 Commerce LLC, prior to the petition date to reduce and minimize any potential confusion relating to an entity named Presidio Fort Worth Hotel LP, an unrelated and unaffiliated partnership that was the former owner of the hotel property owned by the Debtor. 1701 Commerce LLC is a Nevada limited liability company whose members are Vestin Realty Mortgage I, Inc., Vestin Mortgage Realty II, Inc., and Vestin Fund III, LLC. 1701 Commerce LLC's operations are managed by Richfield Hospitality Group, an independent management company that is not affiliated with the Debtor or any of its members. 1701 Commerce LLC owns and operates a full service "Sheraton Hotel" located at 1701 Commerce, Fort Worth, Texas. The Debtor also operates a Shula's steakhouse at the Hotel. Judge D. Michael Ly1nn presides over the bankruptcy case. The Law Office of John P. Lewis, Jr., represents the Debtor. The Debtor disclosed $71,842,322 in assets and $44,936,697 in liabilities. 444 NORTH: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 444 North Northwest Hwy, LLC 444 N. Northwest Highway, Suite 300 Park Ridge, IL 60068 Bankruptcy Case No.: 12-27041 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Jack B. Schmetterer Debtor's Counsel: Stephen J. Brown, Esq. SCHUYLER ROCHE & CRISHAM, P.C. 130 E. Randolph Street, Suite 3800 Chicago, IL 60601 Tel: (312) 565-2400 Fax: (312) 565-8300 E-mail: sjbrown@srcattorneys.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb12-27041.pdf The petition was signed by John Heinz, authorized member manager. 44 CP I LOAN: Files for Chapter 11 in Phoenix --------------------------------------------- 44 CP I Loan LLC and 44 CP II Loan LLC filed bare-bones Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-15286 and 12-15287) in Phoenix on July 9, 2012. The Debtors each estimated assets and debts of $10 million to $50 million. Mark Winkleman, as chief operating officer, signed the Chapter 11 petition. The Debtors are represented by Cathy L. Reece, Esq., at Fennemore Craig, P.C. A meeting of creditors under 11 U.S.C. Sec. 341(a) is scheduled for Aug. 14, 2012 at 9:00 a.m. According to the case docket, the schedules of assets and liabilities and the statement of financial affairs are due July 23, 2012. ACCREDITED MEMBERS: Had $156,200 Net Loss in 1st Quarter -------------------------------------------------------- Accredited Members Holding Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $156,258 on $445,931 of revenue for the three months ended March 31, 2012, compared with a net loss of $353,113 on $595,500 of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $2.11 million in total assets, $2.15 million in total liabilities, and a stockholders' deficit of $40,790. As reported in the TCR on April 9, 2012, GHP Horwath, P.C., in Denver, Colorado, expressed substantial doubt about Accredited Members' 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 reported a net loss of approximately $3,461,000 and used net cash in operating activities of approximately $2,125,000 in 2011, and has an accumulated deficit of approximately $7,570,000 at Dec. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/G5YDAh Colorado Springs, Colo.-based Accredited Members Holding Corporation currently provides various services and products both directly and through its subsidiary corporations Accredited Members, Inc. ("AMI"), and AMHC Managed Services ("AMMS"), which provides management services to third parties including services typically provided by executive level personnel on a fix-contract basis. Through August 2011, the Company provided services through its subsidiary World Wide Premium Packers, Inc. ("WWPP"). AACE LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: AACE LLC dba Best Knights Inn aka Judy Kyongjoon Lee 3021 Pacific Highway E. Fife, WA 98242 Bankruptcy Case No.: 12-44759 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: Karl Y. Park, Esq. LAW OFFICES OF KARL PARK 1010 S 336th St Ste 320 Federal Way, WA 98003 Tel: (253) 815-1400 E-mail: karlpark99@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Judy K. Lee, managing member. AMC ENTERTAINMENT: Debt Document Waivers No Effect on Fitch Rating ------------------------------------------------------------------ AMC Entertainment, Inc.'s amendments and waivers to several of its debt documents have no effect on the company's current ratings or Outlook, according to Fitch Ratings. AMC amended its bank credit facility, and obtained waivers and amendments for both its 8.75% Senior Notes due 2019 and its 9.75% Senior Subordinated Notes due 2020. These amendments and waivers prevent the proposed acquisition of AMC Entertainment Holdings, Inc. (AMC Parent) by Dalian Wanda Group Co. Ltd. (Wanda) from triggering change of control provisions under the debt agreements. After the acquisition closes, AMC intends to reduce debt by approximately $140 million by paying down all of the outstanding 8% senior subordinated notes due 2014. Proceeds are expected to include $90 million from cash on hand and $50 million from funds contributed by Wanda. Fitch notes that as part of the amendment, pricing on both the 2016 and 2018 term loans increased approximately 75 and 50 basis points, respectively. The term loan due December 2016 ($470 million outstanding) will now have a LIBOR floor of 1.00% (there was previously no LIBOR floor). This would have in effect increased the reported interest rate as of March 29, 2012 from 3.49% to 4.25% (based on the 2016 term loans' 3.25% margin over LIBOR). The pricing on the term loan due January 2018 ($300 million outstanding) will increase to LIBOR plus 375 basis points (bps) from 325 bps. The term loan due 2018 already had a 1.00% LIBOR floor in place. The increased interest cost associated with the higher term loan pricing (Fitch calculates an additional $5 million in annual interest) is more than offset by the $140 million reduction in 8% coupon debt ($11 million in annual interest). Fitch views the acquisition and the reduction in debt as beneficial for the credit profile. Wanda is a strategic buyer and removes the private equity ownership exit overhang. However, Fitch expects to maintain the current ratings and Outlook. To date, the 2012 box office has been solid, up 8.4% according to Box Office Mojo. Fitch believes this has mostly been driven by attendance gains. However, it may be challenging for the 2013 film slate to match this year's performance. The Outlook reflects the weak credit metrics (interest coverage, EBITDA margins and gross leverage) relative to the ratings. Fitch notes that the fourth fiscal quarter (ending March 2012) drove improved credit metrics, Fitch EBITDA margins of 12.3% and interest coverage of 2x, as of the last twelve months (LTM) ending March 29, 2012. Relative to its peers, Fitch believes AMC should be able to maintain Fitch calculated EBITDA margins greater than 12%. EBITDA margins had fallen below this level, LTM March 2011 margins were 10.4% and reached as low as 9.5% as of LTM December 2011, but have rebounded in the most recent quarter. The Outlook may be stabilized over the next 9 to 15 months if AMC can demonstrate average interest coverage above 2x. Meaning, in strong performing box office years interest coverage may be higher to provide cushion for weaker box office years. Given Fitch's expectations for a challenging 2013 box office, Fitch will need to be comfortable that the credit metrics could weather a mid-single digit decline in attendance. Also, Fitch is currently comfortable with the level of disclosure and access to management regarding future financial and operating strategy. Rating Rationale: -- Fitch believes movie exhibition will continue to be a key promotion window for the movie studios' biggest/most profitable releases. -- Fitch expects that attendance and box office revenues should be supported by the 2012 healthy film slate. -- Fitch notes that concession revenues have grown in the low- to-mid single digits over the last few years. While Fitch does not anticipate a significant decline in concession per patron, Fitch remains cautious that high-margin concessions (which represent 27% of AMC's total revenues and carry 86% gross margins), may be vulnerable to reduced per-guest concession spending due to economic cyclical factors or a re- acceleration of commodity prices. -- The ratings factor in the intermediate/long-term risks associated with increased competition from at-home entertainment media, limited control over revenue trends, the pressure on film distribution windows, increasing indirect competition from other distribution channels (such as VOD, the Internet and DVD), and high operating leverage (which could make theater operators free cash flow negative during periods of reduced attendance). -- For the long term, Fitch continues to expect that the movie exhibitor industry will be challenged in growing attendance and any potential attendance declines will offset some of the growth in average ticket prices. -- In addition, AMC and its peers rely on the quality, quantity, and timing of movie product, all factors out of management's control. Liquidity As of March 29, 2012, liquidity included $272.3 million in cash at AMC and $180 million available under its $192.5 million secured credit facility due 2015. The secured credit agreement contains a secured leverage covenant of 3.25x, which is calculated on a net basis. Fitch does not believe the company is at risk of breaching this covenant. Current amortization on the AMC term loans are $8.0 million annually. AMC's next significant maturities include $140 million in subordinated notes due 2014 (expected to be repaid upon completion of the acquisition), approximately $470 million in term loans due 2016, $300 million term loans due 2018, $600 million in senior unsecured notes due 2019 and $600 million in subordinated notes due 2020. Fitch calculated free cash flow (FCF) for the latest 12 months was $58 million. Fitch expects FCF to be slightly positive for fiscal years ended 2012 and 2013. Fitch recognizes that AMC, if needed, could generate additional liquidity by divesting its holding in National CineMedia Inc. (NCM). Fitch notes that the company has a low tax basis in its NCM interest, reducing AMC's net proceeds. Leverage As of March 29, 2011, Fitch calculates lease adjusted gross leverage at 5.9x, unadjusted gross leverage at 6.9x and, if the NCM dividend is included in EBITDA, unadjusted gross leverage is at 6.4x. Recovery Ratings AMC's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company and, hence, recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation. Fitch estimates an adjusted, distressed enterprise valuation of $1.3 billion using a 5 times (x) multiple and including an estimate for AMC's 16% stake in National CineMedia LLC (NCM) of approximately $150 million. Based on this enterprise valuation, overall recovery for total debt is approximately 50% (this is before any administrative claims). The 'RR1' Recovery Rating for the company's secured bank facilities reflects Fitch's belief that 91% - 100% expected recovery is reasonable. While Fitch does not assign Recovery Ratings for the company's operating lease obligations, it is assumed the company rejects only 30% of its remaining $2.5 billion in operating lease commitments due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values (at a net present value). The 'RR5' Recovery Ratings for AMC's senior unsecured notes (equal in ranking to the rejected operating leases) reflect an expectation of 11% - 30% recovery. Fitch assumes a nominal concession payment is made to the subordinate debt holders in order to secure their support of a reorganization plan. The 'CCC/RR6' rating for AMC's senior subordinated notes reflects Fitch's expectation for nominal recovery. Fitch currently rates AMC as follows: AMC -- IDR 'B'; -- Senior secured credit facilities 'BB/RR1'; -- Senior unsecured notes 'B-/RR5'; -- Senior subordinated notes 'CCC/RR6'. The rating Outlook is Negative. AMERICAN AIRLINES: Asks for Authority to Modify Retiree Benefits ---------------------------------------------------------------- American Airlines, Inc., AMR Corporation and its debtor affiliates filed an adversary complaint on July 6, 2012, against the Committee of Retired Employees asking Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York to declare that they are under no legal compulsion to continue to provide retiree health and welfare benefits. The Debtors currently provide retiree health and welfare benefits to five groups of retired employees: (1) retired non-union employees; (2) retired pilots; (3) retired ground employees who had been employed in a variety of different positions; (4) retired flight attendants; and (5) retired employees of Trans World Airlines. The Debtors' liability for retiree health and welfare benefits for current retirees for the plan year 2010 was more than $1.3 billion. AMR has about 40,000 current retirees, including American and TWA. According to Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, under the law, a plan sponsor is required to continue providing retiree health and welfare benefits to a plan participant only where the plan sponsor has promised to provide benefits to the participant for life and has not reserved its rights to modify the benefit plan. In this case, the Debtors have not made any promises, explicitly have reserved their rights to modify the benefit plans, or both, Mr. Karotkin told Judge Lane. Therefore, American's retirees hold no vested right to the retiree health and welfare benefits American currently provides, Mr. Karotkin asserts. Because the retiree health and welfare benefits are not vested, and because modifying retiree and welfare benefits to reduce costs fall within American's sound business judgment, American may unilaterally modify health and welfare benefits for current retirees. "We understand any changes to these benefits are concerning to our retirees," Bloomberg News reported, citing an e-mailed statement from Bruce Hicks, an American spokesman. "It's important to remember the changes we're proposing are very similar to those we propose to make for active employees when they retire." The case is AMR Corp. v. Committee of Retired Employees, 12-01744, U.S. Bankruptcy Court, Southern District of New York (Manhattan). 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: July 19 Hearing on More Plan Exclusivity ----------------------------------------------------------- AMR Corporation and the Official Committee of Unsecured Creditors have filed a joint motion seeking additional time to file the company's Chapter 11 plan and to solicit votes from creditors. The motion seeks to extend the deadline for filing the bankruptcy plan of AMR and its affiliated debtors to December 28, and for soliciting votes on the plan to February 28, 2013. Harvey Miller, Esq., at Weil Gotshal & Manges LLP, in New York, said they need additional time to negotiate the terms of a bankruptcy plan as well as to address labor-related issues. "The resolution of these issues is critical to the success of the reorganization process," Mr. Miller said in court papers. "Although substantial progress has been made, the process has not yet concluded." AMR's exclusive plan filing period is currently scheduled to expire on September 28. Extension of the period would delay any formal merger proposal to creditors from US Airways Group Inc., which is weighing a takeover, according to an earlier report by Bloomberg. 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 American Airlines independent while the airline restructures, Bloomberg reported. 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 August 8. Judge Sean Lane has delayed until August 15, after the pilots vote, a ruling on whether American Airlines can reject the contracts of flight attendants, mechanics and stock clerks if agreements aren't reached before that deadline, according to the report. A court hearing is scheduled for July 19. Objections are due by July 12. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wins OK to Buy 4 Aircraft from Boeing -------------------------------------------------------- American Airlines Inc. and its affiliates sought and obtained permission to purchase from The Boeing Company Boeing 737-823 aircraft bearing U.S. Registration Nos. N895NN, N891NN, N893NN, and N894NN. The Debtors are also authorized by the bankruptcy court to enter into an agreement with International Lease Finance Corporation relating to the sale of the N895NN, N891NN, and N893NN aircraft and the leaseback of these aircraft. The Debtors also further authorized to enter into an agreement with AerCap Ireland Limited with respect to the sale of the N894NN aircraft. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: To Reach Out for Potential Deals This Month -------------------------------------------------------------- The Wall Street Journal's Mike Spector, Susan Carey and Anupreeta Das report that AMR Corp. plans to formally sound out potential partners to discuss mergers or other investment deals in coming weeks. WSJ relates that in a letter to employees Tuesday, AMR Chief Executive Tom Horton said the company is near having "greater clarity on our revenue outlook and cost structure" so it "now makes sense to evaluate a range of strategic options, including potential mergers . . . We will be reaching out to interested parties to inform them how we intend to proceed." According to WSJ, people familiar with the matter said any merger proposals would be weighed against an independent restructuring plan being developed by AMR, with the carrier's bondholders, unions and other parties jockeying over which deal would give them the best results. According to WSJ, sources familiar with the matter said AMR plans to share nondisclosure agreements with its unsecured creditors committee, which includes bondholder representatives and labor unions, in the next week or two before sending them out. The agreements could contain complicated provisions governing any merger talks. The sources said American intends to send the nondisclosure agreements to other airlines as soon as this month. The sources also said AMR could invite private-equity firms and other investors to study the company's books. The sources also told WSJ that at a monthly gathering of the airline's creditors committee Tuesday afternoon, Mr. Horton and other executives outlined improved financial results at AMR and the merits and downsides of merging with one of five airlines. According to WSJ, some tie-ups AMR is studying: -- Alaska Air Group Inc., which prizes autonomy -- Delta Air Lines Inc., but antitrust issues loom; -- Republic Airways Holdings Inc.'s Frontier Airlines, which is currently up for sale, but is small in size; -- JetBlue Airways Corp., but cultures could clash; -- US Airways Group Inc., which has been vocal about a deal; and -- closely held Virgin America, which is unprofitable WSJ notes besides US Airways, none of them has publicly voiced the desire for a deal with AMR. A person familiar with the matter also told the Journal that Delta wasn't mentioned during Tuesday's meeting, but is being considered by AMR. Such a combination could pose antitrust hurdles because of the airlines' overlapping routes and sheer size. WSJ notes Alaska Air declined to comment about AMR but said it wanted to stay independent. Virgin America, JetBlue and Frontier declined to comment. 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 NANO: Had $926,800 Net Loss in First Quarter ----------------------------------------------------- American Nano Silicon Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $926,850 on $16,505 of revenues for the three months ended March 31, 2012, compared with net income of $521,820 on $6.27 million of revenue for the three months ended March 31, 2011. For the six months ended March 31, 2012, the Company reported a net loss of $1.14 million on $16,505 of revenues, compared with net income of $3.10 million on $12.19 million of revenues for the six months ended March 31, 2011. In December 2011, the Company fully completed its relocation to the new manufacturing facility and began limited production on Jan. 2, 2012. The Company will need additional funds to meet its operating and financing obligations until sufficient cash flows are generated from production to sustain operations and to fund future development and financing obligations. The Company's largest shareholder and President, Mr. Pu Fachun, has the intention to continue providing necessary funding for the Company's normal operations. The Company's balance sheet at March 31, 2012, showed $24.97 million in total assets, $10.27 million in total liabilities, and stockholders' equity of $14.70 million. As reported in the TCR on Jan. 17, 2012, Friedman LLP, in Marlton, New Jersey, expressed substantial doubt about American Nano Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company suspended its operations in May 2011. In addition, the Company has suffered negative cash flows for the year ended Sept. 30, 2011, and has a net working capital deficiency as of Sept. 30, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/u5AwgL Sichuan, China-based American Nano Silicon Technologies, Inc., was originally incorporated in the State of California on Sept. 6, 1996 as CorpHQ, Inc. The Company has been primarily engaged in the business of manufacturing and distributing refined consumer chemical products through its subsidiaries, Nanchong Chunfei Nano- Silicon Technologies Co., Ltd. ("Nanchong Chunfei"), Sichuan Chunfei Refined Chemicals Co., Ltd. ("Chunfei Chemicals"), and Sichuan Hedi Veterinary Medicines Co., Ltd. ("Hedi Medicines"). AMERICAN INT'L: Sues U.S. Over Alleged $30.2MM Tax Overpayment -------------------------------------------------------------- American Bankruptcy Institute reports that American International Group Inc., which was taken over by the federal government in 2008, sued the U.S. seeking $30.2 million for an alleged overpayment of taxes for 1991. About AIG American International Group, Inc. -- http://www.aig.com/-- is an international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. At the height of the 2008 financial crisis, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage-backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG sold off a number of its businesses and other assets to pay down loans received from the U.S. government. AMERICAN PETRO-HUNTER: Posts $904,300 Net Loss in Q1 ---------------------------------------------------- American Petro-Hunter, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $904,301 on $114,723 of revenue for the three months ended March 31, 2012, compared with a net loss of $560,061 on $45,669 of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1.88 million in total assets, $1.90 million in total liabilities, and a stockholders' deficit of $24,688. As reported in the TCR on April 4, 2012, Weaver Martin & Samyn, LLC, in Kansas City, Missouri, expressed substantial doubt about American Petro-Hunter'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 has suffered recurring losses from operations and is dependent upon the continued sale of its securities or obtaining debt financing for funds to meet its cash requirements. A copy of the Form 10-Q is available for free at: http://is.gd/S1SWgk Scottsdale, Ariz.-based American Petro-Hunter, Inc., is an oil and natural gas exploration and production (E&P) company with current projects in Kansas and Oklahoma. As of May 15, 2012, the Company has two producing wells in Kansas and five producing wells in Oklahoma. It also have rights for the exploration and production of oil and gas on an aggregate of approximately 6,230 acres in those states. This includes the Company's core assets with rights to explore on 2,000 acres in Oklahoma, near the town of Ripley on the North Oklahoma Mississippi Project and a forty percent (40%) working interest in 3,000 acres in south-central Oklahoma (the "South Oklahoma Lease"). AMERIGROUP CORP: Moody's Reviews 'Ba2' CFR for Upgrade ------------------------------------------------------ Moody's Investors Service has placed the Ba2 senior debt rating and Ba2 corporate family rating of AMERIGROUP Corporation under review for upgrade following the announcement that WellPoint, Inc. (WellPoint; NYSE: WLP, IFS at A2) had entered into a definitive agreement to acquire AMERIGROUP. The Baa2 insurance financial strength (IFS) rating of AMERIGROUP Corporation's operating subsidiaries (see list below) have also been placed under review for upgrade. Ratings Rationale Moody's anticipates that WellPoint will assume and guarantee AMERIGROUP's 7.5% senior notes (due in 2019) upon the close of the transaction. The transaction, which is subject to regulatory approval, is expected to close in the first quarter of 2013. The rating agency stated that its review will focus on the completion of the transaction and WellPoint's level of support for the operating subsidiaries and debt being acquired from AMERIGROUP, as well as its integration plans for the business. With projected annual revenues of approximately $8.8 billion primarily in the Medicaid segment, AMERIGROUP provides added diversity to WellPoint's premium and earnings stream. Upon the close of the transaction, Moody's expects that AMERIGROUP's IFS and debt rating will be aligned with the higher rating of WellPoint's operating and holding companies. Absent the transaction, the rating agency had stated that AMERIGROUP's ratings could be upgraded if there was continued diversification through expansion into new geographies or introduction of new products in existing states, if EBITDA coverage was above 10x and if EBITDA margins were maintained in the 5% range with the NAIC RBC ratio maintained at a level of at least 200% of CAL. However, Moody's also said that if there was a loss or impairment of one or more of AMERIGROUP's Medicaid contracts, if the consolidated NAIC RBC ratio fell below 150% CAL, or if EBITDA margins fell below 2%, then the ratings could be downgraded. The following ratings were place under review for upgrade: AMERIGROUP Corporation -- senior unsecured debt rating at Ba2; corporate family rating at Ba2; senior unsecured debt shelf rating at (P)Ba2; subordinated debt shelf rating at (P)Ba3; preferred stock shelf rating at (P)B1. AMERIGROUP Texas, Inc. -- insurance financial strength rating at Baa2; AMERIGROUP Maryland, Inc. -- insurance financial strength rating at Baa2; AMERIGROUP Florida, Inc. -- insurance financial strength rating at Baa2; AMERIGROUP New Jersey, Inc. -- insurance financial strength rating at Baa2. AMERIGROUP Corporation is headquartered in Virginia Beach, Virginia. For the first three months of 2012 total revenue was $1.8 billion, with medical membership as of March 31, 2012 of approximately 2.2 million members. As of March 31, 2012 the company reported shareholders' equity of $ 1.3 billion. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. The principal methodology used in rating AMERIGROUP was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. AMERIGROUP CORP: S&P Places 'BB+' CCR Rating on Watch Positive -------------------------------------------------------------- Standard & Poor's Ratings Services has placed its 'BB+' counterparty credit rating on Amerigroup Corp. on CreditWatch with positive implications following WellPoint Inc.'s announcement that it has entered into an agreement to acquire Amerigroup. "The CreditWatch placement reflects Amerigroup's anticipated acquisition by a higher-rated entity (WellPoint), which likely will result in an upgrade by up to four notches," said Standard & Poor's credit analyst Hema Singh. "The company expects the acquisition to close by first-quarter 2013." "We will continue to monitor Amerigroup's operating performance and financial condition, as well as discuss its capital structure and role within the acquiring firm with WellPoint's management," Ms. Singh continued. "We anticipate that Amerigroup's group of operating health plans will operate as wholly owned subsidiaries of WellPoint. We expect that WellPoint will assume and provide guarantees to Amerigroup's existing 7.5% senior notes due 2019 once the transaction is completed. We expect to raise our rating on Amerigroup by up to four notches to be consistent with our 'A-/Stable' counterparty credit rating on WellPoint." AMERITYRE CORP: Posts $218,100 Net Loss in March 31 Quarter ----------------------------------------------------------- Amerityre Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $218,128 on $1.01 million of revenues for the three months ended March 31, 2012, compared with a net loss of $150,426 on $863,383 of revenues for the three months ended March 31, 2011. For the nine months ended March 31, 2012, the Company reported a net loss of $642,844 on $3.41 million of revenues, compared with a net loss of $649,204 on $2.59 million of revenues for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $2.50 million in total assets, $1.29 million in total liabilities, and stockholders' equity of $1.21 million. As reported in the TCR on Oct. 20, 2011, HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Amerityre's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditors noted that the Company has suffered recurring losses from operations that have resulted in an accumulated deficit. A copy of the Form 10-Q is available for free at: http://is.gd/4d1kvf Boulder City, Nevada-based Amerityre Corporation engages in the development, manufacturing and sale of polyurethane tires. ANOINTED WORD: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Anointed Word Ministries International, Inc. 1266 Greenridge Ave. Lithonia, GA 30058 Bankruptcy Case No.: 12-67257 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Kenneth Mitchell, Esq. GIDDENS, DAVIDSON & MITCHELL P.C. Suite 300-B 5000 Snapfinger Woods Drive Decatur, GA 30034 Tel: (770) 987-7007 E-mail: kmitchell@gdmpclaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-67257.pdf The petition was signed by Bishop Bobby R. Henderson, CEO. APPS GENIUS: Posts $278,000 Net Loss in Q1 2012 ----------------------------------------------- Apps Genius Corp filed its quarterly report on Form 10-Q, reporting a net loss of $278,068 on $3,726 of revenues for the three months ended March 31, 2012, compared with a net loss of $99,977 on $6,107 of revenues for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1.19 million in total assets, $44,330 in total current liabilities, and stockholders' equity of $1.15 million. Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about Apps Genius Corp'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 had a net loss and net cash used in operations of $321,489 and $215,700, respectively, in 2011, had an accumulated deficit of $921,664 at Dec. 31, 2011. and has minimal revenues. A copy of the Form 10-Q is available for free at: http://is.gd/MSHa2V Apps Genius Corp, headquartered in Deerfield Beach, Fla., was incorporated in the State of Nevada on Dec. 17, 2009. The Company's principal business is focused on creating innovative social games and mobile applications that let people play together with real-world friends and family using the currently available infrastructure built by both social and mobile networks. The Company's cross-platform gaming and mobile applications allow users to play and interact with multiple people on multiple networks whether or not they have a preexisting relationship with them. The Company's Social Gaming and Mobile App technology allows users and players to reach across the multiple networks into a virtual application or gaming environment. Additionally, the Company has developed unique player incentive platforms that allow users to share in the success of the game or application. Currently, the Company is developing its platform for Facebook, MySpace, iPhone and Android. ARTE SENIOR LIVING: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Arte Senior Living LLC 11648 E. Shea Boulevard, #101 Scottsdale, AZ 85259 Bankruptcy Case No.: 12-14993 Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. About the Debtor: Arte Senior Living is an operator of an assisted living facility in North Scottsdale, Arizona. Debtor's Counsel: John J. Hebert, Esq. POLSINELLI SHUGHART, P.C. One East Washington Street CityScape Building, Suite 1200 Phoenix, AZ 85004 Tel: (602) 650-2011 Fax: (602) 391-2546 E-mail: jhebert@polsinelli.com - and ? MARK W. Roth, Esq. POLSINELLI SHUGHART P.C. One East Washington Street CityScape Building, Suite 1200 Phoenix, AZ 85004 Tel: (602) 650-2012 Fax: (602) 926.8562 E-mail: mroth@polsinelli.