/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120712.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 12, 2012, Vol. 16, No. 192 Headlines 1555 WABASH: Has Access to Cash Collateral Until Aug. 31 1555 WABASH: Plan Filing Deadline Extended to Aug. 28 1555 WABASH: AMT CADC Asks Court to Dismiss Chapter 11 Case 2655 BUSH: Files Sale-Based Combined Plan and Disclosure Statement 38 STUDIOS: Miscommunication Led to $75-Mil. Default, Execs Say 44 CP I: Voluntary Chapter 11 Case Summary ALLIED SYSTEMS: Yucaipa Unit, CB Investments Are New DIP Lenders ALLIED SYSTEMS: Sidley Austin to Represent Creditors Committee AMERICAN APPAREL: Reports $52.1 Million Total Net Sales for June AMERICAN PETRO-HUNTER: Has 3-Mil. Credit Facility with ASYM AMKOR TECHNOLOGY: Moody's Affirms 'Ba3' CFR/PDR; Outlook Negative APEX DIGITAL: Agrees to File Plan, Disclosure Statement by July 31 APPLETON PAPERS: Extends Sec. Notes Consent Deadline to July 12 ASURION LLC: S&P Affirms 'B+' Longterm Counterparty Credit Rating ATP OIL: D.E. Shaw Discloses 5.1% Equity Stake BAKERSFIELD GROVE: Receiver Has Final Approval to Access Cash BARE NECESSITIES: Files for Chapter 11 to Halt Tax Deed Sale BAYTEX ENERGY: Moody's Rates New C$300MM Sr. Unsecured Notes 'B1' BE AEROSPACE: Moody's Affirms 'Ba1' Corporate Family Rating BEAZER HOMES: Offering $75MM Common Stock and 3MM Equity Units BEHRINGER HARVARD: Bank of America Objects to Cash Collateral Use BIOLIFE SOLUTIONS: Expects $1 Million Revenue in 2nd Quarter CHINA UNITED: Posts $149,200 Net Loss in Q3 Ended March 31 CIRCUS AND ELDORADO: Sets July 23 Hearing on Amended Plan Outline CIRCUS AND ELDORADO: Gets Final Approval to Use Cash Collateral CIRCUS & ELDORADO: Stutman Treister OK'd as Committee's Counsel CLARE OAKS: Court OKs DIP Amendment, Sale Extension COCOPAH NURSERIES: Case Summary & List of Creditors COMMUNITY HEALTH: S&P Keeps 'B' Rating on Upsized Sr. 2020 Notes CONNOLLY LLC: Moody's Assigns 'B2' CFR; Outlook Stable CONNOLLY LLC: S&P Assigns Preliminary 'B' Corp. Credit Rating CYBRDI INC: Had $206,300 Net Loss in First Quarter CUBIC ENERGY: Posts $3.6 Million Net Loss in March 31 Quarter DELTA PETROLEUM: Creditors Voting on Joint Venture With Laramie DENNY'S CORP: GCIG to Open 50 New Denny's Restaurants in China DEWEY & LEBOEUF: Ex-Partners Have Until July 24 to Settle DOLLAR THRIFTY: Moody's Affirms 'B1' CFR, Rates Revolver 'Ba3' DYNEGY INC: Court Approves Merger With Holdings DYNEGY INC: Sec. 341(a) Meeting of Creditors Postponed DYNEGY INC: Wins Nod to Maintain Bank Accounts DYNEGY INC: Aug. 1 Set as Claims Bar Date EAGLE ROCK: Moody's Rates New $250-Million Senior Notes 'B3' EAGLE ROCK: S&P Gives 'B' Unsec. Debt Rating to New $250MM Notes EASTMAN KODAK: Retirees' Committee Taps Segal Co. as Consultant ELPIDA MEMORY: Bondholders Protest Sale to Micron Technology ENERGY CONVERSION: Aug. 29 Hearing on Cash Collateral Objections ESCALON MEDICAL: Had $639,800 Net Loss in March 31 Quarter FERRARA CANDY: S&P Assigns 'B' Corp Credit Rating; Outlook Stable FIDDLER'S CREEK: Creditors, Lawyers to Pay Damages FRANKLIN CREDIT: McCarter & English Approved as Bankruptcy Counsel FRANKLIN CREDIT: SNR Denton OK'd as Special Securities Counsel GLOBAL EQUITY: Had $139,400 Net Loss in 1st Quarter GLOBAL SHIP: DePrince Race Owns 10.3% of Class A Shares GRUBB & ELLIS: Seyfarth Shaw OK'd as Labor & Employment Counsel GUIDED THERAPEUTICS: Warrant Exchange Offer Expires July 5 HALLWOOD GROUP: Posts $9.5 Million Net Loss in Q1 2012 HOMELAND SECURITY: Two Top Execs' Contracts Extended to 2014 HORIZON LINES: Western Asset Mgt. Has 14.4% Stake HOVNANIAN ENTERPRISES: Swaps $6MM Debt With 1.5MM Class A Shares IMAGEWARE SYSTEMS: 3 Execs. to Continue Services Until Dec. 31 INDIANA STEEL AND TUBE: Brownstown Steel Mill Files for Chapter 11 INPHASE TECHNOLOGIES: Has OK to Hire Laufer and Padjen as Counsel INTELLIGENT COMMUNICATION: Posts $195,400 Net Loss in Q1 2012 INTERLEUKIN GENETICS: Delta Dental Increases Stake to 22.9% INTERNATIONAL BARRIER: Posts $65,600 Net Loss in March 31 Quarter J.C. PENNEY: Reports Final Phase of Restructuring Effort JETSTAR PARTNERS: Has Courts Nod to Hire Bell Nunnally as Counsel KV PHARMACEUTICAL: OrbiMed Advisors No Longer Owns Shares LANDAMERICA FINANCIAL: $39 Million Settlement Approved LANTERN PARTNERS: Files Schedules of Assets and Liabilities LARSON LAND: Court Approves $1.6 Million DIP Financing LASER COFINOGA: Moody's Downgrades Standalone BCA to 'Ba2' LIFECARE HOLDINGS: Chief Financial Officer Out Effective Aug. 15 LIFECARE HOLDINGS: Adopts Key Employee Retention Plan LSP ENERGY: Seeks Approval of Settlement With BNY, Bondholders MARKETING WORLDWIDE: St. George Investments Owns 9.99% MORGANS HOTEL: To Issue 3MM Add'l Shares Under Incentive Plan MSR RESORT: Has Until Aug. 1 to Propose Chapter 11 Plan MT. ZION: Court Continues Plan Confirmation Hearing to July 19 NATIONAL VISION: Moody's Assigns 'B2' CFR; Outlook Stable NATIONAL VISION: S&P Gives 'B+' CCR; 'BB-' Credit Facility Rating NAVISTAR INTERNATIONAL: Franklin Hikes Stake to 18.8% NAVISTAR INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'B' NORTHSTAR AEROSPACE: Court Approves Bayard P.A. as Counsel NORTHSTAR AEROSPACE: Court OKs SNR Denton as Bankruptcy Counsel NORTHSTAR AEROSPACE: Harris Williams Approved as Investment Banker NORTHSTAR AEROSPACE: Court Extends Schedules Filing Until July 16 NORTHSTAR AEROSPACE: Logan & Co. OK'd as Administrative Advisor OCALA FUNDING: Taylor Bean Unit Files Ch. 11, Probes Freddie Mac OCALA FUNDING: Case Summary & 6 Largest Unsecured Creditors ODYSSEY PICTURES: Had $68,400 Net Income in Fiscal 3rd Quarter OMEGA HEALTHCARE: Fitch Assigns 'BB+' Subordinated Debt Rating OMEGA NAVIGATION: Has Until Sept. 3 to File Reorganization Plan PARKERVISION INC: Incurred $4.1 Million Net Loss in 1st Quarter PARTY CITY: Moody's Assigns 'B2' Corp. Family Rating PATRIOT COAL: Moody's Cuts Probability of Default Rating to 'D' PATRIOT COAL: S&P Cuts Corp. Credit Rating to 'D' Over Bankruptcy PEREGRINE FINANCIAL: To Liquidate Under Chapter 7 Bankruptcy PINNACLE AIRLINES: Wants More Time to Decide on Unexpired Leases PINNACLE AIRLINES: Wants Until Sept. 28 to File Chapter 11 Plan PINNACLE AIRLINES: Wants Ernst & Young to Audit 2012 Financials PINNACLE HOLDCO: S&P Assigns '(P)B' Corporate Credit Rating PRESSURE BIOSCIENCES: Posts $1.1 Million Net Loss in Q1 2012 R.E. LOANS: Plan of Reorganization Confirmed RG STEEL: Judge Clears Enviros to Pursue Appeal in Pollution Case RG STEEL: Bonus Program Defective, U.S. Trustee Says RITZ CAMERA: To Liquidate Remaining 137 Locations RIVER CANYON: Can Hire Sender Wasserman as Bankruptcy Counsel RT MIDWEST: Ruby Tuesday Restaurants Allowed to Use Cash SAN BERNARDINO, CA: To Seek Creditor Protection Under Chapter 9 SBA TELECOMS: Moody's Rates New $650MM Sr. Unsecured Notes 'B1' SBA TELECOM: S&P Rates New $650MM Senior Unsecured Notes 'B+' SCI REAL ESTATE: First Amended Joint Plan of Liquidation Confirmed SEARS HOLDINGS: 2013 Pension Contribution of Up to $430-Mil. SEDONA DEVELOPMENT: Taps Stinson Morrison as Bankruptcy Counsel SEMCRUDE LP: Creditors' Trust Sues Barclays Over $143MM Fee SKINNY NUTRITIONAL: Trim Capital Reports 11.3% Equity Stake STUDIO ONE: Posts $1.45-Mil. Net Loss in March 31 Quarter TURBOSONIC TECHNOLOGIES: Had $326,700 Loss in March 31 Quarter SUGARMADE INC: Incurred $625,400 Net Loss in Fiscal Q3 VYCOR MEDICAL: Richard Denness Succeeds Kenneth Coviello as CEO WIDEOPENWEST FINANCE: S&P Rates $32MM Sr. Subordinated Notes CCC+ YOU ON DEMAND: Incurred $4.8 Million Net Loss in First Quarter Z TRIM HOLDINGS: Revenue Grows 56% in Second Quarter * Moody's Says Global Spec-Grade Corp. Default Rate Ends at 2.7% * Moody's Says N.A. Pipelines Face Increased Business Risk * Moody's Revises Outlook for North American Railroads to Stable * Easterbrook Creates Circuit Conflict Over Lubrizol * Recent Small-Dollar & Individual Chapter 11 Filings ********* 1555 WABASH: Has Access to Cash Collateral Until Aug. 31 -------------------------------------------------------- The