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by David L. Craik, manager. ASPEN GROUP: Posts $1.6 Million Net Loss in Q1 2012 --------------------------------------------------- Aspen Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.63 million on $1.36 million of revenues for the three months ended March 31, 2012, compared with a net loss of $27,266 on $1.01 million of revenues for the same period last year. The Company's balance sheet at March 31, 2012, showed $6.04 million in total assets, $3.97 million in total liabilities, and stockholders' equity of $2.07 million. "The Company had a net loss allocable to common stockholders of $1,663,600 and negative cash flows from operations of $867,397 for the three months ended March 31, 2012," the Company said in the filing. "The Company's ability to continue as a going concern is contingent on securing additional debt or equity financing from outside investors. These matters raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/8kgvOu Denver, Colo.-based Aspen Group, Inc. (together with its subsidiaries, the "Company", "Aspen" or the "University") was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, the University was acquired by Higher Education Management Group, Inc. ("HEMG") and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized through an acquisition by Aspen Group, Inc., an inactive publicly-held company. ATC VENTURE: Posts $598,900 Net Loss in March 31 Quarter -------------------------------------------------------- ATC Venture Group Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $598,870 on $1.96 million of revenue for the three months ended March 31, 2012, compared with a net loss of $1.35 million on $660,220 of revenue for the three months ended March 31, 2011. For the six months ended March 31, 2012, the Company reported a net loss of $1.06 million on $2.53 million of revenue, compared with a net loss of $1.66 million on $1.35 million of revenue for the six months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $10.48 million in total assets, $6.09 million in total liabilities, and stockholders' equity of $4.39 million. Boulay, Heutmaker, Zibell & Co. P.L.L.P., in Minneapolis, Minnesota, expressed substantial doubt about Cycle Country Accessories Corp. (now known as ATC Venture Group Inc.)'s ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company sustained several consecutive periods of operating losses. A copy of the Form 10-Q is available for free at: http://is.gd/JjIHy0 Minnetonka, Minn.-based ATC Venture Group Inc. has one distinct operating segment, Simonsen Iron Works Inc., which is engaged in the design, manufacture and assembly of an array of parts for original equipment manufacturers (OEMs) and other customers. The Company has offices in Minnetonka, Minn. and Spencer, Iowa, and has approximately 160,000 square feet of modern manufacturing facilities in its owned building in Spencer, Iowa. BAJA MINING: Posts $30.2 Million Net Loss in 1st Quarter -------------------------------------------------------- Baja Mining Corp. reported a net loss of US$30.20 million on US$0 revenue for the three months ended March 31, 2012, compared with a net loss of US$42.77 million on US$0 revenue for the same period last year. For the three-month period ended March 31, 2012, the Company recorded a loss attributed to its shareholders of US$21.34 million as compared to a loss attributed to its shareholders of US$32.81 million for the same period in 2011. The decrease in loss was primarily driven by a lower mark to market adjustment on the Company's derivative instruments carried at fair value and a lower foreign exchange loss than those recognized in the first quarter of 2011. The Company's balance sheet at March 31, 2012, showed US$967.27 million in total assets, US$735.94 million in total liabilities, and stockholders' equity of US$231.33 million. During the period ended March 31, 2012, the Company had a loss of US$30.20 million and as at March 31, 2012, the accumulated deficit attributable to shareholders amounted to US$156.59 million. In addition, subsequent to March 31, 2012, the Company identified cost overruns on the Boleo Project that exceeded the Company's available funding. The funding shortfall of US$246 million was estimated after considering existing cost overrun facilities of $100 million and approximate additional cost contingencies of US$54 million, suggesting a total estimated cost overrun of approximately US$400 million. Provisions within the debt agreements prevent the Company from drawing on available facilities until the shortfall is resolved and provides the lenders with the ability to demand accelerated payment should the Company not be able to resolve the funding shortfall by mid-June 2012. The facilities that may be subject to accelerated payment are the senior debt, the Korean Development Bank ("KDB") subordinated debt, and those relating to the hedge liability totaling US$435,634,000 on the consolidated balance sheet. The Company's ability to continue as a going concern is dependent upon the ability of the Company to (i) obtain financing to satisfy short-term liquidity requirements, (ii) obtain further financing to fund the before mentioned funding shortfall, (iii) complete the development of its Boleo Project, (iv) obtain all requisite permits as stipulated in the senior debt agreements, and (v) establish profitable operations. "As a result, there is substantial doubt that the Company will be able to continue as a going concern." A copy of Baja Mining's condensed interim consolidated financial Statements for the three months ended March 31, 2012, is available for free at http://is.gd/Vw0v7U Vancouver, British Columbia-based Baja Mining Corp. was incorporated on July 15, 1985, under the Company Act of British, Columbia. The Company's primary focus is the development of the El Boleo copper-cobalt-zinc-manganese deposit (the "Boleo Project") located near Santa Rosalia, Baja California Sur, Mexico. The Company is a reporting issuer in Canada and the United States and trades on the Toronto Stock Exchange, the Frankfurt Stock Exchange and the OTC:QX International. BANK OF THE CAROLINAS: Had $2.5 Million Net Loss in Q1 ------------------------------------------------------ Bank of the Carolinas Corporation, filed its quarterly report on Form 10-Q, reporting a net loss of $2.48 million on $3.08 million of net interest income (before provision for loan losses) for the three months ended March 31, 2012, compared with a net loss of $3.21 million on $3.65 million of net interest income (before provision for loan losses) for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $479.76 million in total assets, $468.95 million in total liabilities, and stockholders' equity of $10.81 million. "The significant losses in 2010, 2011, and the first three months of 2012, which were primarily related to credit losses and the valuation allowance on deferred tax assets, reduced the Company's capital levels," the Company said in the filing. "In order to again become well capitalized under federal banking agencies' guidelines, management believes that the Company will need to raise additional capital to recapitalize the Bank and to absorb the potential future credit losses associated with the disposition of its nonperforming assets. Accordingly, management is in the process of evaluating various alternatives to increase tangible common equity and regulatory capital through the issuance of additional equity in public or private offerings. Management is actively evaluating a number of potential capital sources, asset reductions, and other balance sheet management strategies with the goal of increasing its level of regulatory capital to support its balance sheet long-term. Management is currently reducing and otherwise restructuring its balance sheet to improve capital ratios." As reported in the TCR on April 9, 2012, Turlington and Company, LLP, in Lexington, North Carolina, expressed substantial doubt about Bank of the Carolinas' 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 has suffered recurring credit losses that have eroded certain regulatory capital ratios. "As of Dec. 31, 2011, the Company is considered undercapitalized based on their regulatory capital level." A copy of the Form 10-Q is available for free at: http://is.gd/6kVvbh Mocksville, North Carolina-based Bank of the Carolinas Corporation was formed in 2006 to serve as a holding company for Bank of the Carolinas. The Bank's primary market area is in the Piedmont region of North Carolina. BDRC LOFTS: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: BDRC Lofts, Ltd. 323 Congress Avenue #200 Austin, TX 78701 Bankruptcy Case No.: 12-11559 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: C. Daniel Roberts, Esq. C. DANIEL ROBERTS & ASSOCIATES, P.C. 1602 East Cesar Chavez Austin, TX 78702 Tel: (512) 494-8448 Fax: (512) 494-8712 E-mail: droberts@cdrlaw.net Scheduled Assets: $1,456,239 Scheduled Liabilities: $1,222,230 A copy of the Company's list of its 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txwb12-11559.pdf The petition was signed by Bryan Dorsey, president of BDRC, Inc., general partner. BE AEROSPACE: Moody's Rates 10-Yr. Sr. Unsecured Notes 'Ba2' ------------------------------------------------------------ Moody's Investors Service has assigned a Ba2 rating to the announced $675 million add-on to BE Aerospace's 51/4% 10-year senior unsecured notes due 2022. All other ratings including the Ba1 Corporate Family Rating were affirmed. The net proceeds of the add-on will be used for the repurchase the company's $600 million 8 �% notes due 2018 tendered for on July 9, 2012 and for related fees and expenses. The rating on the 2018 notes will be withdrawn upon their full repayment. This action follows the late June signing of a definitive agreement by the company to acquire, for approximately EUR200 million in cash, German based Interturbine Aviation Logistics GmbH, Interturbine Logistics Solutions GmbH, and Interturbine Technologies GmbH (collectively Interturbine). Interturbine is a provider of material management logistical services to global airlines, and maintenance, repair, and overhaul (MRO) providers and will double BE Aerospace's consumable product portfolio. Closing of the transaction is expected in the fourth quarter. Rating Assignments: $675 Million Senior Unsecured Notes due in 2022, Rated Ba2 (LGD4, 64%) Rating Affirmations: Issuer: B/E Aerospace, Inc. Corporate Family Rating/Probability of Default Rating, Affirmed at Ba1 Senior Secured Revolving Credit Facility, Affirmed at Baa2 (LGD2, 12%) Senior Unsecured Notes, Affirmed at Ba2 (LGD4, 64%) Senior Unsecured Shelf, Affirmed at (P)Ba2 The ratings affirmations reflect Moody's view that BE Aerospace's key credit metrics should remain in line with the current ratings. The notes transaction will be largely debt neutral and the Interturbine acquisition, while temporarily reducing company's cash position, similarly will not affect leverage. Near term operating earnings should not change from previously expected level as Interturbine is not expected to positively affect earnings until 2014. Debt-to-EBITDA using Moody's standard accounting adjustments should remain at about 3.0x over the next 12 months with Free Cash Flow-to-Net Debt approaching 16% over the time period, in line with the Ba1 category. The SGL-1 Speculative Grade Liquidity Rating reflects Moody's expectation of BE Aerospace maintaining a very good liquidity profile over the near term, supported by cumulative positive free cash flow generation, cash balance expected to remain at about $400 million at year end and access to the $750 million revolving credit facility ($741 million available as of 3/31/12) . The expectation of cumulative free cash flows is supported by BE Aerospace's large installed product base, strong profit margins and the current favorable phase of the aerospace demand cycle. The stable rating outlook reflects Moody's expectation of further operating performance improvements with growth in global revenue passenger miles and continued high level of MRO activity leading to a relatively quick restoration of credit metrics to become mid- range for the Ba1 rating category. A higher rating, while unlikely at this time, would likely require maintaining operating performance improvements such that Debt/EBITDA is sustained below 2.5 times and EBIT-to-Interest is sustained above 4.0 times. Sustained above-average operating margins, conservative financial policies and very good liquidity would be required for a rating upgrade or positive outlook. The rating and/or outlook could come under downward pressure if operating margins become pressured leading to Debt/EBITDA approaching 3.5 times and EBIT-to-Interest below 3.0 times. Any outsized acquisition or shareholder-friendly initiatives funded with debt, or inability to execute on the backlog with the accelerated OEM production rates, could also warrant consideration for potential negative rating action. The principal methodology used in rating BE Aerospace, Inc. was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Aerospace, Inc is the world's largest manufacturer of commercial and general aviation cabin interior products and a major independent distributor of aerospace fasteners. BE Aerospace's products include aircraft seats, equipment for food and beverage preparation and storage, oxygen delivery systems, a broad line of aerospace fasteners and certain engineering and design services. Revenue for the last twelve months through March 31, 2012 was approximately $2.6 billion. BE AEROSPACE: S&P Affirms 'BB+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'BB+' corporate credit rating, on U.S.-based BE Aerospace International Inc. The outlook remains stable. "We affirmed our 'BB' issue rating on BE Aerospace Inc.'s 5.25% unsecured notes, maturing in 2022, following the announcement of the company's planned $675 million add-on. The recovery rating remains '5', indicating our expectation that noteholders would receive modest (10%-30%) recovery in a payment default. The U.S.- based aircraft parts supplier will use proceeds of its planned $675 million add-on to its existing 5.25% notes to repay $600 million 8.5% unsecured notes and pay the related fees and premium," S&P said. "We believe this will result in roughly $16 million in annual interest savings," S&P said. "We continue to expect that the company's earnings will increase, with a boost from recently acquired operations, and that commercial aerospace market conditions will be solid in 2012," said Standard & Poor's credit analyst Chris DeNicolo. "This should allow credit protection measures to recover sufficiently over the next year following a debt-financed acquisition earlier in 2012." The ratings on BE Aerospace also take into account the risks associated with the cyclical global airline industry as well as the relatively small size of the markets the company serves. BITZIO INC: Had $2 Million Net Loss in First Quarter ---------------------------------------------------- Bitzio, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.00 million on $539,413 of revenues for the three months ended March 31, 2012, compared with a net loss of $8,934 on $0 revenue for the same period last year. The Company's balance sheet at March 31, 2012, showed $2.99 million in total assets, $1.56 million in total current liabilities, and stockholders' equity of $1.43 million. As reported in the TCR on April 4, 2012, Sadler, Gibb & Associates, LLC, in Salt Lake City, expressed substantial doubt about Bitzio's ability to continue as a going concern, following the Company's results for the fiscal yer ended Dec. 31, 2011. The independent auditors noted that the Company has not yet established an ongoing source of revenue sufficient to cover its operating costs. A copy of the Form 10-Q is available for free at: http://is.gd/3g8zTj San Francisco, Calif.-based Bitzio, Inc., develops and sells mobile applications for smartphones. CANTELLO LLC: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: Cantello, LLC 1094 River Avenue Lakewood, NJ 08701 Bankruptcy Case No.: 12-27005 Involuntary Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Michael B. Kaplan Petitioners' Counsel: AGOVINO & ASSELTA, LLP 330 Old Country Road, Suite 201 Mineola, NY 11501 Tel: (516) 248-9880 Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ CM & Associates Construction Breach of Contract $913,312 Management, LLC 1 Washington Park, Suite 1300-B Newark, NJ 07102 R.C. Structures, Inc. Breach of Contract $525,000 5800 Jericho Turnpike, Suite 120W Syosset, NY 11791 Haddad Plumbing & Heating Inc. Breach of Contract $184,000 1223 Broad Street Newark, NJ 07114 Aleta Industries, Inc. Breach of Contract $145,639 242 Eagle Street Brooklyn, NY 11222 CAPE FEAR: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Cape Fear Formal Wear, Inc. 218 North 3rd Street Wilmington, NC 28401 Bankruptcy Case No.: 12-04985 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Algernon L. Butler, III, Esq. BUTLER & BUTLER, LLP PO Box 38 Wilmington, NC 28402 Tel: (910) 762-1908 Fax: (910) 762-9441 E-mail: albutleriii@butlerbutler.com Scheduled Assets: $771,347 Scheduled Liabilities: $1,668,221 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-04985.pdf The petition was signed by Jeffrey Glenn Hovis, president. CBS I LLC: Has Interim Access to Cash Collateral Until Aug. 2 ------------------------------------------------------------- The Bankruptcy Court authorized CBS I, LLC, on an interim basis, to use cash collateral of U.S. Bank National Association on an interim basis. U.S. Bank is the Trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgate Pass-Through Certificates, Series 2006-C28 by CW Capital Management, LLC. The final hearing on this matter will be held on Aug. 2, 2012, at 1:30 p.m. The Debtor sought to use cash collateral to pay all ongoing ordinary course administrative expense obligations incurred in the operation of the Debtor's ongoing business and administration of the Chapter 11 case. According to the Petition, under U.S. Bank's commercial loan, the Debtor has a total debt obligation of approximately $16.39 million. The Debtor asserts U.S. Bank is over secured. The Debtor relates its class A office building with restaurant and cove has been appraised for $19 million. A copy of the Interim Order is available for free at: http://bankrupt.com/misc/CBS_IntCashOrd.pdf Prior to the entry of the order, U.S. Bank filed an opposition to the Cash Collateral use citing that the Debtor has not provided any evidence to prove that its monthly revenues exceed its monthly expenses. According to U.S. Bank, the Debtor has failed to pay a single dollar to CW Capital, in its capacity as Special Servicer, and has not responded to numerous requests for information regarding the subject property. Moreover, U.S. Bank maintained the Debtor has not provided CW Capital any of the protection routinely provided to secured creditors. About CBS 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. 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. No request has been made for the appointment of a trustee or examiner, and no official committees have yet been established in this case. CENVEO INC: Moody's Affirms 'B3' CFR/PDR; Outlook Negative ---------------------------------------------------------- Moody's Investors Service downgraded Cenveo Inc.'s speculative grade liquidity rating to SGL-4 (weak) from SGL-3 (adequate). As part of the same rating action, Cenveo's, corporate family rating (CFR) was affirmed at B3 as was its probability of default rating. As well, ratings for all of Cenveo's debt instruments were affirmed at their existing levels: bank credit facility -- Ba3; second lien notes -- B3; unsecured notes -- Caa2; and subordinated notes -- Caa2. The outlook remains unchanged at negative. The speculative grade liquidity rating action reflects waning financial flexibility as the December 2013 maturity of the company's subordinated debts advances. With the company not having been able to fully refinance the notes issue in March/April and with minimal ability to issue equity, the lack of alternatives will require management to dedicate virtually all of the company's free cash flow and a substantial proportion of un-used revolving credit facility capacity to retire the remaining $153 million of subordinated notes. The following summarizes Cenveo's ratings and the rating actions: Issuer: Cenveo Inc. Speculative Grade Liquidity Rating, downgraded SGL-4 from SGL-3 Corporate Family Rating, affirmed at B3 Probability of Default Rating, affirmed at B3 Outlook, affirmed at Negative Issuer: Cenveo Corporation Senior Secured Bank Credit Facility, affirmed at Ba3 with the LGD Assessment revised to (LGD2, 17%) from (LGD2, 14%) Senior Secured Second Lien Notes, affirmed at B3 with the LGD Assessment revised to (LGD4, 52%) from (LGD3, 45%) Senior Unsecured Regular Bond/Debenture, affirmed at Caa2 with the LGD Assessment revised to (LGD5, 85%) from (LGD5, 79%) Senior Subordinated Regular Bond/Debenture, affirmed at Caa2 with the LGD Assessment revised to (LGD6, 97%) from (LGD6, 93%) Ratings Rationale Cenveo's B3 CFR rating results primarily from limited debt repayment capacity that stems from the inter-relationship of significant interest expense resulting from elevated financial leverage, along with industry-specific systemic issues that limit growth prospects and suppress operating margins. With EBITDA margins of only 10%-to-12% and with interest expense amounting to nearly 60% of EBITDA, cash flow from operations is a relatively weak proportion of revenues (all figures incorporate Moody's standard adjustments). The rating draws support from the company's ability to be free cash flow positive which stems from very low capital intensity. However, while low capital intensity can be a positive feature, Moody's thinks low capital intensity results more from poor return prospects that cause capital rationing than from asset productivity gains. The poor return arithmetic, in turn, stems from the secular decline of core printing activities and Moody's thinks that operational risks are increasing as time passes. As well, the visibility of forward activity levels is opaque and the timing and magnitude of future growth (or secular decline) is highly uncertain. Moody's anticipates only modest top- line growth and expect little in the way of margin expansion. Rating Outlook The rating outlook is negative and reflects the company's ongoing struggles to reconfigure an over-leveraged capital structure in the context of modest top-line growth and free cash flow generation. What Could Change the Rating - Up Moody's would consider an upgrade if TD/EBITDA leverage were expected to be reduced to 4.5x or lower on a sustained basis and positive free cash flow were expected to be sustained in excess of 5% of total debt (in both case, incorporating Moody's standard adjustments). A rating upgrade would also have to involve assurance of solid liquidity arrangements, an absence of near-term refinance risks, improved industry fundamentals, and a stable business platform. What Could Change the Rating - Down Over the near term, it is likely that liquidity-related matters will signal or precipitate downwards rating activities. In this regard, a lack of progress in refinancing/retiring near term debt maturities may provide a catalyst for near term ratings actions. In addition, Moody's would consider Cenveo's ratings for potential downgrade if the company's safety cushion of unused liquidity was eroded, likely owing to minimal or negative free cash flow generation. A debt-financed acquisition of more than nominal size could also result in downward rating pressure. The principal methodology used in rating Cenveo Inc was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CHINA DIGITAL: Had $7.0 Million Net Loss in March 31 Quarter ------------------------------------------------------------ China Digital Animation Development, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $7.03 million on $555,149 of revenue for the three months ended March 31, 2012, compared with a net loss of $735,569 on $2.17 million of revenue for the three months ended Sept. 30, 2010. For the nine months ended March 31, 2012, the Company reported a net loss of $7.34 million on $1.33 million of revenue, compared with a net loss of $2.43 million on $5.99 million of revenue for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $4.45 million in total assets, $642,869 in total current liabilities, and stockholders' equity of $3.81 million. The Company has incurred significant continuing losses during the nine months ended March 31, 2012, and the year ended June 30, 2011, and has relied on the Companys registered capital as well as proceeds from borrowings to fund operations," the Company said in the filing. "As of March 31, 2012, we had cash and equivalents of $432,630 and an accumulated loss of $6,854,564. These conditions raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/QjpRg4 Harbin, China-based China Digital Animation Development, Inc., hrough its operating company, Heilongjiang Hairong Science and Technology Development Co., Ltd., a joint stock company organized under the laws of The People's Republic of China ("Hairong"), has, for the past three years, engaged primarily in the business of digital animation production. CHINA GREEN: Reports $339,100 Net Income in First Quarter --------------------------------------------------------- China Green Energy Industries, Inc., filed its quarterly report on Form 10-Q, reporting net income of $339,054 on $8.85 million of revenues for the three months ended March 31, 2012, compared with a net loss of $321,628 on $3.27 million of revenues for the same period last year. The Company's balance sheet at March 31, 2012, showed $59.11 million in total assets, $55.02 million in total liabilities, and stockholders' equity of $4.09 million. As reported in the TCR on April 23, PKF, in San Diego, Calif., expressed substantial doubt about China Green Energy'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 has experienced negative cash flows from operations and is dependent upon future financing in order to meet its planned operating activities. A copy of the Form 10-Q is available for free at: http://is.gd/HIYwAn Located in Changzhou City, Jiangsu Province, China, China Green Energy Industries, Inc., manufactures and distributes clean technology-based consumer products, including light electric vehicles, or LEVs, and cryogen-free refrigerators. The Company also manufactures and distributes network and High-Definition Multimedia Interface, or HDMI, cables. CHINA MARKETING: Had $522,700 Net Loss in First Quarter ------------------------------------------------------- China Marketing Media Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $522,715 on $2.25 million of revenue for the three months ended March 31, 2012, compared with net income of $363,742 on $3.13 million of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $17.85 million in total assets, $3.35 million in total liabilities, and stockholders' equity of $14.50 million. As reported in the TCR on April 23, 2012, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, Utah, expressed substantial doubt about China Marketing'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 has cash flow constraints and has suffered a large loss from operations. A copy of the Form 10-Q is available for free at: http://is.gd/53caoR Located in Beijing, China, China Marketing Media Holdings, Inc., was originally organized under the laws of the State of Texas on Oct. 29, 1999, under the name Brazos Strategies, Inc. It changed its name to Infolife, Inc., on July 16, 2003 and finally to China Marketing Media Holdings, Inc., on Feb. 7, 2006. China Marketing is a holding company and has no operations other than administrative matters and the ownership of its direct and indirect operating subsidiaries. Through its indirect Chinese subsidiaries, it is engaged in the business of selling magazines and advertising space in its magazines, providing sales and marketing consulting services and online sales of various consumer products. All of the Company's operations, assets, personnel, officers and directors are located in China. Currently, it publishes China Marketing magazine in China. COCOPAH NURSERIES: Files for Chapter 11 Without DIP Financing ------------------------------------------------------------- Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The Debtors' core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Duane Young, vice president and secretary of Cocopah Nurseries, explains in a court filing that the Debtors have experienced diminished liquidity and cash flows due to the significant and sustained contraction in residential, retail and commercial development. In order to maintain access to sufficient funds for utilities, payroll and other tree-care expenses, the Debtors had been involved in protracted and extensive prepetition restructuring negotiations with prepetition lenders. Prepetition, the Debtors reached agreements-in-principal with both prepetition lenders on respective term sheets for an out-of-court restructuring. However, the lenders were unwilling to provide additional protective advances that would be used to meet payroll obligations and provide uninterrupted access to water and utilities. As a result of liquidity woes, the Debtors prepared for bankruptcy and tried to work on a DIP financing agreement with the lenders. Instead of sending a term sheet for DIP financing, lender Rabobank initiated a state-court action to appoint a receiver. This prompted the Debtors to immediately file the bankruptcy cases. The Debtors also point to the unique circumstances of having their assets split between two different collateral pools for two different lenders. This relatively uncommon arrangement -- as opposed to a more typical senior vs. junior creditor arrangement -- gives rise to unique intercreditor disputes. The Debtors have no less than $70 million of secured debt to Rabobank. The Debtors also have no less than $65 million of secured indebtedness to Wells Fargo. The Debtors say they will utilize the protections of the Bankruptcy Code protect and enhance the prepetition lenders' tree and crop collateral through uninterrupted access to water, electricity and other required care. From there, the Debtors remain optimistic that resumed discussions with the prepetition lenders will not only yield reasonable terms for debtor-in- possession financing but, ultimately, a consensual global resolution of their disputes. COMMUNITY HEALTH: Fitch Rates New $1BB Sr. Unsecured Notes 'B/RR5' ------------------------------------------------------------------ Fitch Ratings has assigned a 'B/RR5' rating to Community Health Systems' $1 billion proposed senior unsecured notes due 2020. Proceeds will be used to refinance Community's senior unsecured notes due 2015. Fitch currently rates Community's long-term IDR 'B+'. The Rating Outlook is Stable. The ratings apply to approximately $9.3 billion of debt at March 31, 2012. The 'B+' IDR primarily reflects: -- Community's financial flexibility has improved in recent years. Debt-to-EBITDA dropped to around 5.0 times (x) at March 31, 2012 from 5.8x in 2008 (the year immediately following the $6.9 billion acquisition of Triad Hospitals). -- Liquidity is solid. Community generated free cash flow (FCF; cash from operations less dividends and capital expenditures) of about $454 million in the latest twelve months (LTM) ended March 31, 2012. Additionally, 2012 - 2013 debt maturities are small. Fitch expects Community to continue to prioritize hospital acquisitions as a use of cash. -- Organic operating trends in the for-profit hospital industry are weak. Fitch expects them to remain so throughout 2012. In the near-term, Community's growth will be supported by its recent hospital acquisitions. -- Community's patient admission policies and associated billing practices are facing heightened regulatory scrutiny. Also, there is ongoing uncertainty about any potential financial or operating impact. Solid Financial Flexibility Community's debt leverage has declined since the approximately $6.9 billion debt funded acquisition of Triad Hospitals in 2007. Since the acquisition, Community has generated about $1.9 billion in cumulative FCF and has applied about $300 million for debt reduction. Total debt-to-EBITDA has dropped to about 5.0x at March 31, 2012 versus around 5.8x post the acquisition. The reduction in leverage is about 50% attributable to a lower outstanding debt balance and 50% to growth in EBITDA. At March 31, 2012 debt-to-EBITDA was increased by about 0.2x versus the 2011 year end level of 4.8x. This was due to debt proceeds in 1Q'12 that were used in part to fund Community's recent acquisitions. At March 31, 2012, Fitch calculates debt leverage through the secured bank debt of 3.3x and 5.0x through the senior unsecured notes. Community's bank agreement requires total debt maintained below 5.5x EBITDA and interest coverage of at least 2.25x EBITDA. At March 31, 2012, Community had an adequate operating cushion under the covenants. Fitch does not anticipate Community to apply cash to meaningful debt reduction during 2012. Any incremental drop in leverage is expected to be nominal and to depend upon growth in EBITDA. Maintenance of the 'B+' IDR will depend on total debt-to-EBITDA generally maintained at or below 5.0x. RECENT DEBT REFINANCING IMPROVES LIQUIDITY PROFILE A favorable debt maturity schedule and solid liquidity support Community's credit profile. Near-term debt maturities include about $35 million and $75 million of annual required principal amortization on the bank term loans in 2012-2013, respectively. Community has recently made progress in extending its maturity profile. Over the past year it has moved a total of $3.75 billion of the $6 billion of bank term loans due 2014 to 2016 and 2017. This was accomplished through the issuance of a new $750 million term loan A due 2016 and two separate amend and extend agreements which pushed out $3 billion of the 2014 term loan B maturities to 2017. The 2016 and 2017 term loan maturity dates are contingent upon the refinancing of the non-extended portion of term loan B due July 2014 and the senior notes due July 2015. Community refinanced $1.9 billion of the $2.8 billion 2015 notes with new notes due 2019 in 4Q'11 and 1Q'12. There are about $930 million of remaining notes due 2015. Fitch expects they will be financed through the proposed notes issue and the non-extended portion of term loan B maturing 2014 is currently about $2.2 billion. Community's liquidity was provided by approximately $129 million of cash and marketable securities at March 31, 2012 and availability on the company's $750 million bank revolver ($712.3 million available at March 31, 2012 reduced for outstanding letters of credit). Also adding to Community's liquidity was FCF of about $453 million for the LTM ended March 31, 2012. Community generates solid cash flow relative to its operating and reinvestment requirements. Fitch projects FCF sustained above $300 million annually. The lower level of forecasted FCF is primarily based on Fitch's expectation of higher capital expenditures and cash taxes. Fitch expects that Community will continue to prioritize use of cash for hospital acquisitions. Community stepped up its acquisition activity in 2011, spending $415 million to complete four transactions during the year. Community states that its 2011 acquisitions represent about $400 million of annual revenue. Since the start of 2012, Community has completed four additional acquisitions, including three hospital acquisitions and an acquisition of outpatient diagnostic clinics. The hospital acquisitions are expected to contribute $360 million of annual revenue. Combined, Community's 2011 and year-to-date 2012 hospital acquisitions represent about 6% of the company's 2010 revenues of $13 billion. Weak Organic Operating Trends Community's organic patient volume growth lagged the broader for- profit hospital provider industry in 2011. Across the Fitch-rated group of for-profit hospital providers, same-hospital admissions declined 1.6% on average in 2011 while same-hospital adjusted admissions (a measure that is adjusted for outpatient activity) grew by just 0.4%. Community's same hospital admissions were down 5.6%, and adjusted admissions down 0.7%. Community's organic operating trend did show some improvement in 1Q'12. Community's same hospital admissions declined 2.3% year-over-year, while adjusted admissions were up 2.5%. This is Community's first quarter of positive organic volume growth in eight consecutive quarters. Despite its recently weak organic patient volume trend, Community has not lagged its peers in top-line and EBITDA growth. Strong pricing and an active hospital acquisition strategy have supported revenue and EBITDA growth. Community has managed to achieve consistent incremental growth in EBITDA in recent periods. This despite the margin impacts of integrating less profitable acquired hospitals. The 13.4% EBITDA margin in 2011 was only down about 18 bps from the 2010 level. Heightened Regulatory Scrutiny Community's patient admission policies and associated billing practices have recently been the subject of heightened regulatory scrutiny. There is ongoing uncertainty about the potential for financial liability with respect to past Medicare billing practices or a reduction in the company's revenues and EBITDA resulting from changes in admissions practice. The regulatory issues will take some time to resolve and in the interim period. There is also concern that a reputational issue associated with the governmental inquires could negatively affect operations. However, this does not appear to be the case in recent periods. Organic patient volume trends improved somewhat in 1Q'12. Community is showing strong results in physician recruitment, and it has not been hindered in its acquisition activity. Guidelines for Further Rating Actions Maintenance of a 'B+' IDR for Community would be consistent with financial and credit metrics maintained at the current levels. This includes total-debt-to-EBITDA at or below 5.0x and annual FCF generation above $300 million. Community's currently solid level of financial flexibility makes downward ratings pressure on is unlikely outside of event risk surrounding an acquisition or any potential financial liability stemming from the regulatory issues facing the company. Community has demonstrated that it will consider large acquisitions, as evidenced by the $6.9 billion Triad Hospitals acquisition in 2007 and its December 2010 bid to acquire Tenet Healthcare Corp. Fitch expects though that in the near-term Community will probably continue to focus its acquisition efforts on smaller transactions that can be primarily cash funded. Debt Issue Ratings Fitch currently rates Community as follows: -- Long-term IDR 'B+'; -- Senior secured credit facility 'BB+/RR1''; -- Senior unsecured notes 'B/RR5'. The Recovery Ratings (RR) reflect Fitch's expectation that the enterprise value of Community will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch uses a 6.5x distressed enterprise value (EV) multiple and stresses LTM EBITDA by 30%. Fitch considers post restructuring estimates for interest and rent expense and maintenance level capital expenditure as well as debt financial maintenance covenant requirements. The 6.5x multiple is based on recent acquisition multiples in the healthcare provider space, as well as the recent trends in the public equity valuations of the for-profit hospital providers. Fitch estimates Community's distressed enterprise valuation in restructuring to be approximately $8.3 billion. The 'BB+/RR1' rating for the bank facility reflects Fitch's expectations for 100% recovery under a bankruptcy scenario. The 'B/RR5' rating on the unsecured notes rating reflects Fitch's expectations for recovery in the 11% - 31% range. COMMUNITY HEALTH: Moody's Rates $1-Bil. Sr. Unsecured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service commented that CHS/Community Health Systems, Inc's. proposed offering of $1.0 billion of senior unsecured notes due 2020 are rated B3 (LGD 5, 84%). Moody's understands that the proceeds of the offering will be used to fund the tender for the remaining 8.875% senior unsecured notes due 2015. Moody's will withdraw the ratings on the 2015 notes when the tender is completed. Moody's existing ratings of the company, including the B1 Corporate Family and Probability of Default Ratings, are unchanged. The proposed issuance will continue to extend the company's maturity profile and is not expected to meaningfully affect leverage. The rating outlook remains stable. Ratings assigned: Senior unsecured notes due 2020, B3 (LGD 5, 84%) Ratings unchanged: Senior secured revolving credit facility expiring 2016, Ba3 (LGD 3, 30%) Senior secured term loan A due 2016, Ba3 (LGD 3, 30%) Senior secured term loan B due 2014, Ba3 (LGD 3, 30%) Senior secured term loan B due 2017, Ba3 (LGD 3, 30%) 8.875% senior notes due 2015, B3 (LGD 5, 84%) 8.0% senior notes due 2019, B3 (LGD 5, 84%) Corporate Family Rating, B1 Probability of Default Rating, B1 Speculative Grade Liquidity Rating, SGL-1 Ratings Rationale Community Health's B1 Corporate Family Rating reflects Moody's expectation that leverage will remain high and interest expense coverage will continue to be modest. Furthermore, Moody's anticipates that the opportunity to reduce leverage with free cash flow will be constrained in the near term given the company's investment in capital spending related to replacement hospitals and information technology. Moody's also expects the company to actively pursue acquisitions. However, supporting the rating is Moody's acknowledgement of Community Health's scale and market strength, which should help the company weather unfavorable trends in bad debt expense and weak volumes that continue to affect the industry as a whole. Moody's anticipates that the company will continue to see stable margin performance and maintain very good liquidity. Moody's could upgrade the ratings if financial leverage is materially reduced and cash flow coverage of debt metrics improve. Specifically, if Community Health is able to achieve and sustain adjusted debt to EBITDA below 4.0 times, Moody's could upgrade the ratings. This level reflects the need to see additional cushion in these metrics to absorb potential negative developments given the absence of further clarity around the outcome of ongoing litigation and investigations. A significant debt financed acquisition or adverse developments related to ongoing investigations or litigation could result in a downgrade of the ratings. Additionally, the company's inability to continue to manage headwinds in the industry or Moody's expectation that debt to EBITDA would be sustained above 5.0 times could result in a downgrade. This could result from declining adjusted admission trends and unfavorable reimbursement or pricing trends impacting net revenue growth, greater than expected increases in bad debt expense, or aggressive acquisition activity. The principal methodology used in rating CHS/Community Health Systems, Inc. was the Global Healthcare Service Providers 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. CHS/Community Health Services, Inc., headquartered in Franklin, TN, is an operator of general acute care hospitals in non-urban and mid-sized markets throughout the US. Through its subsidiaries, Community owned, leased or operated 134 hospitals at March 31, 2012. In addition, through its subsidiary, Quorum Health Resources, LLC, Community provides management and consulting services to non-affiliated general acute care hospitals throughout the country. The company is the largest non-urban hospital company in the US and the second largest for-profit hospital operating company overall. Community recognized over $14.0 billion in revenue for the twelve months ended March 31, 2012. COMMUNITY HEALTH: S&P Rates $1-Bil. Senior Notes Due 2020 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to the proposed $1 billion senior notes due 2020 to be borrowed by CHS/Community Health Systems Inc., a wholly owned subsidiary of Franklin, Tenn.-based Community Health Systems Inc. "We rated the notes 'B' (one notch lower than the 'B+' corporate credit rating on the company) with a recovery rating of '5', indicating our expectation of modest recovery for lenders in the event of a payment default. The company will use the proceeds of this new issue to refinance senior notes that mature in 2015," S&P said. The corporate credit rating on Community Health is 'B+' and the rating outlook is stable. "The rating reflects our assessment of the company's business risk profile as "fair" (according to our criteria), because of its large, relatively diversified portfolio of hospitals that helps the company manage uncertain reimbursement and spread local market risk over many markets," S&P said. "The rating is also based on our view of the company's financial risk profile as "highly leveraged," reflected in our expectation that the current debt to EBITDA level of about 5.3x will remain largely unchanged. This viewpoint includes our belief that Community will use its cash flow to fund acquisitions and not repay debt," S&P said. "We believe acquisitions will remain a key strategy to increase earnings, particularly as a difficult reimbursement environment and relatively flat patient volume trends (adjusted for outpatient visits) continue to pressure profitability. (For the latest complete corporate credit rating rationale, see Standard & Poor's research report on Community Health published March 28, 2012.)," S&P said. Ratings List Community Health Systems Inc. Corporate Credit Rating B+/Stable/-- New Ratings CHS/Community Health Systems Inc. $1 bil sr notes due 2020 B Recovery Rating COPPER FIELDS: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Copper Fields Land Holdings, LLC 4901 Marshall Street Wheat Ridge, CO 80033 Bankruptcy Case No.: 12-24325 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Aaron A Garber, Esq. KUTNER MILES BRINEN, P.C. 303 E. 17th Ave. Ste. 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: aag@kutnerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of two largest unsecured creditors is available for free at http://bankrupt.com/misc/cob12-24325.pdf The petition was signed by Cheryl Wise, managing member. CORD BLOOD: Refinances JMJ Debt From Securities Sale to Tonaquint ----------------------------------------------------------------- Cord Blood America, Inc., has signed a new Securities Purchase Agreement and related documents with Tonaquint, Inc., including a Secured Convertible Promissory Note in the amount of $1,252,000. Separately the Company made a final and full payment to JMJ Financial in the amount of $1,117,730.50. The agreement with, and payment to JMJ, also includes full release and cancellation provisions regarding all other notes, amendments, claims and rights that may have existed between the parties. Joseph Vicente, who became Chairman and President on May 15, 2012, explained several key components of the restructured agreements: "The previous JMJ agreements contained several provisions that made them onerous if left in place. One issue was our requirement to take from the existing notes, at JMJ's option, an additional amount in cash of over $1.9 million. Moreover, there were two other notes JMJ could have elected to execute that could have further advanced the cash sum to be paid to the Company, adding further debt to the balance sheet. The requirement to take such a large amount of cash absent a commensurate rate of return for such funding was simply an example of unwarranted potential shareholder dilution and something CBAI's new management finds unacceptable." By cancelling these additional funding options CBAI is not forgoing accretive growth propositions, rather, it is taking this opportunity to institute a level of control of our financing not previously in place. The Tonaquint's agreements contain a right of first refusal to provide future financing to CBAI in the event the Company would need to seek such financing. Tonaquint shares common management with St. George Investments, LLC, and with this restructuring these two entities hold approximately 88% of the Company's total debt balance. Tangiers Investors, LP is the other remaining creditor for the Company's long-term debt. "With JMJ's previous debt balance very close to that of St. George's balance, we believed it important to try limiting the number of competing parties selling simultaneously in the marketplace and thus possibly stalling stock price increase momentum," the company's statement said. While there is a provision that allows for Tonaquint, under certain restrictions, to accelerate the conversion on all or a portion of the outstanding amount of its note into shares of the Company's common stock at a price of $0.03, the agreements include an amortization schedule that allows for a structured monthly payback amount. The fact that the payment schedule will not begin for a period of six months from the date of issuance of the Tonaquint note, combined with a structured payment schedule, provides the Company some spacing as it prepares to meet its debt obligations. CBAI retains the option, under the Tonaquint note, to pay any portion of the monthly amortization payment with cash without any premium. Additionally, the Tonaquint agreements contain prepayment provisions that carry no penalty or premium language if any amount of the debt is prepaid with cash, even if the payment occurs outside the amortization schedule. These highly positive changes provide the Company with an unprecedented level of flexibility as it addresses its longer term payment options for this debt obligation. "As I commented in May regarding our Q1 2012 results, the legacy $2.3 million in principal debt against an authorized share count that has reached its ceiling, was an issue for which we needed to explore alternatives. The announcement of this debt restructuring, along with our settlement agreement effective June 22, 2012 with BioCells, has now put us in a position where can move forward with a plan to extinguish the remaining Company debt," Mr. Vicente said. "We believe we have removed a high degree of uncertainty in both instances, and replaced them with agreements that have very definable components considering the time and financial obligations of CBAI. With these two long term liabilities reduced and settled we have begun the process, and expect within the next few weeks, to file with the SEC a proxy to increase the authorized share limit. This will not be accompanied by a reverse split, but solely an increase in the authorized. Our primary goal with this increase in the authorized is to eliminate the existing debt, and not fund the ongoing working capital requirements of the Company." "We are asking our shareholders to support management in this measure," Cord Blood America's new President stated. "However, we also know that it would be naive to believe that there will not be responses that elicit the fears of dilution; certainly a historical issue for the Company. While we cannot erase the past, we believe it equally important to demonstrate how the actions of the new management team over the last eight weeks have positioned the business in a more positive strategic direction, and how our efforts have addressed the seriousness which we view the issue of dilution. We will continue to strive to strengthen the balance sheet and create shareholder value in the long term and will only evaluate an acquisition where we are confident the return on investment exceeds the costs." Several points that reinforce that trend: -- The BioCells settlement agreement took an obligation of, potentially, in excess of $705,000 due in cash in 2012, and in fact already due, and with the exception of $60,000 to be paid in cash in 2012 ($25,000 of which has already been paid), successfully negotiated instead a contingency payout. The payout amount is based on and to be paid from the pro rata dividends, if any, due to the Company based solely on BioCells' performance. The net effect of this is there will be no large cash payment by the Company in 2012, which would have required the additional issuance of further dilutive convertible debt financing or some other form of financing requiring the issuance of CBAI shares. Considering the BioCells agreement, along with the JMJ notes that were cancelled and not including amounts contained in additional notes JMJ may have executed, in the past month, the Company has negotiated out of over $2.5 million that would have potentially required convertible debt or other financing. The result is a reduction in the potential dilution to the Company's shareholders by more than half. -- There have been no capital contributions from the existing promissory notes since March 2012, except for the final installment of the St. George note, and since our Q1 filing, no additional promissory or debt related instruments have been executed, other than the notes summarized herein and in the 8K filed on July 6, 2012. -- With the termination of the JMJ notes, there are no further obligations required under any existing agreements that require CBAI to take any additional funding. The Company said "[It] pointed out in the press release regarding the BioCells transaction that the Company is at a period in its life cycle where all of its subsidiaries andr investments need to be self sufficient. This is also true of the parent Company, Cord Blood America, Inc. The net result is that as of today, its plans do not include financing options for funding daily operations. This goal remains our number one priority. "In closing, we appreciate the continued strong interest from our shareholders. We hear you. While today will not satisfy all the questions that remain, we believe this most recent set of announcements provide a level of clarity to the most pressing question facing the Company; the solution to the remaining debt balance. We continue to believe that a company absent of debt, with the ability to operate on its own cash flows provides an abundance of strategic growth opportunities, and sustainable shareholder value. We also understand that there are challenges that lie ahead, however, we are confident that today is a major step forward and we look forward to communicating our progress in the quarters ahead," Mr. Vicente concluded. About Cord Blood America Based in Las Vegas, Nevada, Cord Blood America, Inc., is primarily a holding company whose subsidiaries include Cord Partners, Inc., CorCell Co. Inc., CorCell Ltd.; CBA Professional Services, Inc. D/B/A BodyCells, Inc.; CBA Properties, Inc.; and Career Channel Inc, D/B/A Rainmakers International. Cord specializes in providing private cord blood stem cell preservation services to families. BodyCells is a developmental stage company and intends to be in the business of collecting, processing and preserving peripheral blood and adipose tissue stem cells allowing individuals to privately preserve their stem cells for potential future use in stem cell therapy. Properties was formed to hold the corporate trademarks and other intellectual property of CBAI. Rain specializes in creating direct response television and radio advertising campaigns, including media placement and commercial production. After auditing the 2011 results, Rose, Snyder & Jacobs, LLP, in Encino, California, expressed substantial doubt substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained recurring operating losses, continues to consume cash in operating activities, and has insufficient working capital and an accumulated deficit at Dec. 31, 2011. Cord Blood reported a net loss attributable to the Company of $5.97 million in 2011, compared with a net loss attributable to the Company of $8.09 million in 2010. The Company's balance sheet at March 31, 2012, showed $7.41 million in total assets, $7.31 million in total liabilities and $101,042 in total stockholders' equity. DELTA PETROLEUM: Committee Objects to Navigant Consulting Hiring ---------------------------------------------------------------- BankruptcyData.com reports that Delta Petroleum's official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors' motion to retain Navigant Consulting (PI) as valuation advisor. The committee asserts, "Upon information and belief, the bulk of Navigant's work will be related to valuing the Wapiti Causes of Action. The Wapiti Causes of Action will be contributed to the Wapiti Trust on the effective date of the Plan As such, the appropriate time to perform this valuation work is after the Effective Date, when the Wapiti Trust Oversight Board can decide which advisor to retain and then supervise such advisor consistent with their duties to the Wapiti Trust as described in the Plan. Second, Navigant has, upon information and belief, previously performed certain services for a third party related to the very assets at issue in the Wapiti Causes of Action. The Committee is concerned that this past work, the substance of which is not known to the Committee (or, as of July 6, 2012, the Debtors) could prove problematic in connection with the Wapiti Trust's pursuit of the Wapiti Causes of Action." About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors' restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. Laramie Energy II LLC has been approved by the Court to serve as the sponsor for Delta's reorganization plan. As reported by the TCR on July 9, 2012, Delta Petroleum won approval for its disclosure statement explaining the Chapter 11 reorganization plan. DEWEY & LEBOEUF: Allowed to Break Most of Its Leases ---------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that a New York bankruptcy judge let Dewey & LeBoeuf LLP reject most of its property leases Monday, giving two objecting landlords until 5 p.m. today, July 11, to inform the court whether they'll accept the cancellation of the leases as of June 20. That's the date the debtor filed its motion to reject certain unexpired leases and subleases of nonresidential real property and abandon related personal property dating back to May 29, the date of the bankruptcy petition, Bankruptcy Law360 relates. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey & LeBoeuf has won Court authority to use lenders' cash collateral through July 31, 2012. DGSE COMPANIES: Glancy Binkow & Goldberg Probes Firm ---------------------------------------------------- Glancy Binkow & Goldberg LLP is investigating potential claims on behalf of purchasers of the securities of DGSE Companies Inc. concerning possible violations of federal securities laws. The investigation focuses on allegations that certain statements issued by the Company between Aug. 14, 2007 and April 16, 2012, regarding DGSE's business, operations and financial condition were false and misleading. DGSE, together with its subsidiaries, buys and sells jewelry, bullion products, and rare coins to wholesale and retail customers in the United States. The investigation is related to DGSE's April 16, 2012 disclosure that the Company's board of directors had determined the existence of certain accounting irregularities beginning during DGSE's 2007 second calendar quarter and continuing in all subsequent periods, which could affect financial information reported since that time. According to the Company, the accounting irregularities were the result of improper accounting of inventory and other balance sheet accounts by its former Chief Financial Officer. On this news, the trading of DGSE common stock was halted by the American Stock Exchange. The Company now has until Oct. 31, 2012 to comply with American Stock Exchange rules to avoid delisting. Subsequently, on June 18, 2012, the Company received written notice that the Securities and Exchange Commission initiated a private investigation into certain accounting irregularities, disclosed in the Company's Form 8-K, dated April 16, 2012, to determine whether any persons or entities engaged in, or are about to engage in, any possible violations of the federal securities laws. About DGSE Companies DGSE Companies, Inc. -- http://www.bullionexpress.com-- wholesales and retails jewelry, diamonds, fine watches, and precious metal bullion and rare coin products through its Bullion Express, Charleston Gold & Diamond Exchange, Dallas Gold & Silver Exchange, Southern Bullion Coin & Jewelry and Superior Gold & Diamond Exchange operations. DGSE also owns Fairchild International, Inc., one of the largest vintage watch wholesalers in the country. DYNEGY INC: Seeks Joint Administration With Dynegy Holdings ----------------------------------------------------------- Dynegy Inc. is asking the U.S. Bankruptcy Court for the Southern District of New York to approve the joint administration of its Chapter 11 case with the bankruptcy cases of Dynegy Holdings LLC and its affiliated debtors. Dynegy Inc. filed for bankruptcy protection on July 6 to carry out a settlement with creditors holding more than $2.7 billion of claims against Dynegy Holdings and to complete a merger of the two companies. J. Christopher Shore, Esq., at White & Case LLP, in New York, said the proposed joint administration of the cases is for "procedural purposes" only. If approved, it would expedite the administration of Dynegy's case and would reduce expenses, he said. The joint administration won't affect David Hershberg's role as Dynegy Holdings' independent manager. In addition, Dynegy has plans to hire separate counsel, according to court papers. Dynegy proposed that the July 3 order approving the outline of Dynegy Holdings' restructuring plan or the so-called disclosure statement, and certain court orders be made applicable to its bankruptcy case. It also asked the bankruptcy court to amend its July 3 order to authorize the solicitation of votes with respect to the company. Catherine Callaway, executive vice-president of Dynegy, said the company's involvement in the confirmation process is necessary given that the plan and the disclosure statement contemplate the merger of the company and Dynegy Holdings and provide for the treatment of claims against and interests in Dynegy. Moreover, the disclosure statement provides that if Dynegy puts itself into Chapter 11 protection, the outline has to be modified to reflect such filing and be a disclosure statement for both the company and Dynegy Holdings, Ms. Callaway said in a declaration. Dynegy also proposed to postpone the meeting of creditors under Section 341(a) of the Bankruptcy Code. The company expects that it has few creditors, many of which will be unimpaired under the restructuring plan, and that the total amount of its unsecured claims will have no material impact on the results of voting or the treatment of general unsecured claims under the plan, according to court papers. U.S. Trustee Objects The U.S. Trustee, a Justice Department agency that oversees bankruptcy cases, said the company requested "extraordinary first day relief" including the applicability of certain court orders "without having met its burden of proof for the granting of such relief." Dynegy may not obtain any of this relief within the first 21 days after its bankruptcy filing except "to the extent that relief is necessary to avoid immediate and irreparable harm," the U.S. Trustee said in a court filing. The U.S. Trustee also said the bankruptcy court should refrain from entering any order approving the retention of ordinary course professionals even on an interim basis, pointing out that it falls within the purview of Rule 6003(a). About Dynegy 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. 