Hon. Jacqueline Cox of the U.S. Bankruptcy for the Northern District of Illinois entered a fourth interim order, allowing 1555 Wabash LLC to access cash collateral of AMT CADC Venture LLC and Weyerhauser Realty Investors until Aug. 31, 2012. In return for the Debtor's interim use of cash collateral, the Lenders are granted adequate protection for their purported secured interests. The Debtor will, among other things, maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage; and maintain sufficient cash reserves for the payment of postpetition real estate taxes when these taxes become due and payable. The senior lender, AMT CADC, will be granted a priority claim and valid, perfected, enforceable security interests in and to the Debtor's postpetition assets, to the extent of any diminution in the value of the assets during the period from the commencement of the Debtor's Chapter 11 case through the next hearing on the cash collateral use. A final hearing on the Debtor's request to use cash collateral will be held on Aug. 28, 2012, at 10:00 a.m. A full text copy of the interim cash collateral order and budget is available for free at http://is.gd/F3wX5u The cash collateral issues in the Chapter 11 case relate to the rents generated at the Debtor's property and the funds on deposit in accounts maintained by the Debtor. The Senior Lender, AMT CADC Venture LLC, asserts a first position mortgage lien and claim against the property which purportedly secures a senior mortgage debt of $42,126,967. In addition to its mortgage lien on the property, the Senior Lender asserts a security interest in and lien upon the rents being generated at the Property. The Junior Lender, Weyerhauser, asserts a mortgage lien and claim against the Property which secures a second subordinate mortgage debt of $7,492,743. In addition to its mortgage lien on the Property, the Junior Lender asserts a security interest in and lien upon the rents being generated at the Property. About 1555 Wabash 1555 Wabash LLC owns and operates a 14-story mixed use building located at 1555 South Wabash, in Chicago, Illinois. The property is comprised of 176 residential units plus 11,000 square feet of commercial space located on the first floor of the building. The property was originally developed as condominium units to be sold at designated sale prices to qualified buyers. Construction was generally completed as of the middle of 2009. Only 36 of the 100 sale contracts closed. As of the Petition Date, 1555 Wabash leased 115 of the remaining 140 residential apartment units -- roughly 82% -- to qualified tenants, while the commercial space is presently vacant. 1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the property. Judge Jacqueline P. Cox oversees the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's counsel. The Debtor scheduled $90,055 in personal property and said the current value if its condo building is unknown. The Debtor disclosed $51.6 million in liabilities. The petition was signed by Theodore Mazola, president of New West Realty Development Corp, sole member and manager of the Debtor. 1555 WABASH: Plan Filing Deadline Extended to Aug. 28 ----------------------------------------------------- The Hon. Jacqueline Cox of the U.S. Bankruptcy for the Northern District of Illinois granted 1555 Wabash LLC an extension of its exclusive periods set forth in Sections 1121(b) and 1121(c) of the Bankruptcy Code through and including Aug. 28, 2012, and Oct. 28, 2012, respectively. The Debtor said it needs further time for discussions with third parties relating to a transaction that would involve the funding of a plan. The agent of the Debtor's senior lender has also begun to conduct and manage settlement negotiations among the Debtor, guarantors and senior lender. If these settlement negotiations are successful, all issues in this Chapter 11 case and with respect to the property can be resolved. About 1555 Wabash 1555 Wabash LLC owns and operates a 14-story mixed use building located at 1555 South Wabash, in Chicago, Illinois. The property is comprised of 176 residential units plus 11,000 square feet of commercial space located on the first floor of the building. The property was originally developed as condominium units to be sold at designated sale prices to qualified buyers. Construction was generally completed as of the middle of 2009. Only 36 of the 100 sale contracts closed. As of the Petition Date, 1555 Wabash leased 115 of the remaining 140 residential apartment units -- roughly 82% -- to qualified tenants, while the commercial space is presently vacant. 1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the property. Judge Jacqueline P. Cox oversees the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's counsel. The Debtor scheduled $90,055 in personal property and said the current value if its condo building is unknown. The Debtor disclosed $51.6 million in liabilities. The petition was signed by Theodore Mazola, president of New West Realty Development Corp, sole member and manager of the Debtor. 1555 WABASH: AMT CADC Asks Court to Dismiss Chapter 11 Case ----------------------------------------------------------- Lender AMT CADC Venture, LLC, has asked the Hon. Jacqueline Cox of the U.S. Bankruptcy for the Northern District of Illinois to dismiss 1555 Wabash LLC's Chapter 11 case or, in the alternative, granting Lender relief from the automatic stay to pursue the foreclosure proceeding against Debtor. The Lender says that from the moment Lender notified Debtor of its intent to foreclose on the $46 million loan it made to Debtor for the development of a fourteen-story mixed use building located at 1555 S. Wabash, Chicago, Illinois, the Debtor has used every avenue possible to siphon cash from the Property to its owners and insiders. "The Property is hopelessly underwater, with a market value of roughly $30 million and secured debt to Lender of more than $43 million (in addition to a junior mortgage holder owed more than $9 million)," the Lender says. The Debtor is owned and controlled by New West Realty Development Corp. New West is owned and controlled by Theodore Mazola and August Mauro. The Lender claims that two days after the Lender notified Debtor and the Principals that the Lender was commencing its foreclosure remedies with respect to the Property, the Debtor "funneled more than $160,000 to New West by 'washing' it through the property homeowners' association, which the Principals control. Beginning the very next month, the Principals utilized Debtor to pay themselves, and two other principals, $35,000 per month to compensate themselves for, in Mazola's words, 'interviewing attorneys, not only for foreclosure, but then for the bankruptcy, choosing attorneys, negotiating'." The Lender intervened in a state court mechanic's lien action to protect its interests against mechanic's lien claimants who had not been paid by Debtor. The Lender filed a motion for the appointment of a receiver. "The Debtor requested time to file briefs in opposition to the receiver's appointment, but its intent to delay the proceedings became apparent when it filed no briefs. The day the motion to appoint the receiver was to be argued, Debtor strategically presented a motion for substitution of judge, again delaying the receiver's appointment. Four months after Lender filed its motion, Circuit Court Judge Lisa Curcio denied Debtor's request for yet another briefing schedule and granted Lender's motion for the appointment of a receiver to manage the Property," the Lender states. On Dec. 26, 2011, the Debtor paid principal salaries totaling $30,500 for January 2012, but didn't pay taxes. The next day, before the receiver had posted the required bond, the Debtor initiated this proceeding. As of Dec. 27, 2011, the Debtor's indebtedness to the Lender was approximately $43,200,000. Between July 2011, when Lender first notified Debtor of Lender's intent to pursue available remedies on the defaulted loan, and the Petition Date, the