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, 2011, 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. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. 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. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings undertaken Dynegy Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DYNEGY INC: Proposes Aug. 1 as Claims Bar Date ---------------------------------------------- Dynegy Inc. asked the U.S. Bankruptcy Court for the Southern District of New York to issue an order establishing a deadline for creditors to file their proofs of claim. The company proposed that the bankruptcy court establish August 1, 2012, at 5:00 p.m. (Prevailing Eastern Time) as the deadline for creditors, other than governmental units, to file their claims, and January 2, 2013, at 5:00 p.m. (Prevailing Eastern Time) as the deadline for governmental units to file their claims. Any creditor that asserts a claim, which stems from the rejection of an executory contract or unexpired lease, may file a proof of claim by the later of either the applicable "Bar Date" or the first business day that is at least 30 calendar days after the mailing of a notice of rejection or a notice of an order approving the rejection. Meanwhile, creditors holding claims that were reduced by amendments to the schedules may file a proof of claim on the later of the applicable Bar Date or the first business day that is at least 21 calendar days after the mailing of the notice of the amendment. Claims Filing Process Dynegy also sought permission to implement a process governing the filing of proofs of claim. Under the process, the proofs of claim must substantially conform to Dynegy's proposed claim form, which is based on Official Form 10. The proofs of claim must be filed so that they are actually received by the bankruptcy court or Epiq Bankruptcy Solutions LLC, the company's noticing and claims agent, on or before the deadline. Proofs of claim must be filed by mail or overnight delivery to the claims agent: By first-class mail: Dynegy Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5069 757 New York, NY 10150-5069 By overnight mail or hand delivery: Dynegy Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC Third Avenue, Third Floor New York, NY 10017 Creditors may also submit the claim forms by hand delivery to: Clerk of the Bankruptcy Court United States Bankruptcy Court for the Southern District of New York 355 Main Street Poughkeepsie, NY 12601 Any holder of a claim that has been allowed by order of the bankruptcy court, has been paid in full by Dynegy or for which a separate deadline and procedure for setting forth such claim has been fixed by the bankruptcy court is not required to file a proof of claim. Any creditor that has already filed a claim with the Clerk of the U.S. Bankruptcy Court using a form that substantially conforms to the proposed claim form or Official Form 10 is not also required. Any holder of a claim which is listed in Dynegy's schedules is not also required to file, provided that the claim is not scheduled as "disputed," "contingent" or "unliquidated," and the creditor does not disagree with the amount, nature and priority of the claim as stated in the schedules. Dynegy does not also require creditors asserting a claim as a fee claim or an expense of administration of its estate to file proofs of claim. Any affiliate of Dynegy having a claim against the company or any holder of equity interests that does not assert any rights as creditor of the company is also exempted. A copy of the proposed order containing details of the procedures is available without charge at: http://bankrupt.com/misc/DynegyInc_PropOrderBarDate.pdf Notice of the Bar Date Dynegy will serve a notice to all known creditors and other concerned parties, including the U.S. Trustee and attorneys for the official committee of unsecured creditors, at least two business days after the bankruptcy court approves its requests. The company will also have the notice published in the national edition of The New York Times and The Wall Street Journal at least 21 days prior to the August 1 deadline. A creditor's failure to file a proof of claim constitute grounds for disallowance of such claim; render the creditor ineligible for voting on any Chapter 11 plan filed in Dynegy's or for receiving distributions under that plan; and render the creditor bound by the terms of any confirmed plan unless otherwise agreed to by the company and the committee. About Dynegy 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. 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, 2011, 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. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. 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. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings undertaken Dynegy Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DYNEGY INC: Files Statement of Financial Affairs ------------------------------------------------ Dynegy Inc. disclosed that it received income other than from the operation of its business in the two years preceding its Petition Date: Amount Source ------ ------ $1,933 YTD 2012 from interest and miscellaneous income $64,707 FYE 2011 from interest and miscellaneous income Within 90 days immediately preceding the Petition Date, the Debtors made payments or other transfers to creditors totaling more than $97 million. Dynegy Inc. also disclosed that it is a party to several suits and administrative proceedings, executions, garnishments and attachments within one year immediately preceding the Petition Date. There are nine suits that are still pending, including a shareholder litigation regarding failed Blackstone merger captioned Dynegy Inc. v. Coleen Witmer, et al., Cause No. 01-11- 00853-CV, pending in the First District Court of Appeals of Texas. Dynegy Inc. said it paid more than $22 million to attorneys and other professionals for consultation concerning debt consolidation and the preparation of its bankruptcy within one year before the Petition Date. Full-text copies of the Statements are available for free at: http://bankrupt.com/misc/disofa.pdf About Dynegy 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. 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, 2011, 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. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. 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. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings undertaken Dynegy Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DYNEGY INC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Dynegy Inc. aka Dynegy Acquisition, Inc. 601 Travis, Suite 1400 Houston, TX 77002 Bankruptcy Case No.: 12-36728 Chapter 11 Petition Date: July 6, 2012 Affiliates that previously sought Chapter 11 protection on Nov. 7, 2011: Debtor Case No. ------ -------- Dynegy Holdings, LLC 11-38111 Dynegy Roseton, L.L.C. 11-38107 Dynegy Danskammer, L.L.C. 11-38108 Hudson Power, L.L.C. 11-38109 Dynegy Northeast Generation, Inc. 11-38110 Court: U.S. Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris About the Debtors: Dynegy Inc. produces and sells electric energy, capacity and ancillary services in key U.S. markets. Dynegy Inc. filed for Chapter 11 protection to effectuate a merger with Dynegy Holdings, LLC, pursuant to the terms of a court-approved settlement and the Chapter 11 plan of DH. Dynegy Inc. is seeking joint administration with DH's Chapter 11 cases. Dynegy Inc.'s Counsel: J. Christopher Shore, Esq. WHITE & CASE LLP 1155 Avenue of the Americas New York, NY 10036 Tel: (212) 819-8200 Fax: (212) 354-8113 E-mail: cshore@whitecase.com Nov. 7 Debtors' Counsel: Matthew A. Clemente, Esq. Paul S. Caruso, Esq. Brian J. Lohan, Esq. SIDLEY AUSTIN LLP One South Dearborn Street Chicago, IL 60603 Tel: (312) 853-7000 Fax: (312) 853-7036 E-mail: mclemente@sidley.com pcaruso@sidley.com blohan@sidley.com Nov. 7 Debtors' Special Litigation Counsel: WHITE & CASE LLP Nov. 7 Debtors' Financial Advisor: FTI CONSULTING Nov. 7 Debtors' Claims and Noticing Agent: EPIQ BANKRUPTCY SOLUTIONS Dynegy Inc.'s Total Assets: $11.353 billion as of May 31, 2012 Dynegy Inc.'s Total Debts: $5.130 billion as of May 31, 2012 Dynegy Inc. did not file a new list of top largest unsecured creditors together with its petition. The petitions were signed by Catherine B. Callaway, executive vice president, general counsel and chief compliance officer. DYNEGY INC: Bankruptcy Filing Cues Fitch to Lower Rating to 'D' --------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) of Dynegy Inc. to 'D' following its bankruptcy filing, and removed the issuer from Rating Watch Evolving. The ratings for Dynegy Power, LLC (GasCo, IDR 'CCC', Rating Watch Evolving) and Dynegy Midwest Generation, LLC (CoalCo, IDR 'CCC', Rating Watch Evolving) are unaffected by today's rating action on Dynegy. On July 6, 2012, Dynegy filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. This filing is necessary to facilitate the restructuring of Dynegy Holdings, LLC (DH), which had filed for bankruptcy protection on Nov. 7, 2011, along with four of its wholly owned subsidiaries. The Chapter 11 plan for reorganization for DH, which has been agreed to with DH's major creditors, contemplates a merger of Dynegy and DH such that Dynegy will be the surviving entity. Dynegy's bankruptcy filing has no impact on the bankruptcy remote entities, Dynegy Coal HoldCo, LLC and Dynegy GasCo Holdings, LLC and their indirect wholly owned subsidiaries, CoalCo and GasCo, respectively. The bankruptcy filing of Dynegy does not constitute a default under the first lien credit facilities at CoalCo and GasCo. Fitch has taken the following ratings action: Dynegy Inc. -- IDR downgraded to 'D' from 'CC'. DYNEGY INC: NYSE Suspends Trading After Chapter 11 Filing --------------------------------------------------------- The New York Stock Exchange suspended trading in Dynegy Inc. after a unit of the power producer filed a reorganization plan under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York, Poughkeepsie Division, MarketWatch reports. Dynegy's debtors announced they reached an agreement with holders of an aggregate amount of about $1.4 billion of Dynegy Holdings unsecured notes. The bankruptcy filing covers Dynegy Holdings, its direct wholly owned subsidiary, and four of Dynegy Holdings' subsidiaries. The bankruptcy filing lists $11.4 billion in assets and $5.1 billion in debt. Shares of Dynegy closed July 5 at 59 cents, the report noted. About Dynegy 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. 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, 2011, 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. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. 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. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings undertaken Dynegy Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DYNEGY POWER: Moody's Confirms 'B2' CFR; Outlook Stable ------------------------------------------------------- Moody's Investors Service has confirmed the ratings of Dynegy Power, LLC. (GasCo), including the B2 Corporate Family Rating, the Caa1 Probability of Default Rating, and the B2 (LGD-2, 29%) rating on the company's senior secured term loan. The rating action concludes the review for possible downgrade which commenced on November 11, 2011. The rating outlook for GasCo is stable. Ratings Rationale The rating confirmation reflects, in large part, the progress that has occurred with respect to the Dynegy Holdings, LLC's (DH) (and certain affiliates) bankruptcy case. Specifically, on June 1st, the bankruptcy court approved a settlement agreement among creditors representing about 65% of DH's unsecured claims and covering all classes of DH debt. The settlement agreement formed the basis for the company's Plan of Reorganization (POR) and the related Disclosure Statement was approved by the bankruptcy court on July 3rd. The rating confirmation acknowledges the March 9th finding by the examiner concerning the GasCo financing and associated ring-fencing transactions that, among other things, the transactions were not improper and provided several benefits to DH prior to its November 2011 bankruptcy filing. The rating confirmation further considers the July 6 voluntary bankruptcy filing by parent company, Dynegy, Inc. (DYN), which was anticipated, and intended to facilitate a merger between DH and DYN, which is a key component of the company's POR. The maintenance of a Caa1 Probability of Default Rating is based on the fact GasCo currently remains an indirect wholly-owned subsidiary of two bankrupt parents, DH and DYN. Under the current POR, DH's unsecured creditors will receive DYN common equity representing a 99% stake in the reorganized company at emergence from bankruptcy. DH claims participating in this class include DH's $3.4 billion in senior notes, a $110 million tax indemnity claim from a Public Service Enterprise Group, Inc. subsidiary and a $540 million guaranty claim against DH relating to the Roseton-Danskammer lease. Unsecured creditors will also share a cash distribution of $200 million at bankruptcy emergence. As part of the POR, lease noteholders will be entitled to 50% of the proceeds from the future sale of the Roseton and Danskammer plants; provided that the sales proceeds for lease debt holders will be capped at $31 million. DH's unsecured creditors will be entitled to the remaining 50% of the proceeds. Also, a $200 million claim from subordinated debt holders will be reduced to $55 million and treated as an unsecured claim. Finally, DYN equity holders will receive a claim equal to 1% of the fully-diluted common stock of the reorganized company, and 5-year warrants to purchase 13.5% of the common stock of the reorganized company (on a fully-diluted basis) to be exercisable at an equity value for the reorganized company of $4 billion, which Moody's calculates as a 35.6% premium from the midpoint of the equity valuation outlined in the POR. Assuming that the DH creditors approve the current POR and subsequently obtain approval from the bankruptcy court, DYN's funded gross debt, upon emergence from bankruptcy, will amount to approximately $1.7 billion, a reduction of more than $4 billion, with approximately $1.1 billion of funded debt being at GasCo and approximately $600 million of funded debt being at Dynegy Midwest Generation, LLC. (CoalCo). The company hopes to emerge from bankruptcy in September 2012. The stable outlook reflects Moody's belief that GasCo will remain a non-debtor subsidiary of DYN and that the current POR will be approved by creditors and by the bankruptcy court. The ratings will be downgraded if Moody's believes there is an increased likelihood that GasCo could become pulled into bankruptcy to either facilitate DYN's emergence from bankruptcy or because of efforts from creditors. While Moody's believes that the current POR has a reasonably good likelihood of being approved, in the unlikely event that it is not approved, Moody's believes that the potential for a GasCo bankruptcy will have increased. The methodologies used in this rating were Unregulated Utilities and Power Companies published in August 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Houston, TX, DYN's subsidiaries produce and sell electric energy, capacity and ancillary services throughout the US. GasCo's power generation portfolio consists of about 6,771 megawatts (MW) of primarily natural gas-fired intermediate and peaking power generation facilities. CoalCo's portfolio consists of about 3,132 MW of primarily coal-fired baseload power plants. The DNE portfolio consists of about 1,693 MW from two power plants which are primarily natural gas-fired peaking and baseload coal generation facilities. The principal methodology used in this rating was Unregulated Utilities and Power Companies published in August 2009. DZ.EYE.N STUDIOS: Petitioner Wants Chapter 11 Trustee ----------------------------------------------------- Angel Staffing Incorporated, the petitioner in the Chapter 11 case of DZ.EYE.N Studios, LLC, d/b/a Boss-Creative, asks the Bankruptcy Court to appoint a qualified, independent and neutral person as interim Chapter 11 Trustee in the Debtor's case. In October 2010, Angel Staffing loaned the Debtor $100,000. Angel Staffing asserts the Debtor has never repaid one penny of this loan while the principals have paid themselves handsome dividends. According to Angel Staffing, the Debtor has consistently failed to comply with its requests to access the Debtor's books and records. Eric Terry, Esq., at Haynes and Boone, LLP, in San Antonio, Texas, counsel for the Petitioner, says Angel Staffing has no confidence in the abilities or motivations of present management. "In light of all of the foregoing factors, a balancing of potential harms and benefits reveals that the appointment of a trustee can be only advantageous to the estate," he asserts. In May 2012, Angel Staffing filed a lawsuit styled Angel Staffing, Inc. and Shannon Ralston v. DZ.EYE. STUDIOS, LLC d/b/a Boss Creative et al., case no. 2012-CI-07380, in the 45th Judicial District, Bexar County, Texas. An involuntary Chapter 11 case was filed against DZ.EYE.N Studios, LLC (Bank. W.D. Tex. Case No. 12-51861) on June 8, 2012, by Angel Staffing. Angel Staffing asserted a $425,000 claim for an unpaid loan. EASTMAN KODAK: Retirees File Suit Over Benefits ----------------------------------------------- Eastman Kodak's official committee of retired employees filed with the U.S. Bankruptcy Court a suit against the Debtors seeking to resolve a controversy regarding whether the requirements of 11 U.S.C. Section 1114 apply to all "retiree benefits," and therefore apply to any proposal or application by Eastman Kodak Company to terminate or modify retiree benefits. The committee states, "The Retiree Committee respectfully requests that the Court: (1) declare that Section 1114 applies to all Retiree Benefits, whether or not vested, and that the Debtors must therefore comply fully with the provisions of 11 U.S.C. Section 1114 if they seek to modify or terminate any Retiree Benefits; and (2) award the Retiree Committee such other and further relief which this Court deems just and proper." 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. ESP RESOURCES: Incurred $395,400 Net Loss in First Quarter ---------------------------------------------------------- ESP Resources, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $395,380 on $4.29 million of sales for the three months ended March 31, 2012, compared with a net loss of $839,464 on $1.82 million of sales for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $7.11 million in total assets, $6.22 million in total liabilities, and stockholders' equity of $888,946. As reported in the TCR on March 29, 2012, MaloneBailey, LLP, in Houston, Tex., expressed substantial doubt about the Company'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 has incurred losses and negative cash from operations through Dec. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/g9InfS Scott, La.-based ESP Resources, Inc., through its wholly owned subsidiary, ESP Petrochemicals, Inc., is a custom formulator of specialty chemicals for the oil and gas industry. EZENIA! INC: Settles 2 Former Executives' Severance Claims ---------------------------------------------------------- Bob Sanders at New Hampshire Business Review reports that Ezenia has settled the severance claims of two former executives for almost $60,000, but the largest claim, of its former CEO, remains unresolved. The report says the executives' claims have languished since last September, when the publicly traded software company, then headquartered in Nashua, filed for Chapter 11 bankruptcy protection. Ezenia settled the smaller claim of former chief operating officer Tom McCann at the end of last month for $19,000. Mr. McCann started with the company on April 1, 2010, and was terminated on June 30, 2011, according to the report. The report notes the company initially denied the claims on the basis that "it may have certain causes of action against Mr. McCann for certain acts and omissions made during his employment" -- allegations that Mr. McCann denied. Mr. McCann filed a priority claim of $12,725 and general claim of $34,425. The $19,000 lump sum settlement still has to be approved by a bankruptcy court judge, which has scheduled a hearing on it for July 24. According to the report, the court in June approved the $40,000 claim of former President Peter E. Janke. It was half the amount Mr. Janke sad he was owed. Mr. Janke, a former Raytheon executive, first joined the firm as a board member in June 2010 and took over as president in September 2010 with a base salary of $240,000. The report relates Mr. Janke also signed a severance agreement entitling him to receive six months' salary if he was terminated by the company "without cause." Mr. Janke was terminated April 1, 2011, as part of a restructuring agreement, but he didn't get paid the severance. The company claimed he violated the severance terms by receiving self-employment income. Mr. Janke disputed that and filed suit in July 2011 in a state court in Virginia. But that suit was stalled by the company's bankruptcy filing. Mr. Janke agreed to drop the suit as part of a $40,000 settlement. The report adds Khoa D. Nguyen also filed suit against the company in Virginia, for $1.5 million, alleging that the board forced him to resign in June 2011, but there were no settlements regarding his claims as of July 9. In his suit, Mr. Nguyen alleged that the board's termination of Mr. Janke from under him and denial of severance was a "change in control," effectively freezing him out, and thereby giving him no choice but to resign. About Ezenia! Ezenia! Inc., filed for Chapter 11 protection (Bankr. D. N.H. Case No. 11-13664) on Sept. 30, 2011. Judge J. Michael Deasy presides over the case. Daniel W. Sklar, Esq., at Nixon Peabody LLP, represents the Debtor. In updated court filings, the Company disclosed $2.5 million in assets and $1.3 million in debt. Its largest asset -- worth $2.4 million -- is a prepaid licensing contract with Microsoft Corp. Ezenia! Inc., has moved its corporate headquarters to Gig Harbor, Wash., while its finance office is in Salem, N.H. It was originally based in Nashua, N.H. The company previously disclosed it was considering moving to Seattle, Wash., to be near Microsoft. Ezenia stock is traded on the Pink Sheets. FILENE'S BASEMENT: Plan Outline Hearing Continued to July 13 ------------------------------------------------------------ The hearing to consider approval of the disclosure statement with respect to the Joint Plan of Reorganization of Syms Corp. and its subsidiaries has been continued until July 13, 2012, at 10:00 a.m. The hearing was originally scheduled for July 9. In addition, the Bankruptcy Court has extended until July 31, 2012, the Debtors' exclusive period to file a plan upon oral request of the Debtors. Peg Brickley at Dow Jones' DBR Small Cap reports that the alliance behind a deal to get Syms Corp. out of bankruptcy is holding, and a revamped Chapter 11 plan should be on file before a key Friday court hearing, attorneys said. Under the Plan filed May 24, 2012, Syms anticipates paying all its creditors in full. This includes creditors to whom Syms provided guarantees of certain Filene's liabilities. In resolution of certain intercompany claims and related matters concerning the Debtors' historic operations, Syms has agreed that Filene's creditors will share pro rata in a portion of the proceeds of Sym's assets. The Debtors do not believe that Advertising or Clothing have any assets or liabilities, therefore, the Debtors have not proposed a plan for either of these entities. The Plan, while denominated a "Joint Plan" constitutes two separate plans for purposes of voting and distribution. Under the Plan, each holder of Syms General Unsecured Claim -- estimated at $60.3 million -- that is allowed will be paid in full in cash within four years of the plan effective date. Under the Plan, each holder of Filene's General Unsecured Claims -- estimated at $36.8 million -- that is allowed will be paid 75% of the face amount of its claim in cash within four years of the plan effective date. As of May 24, Syms is holding cash of approximately $5.5 million and Filene's is holding cash of approximately $8.6 million. Syms estimates that its real estate assets have an aggregate net realizable value of approximately $149.5 million. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/FILENESB_DS.pdf 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. FILENE'S BASEMENT: Jacob Renick Appointed as Fee Examiner --------------------------------------------------------- The Bankruptcy Court has authorized the employment of Jacob M. Renick as the fee examiner in the bankruptcy case of Filene's Basement, LLC, et al. The Order was made upon agreement among the Debtors, the Official Committee of Unsecured Creditors and the Official Committee of Syms Corp. Equity Security Holders. The Fee Examiner will review in detail all monthly fee requests, quarterly interim fee applications and final fee applications filed with the Court by professionals in the Debtors' case. The Fee Examiner is authorized to utilize the services of the firm M.J. Renick & Associates LLC. The Court has determined that, in conjunction with the appointment of a Fee Examiner, it is necessary to establish uniform procedures for the review, allowance and payment of fees and expenses of professionals to ensure compliance with Section 330 of the Bankruptcy Code and other applicable rules and guidelines. The hourly rates to be paid to the Fee Examiner and M.J. Renick for services rendered will be: M. Jacob Renick $450 Other Professionals $250 - $400 The Fee Examiner and M.J. Renick will be reimbursed for all reasonable and necessary expenses in connection with the rendering of the services. 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. FILENE'S BASEMENT: Equity Panel Taps Houlihan as Investment Banker ------------------------------------------------------------------ The Official Committee of Syms Corp. Equity Security Holders in the bankruptcy case of Filene's Basement, LLC, et al., sought and obtained permission from the Bankruptcy Court to retain Houlihan Lokey Capital, Inc., as its financial advisor and investment banker. The Debtors are authorized and directed to pay Houlihan Lokey's fees and to reimburse Houlihan Lokey for its expenses. The Equity Committee and the Debtors will be bound by the indemnification, contribution and exculpation provisions of the Engagement Agreement and will indemnify and hold harmless Houlihan Lokey and its affiliates. Houlihan Lokey is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. FILENE'S BASEMENT: Equity Panel Can Hire PWC as Financial Advisor ----------------------------------------------------------------- The Official Committee of Syms Corp. Equity Security Holders obtained Bankruptcy Court approval to retain PricewaterhouseCoopers LLP as its financial advisor nunc pro tunc to Nov. 17, 2011. The firm's rates are: Personnel Hourly Billing Rate --------- ------------------- Partner/Principal $789 Director/Senior Manager $557-$607 Manager $494 Senior Associate $410 Associate $347 Secretarial $95 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. FIFTH SEASON INTERNATIONAL: Posts $3.3 Million Net Loss in Q1 2012 ------------------------------------------------------------------ Fifth Season International, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.28 million on $37.52 million of revenue for the three months ended March 31, 2012, compared with net income of $4.54 million on $27.00 million of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $234.95 million in total assets, $195.00 million in total liabilities, and stockholders' equity of $39.95 million. "The Group's consolidated current liabilities exceeded its consolidated current assets by approximately $35 million as of March 31, 2012," the Company said in the filing. "In addition the Group has commitments for the tenant improvement projects and the purchase of commercial properties totaled to $10.7 million as of March 31, 2012. Management believes that these factors raise substantial doubt about its ability to continue as a going concern." "As of March 31, 2012, the Group is in compliance with the covenant requirements with respect to the outstanding borrowings except for the loan with China Construction Bank of Longyun which it is not in compliance with the loan covenant. Longyun [Zibo Longyun Industrial and Trade Co., Ltd., one of the Company's subsidiaries] entered into a loan agreement with China Construction Bank on April 18, 2011, for borrowing $1,906,440 for the purpose of maintaining cash flow. The loan will be repayable in 12 months at an interest rate of 15% above the base rate published by the People's Bank of China. According to the loan agreement, Longyun's debt and capital ratio should not be higher than 65%, current ratio should not be lower than 1 and quick ratio should not be lower than 0.7. Longyun's current ratio and quick ratio were lower than 1 as of Dec. 31, 2011. The maturity date of the loan is April 18, 2012, and Longyun is in default of the loan. The Group has orally agreed with China Construction Bank on extending maturity date from April 18, 2012, to May 18, 2012. During the period that the loan is in default, the Group is required to pay an additional interest penalty charged at 50% of the interest rate defined in the original loan agreement." As reported in the TCR on April 23, 2012, Marcum Bernstein & Pinchuk LLP, in New York, expressed substantial doubt about Fifth Season'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 has a significant working capital deficiency. "[A]s of Dec. 31, 2011, the Company is not in compliance with its loan covenant in connection with its loan with China Construction Bank," the independent auditors said. A copy of the Form 10-Q is available for free at: http://is.gd/lL9V0Z Located in Shenzhen, People's Republic of China, Fifth Season International, Inc., is engaged in the investment, assignment, and leasing of commercial properties, in the operation of department stores, and in the wholesale of goods in China. FLORIDA EUROPEAN: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Florida European Export-Import Co., Inc. 1500 NW 96th Avenue Doral, FL 33172 Bankruptcy Case No.: 12-26338 Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Nathan G. Mancuso, Esq. MANCUSO LAW, P.A. 7777 Glades Road, #100 Boca Raton, FL 33434 Tel: (561) 245-4705 E-mail: ngm@mancuso-law.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb12-26338.pdf The petition was signed by Donald V. Blackburn, president. FOODMART INTERNATIONAL: Case Summary & Creditors List ----------------------------------------------------- Debtor: Foodmart International Corp. 175 Route 59 Spring Valley, NY 10977 Bankruptcy Case No.: 12-23248 Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Mitchell J. Canter, Esq. LAW OFFICES OF MITCHELL J. CANTER 100 Airport Executive Park, Suite 103 Nanuet, NY 10954 Tel: (845) 371-7500 Fax: (845) 352-4464 E-mail: mcanter@canterlaw.biz Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 22 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-23248.pdf The petition was signed by Lewis Wu, president. FOREVERGREEN WORLDWIDE: Had $126,900 Net Loss in 1st Quarter ------------------------------------------------------------ ForeverGreen Worldwide Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $126,891 on $3.60 million of revenues for the three months ended March 31, 2012, compared with a net loss of $342,783 on $2.82 million of revenues for the same period of 2010. The Company's balance sheet at March 31, 2012, showed $2.34 million in total assets, $6.13 million in total liabilities, and a stockholders' deficit of $3.79 million. Sadler, Gibb & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about ForeverGreen'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 has suffered accumulated net losses of $34,573,495 and has had negative cash flows from operating activities during the year ended Dec. 31, 2011. of $909,844." A copy of the Form 10-Q is available for free at: http://is.gd/yH8N4L The Company reported a net loss of $1.46 million on $13.70 million of revenues for the fiscal year ended Dec. 31, 2011, compared with a net loss of $589,735 on $10.62 million of revenues for the fiscal year ended Dec. 31, 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.32 million in total assets, $5.95 million in total liabilities, and a stockholders' deficit of $3.63 million. A copy of the Form 10-K is available for free at: http://is.gd/nKew9x Orem, Utah-based ForeverGreen Worldwide Corporation is a holding company that operates through its wholly owned subsidiary, ForeverGreen International, LLC. The Company's product philosophy is to develop, manufacture and market the best of science and nature through innovative formulations as it produces and manufactures a wide array of whole foods, nutritional supplements, personal care products and essential oils. FRESH START PRIVATE: Wilson Morgan Raises Going Concern Doubt ------------------------------------------------------------- Fresh Start Private Management, Inc., filed its annual report on Form 10-K for the fiscal year ended Wilson Morgan LLP, in Irvine, California, expressed substantial doubt about Fresh Start's ability to continue as a going concern. The independent auditors noted that of the Company's losses from operations. The Company reported a net loss of $408,967 on sales of $771,762 for the year ended Dec. 31, 2011, compared with a net loss of $154,590 on sales of $144,400 for the year ended Dec. 31, 2010. The Company's balance sheet at Dec. 31, 2011, showed $4.51 million in total assets, $1.02 million in total liabilities, and stockholders' equity of $3.49 million. A copy of the Form 10-K is available for free at: http://is.gd/7unyyD Fresh Start Private Management, Inc., through its wholly owned subsidiary, is an alcohol rehabilitation and treatment center headquartered in Santa Ana, California. The Company was established in January 2010 and is currently operating in Santa Ana, California. The Company's alcohol rehabilitation program consists of a Naltrexone implant that is placed under the skin in the lower abdomen coupled with life counseling sessions from specialized counselors. GENELINK INC: Posts $105,700 Net Loss in Q1 2012 ------------------------------------------------ GeneLink, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $105,673 on $771,664 of revenues for the three months ended March 31, 2012, compared with a net loss of $592,223 on $1.40 million of revenues for the same period last year. The Company's balance sheet at March 31, 2012, showed $2.65 million in total assets, $4.12 million in total liabilities, and a stockholders' deficit of $1.47 million. Hancock Askew & Co., LLP, in Savannah, Georgia, expressed substantial doubt about GeneLink'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 has a working capital deficit of $436,310, has incurred recurring operating losses since inception including a loss of $3.8 million in 2011 and had an accumulated deficit at Dec. 31, 2011, of $24,560,315. A copy of the Form 10-Q is available for free at: http://is.gd/OnL11R Based in Orlando, Fla., GeneLink, Inc., is a solution provider in the genetically customized nutritional and personal care marketplace. GETTY PETROLEUM: Committee Reviewing ConocoPhillips Claim --------------------------------------------------------- Convenience Store News, citing a report by Dow Jones & Co.'s DBR Small Cap, relates ConocoPhillips Inc. is seeking to cast a ballot in the Chapter 11 bankruptcy case of Getty Petroleum Marketing Inc., saying GPMI is worth $96.6 million. The claim is based upon GPMI's alleged agreement to indemnify ConocoPhillips for environmental contamination at 77 gas stations. The report relates, if ConocoPhillips' claim is allowed to stand, it could have a major effect on GPMI's bankruptcy plan. Andrew Goldman, Esq., at Wimer Cutler Pickering Hale and Dorr LLP told Dow Jones, the parent of the Wall Street Journal, on Friday the official committee of unsecured creditors is currently reviewing ConocoPhillips' claims. It is too early to tell the specifics of how ConocoPhillips' claim would affect GPMI's bankruptcy, the report adds. According to the report, ConocoPhillips said in bankruptcy court filings it gave 273 convenience stores and gas stations to GPMI in 2005, along with $53 million in cash. Subsequently, GPMI took the cash and allegedly promised to remediate any environmental damage at the sites, the news outlet reported. A few years later, Lukoil took on responsibility for 196 of the locations, with GPMI handling the rest. The report notes ConocoPhillips' claim is scheduled for review by U.S. Bankruptcy Court judge Shelley C. Chapman on July 18. The report adds ConocoPhillips no longer operates convenience stores or gas stations. Its spun-off Phillips 66 company licenses the right for gas station owners to use names such as Conoco and 76. About Getty Petroleum A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing markets gasolines, hydraulic fluids, and lubricating oils through a network of gas stations owned and operated by franchise holders. A former subsidiary of Russian oil giant LUKOIL, the company operates in the Mid-Atlantic and Northeastern US states. Getty Petroleum Marketing's primary asset is the more than 800 gas stations in the Mid-Atlantic states which are located on properties owned by Getty Realty. After scaling back the company's operations to cut debt, in 2011 LUKOIL sold Getty Petroleum Marketing to investment firm Cambridge Petroleum Holding for an undisclosed price. Getty Petroleum and three affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on Dec. 5, 2011. Judge Shelley C. Chapman presides over the case. Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq., and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company, LLP, serves as accountants for the Debtors. Getty Petroleum Marketing, Inc., disclosed $46.6 million in assets and $316.8 million in liabilities as of the Petition Date. The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North America, LLC, serves as the Committee's financial advisors. GH DANIELS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: GH Daniels III & Associates, Inc. fdba RE Landscape Services The Landscape Center 140 GH Daniels Boulevard Gypsum, CO 81637 Bankruptcy Case No.: 12-24237 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob12-24237.pdf The petition was signed by George H. Daniels, III, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- George H. Daniels, III 12024243 7/06/2012 GLYECO INC: Posts $311,900 Net Loss in Q1 2012 ---------------------------------------------- GlyEco, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $311,907 on $418,817 of sales for the three months ended March 31, 2012, compared with a net loss of $101,949 on $179,834 of sales for the same period last year. The Company's balance sheet at March 31, 2012, showed $1.28 million in total assets, $2.32 million in total liabilities, and a stockholders' deficit of $1.04 million. Jorgensen & Co., in Lehi, Utah, expressed substantial doubt about GlyEco'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 has not yet achieved profitable operations and is dependent on its ability to raise capital from stockholders or other sources and other factors to sustain operations. A copy of the Form 10-Q is available for free at: http://is.gd/cUHN1T Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. GOLDEN OAK: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Golden Oak Partners, LLC. 303 South Robertson Blvd. Beverly Hills, CA 90211-3602 Bankruptcy Case No.: 12-33650 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: M. Jonathan Hayes, Esq. LAW OFFICE OF M JONATHAN HAYES 9700 Reseda Bl Ste201 Northridge, CA 91324 Tel: (818) 882-5600 Fax: (818) 882-5610 E-mail: jhayes@hayesbklaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-33650.pdf The petition was signed by Mark Slotkin, managing member. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Olympic Holdings, LLC 12-32707 06/29/12 Wooton Group, LLC 12-31323 06/19/12 GREAT CANADIAN: Moody's Affirms Ba3 CFR, Rates C$400MM Notes B1 ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Great Canadian Gaming Corporation's proposed private placement offering of C$400 million principal amount of senior unsecured notes due 2022. Moody's also assigned Ba1 rating to the company's proposed Amended and Extended C$350 million senior secured credit facility. The company's Corporate Family and Probability of Default ratings were affirmed at Ba3. The outlook is stable. The company intends to use the net proceeds from the offering to refinance its existing US$170 million senior secured term loan B due 2014 and US$170 million senior subordinated notes due 2015, as well as the cross-currency swap liabilities. The affirmation of Great Canadian's Ba3 Corporate Family Rating considers the company's improved debt maturity schedule as a result of the transaction. At the same time, Moody's also notes the covenant package in the new bond indenture will afford the company more flexibility to pursue property developments, acquisitions and capital structure related initiatives such as share repurchases and dividends. Concurrently with the notes issue, the company announced that it intends to make a substantial issuer bid offer to repurchase for cancellation up to C$100 million of its outstanding common stock from shareholders at a fixed price of C$10 per common share. The purchase price will be funded with existing cash on the balance sheet. Rating assigned: C$350 million senior secured revolving credit facility due 2017 -- Ba1 (LGD2, 16) C$400 million senior unsecured notes due 2022 -- B1 (LGD4, 67%) Ratings affirmed: Corporate Family Rating -- Ba3 Probability of Default Rating -- Ba3 Ratings affirmed and will be withdrawn upon closing: C$350 million senior secured revolving credit facility due 2016 - Ba2 (LGD3, 31%) US$170 million senior secured term loan due 2014 ($163.2 million outstanding at March 31, 2012) - Ba2 (LGD3, 31%) US$170 million senior subordinated notes due 2015 - B2 (LGD5, 85%) Ratings Rationale Great Canadian's Ba3 Corporate Family Rating continues to reflect the company's leading market position, eligibility for capital spending reimbursement programs in British Columbia (B.C.) and Nova Scotia, and substantial barriers to entry in the regulated Canadian Gaming Market. The rating also reflects Great Canadians' modest financial leverage (around 3.0x debt/EBITDA currently) and solid cash flow to debt metrics as well as good liquidity profile. Conversely, the rating is constrained by the company's relatively small revenue size and limited diversification: over 50% of property EBITDA currently comes from two casinos in B.C. While Moody's generally views favorably the unique government support structure and control on gaming activities in Canada that contributed to the more stable revenues for gaming operators such as Great Canadian, the involvement of the government will also likely limit profitability upside. In addition, the Ontario Lottery and Gaming Corporation (OLG)'s recent announcement on its plans to overhaul gaming operations in the province, including developing a new casino in the Greater Toronto area and closing money-losing facilities, could cause earnings uncertainties in the near term due to the termination of operating agreements in two Ontario racinos owned by the company. The stable outlook depicts Moody's view that Great Canadian's flagship property, River Rock Casino Resort (which accounted for 37% and 44% of consolidated revenues and property EBITDA, respectively as of LTM March 31, 2012), will continue to see steady revenue and earnings growth that will help offset weaker performance at its other properties, including the Boulevard Casino in Vancouver and the two racinos in Ontario. Furthermore, the outlook is also contingent upon management's adherence to a conservative financial policy. The Ba3 rating assumes the company will maintain an overall balanced financial policy such as its debt/EBITDA remains below 4.5x. A rating upgrade is unlikely in the near to medium term, given Great Canadian's small revenue, earnings concentration and uncertainty surrounding the Ontario gaming market. In order for Moody's to consider any positive movement in Great Canadian, the company would need to achieve healthy organic growth, diversify its revenue stream and maintain a conservative financial policy, leading to significant and sustained improvement in credit metrics (such as debt/EBITDA materially below 3.0 times sustainably). Negative rating pressure could develop should the company pursue a more aggressive financial policy with share buy backs, acquisitions or dividend distributions resulting in higher debt levels and weaker liquidity. Quantitatively, the rating could be downgraded if debt/EBITDA deteriorates to a level approaching 4.5 times and retained cash flow/net debt falls below 15% for an extended period. The principal methodology used in rating Great Canadian Gaming Corporation was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Great Canadian Gaming Corporation, a TSX-listed company headquartered in Richmond, British Columbia, is a multi- jurisdictional gaming and entertainment operator in Canada with operations in British Columbia, Ontario and Nova Scotia. The company also operates four card rooms in the State of Washington. Revenue for the last twelve months ended March 31, 2012 was approximately C$399 million. GREAT CANADIAN: S&P Rates C$400-Mil. Unsecured Notes at 'BB+ ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Great Canadian Gaming Corp. (GCG), including its 'BB+' long-term corporate credit rating on the company. The outlook is stable. "The affirmation follows the company's announced refinancing that incorporates a C$400 million issuance of unsecured notes to fund the redemption of GCG's US$161.1 million senior secured term loans and US$170 million subordinated notes, swap breakage costs, and the repurchase of C$100 million of shares," said Standard & Poor's credit analyst Donald Marleau. "We view the refinancing as credit neutral, with pro forma leverage remaining consistent with the rating at 3x and no meaningful deterioration in the company's strong liquidity," Mr. Marleau added. At the same time, Standard & Poor's assigned its 'BB+' issue-level rating, and '4' recovery rating to GCG's proposed C$400 million notes. The ratings on GCG reflect what Standard & Poor's views as the company's significant revenue and EBITDA concentration in British Columbia (B.C.), an allocation structure that provides provincial governments with a fixed percent of revenues, and regulatory changes in Ontario that will disrupt current operations and could compel higher capital expenditures or acquisitions. The ratings are supported by the limited competition in the company's key markets, its solid market share in B.C., capital- expenditure reimbursements from some provincial governments, and credit measures that are consistent with the rating. GCG is a multijurisdictional gaming, entertainment, and hospitality operator, with operations in B.C., Nova Scotia, Ontario, and Washington State. The company operates 10 casinos (one with a hotel and conference center); four racetracks with some gaming (racinos); four card rooms; two community gaming centers; a recently acquired bingo hall; and various other food, beverage, and entertainment facilities. The stable outlook reflects our view that GCG's credit measures will remain in line with the 'BB+' rating, with total debt to adjusted EBITDA (including capital reimbursements) below 3.5x. Assuming steady EBITDA and operating cash flow in 2012, leverage should remain at about 3x, while strong liquidity and low capital expenditures give the company some flexibility to complete small acquisitions or greenfield capital investments without straining its financial risk profile. "Given our assessment of GCG's fair business risk profile, a higher rating would likely be linked to the combination of improved operating diversity, sustained improvements in operating performance, and financial policies that preserve leverage below 2.5x. On the other hand, there could be downward pressure on the rating if leverage increases above 3.5x because of weaker operating performance, acquisitions and growth initiatives, or capital structure initiatives," S&P said. GREAT CHINA INTERNATIONAL: Posts $626,300 Net Loss in 1st Qtr. -------------------------------------------------------------- Great China International Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $626,287 on $1.97 million of revenues for the three months ended March 31, 2012, compared with a net loss of $733,775 on $1.71 million of revenues for the comparable period last year. The Company's balance sheet at March 31, 2012, showed $60.63 million in total assets, $34.05 million in total liabilities, and stockholders' equity of $26.58 million. Kabani & Company, Inc., in Los Angeles, California, expressed substantial doubt about Great China International's ability to continue as a going concern, following the Company's results for the fiscal yer ended Dec. 31, 2011. The independent auditors noted that the Company has a working capital deficit of $27,643,655 as of Dec. 31, 2011. "In addition, the Company has negative cash flow for each of the two years in the period ended Dec. 31, 2011. of $3,289,571 and $349,200 respectively." A copy of the Form 10-Q is available for free at: http://is.gd/cOZBUv Shenyang, China-based Great China International Holdings, Inc., was incorporated in the State of Nevada on Dec. 4, 1987, under the name of Quantus Capital, Inc. The Company, through its various subsidiaries, is engaged in commercial and residential real estate leasing, management, consulting, investment, development and sales in the city of Shenyang, Liaoning Province, in the People's Republic of China ("PRC"). GREGORIO'S LLC: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gregorio's LLC P.O. Box 117 Colebrook, CT 06021 Bankruptcy Case No.: 12-51282 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Ronald Chorches, Esq. LAW OFFICES OF RONALD I. CHORCHES, LLC 449 Silas Deane Highway, 2nd Floor Wethersfield, CT 06109 Tel: (860) 563-3955 Fax: (860) 513-1577 E-mail: ronchorcheslaw@sbcglobal.net Estimated Assets: $0 to $50,000 Estimated Debts: $100,001 to $500,000 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ctb12-51282.pdf The petition was signed by Bill Koutroumanis, member. HANAR LLC: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Hanar, LLC 1623 S.W. 1st Avenue Ocala, FL 34471 Bankruptcy Case No.: 12-04470 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $5,298,360 Scheduled Liabilities: $13,164,176 A copy of the Company's list of its 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-04470.pdf The petition was signed by Dawn Tottel, manager. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Chaps Hospitality, LLC 12-05072 04/02/12 Laan Hospitalities, LLC 12-00252 01/17/12 U.S. 19 Land Trust No. 99 12-01855 02/10/12 VLG Hospitality, LLC 12-01689 02/07/12 HAWKER BEECHCRAFT: Sale to Chinese Firm Raises Political Concerns ----------------------------------------------------------------- The Wall Street Journal's Mike Spector and Joann S. Lublin report that Hawker Beechcraft Inc.'s deal to sell the bulk of its businesses for $1.79 billion to Chinese company Superior Aviation Beijing Co. could raise political concerns given U.S. sensitivities about previous Chinese attempts to buy American assets. According to WSJ, Timothy J. Keeler, a partner at Mayer Brown LLP in Washington, said that even though Superior won't acquire Hawker's defense business, the government may insist that it show it has "robust" controls in place to prevent the export of sensitive technology and goods. Hawker has said the acquisition by Superior would need to be cleared by the Committee on Foreign Investment in the U.S. Mr. Keeler worked on CFIUS-related decisions while chief of staff at the office of the U.S. trade representative and an official at the U.S. Treasury. "It's aircraft. It's China. I have no doubt that it will be scrutinized very closely," Mr. Keeler said, according to WSJ. The government panel, headed up by the Treasury Department, reviews foreign purchases of U.S. businesses. WSJ notes Hawker disclosed last week it has been in talks with five other suitors in the past several months. According to WSJ, people familiar with the discussions said those companies have included Textron Inc., Mahindra & Mahindra Ltd., of India, Brazil's Embraer SA, and New United, another Chinese company. The sources also said Carlyle Group, the large U.S. private-equity firm, has been mulling a bid in recent weeks. On Monday, Hawker announced Superior has an exclusive right for 45 days to negotiate to buy Hawker's corporate jet and propeller plane operations. If a deal is reached, Superior would serve as the stalking horse bidder in a bankruptcy auction. Superior will make payments over the next six weeks to support Hawker's continuing jet operations. If successful in its approach, Superior has pledged to keep Hawker jobs in Wichita, where the company is based, and elsewhere in the U.S. Superior, which has ownership ties to Beijing's municipal government, won't be bidding on Hawker's defense unit, Hawker Beechcraft Defense Co., houses military technology and sells military training and light attack aircraft to U.S. and foreign governments. It isn't part of the deal. It will continue to operate and could later be sold separately. If sold, Hawker said, the company would refund as much as $400 million of Superior's $1.79 billion purchase price. According to WSJ, a winning bid by Superior would further the ambitions of China's aerospace industry to move deeper into jet production, as well as give Superior itself a bigger role in the industry. Makers of small aircraft have been looking to China recently as a key source of demand as the market for business jets shrinks. Hawker has filed a bankruptcy-exit plan that hands ownership in the reorganized company to hedge-fund creditors owed roughly $1.7 billion to $1.8 billion in exchange for cancellation of the debt. According to WSJ, sources familiar with the matter said the creditors have decided instead that a sale would give them a better recovery on their holdings. Hawker's big senior creditors are Centerbridge Partners; Angelo, Gordon & Co.; Sankaty Advisors; and Capital Research & Management. Such firms often purchase debt of companies like Hawker at a discount, meaning they could profit on a sale, even if it doesn't repay their claims in full. HANOVER PORTFOLIO: Had $430,800 Net Loss in First Quarter --------------------------------------------------------- Hanover Portfolio Acquisitions, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $430,784 on $1,673 of revenues for the three months ended March 31, 2012. As the Company began its operating activities on Sept. 1, 2011, it had no revenues for the three months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $1.03 million in total assets, $1.75 million in total liabilities, and a stockholders' deficit of $718,731. Rose, Snyder & Jacobs LLP, in Encino, California, expressed substantial doubt about Hanover Portfolio'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 has incurred recurring net losses. A copy of the Form 10-Q is available for free at: http://is.gd/w5PvdM Woodland Hills, Calif.-based Hanover Portfolio Acquisitions, Inc., operates in two business segments 1) purchases distressed debt portfolios at a significant discount to their face value and seeks to either collect on the outstanding balances or resell some or all of the portfolios and 2) intellectual property licensing and commercialization. HORIYOSHI WORLDWIDE: Had $590,200 Net Loss in 1st Quarter --------------------------------------------------------- Horiyoshi Worldwide, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $590,191 on $316,561 of revenue for the three months ended March 31, 2012, compared with a net loss of $380,572 on $228,828 of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $2.25 million in total assets, $980,474 in total current liabilities, and stockholders' equity of $1.27 million. As reported in the TCR on April 9, 2012, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about Horiyoshi Worldwide'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 has accumulated losses of $3,732,640 since inception. A copy of the Form 10-Q is available for free at: http://is.gd/60L7nY Los Angeles, Calif.-based Horiyoshi Worldwide, Inc., is engaged in the design and production of the "Horiyoshi" and "Heroes & Demons" collections and the operation of its branded retail store in London, England. HORSEHEAD HOLDING: Moody's Assigns 'B2' CFR/PDR; Outlook Stable --------------------------------------------------------------- Moody's Investors Service, has assigned first time ratings to Horsehead Holding Corp. including a B2 Corporate Family Rating and a B2 Probability of Default Rating. At the same time Moody's assigned a B2 rating to the company's guaranteed senior secured notes due 2017 and a SGL-2 speculative grade liquidity rating. Proceeds will be used to fund the construction of a new zinc plant, which will use solvent extraction technology. Horsehead, a holding company, operates through three principal subsidiaries, Horsehead Corporation, International Metals Reclamation Company (INMETCO), and Zochem Inc. The outlook is stable. Assignments: Issuer: Horsehead Holding Corp Corporate Family Rating, B2 Probability of Default Rating, B2 Speculative Grade Liquidity Rating, SGL-2 Sr. Secured Notes, B2, LGD3, 45% Ratings Rationale The B2 corporate family rating reflects Horsehead's solid position as a leading US producer of zinc metal and zinc oxide, and a recycler of other metals recovered through its high temperature metals recovery facilities. The rating also considers the company's relatively unique feedstock source for its zinc smelter, which is derived from the waste material from steel mills' electric arc furnaces (EAF). EAF dust is an EPA listed hazardous waste that is generated from galvanized scrap melted by minimills, which contains approximately 20% zinc. The rating also acknowledges the diversity of end use markets for the company's zinc oxide production, (although there is dependence on the tire industry) but at the same time considers that its zinc products have a relatively important dependence on the steel industry. Given the nature of the feedstock supply and a planned portion of the output sales, the company has a symbiotic relationship with the steel industry. As such, the health of the U.S. steel industry is an important factor in the rating. Despite this interdependence, Horsehead performed reasonably well in the depths of the steel industry downturn. The company's longstanding relationships with the minimills, its primary source of feedstock, as well as with its customer base are also favorable factors in the rating. However, the rating incorporates the company's reliance on its one smelting/refining facility in Monaca, PA to convert its feedstock to zinc products, the volatility of zinc prices, and the less than optimal although improving performance of the steel minimills in the U.S. Although capacity utilization is up year-on-year, Moody's expects recovery of the steel industry to be gradual, as a large percentage of steel production goes to the construction industry. The rating also considers that the debt being incurred is to fund development of a new zinc plant to replace the current Monaca smelter. While Moody's believes that the technology being employed, essentially a solvent extraction/electro-winning technology (SXEW), which is widely used in the copper industry, is relatively straightforward, production from this new facility is not expected until the third quarter of 2013. In the interim, the company's earnings and cash generation will be derived from its current operations, which are higher cost than the planned SXEW replacement facility and therefore more vulnerable to movement in zinc prices. Moody's acknowledges that the company's hedging program covering approximately 75% of anticipated shipments through June 2013 (zinc put options at $0/85/lb) provides protection against likely price volatility and provides an underpinning to earnings during the construction phase. The company's SGL-2 speculative grade liquidity rating reflects Horsehead's acceptable liquidity profile, supported by its cash position of $172 million at March 31, 2012, its $60 million revolving credit facility (unused except for L/C's issued), and the proceeds from the debt issuance to support the strategic capital investment to replace its existing smelter with an SXEW process. Moody's believes these resources are adequate to support the strategic growth investment. However, should zinc prices fall below $0.80/lb, after the current hedges expire in June 2013 and before the new zinc plant is operational, Moody's believes borrowings under the revolver might be required. Under Moody's loss given default methodology, the senior secured notes are rated at the corporate family level reflecting their position in the liability structure and the support provided by the convertible notes, which are ranked lower in the liability waterfall. The stable outlook reflects Moody's view that zinc prices and the company's hedged position will allow for earnings and cash flow that will, together with the company's available liquidity, support the planned capital investment. Given the strategic capital investment required over the next several years to bring the new zinc facility on line, upward rating movement is unlikely until construction is complete and the plant has demonstrated solid operating statistics. The rating could be lowered should debt/EBITDA be sustained above 5.5x, (operating cash flow less dividends)/debt be lower than 12.5%, or EBIT/interest be lower than 2x. The principal methodology used in rating Horsehead Holding Corp. was the Global Steel Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Horsehead Holding Corp. is a specialty based zinc products company that sells fabricated products, zinc oxides and powders. The company also recycles electric arc furnace dust, a hazardous waste generated by steel minimills. The company is headquartered in Pittsburgh, Pennsylvania and generated $453 million of revenues for the twelve months ended March 31, 2012. IMPERIAL CAPITAL: FDIC Objects to $1.6-Mil. Administrators Fee -------------------------------------------------------------- Juan Carlos Rodriguez at Bankruptcy Law360 reports that the Federal Deposit Insurance Corp. on Monday objected to about $1.6 million in fees sought by administrators including Bank of New York Mellon Corp. in the bankruptcy of Imperial Capital Bank, saying payments would only be for the companies' benefit. About Imperial Capital Bancorp La Jolla, California-based Imperial Capital Bancorp, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 09-19431) on Dec. 18, 2009. Gary E. Klausner, Esq., Eve H. Karasik, Esq., and Gregory K. Jones, Esq., at Stutman, Treister & Glatt, P.C., in Los Angeles, serves as the Debtor's bankruptcy counsel. FTI Consulting Inc. serves as its financial