Debtor siphoned more than $600,000 from the Property and into the hands of the Principals and the various companies they own, all purportedly for fees, expenses, commissions and salaries. The Lender says that while a substantial amount of money was washed through the HOA under the guise of reimbursement of previously-paid expenses: (1) Debtor fell short on its obligations to the HOA by more than $200,000 (and owed the HOA more than $700,000 in past-due assessments); (2) Debtor failed to make any payments to Lender on its loan, despite accruing more than $1.3 million in interest during that time period; and (3) the Property and its residents suffered. The condominium homeowners described the conditions at the Property, as, among other things: concrete crumbling from the ceiling of the parking structure. The Lender is represented by: PIRCHER, NICHOLS & MEEKS I. Bruce Speiser, Esq. Timothy J. McCaffrey, Esq. Emily A. Fox, Esq. 900 N. Michigan Avenue, Suite 1050 Chicago, IL 60611 Tel: (312) 915-3112 Fax: (312) 915-3348 E-mail: bspeiser@pircher.com tmccaffrey@pircher.com efox@pircher.com About 1555 Wabash 1555 Wabash LLC owns and operates a 14-story mixed use building located at 1555 South Wabash, in Chicago, Illinois. The property is comprised of 176 residential units plus 11,000 square feet of commercial space located on the first floor of the building. The property was originally developed as condominium units to be sold at designated sale prices to qualified buyers. Construction was generally completed as of the middle of 2009. Only 36 of the 100 sale contracts closed. As of the Petition Date, 1555 Wabash leased 115 of the remaining 140 residential apartment units -- roughly 82% -- to qualified tenants, while the commercial space is presently vacant. 1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the property. Judge Jacqueline P. Cox oversees the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's counsel. The Debtor scheduled $90,055 in personal property and said the current value if its condo building is unknown. The Debtor disclosed $51.6 million in liabilities. The petition was signed by Theodore Mazola, president of New West Realty Development Corp, sole member and manager of the Debtor. 2655 BUSH: Files Sale-Based Combined Plan and Disclosure Statement ------------------------------------------------------------------ 2655 Bush LLC has filed a combined disclosure statement and reorganization plan dated June 17, 2012. The Debtor's sole material asset is a building and associated parking garage located at 2655 Bush Street, at the intersection of Divisadero Street, in San Francisco, California. The Property has received entitlements for development into approximately 4,180 square feet of retail space and 81 residential condominium or apartment units. The Debtor intends to sell the Property, thereby providing funds to satisfy all of its debts; until that occurs, the Debtor's sole member will continue to provide the Debtor with financial support. Under the Plan of Reorganization, the Debtor proposes to pay secured and unsecured creditors in full, over time. Specifically, the debt secured by a first deed of trust encumbering the Property will receive monthly payments of interest and principal, and a balloon payment of the balance of the debt upon the sale of the Property, or in any event by the first day of the 18th month after the Effective Date of the Plan. Substantially all other secured and unsecured debts will be paid in full, half when the Plan becomes effective, half on the first anniversary of the Effective Date. The classification and treatment of claims under the plan are: A. Class 1A (City and County of San Francisco) will be paid in two equal installments of $29,400 on Effective Date and on the earlier of sale or the first anniversary of Effective Date, interest and charges paid with second installment. B. Class 1B (Sum L. Seto Properties LLC and Jenny P. Seto Properties LLC) will be 18 monthly payments of approximately $42,000 and a 19th payment of the balance owed, approximately $7.5 million; paid in full upon sale, if earlier. C. Class 1C (Katherine Simon) will be paid in two equal installments of $15,000 on Effective Date and on the earlier of sale or the first anniversary of Effective Date, interest at 6% paid with second installment. D. Class 1D (Peter Siwinski) will be paid in two equal installments of $12,500 on Effective Date and on the earlier of sale or the first anniversary of Effective Date, interest at 6.5% paid with second installment. E. Class 1E (Robert Guichard) will be paid in two equal installments of $10,000 on Effective Date and on the earlier of sale or the first anniversary of Effective Date, interest at 7% paid with second installment. F. Class 2A (General Unsecured Creditors) will be paid in full, without interest, principal paid in two equal installments on Effective Date and on the earlier of sale or the first anniversary of the Effective Date. G. Class 2B (Unsecured Claim of Ernest McNabb) will receive no payment until every other creditor has received all payments provided under the Plan; thereafter, payment on such terms as the Debtor and Mr. McNabb agree. H. Class 3 (Ownership Interests of Ernest McNabb) is not affected by the Plan. In addition, administrative claims will be paid in full on confirmation of the Plan or when they come due. A full-text copy of the combined disclosure statement and plan is available for free at: http://bankrupt.com/misc/2655_BUSH_plan.pdf San Francisco, California-based 2655 Bush LLC owns a building and associated parking garage located at 2655 Bush Street, at the intersection of Divisadero Street, in San Francisco, California. 2655 Bush LLC filed for Chapter 11 (Bankr. N.D. Calif. Case No. 12-30388) on Feb. 8, 2012. Judge Thomas E. Carlson presides over the case. The company disclosed assets of $15.04 million and liabilities of $12.4 million. 38 STUDIOS: Miscommunication Led to $75-Mil. Default, Execs Say --------------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that executives of 38 Studios LLC, the bankrupt game developer bankrolled by former MLB ace Curt Schilling, told a Chapter 7 trustee Tuesday that poor communication with Rhode Island officials helped lead the company to default on a $75 million loan guarantee from the state. 38 Studios LLC, a video-game developer founded by former Boston Red Sox pitcher Curt Schilling, filed for liquidation on June 8, 2012, without attempting to reorganize. Although based in Providence, Rhode Island, the company filed the Chapter 7 petition in Delaware (Case No. 12-11743). 44 CP I: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 44 CP I Loan LLC c/o Cathy L. Reece, Esq. FENNEMORE CRAIG, P.C. 3003 N. Central Avenue, Suite 2600 Phoenix, AZ 85012 Tel: (602) 916-5343 Bankruptcy Case No.: 12-15286 Chapter 11 Petition Date: July 9, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: Cathy L. Reece, Esq. FENNEMORE CRAIG, P.C. 3003 N. Central Avenue #2600 Phoenix, AZ 85012-2913 Tel: (602) 916-5343 Fax: (602) 916-5543 E-mail: creece@fclaw.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 Mark Winkleman, chief operating officer. Affiliate that sought Chapter 11 protection: Debtor Case No. Petition Date ------ -------- ------------- 44 CP II Loan LLC 12-15287 7/09/2012 Assets: $10,000,001 to $50,000,000 Debts: $10,000,001 to $50,000,000 ALLIED SYSTEMS: Yucaipa Unit, CB Investments Are New DIP Lenders ---------------------------------------------------------------- Judge Christopher S. Sontchi of U.S. Bankruptcy Court for the District of Delaware has approved, on an interim basis, an amended DIP financing facility obtained by Allied Systems Holdings Inc. and its affiliates. There is an objection to the proposed DIP financing. The car hauler's proposed bankruptcy loan from private equity owner Yucaipa would "shackle the hands" of the company, unsecured creditors of Allied Systems said, according to a report by Marie Beaudette at Dow Jones' DBR Small Cap. Under the amended DIP financing facility, the DIP lenders are Yucaipa Leveraged Finance, LLC, and CB Investments, LLC. Yucaipa Leveraged Finance will provide $15 million and CB Investments will provide $5 million upon final approval of the DIP financing. As previously reported by the Troubled Company Reporter, Judge Sontchi had authorized the Debtors, on an interim basis, to access up to $10 million in loans from Yucaipa affiliates, Yucaipa American Alliace Fund II L.P. and Yucaipa American Alliance (Parallel) Fund II L.P. To secure the DIP loan, the DIP lenders are granted postpetition leins on all prepetition collateral of the Debtors. The DIP loans will be used to, among other things, pay payroll- related expenses. The Debtors have separately sought court permission to pay $600,000 in payroll obligations. Christopher M. Samis, Esq., at Richards Layton & Finger P.A., said in court filings that on June 8, 2012, Allied and its affiliates issued wage checks to their employees. Because many have the Debtors' employees 'had not yet cashed their wage checks as of the Voluntary Petition Date, a significant number of wage checks are in float, and the Debtors are concerned that if their employees attempt to cash the wage checks prior to the First Day Hearing, they will not be honored. In addition to the wage checks, three are also checks in float on account of Driver Drafts for payment advances, tolls, fines and reimbursement of driver expenses. If the Employee Checks are not honored when the Debtors' employees present them for payment, it could cause irreparable damage to employee morale and even lead to employee attrition to the detriment of the Debtors' estates and their stakeholders. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. Allied is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. ALLIED SYSTEMS: Sidley Austin to Represent Creditors Committee -------------------------------------------------------------- An official committee of unsecured creditors has been appointed in the Chapter 11 cases of Allied Systems Holdings Inc. and Allied Systems Ltd. The Committee is being represented by: Michael G. Burke, Esq. Brian J. Lohan, Esq. SIDLEY AUSTIN LLP 787 Seventh Avenue New York, NY 10019 Tel: (212) 839-5300 Fax: (212) 839-5599 Email: mgburke@sidley.com blohan@sidley.com - and - Matthew A. Clemente, Esq. SIDLEY AUSTIN LLP One South Dearborn Street Chicago, IL 60603 Tel: (312) 853-7000 Fax: (312) 853-7036 Email: mclemente@sidley.com About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. AMERICAN APPAREL: Reports $52.1 Million Total Net Sales for June ---------------------------------------------------------------- American Apparel, Inc., announced preliminary sales for the month and quarter ended June 30, 2012. The Company reported that for the month ended June 30, 2012, total net sales increased 16% to $52.1 million when compared to the month ended June 30, 2011. Between the same periods, comparable store sales on a preliminary basis increased an estimated 19% and wholesale net sales increased an estimated 8%. For the quarter ended June 30, 2012, total net sales increased an estimated 12% to $149.2 million, comparable store sales increased an estimated 16% and wholesale net sales increased an estimated 10%. "We are very pleased to report strong sales performance across all distribution channels and geographies and these results again exceeded our expectations," stated Dov Charney, Chairman and CEO. "In the month of June 2012, more merchandise was sold to customers than for any June in our history. On a per store basis, annualized June 2012 in-store sales are trending only 8% less than the historic high set in 2008 and we think we can surpass that historic level within the next 12 to 18 months." The Company made a significant improvement in its EBITDA performance in 2011 and the Company is reiterating its 2012 EBITDA projection to be in the range of $32 million to $40 million. A copy of the Form 8-K is available for free at: http://is.gd/HbgjF8 About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at March 31, 2012, showed $331.38 million in total assets, $288.97 million in total liabilities and $42.41 million in total stockholders' equity. AMERICAN PETRO-HUNTER: Has 3-Mil. Credit Facility with ASYM ----------------------------------------------------------- American Petro-Hunter, Inc., entered into a three-year credit facility with ASYM Energy Partners LLC and its affiliates, a private investment firm focused on the energy industry. The credit facility, in the amount of $10 million, is secured by all of the Company's assets. Proceeds from the loan will be utilized to fund the development drilling of oil properties located in central Oklahoma as well as acquisitions, repayment of certain accounts payable, and working capital. As part of the transaction, ASYM will advise the Company in the areas of operational, technical, engineering and financial matters. In addition, a total of approximately $2.7 million of liabilities were either forgiven or exchanged for common stock in the Company. This included the forgiveness of the Royalty Interest Payable, the exchange of equity for accounts payable that reduced the balance to approximately $0.3 million, and the amendment of the convertible debentures which extended the maturity date to six months after the maturity of the credit facility, and removed all liens and security interests. Also as part of the transaction, the 6% overriding royalty interest held by certain convertible debenture holders was contributed to the Company. The Company intends to utilize the credit facility to initially fund the development drilling of the Company's North and South Oklahoma oil focused horizontal drilling program, primarily targeting the Mississippi Lime and the Woodford Shale. The credit facility will also allow the Company to participate for its full working interest participation and accelerate production as well as allow the Company to consider acquisitions of projects, production and leases. Company President Robert McIntosh states, "We are extremely pleased to have closed this milestone funding arrangement with ASYM and are expecting outstanding upside for the development of our projects, especially with the welcome inclusion of added expertise bolstering our financial and engineering strengths. We have aggressive growth plans ahead and look forward to our new funding partner's active engagement that we expect will allow the Company to gain the necessary scale through significant production and cash flow growth. As we meet our business objectives, we should be in a position to migrate to an exchange like the NYSE AMEX or NASDAQ with the goal of providing increased liquidity to our shareholders." About American Petro-Hunter, Inc. 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 March 15, 2012, the Company has two producing wells in Kansas and six producing wells in Oklahoma. It also has 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"). 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. The Company's balance sheet at Dec. 31, 2011, showed $2.1 million in total assets, $4.2 million in current liabilities, and a stockholders' deficit of $2.1 million. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Weaver Martin & Samyn, LLC, in Kansas City, Missouri, expressed substantial doubt about American Petro-Hunter's ability to continue as a going concern. 