advisor. The Company disclosed $40.4 million in assets and $98.7 million in liabilities. Tiffany L. Carroll, the U.S. Trustee for Region 15, appointed three members to the official committee of unsecured creditors in the Debtor's case. David P. Simonds, Esq., and Christina M. Padien, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Los Angeles represents the Committee as counsel. The U.S. Bankruptcy Court last month confirmed Imperial Capital Bancorp's Second Amended Chapter 11 Plan of Reorganization proposed by the Debtors and HoldCo Advisors. INAMED CORP: 11th Cir. Bars Individual Suit Over Breast Implants ---------------------------------------------------------------- The U.S. Court of Appeals for the Eleventh Circuit affirmed a district court ruling that barred an individual from pursuing a 2006 personal injury suit against Inamed Corporation and its successor, Allergan, Inc., alleging injuries caused by defective silicone breast implants. The Eleventh Circuit agreed with the U.S. District Court in Alabama that a 1999 class settlement precluded Zuzanna Juris from prosecuting her individual case. At one point in the 1990s, more than 15,000 lawsuits were pending against Inamed across the country. In 1999, District Court Judge Sam Pointer in Alabama approved a mandatory, limited fund class settlement, which resolved tens of thousands of claims arising out of injuries allegedly caused by defective silicone breast implants manufactured by Inamed, and that ultimately saved the company from bankruptcy. Each claimant received $725. Class counsel received no fees out of the Inamed settlement fund. The Order was not appealed. In 2006, Ms. Juris filed an individual action in California state court against Inamed and Allerga. The defendants contended that Ms. Juris's lawsuit was barred because the 1999 class settlement resolved her claims; Ms. Juris posited that she could avoid the settlement's res judicata effect on due process grounds. The Eleventh Circuit's decision indicates that throughout the 1990s, each audit letter prepared by Inamed's independent auditing firm, Coopers & Lybrand, included a qualified opinion expressing "substantial doubt about the Company's ability to continue as a going concern." For fiscal years 1995, 1996, and 1997, Inamed reported pre-tax operating losses of $8.6 million, $6.0 million, and $6.6 million, respectively. By the end of 1997, the company's consolidated book value -- subtracting liabilities from assets -- was negative $10.9 million. Setting aside the $9.2 million contingent liability booked in 1994 in anticipation of the proposed global settlement, Inamed's book value was still negative $1.7 million. Inamed came close to filing for Chapter 7 bankruptcy liquidation. The Eleventh Circuit's decision noted that, had Inamed elected to pursue Chapter 7 bankruptcy at the end of 1997, the company's saleable assets, discounted by the impairment likely to result from a forced liquidation, would have totaled between $11.4 million and $20.4 million. From this sum, senior secured noteholders would have been entitled to $19 million, leaving unsecured creditors -- trade creditors, subordinated noteholders and tort claimants -- with somewhere between $0 and $1.4 million. At best, the tort claimants would have been left to compete for $1.4 million against trade creditors, with rights to payment valued at $12.5 million, and subordinated noteholders, with rights to payment valued at $10 million. Inamed's senior secured noteholders agreed to advance funds to Inamed on the condition that the settlement would be mandatory and not exceeding $31.5 million. The senior creditors had no obligation to contribute funds. The Class Plaintiffs' counsel ultimately accepted the comparative benefit of the $31.5 million limited fund, obtained by Inamed from the senior secured noteholders, as the only available resolution. For fiscal year 1998, Inamed's net sales increased by 24%. It reported a net income in 1998, compared to a substantial net loss in 1997. However, Inamed's book value in 1998 was still negative $15,625,000, and it remained a debt-ridden company. By 1999, Inamed began reporting a much improved operating income, openly attributing its profitability to settling the breast implant litigation and an aggressive cost-reduction program. On Sept. 1, 1999, Inamed purchased Collagen Aesthetics, Inc., for roughly $159 million, the funding for which was provided by substantial borrowing. Nevertheless, even after undergoing a public offering to raise proceeds to pay the debt incurred in the purchase, Inamed's financial viability remained precarious. On March 23, 2006, Allergan purchased substantially all of Inamed's outstanding common stock, as well as its wholly owned subsidiary, McGhan Medical Corporation. The case is ZUZANNA JURIS, Plaintiff-Appellant, v. INAMED CORPORATION, McGHAN MEDICAL CORP., et al., Defendants-Appellees, No. 10-12665 (11th Cir.). A copy of the Eleventh Circuit's July 6, 2012 decision is available at http://is.gd/096pZCfrom Leagle.com. INDIANAPOLIS DOWNS: CEO Seeks Probe of Creditor's Links to Rival ---------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that Indianapolis Downs LLC's CEO asked for court permission Monday to investigate Fortress Investment Group LLC, a major creditor of the bankrupt horse track and casino operator, over suspicions that the firm is in cahoots with the debtors' primary competitor. According to Bankruptcy Law360, Chairman and CEO Ross Mangano filed a motion for a Rule 2004 examination of FIG in Delaware bankruptcy court on behalf of himself and several family trusts ? collectively known as the "Oliver parties." About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INDYMAC BANCORP: Trustee Takes Insurers' $80MM Win to 9th Circ. --------------------------------------------------------------- Bibeka Shrestha at Bankruptcy Law360 reports that IndyMac Bancorp Inc.'s bankruptcy trustee is asking the Ninth Circuit to scrutinize a recent ruling that closed the door to $80 million of coverage for securities lawsuits targeting former IndyMac directors and officers, according to an appeals notice posted Friday. Bankruptcy Law360 relates that the move comes after a California federal judge agreed with a coalition of insurers that coverage for securities litigation against former executives at IndyMac and its subsidiary IndyMac Bank FSP was only available under one set of insurance policies worth $80 million. About IndyMac Bancorp Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- was the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp filed for Chapter 7 bankruptcy protection (Bankr. C.D.Calif., Case No. 08-21752) on July 31, 2008. At the time of the FDIC takeover, IndyMac was the third-largest bank failure in U.S. history. Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. IndyMac's banking operations, now known as OneWest Bank FSB, are under the control of a new ownership group that includes hedge- fund managers John Paulson and George Soros. INFRAX SYSTEMS: Posts $599,800 Net Loss in March 31 Quarter ----------------------------------------------------------- Infrax Systems, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $599,785 on $66,650 of revenues for the three months ended March 31, 2012, compared with a net loss of $905,592 on $86,315 of revenues for the three months ended March 31, 2011. The Company reported a net loss of $2.62 million on $382,374 of revenues for the nine months ended March 31, 2012, compared with a net loss of $1.84 million on $466,558 of revenues for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $5.98 million in total assets, $2.97 million in total liabilities, and stockholders' equity of $3.01 million. Randall N. Drake, CPA, PA, in Clearwater Florida, expressed substantial doubt about Infrax Systems' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditors noted that the Company has incurred significant recurring losses from operations and is dependent on outside sources of financing for continuation of its operations. A copy of the Form 10-Q is available for free at: http://is.gd/Ua3HEl Pinellas Park, Fla.-based Infrax Systems, Inc., since its inception, had been dedicated to selling and/or licensing a fiber optic management software system under the name OptiCon Network Manager, originally developed, and acquired from Corning Cable System, Inc., through a related company, FutureTech Capital, LLC. In October 2009, the Company began developing smart grid energy related products. As of June 29, 2010, the Company acquired the assets and management of Trimax Wireless Systems, Inc. ("Trimax"), in exchange for equity and a note payable. In April 2011, the Company acquired controlling interest in Lockwood Technology Corporation ("Lockwood"), a provider of advanced asset management solutions. The Trimax and Lockwood product lines are expected to provide an operating platform and enhanced operating effectiveness to the Secure Intelligent Energy Platform. While the Company continues to support the OptiCon Network Management platform, the Company has shifted its focus and energies towards the "Smart Grid" energy sector. INNER CITY: Wins OK for Meyer Suozzi as Counsel for Unit's IP Case ------------------------------------------------------------------ Eric Hornbeck at Bankruptcy Law360 reports that New York state Lawrence K. Marks said Monday he won't boot Meyer Suozzi English & Klein PC from representing Inner City Broadcasting Corp. in a shareholder's lawsuit alleging that Inner City and its bankrupt radio subsidiary are giving away their trademarks and other intellectual property. Judge Lawrence K. Marks ruled during a hearing Monday that Meyer Suozzi can continue to represent nondebtor parent company Inner City Broadcasting against allegations by the shareholder, Hugh Wyatt, according to Bankruptcy Law360. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INT'L BEVERAGES: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: International Beverages Express 14414 Hamlin St. Van Nuys, CA 91401 Bankruptcy Case No.: 12-16208 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Tatiana K. Linton, Esq. LAW OFFICES OF TATIANA K. LINTON 3940 Laurel Canyon Blvd #1519 Studio City, CA 91604 Tel: (818) 374-1302 Fax: (818) 374-1367 Scheduled Assets: $2,277,000 Scheduled Liabilities: $3,178,847 A copy of the Company's list of its 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-16208.pdf The petition was signed by Lev Khalfin, president. IRONSTONE GROUP: Had $13,800 Net Loss in First Quarter ------------------------------------------------------ Ironstone Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $13,755 on $0 revenue for the three months ended March 31, 2012, compared with a net loss of $13,184 on $0 revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1,101,137 in total assets, $1,327,910 in total liabilities, and a stockholders' deficit of $226,773. Madsen & Associates CPA's, Inc., in Murray, Utah, expressed substantial doubt about Ironstone Group'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 for its planned activity. A copy of the Form 10-Q is available for free at: http://is.gd/L3tRIX San Francisco, Calif.-based Ironstone Group, Inc., and subsidiaries have no operations but are seeking appropriate business combination opportunities. At March 31, 2012, the Company had $1,007,020 in marketable securities, $1,820 in cash, and an investment in Salon Media Group, Inc., valued at $92,297. JAYHAWK ENERGY: Incurred $983,300 Net Loss in March 31 Quarter -------------------------------------------------------------- JayHawk Energy, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $983,355 on $158,196 of revenues for the three months ended March 31, 2012, compared with a net loss of $881,246 on $91,810 of revenues for the three months ended March 31, 2011. For the six months ended March 31, 2012, the Company reported a net loss of $937,891 on $327,451 of revenues, compared with a net loss of $818,454 on $171,355 of revenues for the six months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $4.79 million in total assets, $2.99 million in total liabilities, and stockholders' equity of $1.80 million. DeCoria, Maichel & Teague, PS, in Spokane, Washington, expressed substantial doubt about JawHawk Energy's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company has incurred substantial losses, has negative working capital and has an accumulated deficit. A copy of the Form 10-Q is available for free at: http://is.gd/rfkyUv Coeur d'Alene, Idaho-based JawHawk Energy, Inc., is engaged in the acquisition, exploration, development, production and sale of natural gas, crude oil and natural gas liquids primarily from conventional reservoirs within North America. JBI INC: Had $2.8 Million Net Loss in First Quarter --------------------------------------------------- JBI, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of US$2.83 million on US$633,180 of sales for the three months ended March 31, 2012, compared with a net loss of US$2.76 million on US$581,054 of sales for the same period last year. The Company's balance sheet at March 31, 2012, showed US$7.26 million in total assets, US$4.75 million in total liabilities, and stockholders' equity of US$2.51 million. As reported in the TCR on March 26, 2012, MSCM LLP in Toronto, Canada, expressed substantial doubt about JBI, Inc.'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 has experienced negative cash flows from operations since inception and has accumulated a significant deficit. A complete text of the Form 10-Q is available for free at: http://is.gd/bXUPVL Thorold, Ontario, Canada-based JBI, Inc. (OTC QB: JBII) -- http://www.plastic2oil.com/-- is a North American fuel company that transforms unsorted, unwashed waste plastic into ultra-clean, ultra-low sulphur fuel without the need for refinement. K.C. & MCKINZIE: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: K.C. & McKinzie Partnership P.O. Box 1635 Zephyr Cove, NV 89448 Bankruptcy Case No.: 12-51590 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Jeffrey L Hartman, Esq. HARTMAN & HARTMAN 510 West Plumb Lane, Ste B Reno, NV 89509 Tel: (775) 324-2800 Fax: (775) 324-1818 E-mail: notices@bankruptcyreno.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of four largest unsecured creditors is available for free at http://bankrupt.com/misc/nvb12-51590.pdf The petition was signed by Paul McKinzie, general partner. LARSS TRUST: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: LARSS Trust fdba Frank W. Boykin II Family Trust P.O. Drawer 1410 Ruston, LA 71273 Bankruptcy Case No.: 12-02372 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Irvin Grodsky, Esq. IRVIN GRODSKY, P.C. P.O. Box 3123 Mobile, AL 36652-3123 Tel: (251) 433-3657 E-mail: igpc@irvingrodskypc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of six largest unsecured creditors is available for free at http://bankrupt.com/misc/alsb12-02372.pdf The petition was signed by Frank W. Boykin, II, co-trustee and Gary Moore, authorized representative. LANTERN PARTNERS: Wants to Employ Frost Brown as Attorney --------------------------------------------------------- Lantern Partners, LLC, seeks permission from the Bankruptcy Court to employ Frost Brown Todd LLC as its counsel. Frost Brown will, among other things: (a) advise the Debtor of its powers and duties as debtor-in- possession; (b) provide assistance, advice and representation concerning a plan of reorganization, a disclosure statement relating thereto, and the solicitation of consents to and confirmation of that Plan; (c) advise the Debtor in connection with any sale of assets; (d) provide assistance, advice and representation concerning any further investigation of the assets, liabilities and financial condition of the Debtor thay may be required; and (e) represent the Debtor at hearings or matters pertaining to its affairs as debtor-in-possession. To the best of the Debtor's knowledge, Frost Brown is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The rates of those attorneys most likely to work for the Debtor range from $550 per hour in the case of members to $110 per hour in the case of paraprofessionals. Frost Brown may seek for reimbursement of its expenses. Prior to the Petition Date, Frost Brown received a retainr from the Debtor in the amount of $41,046. About Lantern Partners Lantern Partners LLC filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 12-06288) on May 25, 2012, in Indianapolis, Indiana. The Debtor, a single asset real estate as defined in 11 U.S.C., Sec. 101 (51B), estimated assets and debts of $10 million to $50 million. The Debtor's principal asset is located at 10500 Kincaid Drive, Fishers, Indiana. The Debtor's principal asset is located at 10500 Kincaid Drive, Fishers, Indiana. This is the address of a Kindaic Freedom Mortgage Building, a 125,000 square-foot office building, according to indianpolis.citysearch.com. Jeffrey A. Hokanson, Esq., and Jeremy M. Dunn, Esq., at Frost Brown Todd LLC, serve as the Debtor's bankruptcy counsel. Judge Anthony J. Metz, III, presides over the case LEAGUE NOW: Had $24,900 Profit in First Quarter ----------------------------------------------- League Now Holdings Corporation filed its quarterly report on Form 10-Q, reporting net income of $24,874 on $933,303 of revenues for the three months ended March 31, 2012, compared with a net loss of $35,067 on $75,596 of revenues for the comparable period last year. The Company's balance sheet at March 31, 2012, showed $1.25 million in total assets, $1.40 million in total liabilities, and a stockholders' deficit of $151,668. As reported in the TCR on April 23, 2012,Harris F. Rattray CPA, in Pembroke Pines, Florida, expressed substantial doubt about League Now's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditor noted that the Company has incurred accumulated net losses of $207,200 and needs to raise additional funds to meet its obligations and sustain its operations. A copy of the Form 10-Q is available for free at: http://is.gd/64vIiO Brecksville, Ohio-based League Now Holdings Corporation, through its subsidiary, Infiniti Systems Group, Inc., provides technology integration services to businesses in the midwestern United States. LIGHTSQUARED INC: Reaches Termination Deal With Former CEO ---------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that LightSquared Inc. reached an agreement Monday with its former CEO finalizing the terms of his termination and giving him an allowed $750,000 unsecured, nonpriority claim and a common equity interest of 8.8 million shares of the company's common stock. Under the settlement agreement, LightSquared and ex-CEO Sanjiv Ahuja have agreed that his employment will end and he'll resign from the board of directors of each LightSquared entity, according to Bankruptcy Law360. About LightSquared LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. LUPER ENTERPRISES: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Luper Enterprises, Inc. dba Bungalow Beach Resort 2000 Gulf Drive Bradenton Beach, FL 34217 Bankruptcy Case No.: 12-10465 Chapter 11 Petition Date: July 8, 2012 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: R. John Cole, II, Esq. R. JOHN COLE, II, PA 46 N Washington Blvd, Suite 24 Sarasota, FL 34236 Tel: (941) 365-4055 Fax: (941) 365-4219 E-mail: rjc@rjcolelaw.com Scheduled Assets: $1,451,689 Scheduled Liabilities: $7,328,011 A copy of the Company's list of its four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-10465.pdf The petition was signed by A. Gayle Luper, president/owner. MAMMOTH LAKES, CA: Outline & Summary of Plan; July 12 Hearing Set ----------------------------------------------------------------- The Town of Mammoth Lakes, California, will appear before the Bankruptcy Court in Sacramento on July 12 at 1:30 p.m. on its requests to schedule: -- a hearing on its eligibility to seek creditor protection under Chapter 9 of the Bankruptcy Code; and -- another hearing to consider approval the Chapter 9 Plan For The Adjustment Of Debts and explanatory disclosure statement the town filed along with its Chapter 9 petition. The Chapter 9 bankruptcy plan is premised on the Long-Term Financial Forecast and Business Plan, which is the final planning document adopted by the town council on June 20, 2012, that presents strategies for the town to maintain a balanced operating budget, address its debts, rebuild fiscal stability, and enable the town to continue to provide municipal services through June 30, 2017. The Plan involves the restructuring or discharge of: (a) roughly $3.3 million of publicly held and privately held financing obligations; (b) obligations to current employees; (c) claims of the California Joint Powers Insurance Authority, through which the town obtains its general liability, real property and workers' compensation coverage, for over $1.4 million owed for retroactive adjustment payment calculations relating to retroactive adjustment payment calculations relating to prepetition date periods; (d) an unsecured judgment in favor of Mammoth Lakes Land Acquisition LLC in the amount of $42,746,754 as of April 30, 2012; (e) claims arising from tort and breach of contract lawsuits against the town; and (f) various other unsecured claims, including $600,000 in debt owed to state agencies for capital improvement loans and claims arising from the rejection of executory contracts. The Wall Street Journal's Michelle Kung and Mike Cherney report that a municipal official said Mammoth Lakes hopes to emerge from bankruptcy protection before the end of the year. The Plan groups claims against the town in 10 classes. About $1.805 million in obligations to Union Bank on account of certificates of participation -- COP -- are in class 1 and unimpaired. Citizens Bank (Police Facility) COP Obligations -- $317,713 -- in class 2 are unimpaired. Citizens Bank, the holder of the class 2 claim, will receive amended and restructured payments through year 2017. Citizens Bank also holds the Mammoth Lakes Housing Corporation Land Acquisition Project COP Obligations -- $201,446 -- in class 3. The claim is impaired, and Citizens Bank will receive amended and restructured payments through year 2017. Claims on account of employee prepetition leave are in class 4 and are impaired. According to the disclosure statement explaining the Plan, the number of hours of comprehensive and sick leave accrued and earned by each employee but unpaid as of July 1, 2012 -- that is, the hours in each employee's "Employee Prepetition Leave Bank" -- will be reduced by 10%. During their continued employment with the town, employees will not be permitted to cash out any hours in the so-called Employee Prepetition Leave Bank. Upon voluntary termination of employment, an employee will receive cash payment representing 50% of the hours of accrued and unpaid leave, at their full rate of pay at the time of separation. The value of the remaining 50% will be paid in 12 equally monthly payments at each employee's full rate of pay. Upon involuntary termination, the employee will receive a cash payment representing 100% of the hours of accrued and unpaid leave at the full rate of pay at the time of separation. The Plan provides for a Convenience Class in class 5, consisting of holders of general unsecured claims in an allowed amount of less than $10,000 or who elect to reduce their claim to be treated as a Convenience Class Claim. The class 5 claimants are impaired. They will receive a one-time cash payment in an amount equal to 10% of the allowed amount of the claim. Holders of allowed general unsecured claims not otherwise classified under the Plan are grouped in class 6. The class 6 holders include Mammoth Lakes Land Acquisition on account of the judgment debt. The claimants are impaired. They will be given beneficial interests in a Plan of Adjustment Trust to be created under the Plan. The amounts available for distribution to Allowed Class 6 Claims from the Trust will be roughly $5.8 million in total in cash payments from the general fund over the next 10 years, and the net proceeds of the sale of a real estate, estimated to be roughly $250,000. The estimated payment to holders of Class 6 Claims is roughly 5% to 12% of their claims. The Convenience Class will not participate in the Class 6 Claims Fund. Classes 7 and 8 are allocated for the claims of CJPIA for general liability coverage obligations ($861,657) and workers compensation coverage obligations ($557,179). The claims are impaired and will be paid over 10 years under the Plan. The Plan does not impair the town's obligations -- in class 9 -- to either the California Public Employees' Retirement System in its capacity as trustee for the pension trusts nor the town's retired workers and their dependents who are the beneficiaries of the trusts. The Plan also does not alter the obligations of the town funds that are restricted by grants, by federal law and by California law; pursuant to the Tenth Amendment to the United States Constitution, and the provision of the Bankruptcy Code that implement the Tenth Amendment. Thus, securities funded by restricted funds, like the Special Assessment and Special Tax Obligations secured by special revenues of the town's restricted funds, grouped in class 10, are not altered by the Plan. According to the Plan, the town regrets such recovery to holders of Class 6 Claims. The town said it lacks the revenues to make the payments while maintaining an adequate level of municipal services such as the provision of police protection, the repairing of the town's streets and support for the essential functions of a tourism-based resort community. According to WSJ, the bankruptcy stems from a planned real-estate project the town had intended to pursue with Mammoth Lakes Land Acquisition but ultimately decided to end. The developer sued the town for ending the contract and won. Town officials said they tried to negotiate with the developer but couldn't reach terms on a $43 million judgment. According to Standard & Poor's, the obligation to the real estate developer represents 250% of the town's annual general fund budget. Mammoth Lakes projected a $2.8 million budget shortfall for its 2012-13 fiscal year. About Mammoth Lakes, Calif. The town of Mammoth Lakes, a small California resort community near Yosemite National Park, filed a Chapter 9 bankruptcy petition (Bankr. E.D. Calif. Case No. 12-32463) on July 3, 2012, estimating $100 million to $500 million in assets and $50 million to $100 million in debts. Bankruptcy Judge Thomas C. Holman oversees the case. Lawyers at Fulbright & Jaworski LLP and Klee, Tuchin, Bogdanoff & Stern, LLP, serve as the Debtor's counsel. The petition was signed by Dave Wilbrecht, town manager. MARLOW MANOR: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Marlow Manor Downtown, LLC 337 East 4th Avenue Suite 1 Anchorage, AK 99501 Bankruptcy Case No.: 12-00421 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Alaska (Anchorage) Debtor's Counsel: David H. Bundy, Esq. DAVID H. BUNDY, PC 310 K Street, Suite 200 Anchorage, AK 99501 Tel: (907) 248-8431 Fax: (907) 248-8434 E-mail: dhb@alaska.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/akb12-00421.pdf The petition was signed by Marc A. Marlow, manager. MASZERA CORPORATION: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: The Maszera Corporation 29690 Foskey Lane Delmar, MD 21875 Bankruptcy Case No.: 12-22665 Chapter 11 Petition Date: July 8, 2012 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: Maurice Carroll Williams, Esq. LAW OFFICE OF MAURICE C. WILLIAMS P.O. Box 11396 Baltimore, MD 21239 Tel: (443) 676-7049 Fax: (443) 378-7405 E-mail: MauriceCWESQ@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Dmytro Maszera, president. MELK LOFTS: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Melk Lofts, LLC P.O. Box 31081 San Francisco, CA 94131 Bankruptcy Case No.: 12-32047 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Matthew D. Metzger, Esq. BELVEDERE LEGAL, APC 605 Market St. #505 San Francisco, CA 94105 Tel: (415) 513-5980 E-mail: mmetzger@belvederelegal.com Scheduled Assets: $1,242,894 Scheduled Liabilities: $2,294,055 A copy of the Company's list of its 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb12-32047.pdf The petition was signed by Christopher Kevin Stephens, president. MERRILL CORP: Moody's Confirms 'Caa3' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service confirmed all existing ratings for Merrill Corporation following the extension of the company's revolver maturity to July 20 from June 29. Given imminent debt maturities and a weak liquidity position, Moody's has also appended an /LD indicator to Merrill's Ca Probability of Default Rating ("PDR") to designate a limited default on the first lien credit facilities associated with the extended maturity. The rating outlook is stable. Actions: Issuer, Merrill Corporation Corporate Family Rating. confirmed at Caa3 Probability of Default Rating, confirmed at Ca, /LD designation appended Outlook, revised to Stable from Rating Under Review Issuer, Merrill Communications LLC First Lien Senior Secured Credit Facilities, confirmed at Caa1 (LGD2 18%) Second Lien Senior Secured Credit Facilities, confirmed at Ca (LGD4 65%) Outlook, revised to Stable from Rating Under Review Ratings Rationale According to Moody's analyst Ben Nelson, "While we view the revolver extension as a default under Moody's definition of default, it is also a sign of lender willingness to work towards a longer-term solution." Lenders agreed to waive certain events of default and extended the revolver maturity to July 20, 2012 in exchange for an increase in pricing and a reduction in the revolving credit commitment to $34 million from $40 million. Merrill continues to face an imminent revolver maturity, as well as the maturity of $374 million of first lien term loans in December 2012 and $215 million of second lien term loans and accrued payment-in-kind interest in November 2013. The company remains current on its interest payments and generated positive free cash flow for the twelve months ended October 31, 2011, and, based on preliminary financial statements, for the twelve months ended April 30, 2012 Refinancing risk is the principal factor influencing Merrill's Caa3 Corporate Family Rating ("CFR") and Ca /LD PDR. The Caa3 CFR is positioned one notch above the PDR to reflect Moody's expectation for above average recovery in the event Merrill determines a debt restructuring represents the best solution to its refinancing needs. The stable rating outlook incorporates Moody's view that operating performance will not deteriorate from current levels. The outlook also reflects Moody's view that the ratings are positioned appropriately to reflect both the refinancing risk in the current capital structure and prospects for above average recovery in the event of a restructuring. Moody's could downgrade the ratings if performance is expected to deteriorate to the extent that Moody's no longer expect above average recovery. Conversely, Moody's could upgrade the ratings if Merrill refinances successfully its upcoming debt maturities. The principal methodology used in rating Merrill Corporation was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in St. Paul, Minnesota, Merrill Corporation provides a range of document and data management services, litigation support, branded communication programs, fulfillment, imaging, and printing services organized along two main business segments: Legal and Financial Transaction Services ("LFTS") and Marketing and Communication Solutions ("MCS"). The company generated $788 million of revenue for the twelve months ended October 31, 2011, and, based on preliminary financial statements, $797 million of revenue for the twelve months ended April 30, 2012. MF GLOBAL: CRT Offers Sellers Guaranteed Recoveries --------------------------------------------------- CRT Special Investments LLC disclosed that sellers of certain MF Global trade claims will be provided with guaranteed recoveries in its weekly auctions. CRT Special Investments' weekly auctions will provide holders of 4d, 30.7, securities account, and UK claims the opportunity to auction their claims for the highest price, while guaranteeing minimum recoveries, subject to acceptable documentation, including a Notice of Determination, and weekly limits on aggregate claim guarantees. 4d Domestic Customer Account Claims: -- $0.93 for claims under $100,000 -- $0.945 for claims over $100,000 30.7 Foreign Account Claims: -- $0.74 for claims under $100,000 -- $0.75 for claims over $100,000 UK Non Segregated Account Claims: $0.62 UK Segregated Account Claims: $0.84 "No other auction of MF Global trade claims has guaranteed a minimum price for claims holders," said Joe Sarachek, Managing Director of CRT Special Investments. "Our aim is to leverage the auction process, together with our insight into the claims trading market and thorough understanding of the ongoing bankruptcy proceedings, to provide guaranteed recoveries and liquidity for MF Global customers." CRT Special Investments, which has been a leading participant in the MF Global trade claims market, has the expertise and knowledge of the market not only to offer liquidity to customers looking to sell, but also to structure loans and settlements for those customers who are not yet able to sell their claims. CRT Special Investments is an affiliate of CRT Capital Group LLC, a Stamford- based broker-dealer that has serviced institutional customers for more than 20 years. CRT provides in-depth research on the MF Global bankruptcy proceedings and claims trading market. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MONTECITO AT MIRABEL: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Montecito At Mirabel Development, L.L.C. c/o DeConcini McDonald Yetwin & Lacy PC 6909 East Main Street Scottsdale, AZ 85251 Tel: (480) 398-3100 Bankruptcy Case No.: 12-15110 Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Shelton L. Freeman, Esq. DECONCINI MCDONALD YETWIN & LACY, PC 6909 East Main Street Scottsdale, AZ 85251 Tel: (480) 398-3100 Fax: (480) 398-3101 E-mail: tfreeman@lawdmyl.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Megan Johnson, manager. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Weston Ranch Development, LLC 09-33901 12/31/09 The Landing at Reid's Ranch 09-33903 12/31/09 Development, LLC NAVISTAR INT'L: Liquidity Concerns Cue Fitch to Lower IDR to 'B+' ----------------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative the long-term IDR for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) to 'B+' from 'BB-'. Additionally, Fitch has downgraded NAV's senior subordinated convertible debt to 'B-' from 'B'. Fitch has also affirmed NAV's and NFC's senior unsecured debt at 'BB-'. The Rating Outlook is Negative. The downgrade reflects increased concerns about NAV's free cash flow and liquidity which Fitch expects will be lower than originally anticipated in the near to medium term. This is due to the cost of implementing a change to NAV's engine strategy announced on July 6, 2012. Manufacturing debt/EBITDA increased materially in the first half of 2012, to slightly above 4 times (x) at April 30, 2012, from 2.4x at Oct. 31, 2011. Debt/EBITDA could remain elevated compared to recent levels. NAV announced earlier today it will incorporate SCR technology in its engines to meet 2010 U.S. emissions regulations. The change to NAV's engine strategy is intended to address the delayed certification of its EGR-only engine by the Environmental Protection Agency (EPA). NAV expects to begin producing heavy duty engines with SCR technology in early 2013. NAV has not yet provided details about costs to develop the engines or when the transition will be complete, including any required certification of the engines by the EPA. The Negative Rating Outlook reflects concerns about NAV's ability to deliver trucks during the transition period. This will also be subject to the availability of emissions credits and NAV's use of non-conformance penalties (NCP). Emissions credits are expected to be depleted in 2012 for heavy duty engines and in 2013 for medium duty engines. NAV is discussing its engine plans with the EPA and the California Air Resources Board (CARB). However, the outcome has yet to be determined and may be subject to legal review. In June 2012, the U.S. Court of Appeals invalidated the EPA's Interim Final Rule allowing NAV to use NCP's. However, the ruling has not yet been put into effect. Other rating concerns include low margins, a large pension obligation and execution risks associated with the engine transition. Another rating concern is possible distraction regarding NAV's efforts to address engine quality issues that contributed to high warranty charges in the first half of fiscal 2012. Challenges surrounding NAV's engine strategy have contributed to a delayed recovery of NAV's market share of medium and heavy duty trucks in the U.S. and Canada. NAV's ratings may be at risk for an additional downgrade if warranty costs don't stabilize and eventually improve or if free cash flow doesn't recover sufficiently from the first half of 2012 to maintain NAV's liquidity at a stable level. Another possible negative rating factor is if NAV's integration strategy and expansion overseas fail to produce improved margins. In addition, activist investors have accumulated approximately 25% of NAV's common shares in recent months which introduces some uncertainty about long term operating and financial policies. Conversely, Fitch may revise NAV's Rating Outlook to stable if they are able to maintain production levels through the use of emissions credits and NCP's. The ratings and Outlook could also be supported if engine quality improves materially, operating margins improve, NAV manages commodity costs effectively, and the company's market share recovers. The rating of 'BB-' on NAV's senior unsecured debt is one notch above the IDR and reflects modest recovery prospects in a distressed scenario. The 'B-' rating for senior subordinated convertible notes reflects its low priority relative to NAV's senior debt and its low expected recovery in a distressed scenario. Large warranty charges were largely responsible for a material loss in the first half of 2012. Other factors that contributed to these results included higher commodity costs for steel and rubber and the negative impact of lower sales of military trucks and parts. Other factors included weak demand in Brazil associated with engine pre-buying in 2011, and a transition to contract engine manufacturing for a large customer in Brazil. NAV also incurred start-up and restructuring costs in certain businesses and relocated its headquarters as part of the engineering integration. Fitch expects costs related to the change in NAV's engine strategy could result in negative manufacturing free cash flow (FCF) in the second half of fiscal 2012. This compares to Fitch's previous expectation that free cash flow would be break-even or slightly positive. The negative impact on manufacturing FCF could continue into fiscal 2013 until the SCR transition is complete. Manufacturing FCF in the first half of 2012 was negative $388 million. This figure reflects low margins and capital expenditures which remain higher than average as NAV integrates its engineering functions, invests in a research center and engine testing facility, and realigns other parts of its business. NAV's manufacturing FCF is also constrained by recurring pension contributions. NAV's net pension obligations totaled $1.8 billion (approximately 57% funded) at the end of 2011. As of April 30, 2012, NAV expected to contribute $190 million to the plans in 2012. Of this amount, $82 million was contributed during the first half of the year. Between 2013 and 2015, NAV estimated it would be required to contribute at least $210 million annually. However, NAV has indicated that required contributions could be less than these estimates based on recent pension legislation. Liquidity is currently adequate. However, it may become a concern if performance doesn't improve, or if temporary cash requirements, such as SCR-related costs, or higher working capital requirements for used-truck inventories, do not reverse. At April 30, 2012, NAV's liquidity (excluding NFC) included $681 million of cash and marketable securities. This was down from nearly $1.2 billion at Oct. 31, 2011, and $192 million of availability under a $355 million asset-based credit facility ('ABCL') that matures in 2016. In June 2012, NAV borrowed an additional $138 million under the ABCL. Liquidity is offset by $230 million of manufacturing debt due within one year. NAV repurchased a combined $200 million of shares in fiscal 2011 and the first half of fiscal 2012. Fitch anticipates further repurchases will be minimal in the near to medium term until NAV resolves concerns about engine certification and low margins. Fitch views NFC as neutral to the rating. NFC's financial performance is generally in line with Fitch's expectations. Profitability has declined slightly in the six-months ended April 30, 2012 due to the run-off of NFC's retail portfolio. The retail balance is expected to decline further over the next several years. This is due to NFC's agreement with GE Capital in 2010 as the primary funding source for the company's retail portfolio. Asset quality continues to improve and provisioning volatility has declined as NFC focuses on its relatively lower risk wholesale portfolio. NFC's capitalization is consistent with similarly rated captives. Fitch expects leverage to improve and stay below historical levels due to reduced financing needs as a result of NFC's agreement with GE Capital. In the fourth quarter of 2011, NFC completed a significant refinancing of its credit facilities. Fitch believes the refinancing of its credit facilities may mitigate any potential near-term liquidity concerns. Due to NFC's close operating relationship and importance to the parent, its ratings are directly linked to those of the ultimate parent. The relationship is governed by the Master Intercompany Agreement. Also, there is a requirement referenced in NFC's credit agreement requiring Navistar, Inc. or NAV to own 100% of NFC's equity at all times. Fitch's ratings cover approximately $2 billion of debt at NAV and $2.5 billion of outstanding debt at its Financial Services segment, the majority of which is at NFC, as of April 30, 2012. Fitch has taken the following rating actions for NAV and NFC: Navistar International Corporation -- Long-term IDR downgraded to 'B+' from 'BB-'; -- Senior unsecured notes affirmed at 'BB-'; 'RR3' Recovery Rating assigned ; -- Senior subordinated notes downgraded to 'B-' from 'B'; 'RR6'Recovery Rating assigned . Cook County, Illinois -- Recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 affirmed at 'BB-'. Illinois Finance Authority (IFA) -- Recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 affirmed at 'BB-'. Navistar Financial Corporation -- Long-term IDR downgraded to 'B+' from 'BB-'; -- Senior unsecured bank credit facilities affirmed at 'BB-'; 'RR3' Recovery Rating assigned. NERIUM BIOTECHNOLOGY: Posts $1.5 Million Net Loss in 1st Quarter ---------------------------------------------------------------- Nerium Biotechnology, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.54 million on $689,293 of revenue for the three months ended March 31, 2012, compared with a net loss of $219,190 on $124,785 of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1.51 million in total assets, $931,302 in total liabilities, and stockholders' equity of $573,725. MSCM LLP, in Toronto, Ontario, expressed substantial doubt about Nerium's ability to continue to as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has experienced operating losses since inception and is dependent upon future financing. A copy of the Form 10-Q is available for free at: http://is.gd/YVTcnm San Antonio, Texas-based Nerium Biotechnology, Inc., is a biotechnology company involved in the development of Nerium oleander-based products for the treatment of certain forms of proliferative diseases and viral infections. NETWORK CN: Had $623,400 Net Loss in First Quarter -------------------------------------------------- Network CN Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $623,445 on $406,775 of revenues for the three months ended March 31, 2012, compared with a net loss of $821,935 on $396,703 of revenues for the same period last year. The Company's balance sheet at March 31, 2012, showed $1.17 million in total assets, $6.84 million in total liabilities, and a stockholders' deficit of $5.67 million. As reported in the TCR on April 18, 2012, Baker Tilly Hong Kong Limited, in Hong Kong SAR, expressed substantial doubt about Network CN'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 has incurred net losses of $2,102,548, $2,603,384 and $37,383,361 for the years ended Dec. 31, 2011, 2010, and 2009, respectively. "Additionally, the Company used net cash in operating activities of $388,278, $1,552,403 and $5,428,273 for the years ended Dec. 31, 2011, 2010, and 2009, respectively. "As of Dec. 31, 2011, and 2010, the Company recorded stockholders' deficit of $5,056,418 and $3,524,536 respectively. A copy of the Form 10-Q is available for free at: http://is.gd/UiE7qH Causeway, Hong Kong-based Network CN Inc. operates in one single business segment: Media Network, providing out-of home advertising services. NEW SALEM: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------- Debtor: New Salem Missionary Baptist Church of Tampa, Inc. 405 North Oregon Avenue Tampa, FL 33606 Bankruptcy Case No.: 12-10438 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Sheila D. Norman, Esq. NORMAN AND BULLINGTON, P.A. 1905 West Kennedy Boulevard Tampa, FL 33606 Tel: (813) 251-6666 Fax: (813) 254-0800 E-mail: sheila@normanandbullington.com Scheduled Assets: $880,412 Scheduled Liabilities: $1,238,596 A copy of the Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-10438.pdf The petition was signed by Rufus Spencer, president. NUSTAR LOGISTICS: Moody's Reviews Ratings for Possible Downgrade ---------------------------------------------------------------- Moody's Investors Service placed the ratings of NuStar Logistics, L.P. under review for downgrade. This follows NuStar's announcement on July 6, 2012 that it has requested and obtained a waiver of a covenant default for the leverage ratio on their revolving credit facility. Ratings Rationale "Investment-grade companies are rarely required to seek a waiver of a leverage covenant default and be obliged to divest a business in which it has made significant investment to ensure future compliance," said Harry Schroeder Moody's Vice President. NS procured the waiver for the leverage ratio in the revolving credit that it had just executed in May 2012. Asphalt non- performance and a sizeable trading loss due to the outside of normal practice of lifting of hedges in fuels collapsed EBITDA and precipitated the breach. The waiver was granted but the fundamental businesses remain unchanged and all segments have suffered from lack of meaningful growth in operating income and EBITDA. To partially address this, NS has entered into a JV of its asphalt business. Moody's views it as a de facto distressed sale of Asphalt with a limit of about a further $100 million of capital investment that may be required to support ongoing working capital requirements. NS retains a 50% interest but Moody's gives it no value in Moody's rating. Deconsolidation allows the removal of the negative LTM asphalt EBITDA for covenant purposes and removes a large amount of working capital that NS currently carries on its balance sheet. This should address covenant compliance but, unfortunately, does not retire the entirety of capital invested in the asphalt business. This stranded capital has significant ongoing carrying cost which is economically dilutive and burdensome to the storage and transport businesses; businesses that do not generate high returns on capital in the first place. Going forward, it is not clear whether the company is now focused on optimizing the cash flows and returns on its storage and transportation businesses or if it will continue a high-growth assets strategy. Moody's is adopting a wait and see position but look for demonstrated results derived from the existing asset base that bolster cash flow and are proportional to the last three- years' investment. This will allow debt/EBITDA and returns on capital to equilibrate to the level of investment-grade peers. Two other observations: a) the company may choose to undertake material non-maintenance investment in assets and "grow into" a debt/EBITDA metric. This tack may or may not be successful but Moody's views the immediacy of improved cash flow generation and improving returns on invested capital, not 'to-come' projections and opportunities, as linchpins to maintaining the investment- grade; and b) the insiders of NS's and NuStar GP Holdings own about 3% of the LP and 19% of the GP (30%/70% value split). The GP holds the incentive distribution rights in NS. At present, the GP receives 23% of NS cash distribution while owning 14% of the LP units. A case can be made that investment and growth is more important to the insiders than the maintenance of an investment grade rating. That is why Moody's has placed the rating under reveiw for downgrade; the actions of the next few months will be indicative of the tack the company wishes to follow. The Baa3 senior unsecured rating reflects NS's breadth of midstream assets in the US and abroad and the long established and essential role of that portfolio within the United States' energy infrastructure. In order for the outlook to return to stable, the company will need to bolster both EBIT and EBITDA to a level supporting all capital employed and have debt / EBITDA at or below 4.5x by year-end 2012 and in the 4.0x range on an ongoing basis. It must also bring its return on capital back into line with investment-grade peers. The ratings may be downgraded if leverage is not significantly reduced from current levels, after adjusting for the JV debt deconsolidation, by year-end. The driver of this will need to be EBITDA growth not equity issuance. The principal methodology used in rating NuStar was the Global Midstream Energy Industry Methodology published in December 2010. PARADISE DREAM: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Paradise Dream Consultants LLC 529 NE 86th Street Seattle, WA 98115 Bankruptcy Case No.: 12-17070 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Timothy W. Dore Debtor's Counsel: David C. Smith, Esq. LAW OFFICES OF DAVID SMITH, PLLC 201 St. Helens Avenue Tacoma, WA 98402 Tel: (253) 272-4777 E-mail: ecf@davidsmithlaw.com Scheduled Assets: $3,501,275 Scheduled Liabilities: $730,000 A copy of the Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wawb12-17070.pdf The petition was signed by Tim Prekaski. PARAMJEET MALHOTRA: Judge Dismisses FCA Kickback Claims ------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that U.S. District Judge James L. Robart on Monday dismissed a False Claims Act suit brought by married real estate managers, saying their claims that their bankruptcy trustee undervalued their property as part of a kickback scheme were not pled specifically enough. Bankruptcy Law360 relates that Judge Robart gave the couple, Paramjeet and Sunita Malhotra, leave to file more specific complaint within 20 days. Their qui tam suit alleges that the trustee, along with others including RE/MAX Eastside Brokers Inc., undervalued the Malhotra's properties. PARTY CITY: S&P Assigns 'B' Corporate Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Elmsford, N.Y.-based Party City Holdings Inc. (existing parent company to Amscan Holdings Inc.). The outlook is stable. "At the same time, we assigned a 'B' issue-level rating to Party City's proposed senior secured $1.05 billion term loan due 2019," S&P said. "Our '4' recovery rating on the term loan indicates our expectation of average (30%-50%) recovery in the event of a default. The company will also have access to a proposed $400 million asset-based lending (ABL) facility due 2017, which is unrated. All ratings are subject to review of final documentation," S&P said. "All ratings on Amscan remain on CreditWatch, where we placed them with negative implications on June 18, 2012, following the company's announcement that Thomas H. Lee Partners would acquire it in a leveraged buyout. Amscan will be merged into its existing parent company, Party City, at the close of the transaction. At that point we will lower all of our ratings on Amscan by one notch, including the corporate credit rating to 'B' from 'B+'," S&P said. "We will then withdraw all existing ratings on Amscan once the acquisition has closed and all outstanding debt at Amscan is repaid. Pro forma for the transaction close, which we expect to occur by the end of July 2012, approximately $2.2 billion of total adjusted debt will be outstanding at Party City," S&P said. "The assignment of ratings on Party City and the expected downgrade of Amscan Holdings Inc. reflect the increase in leverage at Party City resulting from the proposed acquisition," said Standard & Poor's credit analyst Stephanie Harter. "We estimate the transaction will weaken Party City's credit metrics considerably, and believe the leveraged buyout indicates their financial policy has become very aggressive. We also factor in Amscan's history of using leverage to fund dividends, ownership changes, and acquisitions," S&P said. Standard & Poor's had previously expected Amscan's credit measures to improve modestly and that leverage would remain closer to 5x. "However, we estimate that pro forma total adjusted leverage for Party City at the transaction's close will be over 7x (including our adjustments for operating leases)," S&P said. Party City designs, manufactures, and distributes party goods, also operating its mostly company-owned Party City, Halloween City, and Party Packagers retail businesses in the U.S. and Canada. PATRIOT COAL: Receives Court OK of $802 Million DIP Financing ------------------------------------------------------------- Patriot Coal Corporation disclosed that the Bankruptcy Court for the Southern District of New York granted Patriot interim approval of its $802 million Debtor-in-Possession financing from Citigroup Global Markets Inc., Barclays Bank PLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers, and granted Patriot interim authorization to access immediately $677 million of the DIP financing. The DIP financing and cash from the Company's ongoing operations will provide Patriot with financial flexibility to operate its business in the ordinary course, including funding post-petition payments to suppliers and meeting other customary business obligations, during the reorganization process. In addition, the Bankruptcy Court granted interim authorization for Patriot to continue to pay wages and provide health care and other benefits to employees, use existing cash management systems, and take certain other actions to help ensure that Patriot's mining operations and customer shipments continue in the ordinary course. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal Corporation (NYSE: PCX) and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. The case has been assigned to the Honorable Shelley C. Chapman. PEGASUS RURAL: To Auction Spectrum Assets & Leases in August ------------------------------------------------------------ According to a notice posted on the Web site of law firm Elliott Greenleaf, certain debtor subsidiaries of Xanadoo Spectrum LLC, which Elliott Greenleaf represents in chapter 11 cases filed in Delaware, have spectrum assets for sale and the Court has approved a global settlement with their pre-petition senior secured creditor. The United States Bankruptcy Court for the District of Delaware entered an order on June 29, 2012 approving the bidding procedures for the sale of the Company's 700 MHz spectrum assets and 2.5 GHz spectrum leases. The 700 MHz assets comprise 23 licenses for the commercial use of 2 MHz in the A Block of the 700 MHz frequency band, covering approximately 164 million people. The geographic regions within the licensed areas include substantially all of the East Coast and Midwest, most of the West Coast, as well as Hawaii, Puerto Rico and the American Possessions. The 2.5 GHz assets comprise 40 leases of Educational Broadband Service licenses in the 2.5 GHz band, covering approximately [10] million people. The geographic regions within the licensed areas include primarily rural areas Arkansas, Illinois, Kansas, Louisiana, Minnesota, Missouri, Nebraska, Oklahoma and Texas. Parties interested in the 2.5 GHz leases are encouraged to bid on all or any part of the 2.5 GHz leases. The Bankruptcy Court has scheduled an auction for these assets to take place on August 20, 2012. The Company has entered into a stalking horse agreement with its sole senior secured creditor, Beach Point Capital, which consists of a credit bid in the amount of $30 million for the 700 MHz assets and $500,000 for the 2.5 GHz leases. The Company is soliciting all interested parties to submit materials required to participate in the auction by the August 10, 2012 deadline. The detailed schedule is as follows: Deadline to Meet August 10, 2012 Participation Requirements Deadline to Submit Proof August 15, 2012 of Financial Ability to Perform at 4:00 p.m. (Eastern) Deadline for Debtors to Notify August 15, 2012 Potential Bidders of the Minimum Overbid Deadline for Debtors to Cancel an August 15, 2012 Auction Deadline to Object to Sale August 17, 2012 at 4:00 p.m. (Eastern) Deadline to Notify Designation August 17, 2012 of Qualified Bidder at 6:00 p.m. (Eastern) Auction and Deadline to Submit August 20, 2012 Qualified Bid at 10:00 a.m. (Eastern) Sale Hearing August 22, 2012 at 10:00 a.m. (Eastern) About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. NHB Advisors Inc. is their financial advisors. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. The Chapter 11 filing followed the maturity in May 2011 of almost $60 million in secured notes owing to Beach Point Capital Management LP. The Court denied a motion by the secured noteholders to dismiss the Chapter 11 case and appoint a Chapter 11 trustee. The companies filed a proposed reorganization plan in February predicting sale of licenses in the 700 megahertz spectrum would pay all secured and unsecured creditors in full, with interest. In a separate filing, the companies said the assets will be turned over to secured lenders if there is neither a lender nor a buyer to finance a plan. The plan will be funded either by a new loan or by selling the business and the assets. PJ FINANCE: Completes Chapter 11 Plan of Reorganization ------------------------------------------------------- PJ Finance Company LLC has successfully completed a Chapter 11 plan of reorganization. The investment banking group of Carl Marks Advisory Group LLC served as financial advisor to the Official Committee of Unsecured Creditors (UCC). PJ Finance sought protection under Chapter 11 due to pressures from declining occupancy and cash flow. At the time of the filing, more than 1,700 units were offline and occupancy rates at near historic lows. Through the Chapter 11 process, the Debtors worked in conjunction with the UCC and Torchlight Loan Services LLC, the special servicer of $475 million senior mortgage notes, to rehabilitate the properties and right size their capital structure. An auction with financing support was formulated to maximize value and select a sponsor for a consensual plan of reorganization. Following a highly competitive and extensive auction, the existing equity owners of the properties, in conjunction with affiliates of Starwood Capital, became the sponsors of the plan of reorganization under which $22.5 million in new capital was invested along with the assumption of mortgage notes. Notably, the plan also makes payment to all general unsecured creditors in full. "The Chapter 11 process and the cooperation of all the stakeholders yielded substantial value recovery, a testament to the possibilities available to creditors in a dynamic bankruptcy process," said Christopher K. Wu, partner, Carl Marks Advisory Group. "Carl Marks showed us outstanding creativity, a strong voice of advocacy and persistence in achieving this remarkable result," said Alberto Carrizal, chairman of the Unsecured Creditors Committee. The Carl Marks team was led by Christopher Wu and Scott Webb. Mark Power and Joseph Orbach of Hahn & Hessen served as counsel to the UCC. About PJ Finance Chicago, Illinois-based PJ Finance Company, LLC, owns apartment communities in the states of Arizona, Florida, Georgia, Tennessee and Texas. PJ Finance owns or holds ownership interests in 32 apartment communities that collectively have more than 9,500 rentable units. It has 20 apartment locations in Texas, and the remaining 12 in Arizona, Florida, Georgia and Tennessee. The day- to-day operations of the portfolio are managed by a third party, WestCorp Management Group One, Inc. PJ Finance and various affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10688) on March 7, 2011. Matthew L. Hinker, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware; and Michelle E. Marino, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware, serve as bankruptcy counsel. Ernst & Young LLP serves as the Debtors' independent auditors. Kurtzman Carson Consultants, LLC, is the Debtors' claims and notice agent. An official committee of unsecured creditors has been named in the case. Christopher A. Jarvinen, Esq., Janine M. Cerbone, Esq., Joseph Orbach, Esq., and Mark T. Power, Esq., at Hahn & Hessen LLP, in New York, N.Y. represent the committee as lead counsel. Kimberly A. Brown, Esq., Matthew B. McGuire, Esq., and Richard Scott Cobb, Esq., at Landis Rath & Cobb, in Wilmington, Del., serve as the Committee's local counsel. The Debtors estimated total assets of at least $275 million (estimated value of portfolio securing loan to Bank of America) and total debts of at least $479 million ($475 million owed to BofA, $4.4 million trade debt). The Debtors emerged from Chapter 11 protection May 11, 2012. PORT WASHINGTON: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Port Washington Mobil, LLC 1880 N. Wisconsin Street Port Washington, WI 53074 Bankruptcy Case No.: 12-30160 Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Margaret Dee McGarity Debtor's Counsel: Albert Solochek, Esq. HOWARD, SOLOCHEK & WEBER S.C. 324 East Wisconsin Avenue Milwaukee, WI 53202 Tel: (414) 272-0760 E-mail: alsolochek@hswmke.