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. The Company reported a net loss of $2.7 million on $317,900 of revenue for the year 2011, compared with a net loss of $2.5 million on $92,800 of revenue for 2010. AMKOR TECHNOLOGY: Moody's Affirms 'Ba3' CFR/PDR; Outlook Negative ----------------------------------------------------------------- Moody's Investors Service affirmed Amkor Technology, Inc.'s debt ratings -- Ba3 Corporate Family (CFR), Probability of Default (PDR), and Senior Unsecured; as well as the SGL-2 Speculative Grade Liquidity rating -- but has changed the outlook to negative from stable. Ratings Rationale The change to a negative rating outlook follows Amkor's announcement that Tessera, Inc. has prevailed over Amkor in its patent arbitration, and a separate announcement that Tessera has commenced litigation seeking an injunction and damages related to one of the disputed US patents. The full amount of the arbitration award has yet to be determined, but Moody's believes the arbitration will conclude by the end of 2012 with a required payout within the first quarter of 2013. Over the coming year, Moody's expects Amkor's revenues will be in excess of $2.7 billion but with negative free cash flow (FCF) of at least $150 million due to increased capital expenditures in 2012. In 2013, Moody's also expects negative FCF of at least $50 million due to cash payments under the arbitration award while the high capital spending continues. The negative outlook reflects: 1) Moody's expectation of strain to Amkor's liquidity as the company is consuming cash for increased capital expenditures to support a key customer and to begin construction of a new production facility in Korea; 2) Moody's view that the final arbitration order could require Amkor to pay Tessera at least $125 million, all in the first quarter of 2013; 3) Moody's view that the litigation could divert management attention away from managing the business during challenging industry conditions; and 4) the uncertainty of longer term cash flows from the potential for an injunction on the disputed patent. In addition to the cash amount of the patent arbitration award, Moody's notes that Tessera is seeking an injunction related to alleged infringement of one of the US patents. Moody's believes that Tessera's pursuit of injunctive relief indicates that this patent could be an important contributor to Amkor revenues. Thus, should Tessera be awarded injunctive relief, Moody's believes that Amkor could be forced to either make further, significant financial concessions to license the technology or lose a significant revenue stream. Tessera has already cancelled its license to Amkor for this particular technology. Moody's expects Amkor will conserve cash in anticipation of the required payments under the arbitration award, and will refrain from further share repurchases. Moreover, Moody's expects that Amkor could take further steps to bolster liquidity, such as slowing the pace of capital expenditures or further increasing the size of the revolver. The rating could be downgraded if Tessera prevails in its effort to obtain an injunction. The rating could also be downgraded if Amkor makes further share repurchases prior to making the arbitration award payments or if Amkor fails to otherwise increase liquidity to cushion the cash impact of the arbitration award and a potential unfavorable ruling on Tessera's request for injunctive relief. The rating could also be downgraded if the ratio of debt to EBITDA (Moody's standard adjustments) approaches 4x, or if Amkor is unable to make steady progress restoring its EBITDA margin to historical level of around 24%. The rating outlook could be stabilized if either Tessera is not awarded an injunction related to the US patent or Amkor is able to settle this patent litigation for less than $50 million and Amkor begins to generate sustained annual free cash flow of at least $100 million and the ratio of debt to EBITDA (Moody's standard adjustments) is on course to decline below 2.5x. Amkor, based in Chandler, Arizona, is one of the largest providers of outsourced semiconductor assembly and test (OSAT) services for integrated semiconductor device manufacturers (IDM) as well as fabless semiconductor companies. The following ratings were affirmed: CFR: Ba3 PDR: Ba3 Senior Unsecured Debt: Ba3 Speculative Grade Liquidity rating at SGL-2 Outlook changed to negative from stable. The principal methodology used in rating Amkor was the Global Semiconductor Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published in June 2009. APEX DIGITAL: Agrees to File Plan, Disclosure Statement by July 31 ------------------------------------------------------------------ The Bankruptcy Court has approved a stipulation between Apex Digital, Inc., and the U.S. Trustee to settle the U.S. Trustee's motion to dismiss the Debtor's Chapter 11 case or convert it to Chapter 7. Under the terms of the stipulation, the disclosure statement and reorganization plan must be filed by the Debtor on or before July 31, 2012. Apex Digital earlier opposed the motion filed by Peter C. Anderson, the U.S. Trustee for the Central District of California, for an order either converting the Debtor's bankruptcy case to Chapter 7 or dismissing the Debtor's bankruptcy case. Pursuant to the Motion, the U.S. Trustee asserts the dismissal or conversion of the Debtor's bankruptcy case is warranted due to (1) failing to file monthly operating reports for the months of January, February and March 2012, and (2) failing to pay its U.S. Trustee quarterly fee due for the first quarter of 2012. Juliet Y. Oh, Esq., at Levene Neale Bender Yoo & Brill, LLP, informs the Court that after receiving notice of the delinquencies through the Motion, the Debtor immediately acted to cure the delinquencies. Specifically, on April 30, 2012, the Debtor filed its MORs for the months of January, February and March 2012. In addition, on April 18, 2012, the Debtor submitted payment of U.S. Trustee quarterly fee due for the first quarter of 2012, in the sum of $4,875. The payment has been received by the U.S. Trustee, and that the Debtor is therefore current on U.S. Trustee quarterly fee payment obligations. Ms. Oh submits that the Debtor has not been sitting idly by during the pendency of this case. The Debtor has been maintaining its business operations and administering its bankruptcy estate while engaging in exhaustive plan negotiations with the Official Committee of Unsecured Creditors and the Debtor's principal, David Ji. The lack of a disclosure statement or plan of reorganization is due to the Debtor's belief that pursuing confirmation of a plan of reorganization which has the full support of the Committee is the most viable, cost-effective and efficient way to emerge from Chapter 11 and is therefore in the best interest of the Debtor's estate and creditors. The fact that the Debtor has not yet filed a disclosure statement or plan of reorganization does not indicate that the Debtor is incapable of effectuating a plan of reorganization or effectively reorganizing, and the Motion does not purport to argue otherwise. As reported in the Troubled Company Reporter on May 24, 2012, Kenneth G. Lau, Esq., representing the U.S. Trustee, argues that: -- no disclosure statement and reorganization plan has been filed to date in the Debtor's case; -- the Debtor has failed to file monthly operating reports since Jan. 31, 2012; -- the Debtor has failed to pay the quarterly fees for the quarter ended Mar. 31, 2012, amounting to $4,875. In addition, quarterly fees continue to accrue and will be due on July 31, 2012. About Apex Digital Walnut, California-based Apex Digital, Inc., was a leading producer and seller of consumer electronic products, including high-definition LCD televisions, home entertainment media devices, digital set top boxes and lighting products (e.g., solar powered lights), which are carried and sold in hundreds of retail outlets nationwide. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, in Los Angeles, California, represent the Debtor. In its schedules, the Debtor disclosed $12.8 million in assets and $27.1 million in liabilities, as of the Petition Date. Rosendo Gonzalez has been named Chapter 11 examiner in the bankruptcy case. Mr. Gonzalez has tapped C. John M. Melissinos, Esq., at Davidoff Gold LLP, as counsel. APPLETON PAPERS: Extends Sec. Notes Consent Deadline to July 12 --------------------------------------------------------------- Appleton Papers Inc. has extended the expiration time for its solicitation of consents to amend the indenture governing its 10.50% Senior Secured Notes due 2015. The extension is aimed to permit, and give effect to, the transactions contemplated by the previously announced Equity Purchase Agreement dated as of May 16, 2012, as amended, by and among Appleton Papers Inc., Paperweight Development Corp., Hicks Acquisition Company II, Inc., and HH- HACII, L.P., and the Cross Purchase Agreement dated as of May 16, 2012 between PDC and HACII. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired at 11:59 p.m. EDT on July 2, 2012, with respect to the Transactions. As extended, the expiration time for the consent solicitation will be 4:00 p.m., New York City time, on Thursday, July 12, 2012. Appleton also amended the consent solicitation solely with respect to the Senior Notes to: (a) increase the consent payment to $15.00 for each $1,000 principal amount of the Senior Notes for which a properly completed and duly executed consent is received prior to the expiration time and not duly and validly revoked; and (b) agree to use its commercially reasonable efforts to effect a tender offer for the outstanding Senior Notes within 75 days after the closing of the Transactions at a make-whole price equal to: (i) accrued and unpaid interest on those Senior Notes to the redemption date plus; (ii) (A) interest on the outstanding Senior Notes that would have accrued from and including the redemption date to but excluding Feb. 8, 2013, plus (B) the redemption price set forth in Section 3.07 of the indenture governing the Senior Notes, in the case of each of those clauses (A) and (B) discounted back to the redemption date, computed on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using a discount rate equal to a comparable U.S. treasury security plus 50 basis points. On July 9, 2012, Appleton extended the expiration time for its previously announced solicitation of consents to amend the indenture governing its 11.25% Second Lien Notes due 2015 to permit, and give effect to, the Transactions. As extended, the expiration time for the consent solicitations will be 4:00 p.m., New York City time, on Thursday, July 12, 2012. About Appleton Papers Appleton, Wisconsin-based Appleton Papers Inc. -- http://www.appletonideas.com/-- produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. Appleton Papers is a 100%-owned subsidiary of Paperweight Development Corp. The Company reported a net loss of $2.11 million for the year ended Dec. 31, 2011, compared with a net loss of $31.66 million for the year ended Jan. 1, 2011. Appleton's balance sheet at April 1, 2012, showed $609.83 million in total assts, $864.04 million in total liabilities, and a $254.21 million deficit. * * * Appleton Papers carries a 'B' corporate credit rating, with stable outlook, from Standard & Poor's. IT has a 'B2/LD' probability of default rating from Moody's. ASURION LLC: S&P Affirms 'B+' Longterm Counterparty Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' long-term counterparty credit rating on Nashville, Tenn.-based Asurion LLC. The outlook is stable. "At the same time, we assigned a 'BB-' senior secured debt rating to Asurion LLC's $300 million five-year amortizing first-lien term loan under its existing credit facility. The recovery rating on the company's first-lien term loan and revolving credit facility is '2', indicating our expectation for substantial (70%-90%) recovery for lenders in the event of a payment default," S&P said. "The recovery rating on the company's second-lien term-loan facility is '6', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. "The rating affirmation reflects that the completion of the proposed transaction will not affect the company's credit profile," said Standard & Poor's credit analyst Polina Chernyak. "The rating on Asurion's first-lien senior credit facility is based on our evaluation of the company's enterprise value at default. The counterparty credit rating on Asurion LLC reflects its significant leverage and fluctuating credit metrics -- resulting in a leveraged balance sheet that, in addition to the company's financial management strategy, is a weakness to the rating. The company's dependence on new subscribers and contract renewals could challenge the sustainability of its leading competitive position," S&P said. Asurion's operating performance, which is a key strength to the rating, and its leading competitive position and cash-generating capabilities (as measured by revenue and EBITDA), which support the company's deleveraging capabilities, offset the rating weaknesses. "The stable outlook reflects our view that the company will continue to generate solid cash flow and will be able to service its debt adequately," S&P said. "We believe that the company's cash-flow generating ability and EBITDA growth result largely from its successful international expansion, strong attachment rates, and solid competitive position in the handset protection and extended service warranty market, and the value it offers to its clients and customers. We believe that these factors will enable the company to sustain favorable operating performance despite the weak economy. In addition, we believe that despite difficult economic conditions and the global pullback in consumer spending, extended service warranties and handset protection coverage will remain a growing business for NEWAsurion. We believe that NEWAsurion's solid client relationships will enable the company to generate cash flow that supports the current rating for the next 24 months. We believe the company will continue to expand its products and services successfully on a global basis and to gain additional market share through market penetration," S&P said. ATP OIL: D.E. Shaw Discloses 5.1% Equity Stake ---------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, D. E. Shaw & Co., L.P., and David E. Shaw disclosed that, as of June 27, 2012, they beneficially own 2,662,347 shares of common stock of ATP Oil & Gas Corporation which represents 5.1% of the shares outstanding. A copy of the filing is available for free at http://is.gd/izRVFN About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. The Company's balance sheet at March 31, 2012, showed $3.63 billion in total assets, $3.48 billion in total liabilities, $115.81 million in redeemable noncontrolling interest, $71.18 million in 8% convertible perpetual preferred stock, and a $34.44 million total shareholders' deficit. * * * As reported by the TCR on May 9, 2012, Moody's Investors Service affirmed ATP's Caa2 Corporate Family Rating. The Caa2 Corporate Family Rating reflects ATP's small production and cash flow base, low drilling risk diversification, high proportion of proved undeveloped reserves and short PD (proved developed) reserve life, extremely high leverage and chronic liquidity challenges. BAKERSFIELD GROVE: Receiver Has Final Approval to Access Cash ------------------------------------------------------------- Judge Erithe A. Smith of the Bankruptcy Court for the Central District of California allowed Steven M. Speier -- in his capacity as receiver for a rental property in Bakersfield, Calif., owned by Bakersfield Grove Limited, LLC -- access to the cash collateral of U.S. Bank, N.A., on a final basis, pursuant to a stipulation between the parties, through the earlier of plan confirmation, dismissal, or conversion of the Chapter 11 case. Judge Smith also gave final approval to the terms of the stipulation to provide adequate protection and permit the receiver to continue in possession of the property. As adequate protection for the Receiver's use of Cash Collateral and the imposition of the automatic stay: (i) the Bank will receive up to $80,000 in adequate protection payments; and (ii) the Bank will have a lien on and security interest in the rents, issues, profits, or other Cash Collateral generated on or after the Petition Date that would have been collateral under the Pre-Petition Loan Documents to secure the Pre-Petition Obligations. The Bank will also have a claim of the highest administrative priority above all