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven largest unsecured creditors is available for free at: http://bankrupt.com/misc/wieb12-30160.pdf The petition was signed by Sadhana Singh, managing member. PREMIER GOLF: Disputed Assets Belong to Estate, Not Ostronics ------------------------------------------------------------- Bankruptcy Judge Dennis R. Dow allowed the Chapter 11 Trustee of Premier Golf Missouri, LLC, to sell real and personal property free and clear of liens, interests and encumbrances over the objection of Martin P. Ostronic, Carla B. Ostronic, Double "O" Development, LLC, KAH Legacy Holding Company, LLC and M & G Contractors, LLC. The Ostronic Group asserted that a significant amount of its personal property was still located at the Golf Club and should not be subject to the sale. The Disputed Assets include construction and kitchen equipment, office furniture, and decorative accessories. Judge Dow said under Missouri law, the Chapter 11 Trustee made a prima facie case that the Debtor owned and controlled the Disputed Assets at the time of the bankruptcy filing and the Ostronic Group offered nothing to rebut the presumption other than inconclusive documents and inconsistent testimony. The Debtor possessed, maintained, repaired and insured them, essentially exercising all the incidents of ownership. Accordingly, the Disputed Assets shall be deemed sold to Armed Forces Bank, N.A., the successful bidder, as of the entry date of the Order approving the sale. The Court also denied the Ostronic Group's Motion for Relief from Stay. Martin Ostronic is in the construction and development business. Beginning in 2004, Mr. Ostronic was responsible for building the Golf Club, modifying the golf course, and working with the general manager to assist with operations. To that end, he and the Ostronic Group purchased a number of items for use at the Golf Club (e.g., furniture, fitness equipment, kitchen appliances), and invested a substantial amount of capital and operational funding. Besides being a principal of the Golf Club, Mr. Ostronic eventually took over the general manager function. Between the Debtor's first bankruptcy and the second one, Mr. Ostronic worked with the Golf Club's lender to reduce its debt and continued his efforts to manage the property. Shortly after the second bankruptcy filing, the Court entered an order appointing the Chapter 11 Trustee. The Chapter 11 Trustee spent several months addressing the Debtor's cash flow needs and attempting to maintain the Golf Club for the benefit of the Debtor's members, vendors and employees. She ultimately concluded that the Debtor's current operations and financial affairs were below par, and the Debtor had no ability to reorganize or effectuate a plan of reorganization. Consequently, the Trustee filed a motion to sell assets in February 2012, including real property (golf course and clubhouse), intellectual property, assignable rights and permits, and all machinery, equipment (including all office equipment), trade fixtures, tools, dies, motor vehicles and furniture. At a hearing held on March 1, 2012, the Chapter 11 Trustee announced that an auction had been conducted and Armed Forces Bank was the successful bidder. By Order dated March 8, 2012, the Court approved the sale of the Debtor's assets to the Bank subject to the Court's determination of what interest, if any, the Ostronic Group had in the Disputed Assets. A copy of the Court's July 6, 2012 Memorandum Opinion is available at http://is.gd/fIGvbmfrom Leagle.com. About Premier Golf Missouri Kansas City, Missouri-based Premier Golf Missouri LLC owns and operates an 18-hole golf course and clubhouse located in Clay County, doing business as the Staley Farms Golf Club. Premier Golf Missouri filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case No. 11-41669) on April 12, 2011. Judge Dennis R. Dow oversees the case. Donald G. Scott, Esq., at McDowell Rice Smith & Buchanan, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. The petition was signed by Jon Vodehnal, general manager. The Debtor's principal assets consist of the Golf Club, the real estate on which the Golf Club is located, and the revenues the Golf Club generates. The Debtor first filed for Chapter 11 bankruptcy in September 2009. That case was dismissed under 11 U.S.C. Sec. 1112 for cause in February 2010. RACKWISE INC: Posts $2.2 Million Net Loss in Q1 2012 ---------------------------------------------------- Rackwise, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.23 million on $684,149 of revenues for the three months ended March 31, 2012, compared with a net loss of $899,127 on $536,475 of revenues for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1.06 million in total assets, $3.53 million in total liabilities, and a stockholders' deficit of $2.47 million. As reported in the TCR on April 9, 2012, Marcum LLP, in New York, N.Y., expressed substantial doubt about Rackwise, Inc.'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 has not achieved a sufficient level of revenues to support its business and has suffered recurring losses from operations. A copy of the Form 10-Q is available for free at: http://is.gd/J6XcGh Rackwise, Inc., is a software development, sales and marketing company within the markets of IT infrastructure, data center monitoring, management and optimization, data center cost efficiency and green data centers. The Company's executive offices are currently located in San Francisco, California, and the Company has a software development and data center in the Research Triangle Park in Raleigh, North Carolina. The Company is in the process of relocating our executive offices to Folsom, California and expanding its software development center. RG STEEL: To Face Air Pollution Suit From U.S. Government --------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that U.S. District Judge John Preston Bailey on Monday allowed the U.S. government to move forward with a lawsuit against an RG Steel LLC unit for alleged violations of air pollution and hazardous waste laws. Bankruptcy Law360 relates that Judge Bailey found that the suit targeting RG Steel Wheeling LLC is exempt from the automatic stay in the bankruptcy under the police and regulatory powers exception in Section 362(b)(4) of the Bankruptcy Code. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. RIDGE VIEW: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Ridge View Farm LLC 400 Totoket Road Northford, CT 06472 Bankruptcy Case No.: 12-31617 Chapter 11 Petition Date: July 6, 2012 Court: U.S. Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN, P.C. 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ctb12-31617.pdf The petition was signed by Joseph Spezzano 3rd, member. RITZ CAMERA: Seeks to Sell Off Its Assets at Auction ---------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that Ritz Camera & Image LLC is asking the court's permission to hold a September auction for the 137 camera stores that will be left in the chain after it holds store-closing sales at 82 locations. Amanda Bransford at Bankruptcy Law360 reports that Ritz Camera & Image is seeking a stalking horse bidder as it looks to auction itself as a going concern by early September, according to documents the company filed Friday in Delaware bankruptcy court. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. TAKE FLIGHT: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Take Flight LLC 4550 NW Newberry Hill Road, Suite 202 Silverdale, WA 98383 Bankruptcy Case No.: 12-17009 Chapter 11 Petition Date: July 5, 2012 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Debtor's Counsel: Norman K. Short, Esq. GSJONES LAW GROUP, P.S. 1155 Bethel Avenue Port Orchard, WA 98366 Tel: (360) 876-9221 E-mail: norm@gsjoneslaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wawb12-17009.pdf The petition was signed by William Wright, manager. SECURE INTERNET: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Secure Internet Commerce Network, Inc. dba SicommNet P.O. Box 33562 San Diego, CA 92103 Bankruptcy Case No.: 12-09553 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Louise DeCarl Adler Debtor's Counsel: Craig E. Dwyer, Esq. 8745 Aero Drive, Suite 301 San Diego, CA 92123 Tel: (858) 268-9909 Fax: (858) 268-4230 E-mail: craigedwyer@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company?s list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/casb12-09553.pdf The petition was signed by Michael T. Elliott, chief executive officer. SIGNATURE GROUP: J. McIntyre Faults Current Board for Woes ---------------------------------------------------------- James A. McIntyre, the largest individual stockholder of Signature Group Holdings, Inc. has delivered a letter to Signature Group stockholders in connection with the 2012 Annual Meeting scheduled to be held on July 24, 2012. In the letter, Mr. McIntyre and the GOLD Card Nominees highlight, among other things, the current Board's effort to deflect responsibility for the massive destruction in stockholder value and other failures under the current Board and management team, including (i) a flawed acquisition strategy, (ii) an inability to capitalize on the Company's NOL's and (iii) the failure to serve stockholders in the areas of transparency, executive compensation and corporate governance. In addition, Mr. McIntyre and the GOLD Card Nominees detailed their plan for creating value and being accountable. They also set the record straight regarding Mr. McIntyre's service at the Company and address the misleading assertions made in recent communications sent out by the Signature Board. Mr. McIntyre urges stockholders to vote the GOLD proxy card to elect the five independent, experienced and highly qualified GOLD Card Nominees -- J. Hunter Brown, Barton I. Gurewitz, James A. McIntyre, Robert A. Peiser and Joyce White. 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. SINCKLER INC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Sinckler, Inc. 4459 Matilda Avenue P.O. Box 188 Bronx, NY 10470 Bankruptcy Case No.: 12-12889 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Martin Glenn Debtor's Counsel: Arlene Gordon-Oliver, Esq. ARLENE GORDON-OLIVER, P.C. Westchester Financial Center 50 Main Street, Suite 1000 White Plains, NY 10606 Tel: (914) 682-2113 Fax: (914) 682-2114 E-mail: ago@gordonoliverlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Geoffrey Sinckler, president. SINO-FOREST: Creditors to Acquire Substantially All Assets ---------------------------------------------------------- Sino-Forest Corporation is proceeding to implement a restructuring transaction pursuant to which its creditors will acquire substantially all of the assets of the Company in accordance with the terms described in the Restructuring Support Agreement entered into by certain noteholders and the Company on March 30, 2012. Pursuant to the Restructuring Transaction, Sino-Forest will transfer substantially all of its assets, other than certain excluded assets, to a newly formed entity owned and controlled by its creditors in full and final settlement of all claims against the Company. As announced on June 8, 2012, holders of more than 72% of the aggregate principal amount of the Company's outstanding notes (with more than 66.67% of the principal amount of each of the four series of Notes) have agreed to be parties to the Support Agreement. Pursuant to certain revised deadlines under the Support Agreement, Sino-Forest is required to file a plan under the Companies' Creditors Arrangement Act ("CCAA") in respect of the Restructuring Transaction on or before August 7, 2012. In accordance with the sale process procedures approved by the Ontario Superior Court of Justice on March 30, 2012, Sino-Forest's financial advisor, Houlihan Lokey, had been soliciting offers to purchase substantially all of Sino-Forest's assets. Following consultation with the court-appointed Monitor, FTI Consulting, the Company's financial advisor and the Ad Hoc Committee and its advisors, the Company determined that none of the bids submitted pursuant to the SPP constituted Qualified Bids as defined in the SPP and the sale solicitation process has been terminated in accordance with the SPP. About Sino-Forest Corp. Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest Corporation on March 30, 2012, obtained an initial order from the Ontario Superior Court of Justice for creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act. Under the terms of the Order, FTI Consulting Canada Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in implementing its restructuring plan. Gowling Lafleur Henderson LLP is acting as legal counsel to the Monitor. During the CCAA process, Sino-Forest expects its normal day-to- day operations to continue without interruption. The Company has not planned any layoffs and all trade payables are expected to remain unaffected by the CCAA proceedings. SUPER CASEY: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Super Casey LLC 906 Maple Hill Road Bloomington, IL 61704 Bankruptcy Case No.: 12-71561 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Central District of Illinois (Springfield) Judge: Mary P. Gorman Debtor's Counsel: Mercer Turner, Esq. LAW OFFICE OF MERCER TURNER, PC 202 N Prospect, Suite 202 Bloomington, IL 61704 E-mail: mercerturner1@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Harish Patel, member. TARGETED MEDICAL: Posts $975,900 Net Loss in 1st Quarter -------------------------------------------------------- Targeted Medical Pharma, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $975,917 on $1.38 million of revenue for the three months ended March 31, 2012, compared with a net loss of $928,790 on $2.04 million of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $9.55 million in total assets, $9.48 million in total liabilities, and stockholders' equity of $72,050. As reported in the TCR on Apr 23, 2012, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about Targeted Medical'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 has losses for the year ended Dec. 31, 2011, totaling $4.18 million as well as accumulated deficit amounting to $4.49 million. "Further the Company appears to have inadequate cash and cash equivalents of [$147,000] as of Dec. 31, 2011, to cover projected operating costs for the next 12 months." A copy of the Form 10-Q is available for free at: http://is.gd/kGLVzZ Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a specialty pharmaceutical company that develops and sells a line of patented prescription medical food products through a network of distributors and directly to physicians who dispense medical foods and other pharmaceutical products through their office practices. TRI-VALLEY CORP: Incurred $1.5 Million Net Loss in First Quarter ---------------------------------------------------------------- Tri-Valley Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $1.48 million on $862,620 of revenues for the three months ended March 31, 2012, compared with a net loss of $2.21 million on $710,296 of revenues for the same period last year. The Company's balance sheet at March 31, 2012, showed $17.58 million in total assets, $14.12 million in total liabilities, and stockholders' equity of $3.46 million. As reported in the TCR on April 23, 2012, Brown Accountancy Corporation, in Bakersfield, California, expressed substantial doubt about Tri-Valley'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 Tri-Valley has incurred a net loss from operations for the year ended Dec. 31, 2011, and has a retained earnings deficit as of Dec. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/9kKM5k Bakersfield, Calif.-based Tri-Valley Corporation is a crude oil and natural gas exploitation, development and production company engaged in locating and developing hydrocarbon resources in California. The Company is also engaged in early-stage exploration of precious minerals in Alaska. U-SWIRL INC: Incurred $124,100 First Quarter Net Loss ----------------------------------------------------- U-Swirl, Inc., formerly Healthy Fast Food, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $124,108 on $649,989 of revenues for the three months ended March 31, 2012, compared with a net loss of $195,445 on $585,401 of revenues for the same period last year. The Company's balance sheet at March 31, 2012, showed $2.17 million in total assets, $822,369 in total liabilities, and stockholders' equity of $1.35 million. L.L. Bradford & Company, LLC, in Las Vegas, Nevada, expressed substantial doubt about U-Swirl'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 has incurred recurring losses and lower-than-expected sales. A copy of the Form 10-Q is available for free at: http://is.gd/0hAALJ Henderson, Nev.-based U-Swirl, Inc., U-Swirl, Inc., formerly Healthy Fast Food, Inc.,was incorporated in the state of Nevada on Nov. 14, 2005. As of March 31, 2012, the Company owned and operated six U-Swirl Yogurt cafes. From the Company's inception through March 31, 2012, the Company has sold (a) 13 franchise area development agreements, including the first franchise agreement under the area development agreement; (b) 12 single-unit franchise agreements as subsequent franchises under an area development agreement or without an area development agreement; and (c) one license agreement that was converted to a franchise agreement. UNITED AMERICAN: Posts $1.2-Mil. Net Loss in March 31 Quarter ------------------------------------------------------------- United American Healthcare Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $1.18 million on $1.64 million of revenue for the three months ended March 31, 2012, compared with a net loss of $52,000 on $2.16 million of revenue for the three months ended March 31, 2011. The Company reported a net loss of $2.33 million on $4.81 million of revenue for the nine months ended March 31, 2012, compared with a net loss of $1.88 million on $6.48 million of revenue for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $15.68 million in total assets, $13.66 million in total liabilities, and stockholders' equity of $2.02 million. As reported in the TCR on Oct. 20, 2011, UHY LLP, in Farmington Hills, Michigan, expressed substantial doubt about United American Healthcare's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditors noted that the Company incurred a net loss from continuing operations of $7.5 million for the year ended June 30, 2011, and, as of that date, had a net working capital deficiency of $6.4 million. A complete text of the Form 10-Q is available for free at: http://is.gd/5BYUww Chicago, Illinois-based United American Healthcare Corporation provides contract manufacturing services to the medical device industry, with a focus on precision laser-cutting capabilities and the processing of thin-wall tubular metal components, sub- assemblies and implants, primarily in the cardiovascular market. US XPRESS: S&P Affirms B Corp. Credit Rating on Covenant Amendment ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings, including the 'B' corporate credit rating, on Chattanooga, Tenn.-based long- haul trucking company US Xpress Enterprises Inc. "At the same time, we removed the ratings from CreditWatch, where we had placed them with negative implications on April 12, 2012," S&P said. The outlook is negative. "Our ratings affirmation reflects near-term improvement in US Xpress' liquidity position and covenant headroom as a result of amendments to its senior secured credit facility," said Standard & Poor's credit analyst Anita Ogbara. "The company's earnings have strengthened as a result of more balanced supply and demand as well as better pricing in the trucking sector." "Still, the U.S. economy remains weak, and we continue to expect slow GDP growth, particularly during the second half of 2012," she added. The ratings on US Xpress reflect the company's highly leveraged capital structure and the intensely competitive, highly fragmented, cyclical truck-load (TL) market in which it operates. US Xpress' significant business position as a major TL carrier with good customer, end-market, and geographic diversity partially offsets these factors. Standard & Poor's categorizes the company's business profile as "weak," its financial profile as "aggressive," and its liquidity as "adequate" under its criteria. WM BOLTHOUSE: Moody's Reviews B2 CFR for Upgrade on Campbell Deal ----------------------------------------------------------------- Moody's Investors Service placed the B2 Corporate Family Rating and other ratings of Wm. Bolthouse Farms, Inc. on review for upgrade following the announcement that Campbell Soup Company agreed to acquire Wm. Bolthouse for $1.55 billion. The closing of the acquisition is subject to regulatory approvals and is expected to occur in late summer 2012. The review for upgrade reflects the stronger credit profile of Campbell as well as the intention of the companies to pay off the Bolthouse debt at the close of the transaction. Bolthouse's ratings will be withdrawn once the acquisition successfully closes and its rated debt has been paid off. Ratings placed under review for upgrade: Corporate Family Rating of B2 Probability of Default Rating of B2 Sr Sec Bank Credit facility 1st lien $55M revolver due 2015 of B1, LGD-3, 38% Sr Sec Bank Credit facility 1st lien $550M term loan due 2016 of B1, LGD-3, 38% Sr Sec Bank Credit facility 2nd lien $175M term loan due 2016 of Caa1, LGD-5, 88% Ratings Rationale Bolthouse's B2 Corporate Family Rating reflects the company's modest scale relative to much larger and diverse natural products and packaged goods companies, concentration of its vertically integrated raw material sources, fairly narrow product focus, and credit risks associated with private equity ownership. These speculative grade elements in the company's profile are balanced by the company's leading market position within its core carrot business and its healthy beverage segment as well as the relatively stable nature of the company's earnings with less volatility than is typical for natural product processors. The principal methodology used in rating Wm. Bolthouse Farms, Inc. was Moody's Global Food -- Protein and Agriculture industry methodology published in September 2009 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. BF Bolthouse Holdco, LLC through its operating subsidiaries including Wm. Bolthouse Farms, Inc. is a grower, processor and distributor of peeled and cut carrots and carrot products, and a producer of fruit and vegetable based beverages and salad dressings. Bolthouse also has a cold storage freight forwarding warehouse business located in Chicago, which allows retailers to pick up Bolthouse products and other produce which have been shipped by rail from Bakersfield. Revenues for the fiscal year ending March 2012 were approximately $690 million. Bolthouse is headquartered in Bakersfield, California. VYSOTA ENTERPRISES: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Vysota Enterprises, Inc. 1511 La Esplanade Pl. Santa Rosa, CA 95404 Bankruptcy Case No.: 12-11868 Chapter 11 Petition Date: July 9, 2012 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: John H. MacConaghy, Esq. MACCONAGHY AND BARNIER 645 1st St. W #D Sonoma, CA 95476 Tel: (707) 935-3205 E-mail: macclaw@macbarlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company?s list of its eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb12-11868.pdf The petition was signed by Vladimir Abramov, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- La Promenade Villas, LLC 12-11732 06/24/12 WOLFGANG CANDY: Divine Offers to Acquire Assets $1.5 Million ------------------------------------------------------------ Candy Woodall at yorkdispatch.com reports that Alabama-based Divine Serendipity LLC has offered to buy Wolfgang Candy for $1.5 million. According to the report, the proposed sale is subject to approval by both M&T Bank, Wolfgang's lender, and the United States Bankruptcy Court in Harrisburg. An August hearing is scheduled before Mary D. France, chief judge of the Middle District Bankruptcy Court. "Since our bankruptcy filing in March, we've been seeking partnership opportunities to further capitalize our business and grow our retail brand. We're very happy that a suitable buyer has emerged in the process, who seems to believe in the same plan," the report quotes Wolfgang CEO Ben McGlaughlin as saying. The report says that buyer is William "Wayne" Sellers, a 49-year- old, self-proclaimed Southern Baptist who said God has guided him through business decisions for more than 24 years. Based in York, Pennsylvania, Wolfgang Candy Co., Inc., filed for Chapter 11 bankruptcy protection on March 13, 2012 (Bankr. M.D. Penn. Case No. 12-01427). Judge Mary D. France presides over the case. Lawrence V. Young, Esq., at CGA Law Firm, represents the Debtor. The Debtor listed assets of less than $50,000, and estimated debts of between $1 million and $10 million. ZYTO CORP: Had $65,800 Profit in First Quarter ---------------------------------------------- ZYCO Corp. filed its quarterly report on Form 10-Q, reporting net income of $65,823 on $1.09 million of revenue for the three months ended March 31, 2012, compared with a net loss of $331,152 on $808,114 of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1.07 million in total assets, $3.83 million in total liabilities, and a stockholders' deficit of $2.76 million. Hansen, Barnett, & Maxwell, P.C., in Salt Lake City, Utah, expressed substantial doubt about ZYTO'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 has an accumulated deficit, and negative working capital. A copy of the Form 10-Q is available for free at: http://is.gd/7yipeh ZYTO Corp.'s operations consist of the manufacturing and distribution of biocommunication devices and software designed to facilitate communication between computers and the human body. ZOOM TELEPHONICS: Posts $114,300 Net Loss in Q1 2012 ---------------------------------------------------- Zoom Telephonics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $114,267 on $3.98 million of sales for the three months ended March 31, 2012, compared with a net loss of $284,602 on $2.81 million of sales for the comparable period of 2011. The Company's balance sheet at March 31, 2012, showed $5.08 million in total assets, $1.54 million in total current liabilities, and stockholders' equity of $3.54 million. As reported in the TCR on April 9, 2012, Marcum LLP, in Boston, Massachusetts, expressed substantial doubt about Zoom Telephonics' 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 has had recurring net losses and continues to experience negative cash flows from operations. A copy of the Form 10-Q is available for free at: http://is.gd/3Lavkv Located in Boston, Massachusetts, Zoom Telephonics, Inc., designs, produces, markets, sells, and supports broadband and dial-up modems, Wi-Fi(R) and Bluetooth(R) wireless products, and other communication-related products. YUKON-NEVADA GOLD: Posts $7.8-Mil. Net Loss in First Quarter ------------------------------------------------------------ Yukon-Nevada Gold Corp. reported a net loss of US$7.84 million on US$20.89 million of revenue for the three months ended March 31, 2012, compared with net income of US$28.95 million on US$18.97 million of revenue for the same period last year. The Company incurred a US$5.35 million loss from operations for the three month months ended March 31, 2012 (2011 - US$17.13 million), and a US$6.50 million outflow of cash from operations for the same period (2011 - US$2.73 million outflow). At March 31, 2012, the Company had a working capital deficiency of US$65.27 million (Dec. 31, 2011 ? US$52.72 million) and an accumulated deficit of US$366.79 million (Dec. 31, 2011 - US$358.94 million). The Company's balance sheet at March 31, 2012, showed US$348.91 million in total assets, US$265.48 million in total liabilities, and shareholders' equity of US$83.43 million. As reported in the TCR on April 9, 2012, Deloitte & Touche LLP, in Vancouver, Canada, said that the Company has incurred net losses over the past several years and, as of Dec. 31, 2011, has a working capital deficit in the amount of US$52.7 million and an accumulated deficit of US$358.9 million. "These conditions indicate the existence of material uncertainties that may cast substantial doubt about the Company's ability to continue as a going concern." A copy of Yukon-Nevada's condensed consolidated interim financial statements for the three months ended March 31, 2012, and 2011, is available for free at http://is.gd/i8apzr Vancouver, Canada-based Yukon-Nevada Gold Corp.'s operations are primarily related to the acquisition, exploration and production of gold in North America. As of March 31, 2012, the Company had one producing gold mine located in Nevada, U.S.A. and exploration properties in Canada (Yukon) and the U.S.A. For the three months ended March 31, 2012, and 2011, 100% of the Company's gold production was sold through a single broker. * Moody's Says US Tech Companies' Cash Piles Won't Affect Ratings ----------------------------------------------------------------- US technology companies are set to continue stockpiling cash but ratings are unlikely to be affected, says Moody's Investors Service in a new special comment "Overseas Cash Pile To Continue Surging, Albeit with Limited Credit Impact." Still, these large cash piles are unlikely to affect credit ratings as strong liquidity management is embedded in Moody's ratings, says the rating agency. In addition, companies covered in the report have very strong cash to debt ratios, securing their ratings for the time being. Moody's estimates that major technology companies hold aggregate cash of $457 billion, with industry behemoth Apple holding $110 billion, or 24% of the total. The top six companies - Apple (unrated), Microsoft (Aaa stable), Cisco (A1 stable), Google (Aa2 stable), Oracle (A1 stable) and Qualcomm (unrated) -- together represent $324 billion, or 71% of the multi-billionaire club's $457 billion of cash balances. Major technology companies continue to stockpile cash to create financial flexibility and protect against business risks inherent in the technology sector. High cash balances also allow companies to take swift advantage of opportunities or challenges, says Moody's These hoards - and concentration among companies - will continue to grow, says Moody's. The rating agency estimates that the top ten cash holders represent 83% of aggregate cash, up from 74% at the end of 2006. Moody's projects this concentration to exceed 85% over the next three years. In addition, overseas cash holdings are projected to double over the next three years. Moody's sampled 22 rated and unrated US- based technology companies that currently report the geographic location of cash holdings, and found that $289 billion, or 70% of their total cash is maintained overseas. The report also notes that a compelling reason for technology companies to keep cash abroad is the tax cost of repatriating the funds, says Moody's, and acts as a disciplinary force that limits huge dividend payments, share buybacks or credit weakening acquisitions. It's unlikely this situation will change in the current political cycle, says Moody's. * Moody's Says Student Loan Default Rate Stable But High in 2012 ---------------------------------------------------------------- The default rate of securitized private (non-guaranteed) student loans will be stable but high in 2012, says Moody's Investors Services in a new report, "Private (Non-Guaranteed) Student Loan Defaults, Stable but High in First-Quarter 2012, Will Remain So." According to Moody's Private Student Loan Indices, the default rate index ended the first quarter of 2012 at 4.9%. Although the index has been stable, hovering around 5% since mid-2010, it remains roughly twice as high as it was prior to the recession. "Defaults of private student loans, which the US government doesn't guarantee, are going to remain stable but high because the unemployment rate, the key credit driver of student loan defaults, will be remaining in the 8%-9% range for the rest of 2012," says Tracy Rice, a Moody's Assistant Vice President and Analyst. "Default rates won't improve significantly until the unemployment rate gets back close to its pre-recession levels, in 2015-2016." The default rate for 2006 through 2010 securitizations remains worse than that for older securitizations, says Moody's, because they contain large concentrations of loans to students graduating into a weak job market. As for loan delinquencies, the 90-plus delinquency rate index was down slightly in first-quarter 2012 from first-quarter 2011, at 2.5% from 2.7%. However, the improvement was not strong enough to change Moody's forecast that 90-plus delinquencies will remain close to current high levels for the rest of 2012. Moody's Private Student Loan Indices track ten years of credit performance data of 65 individual private student loan securitizations that Moody's rates, representing $40 billion in outstanding pool balance. The indices weigh each securitization equally. Because private loan pools vary considerably in credit performance, the indices provide a benchmark for relative comparisons among issuers and individual transactions. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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 ***