administrative expenses incurred in Debtor's Chapter 11 case. The Debtor owns real property in Bakersfield, Calif., which has been operated by the Debtor as a rental property and the Grove Property produces rents which the Bank asserts constitute its cash collateral. Prior to the Petition Date, the Bank initiated a judicial foreclosure action against the Debtor in the U.S. District Court for the Central District of California. On Dec. 16, 2011, the District Court entered an order for the appointment of a temporary receiver to manage the Grove Property. Pursuant to that order, Mr. Speier was appointed as receiver and took possession of the Grove Property. The Debtor, the Bank and the Receiver have entered into the Stipulation which provides that the Receiver be excused for immediate turnover of the Grove Property, and the income derived. The Debtor and the Bank desire that the Receiver continue his use of the Cash Collateral generated by the Grove Property to pay operating expenses associated with the Grove Property and to maintain the Grove Property and the Stipulation also provides for the continued interim use of Cash Collateral. The Bank is the only known creditor asserting an interest in the Cash Collateral, and the Bank consents to the use of the Cash Collateral by the Receiver on the terms specified in the Stipulation. The Debtor, the Bank and the Receiver also have agreed that the Receiver will continue to operate the Grove Property, including continuing to collect rent and charges from the tenants, paying the monthly expenses associated with the Grove Property, and preparing reports to the Bank and the Debtor. However, the Receiver is not permitted to sell or lease the Grove Property. The Receiver projects monthly income for 2012 ranging from approximately $106,000 to $119,000. In the event that the income from the Grove Property exceeds the amount of the expenses in the Budget, the Receiver will use the excess cash first to pay delinquent real property taxes associated with the Grove Property and, second, to pay up to $80,000 per month to the Bank as adequate protection for the use of the Bank's cash collateral. Any cash remaining after these payments will be held in reserve by the Receiver. The Bank will also receive post-petition replacement liens on any post-petition assets that, but for the filing of the Bankruptcy Case, would have been collateral under the terms of the Construction Loan, and the post-petition liens will have the same extent, validity, scope and priority as the Bank's prepetition liens. The post-petition replacement liens will not attach to any assets in which the Bank did not have a lien as of the Petition Date. To the extent there is a post-petition decline in the value of the Bank's collateral, the Bank will receive a super-priority administrative claim. Both the Debtor and the Bank reserve their rights to move to compel the Receiver to comply with the turnover requirements. The Bank reserves the right to move for relief from the automatic stay or to move for additional adequate protection and the Debtor reserves the right to oppose these requests. Both the Debtor and the Bank reserve their rights to compel a higher or lower monthly payment to the Bank for purposes of adequate protection, relief from stay or under the terms of a plan of reorganization. In the event the Stipulation terminates, the Debtor reserves the right to move for an order authorizing the use of the Bank's cash collateral and the Bank reserves the right to oppose such a request. The Debtor, however, has waived the right to surcharge the Bank or its collateral. About Bakersfield Grove Limited Brea, California-based Bakersfield Grove Limited, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-13157) on March 12, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), has properties located at Panama Lane, in Bakersfield, California. Judge Erithe A. Smith presides over the case. Kathy Bazoian Phelps, Esq., at Danning, Gill, Diamond & Kollitz, LLP. The petition was signed by Robert M. Clark, president of managing member. BARE NECESSITIES: Files for Chapter 11 to Halt Tax Deed Sale ------------------------------------------------------------ Paul Brinkmann at South Florida Business Journal reports that Bare Necessities Strip Club and Liquor Store in Miami, Florida, has filed for Chapter 11 protection, listing $477,197 in assets and debt of $499,068. According to the report, Robert Meyer, Esq., attorney for Bare Necessities, said there are plenty of assets and the bankruptcy was only filed to stop a tax deed sale scheduled for July 11. He said the company did not pay its taxes due to "oversight." The report, citing court documents, says the company also owns property in the Hialeah area. The club is owned and managed by Roger Farrell of Miami. According to the report, the largest creditor is Plantation-based Equitable Mortgage and Investment, with mortgages on three properties totaling $150,000. Miami-Dade County's Building Department shows three claims totaling $50,000. BAYTEX ENERGY: Moody's Rates New C$300MM Sr. Unsecured Notes 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Baytex Energy Corp.'s proposed C$300 million senior unsecured notes due 2022. Baytex's other ratings are unchanged. The rating outlook remains stable. Proceeds from the notes will be used to fund the redemption of the C$150 million debenture due August 26, 2016 and to reduce drawings under the C$700 revolving credit facility. Upgrades: Issuer: Baytex Energy Corp. Multiple Seniority Shelf, Upgraded to LGD5, 77% from LGD5, 79% Senior Unsecured Regular Bond/Debenture, Upgraded to LGD5, 77% from LGD5, 79 % Senior Unsecured Regular Bond/Debenture, Upgraded to LGD5, 77% from LGD5, 79 % Assignments: Issuer: Baytex Energy Corp. Senior Unsecured Regular Bond/Debenture, Assigned a range of 77 - LGD5 to B1 Ratings Rationale Baytex's Ba3 Corporate Family Rating (CFR) reflects its relatively small reserves, short reserve life in terms of proved developed (PD) reserves, high leverage on PD reserves and high dividend payments. At the same time, the rating considers Baytex's 85% oil- weighted production platform and solid leveraged full cycle ratio (LFCR), growing production profile, strong interest coverage, and favorable leverage on production and retained cash flow. The US$150 million and C$300 million senior unsecured notes are rated one notch below the Ba3 CFR due to the existence in the capital structure of the prior-ranking C$700 million senior secured revolving credit facility. The SGL-2 Speculative Grade Liquidity rating indicates good liquidity through mid-2013. During this period Moody's expects Baytex to consume C$150 million of negative free cash flow, which will be funded with drawings under the revolver. Pro-forma for the notes issuance Baytex will have about C$500 million available, after minimal letters of credit, under its C$700 million senior secured revolving credit facility due 2014. The company should be well in compliance with its three financial covenants through mid- 2013. Alternate liquidity is limited as the company's assets are pledged under its revolving credit facility. In May 2012 the company closed the sale of the non-operating North Dakota assets for US$312 million. The stable outlook reflects Baytex's growing production profile and oil bias, favorable leverage in terms of production and strong interest coverage. While a rating upgrade is not likely over the near term, it would be possible if PD reserves were expanded towards 100 million boe and the PD reserve life was increased toward 6 years, while maintaining conservative financial metrics. A negative outlook or downgrade could be considered if the company's E&P debt to production appeared likely to rise above $25,000 per boe or if or retained cash flow to debt appeared likely to fall below 25%. The principal methodology used in rating Baytex Energy Corp. was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Baytex Energy Corp. (Baytex) is a Calgary, Alberta based independent exploration and production (E&P) company that has proved reserves of approximately 132 million barrels of oil equivalent (boe) and average daily production of approximately 40,000 boe/d of which 80% is oil. BE AEROSPACE: Moody's Affirms 'Ba1' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed all BE Aerospace ratings including the Ba1 Corporate Family Rating and the Ba2 ratings on all of its senior unsecured note issues. This action follows the increase in the amount of the add-on to the 5 1/4% note issue due 2022 to $800 million from $675 million. The net proceeds of the add-on will be used to fund the repurchase of the company's $600 million 2018 8 �% senior notes in its tender offer and consent solicitation with remaining net proceeds to be used for other general corporate purposes, including potential acquisitions. Moody's notes that the resulting increase in the company's leverage metric will remain consistent with the Ba1 CFR rating range. More information on the rating assignment on the add-on issue is provided in the July 9 press release. 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. BE 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. BEAZER HOMES: Offering $75MM Common Stock and 3MM Equity Units -------------------------------------------------------------- Beazer Homes USA, Inc., has commenced concurrent underwritten public offerings of common stock and tangible equity units. The Company is offering $75 million of its common stock and 3,000,000 (equal to $75 million) of its tangible equity units in the concurrent offerings. The units are comprised of a prepaid stock purchase contract and an unsecured senior amortizing note due 2015. In addition, the Company intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the tangible equity units sold to cover over-allotments and a 30-day option to purchase up to an additional 15% of the shares of common stock. Neither offering is contingent upon completion of the other offering. The Company's common stock is listed on the New York Stock Exchange under the symbol "BZH," and the Company intends to apply to list the tangible equity units on the New York Stock Exchange under the symbol "BZT." The Company intends to use the net proceeds from these concurrent offerings for growth capital, including for approximately $100 million of potential land investments in Florida, California, Texas, North Carolina and Arizona, and for general corporate purposes, including the repayment of outstanding indebtedness. Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., Deutsche Bank Securities Inc. and UBS Securities LLC are serving as the joint book-running managers for the offerings and KKR Capital Markets LLC and Moelis & Company LLC are serving as co-managers for the offerings. The shares of common stock and the tangible equity units, including the underlying stock purchase contracts and senior amortizing notes, will all be issued pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. Preliminary prospectus supplements related to the offerings have been filed with the SEC and are available free of charge on the SEC's Web site at http://www.sec.gov. Copies of the preliminary prospectus supplements and the accompanying base prospectus related to the common stock and tangible equity units offerings may be obtained from (i) Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York, 10010, or by telephone at +1 (800) 221-1037, or by email at newyork.prospectus@credit-suisse.com; (ii) Goldman, Sachs & Co., via telephone: (866) 471-2526, email: prospectus- ny@ny.email.gs.com, or standard mail at Goldman, Sachs & Co., 200 West Street, New York, NY 10282, Attn: Prospectus Department; (iii) Deutsche Bank Securities Inc., Attention: Prospectus Group, 60 Wall Street, New York, NY 10005-2836 or by telephone at: (800) 503-4611, or by email at: prospectus.CPDG@db.com; or (iv) UBS Securities LLC, 299 Park Avenue, New York, NY 10171, Attention: Prospectus Department, or by calling (888) 827-7275. Investors should read these documents for more complete information prior to investing. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2011, showed $1.87 billion in total assets, $1.67 billion in total liabilities, and $200.38 million in total stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa2' probability of default and corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. In a credit opinion issued in March 2012, Moody's said that the Caa2 corporate family rating reflects Moody's expectation that Beazer's operating and financial performance, while improving modestly, will remain weak over the next two years. More specifically, Moody's assumes that elevated debt leverage, on- going operating losses, and declining tangible equity will continue over this time period. In addition, Moody's expects that Beazer's cash flow generation, which was a negative $113 million on a reported basis (and a negative $106 million on a Moody's- adjusted basis) over the trailing 12 months ended December 31, 2011, will continue to be weak in fiscal 2012 and 2013, as the benefits of inventory liquidation have largely played out and the company pursues land investments. BEHRINGER HARVARD: Bank of America Objects to Cash Collateral Use ----------------------------------------------------------------- Bank of America, N.A. on behalf of itself and as agent for Regions Bank, has filed a response to the motion for interim and final usage of cash collateral filed by BHFS I, LLC, and its affiliates. The Lender does not object to the Debtors' request to use cash collateral in its entirety; however, BofA said the Debtors' use of the Lender's cash collateral should, at this early stage of the case, be limited to amounts necessary for the operation of the Debtors' businesses and restricted so as to allow each Debtor to only use the cash collateral generated by its own operations. Further the Debtors' use of cash collateral should be conditioned on providing the Lender with adequate protection. As reported in the Troubled Company Reporter on June 21, 2012, Behringer Harvard Frisco Square LP and its affiliated debtors, BHFS I LLC, BHFS II LLC, BHFS III LLC, BHFS IV LLC, BHFS Theater LLC, obtained interim permission to use cash securing their obligations to their prepetition lenders. The Debtors said in court papers that, without an immediate ability to use Cash Collateral, they do not have other sufficient cash and funds to carry on the operation of their businesses, to pay employees, pay vendors and service providers, and to protect their property. Absent an immediate use of Cash Collateral, the Debtors and their estates will suffer immediate and irreparable injury. Four debtors -- BHFS I LLC, BHFS II LLC, BHFS III LLC, and BHFS IV LLC -- owed Bank of America, N.A., as agent for itself and for Regions Bank, $43.8 million under a syndicated loan. BofA and Regions Bank assert a first lien on the Four Debtors' assets. BHFS Theater owed Bank of America $4.6 million under a separate loan. BofA asserts a first lien on BHFS Theater's assets. BofA and Regions Bank, as lenders under the syndicated loan, assert a second lien on BHFS Theater's assets. The Debtors' loans matured in January 2012, and the lenders accelerated all obligations in February 2012. The Debtors have proposed multiple restructuring mechanisms to their senior secured lenders which, due mostly to the lenders' internal disagreements, have not led to any meaningful progress. An inability to refinance their obligations in light of market conditions, and the continued and severe downturn in the commercial real estate markets have led the Debtors to file for Chapter 11 to restructure their obligations, reorganize their businesses, preserve going concerns, and maximize the returns for all creditors and stakeholders. About BHFS Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13 in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BIOLIFE SOLUTIONS: Expects $1 Million Revenue in 2nd Quarter ------------------------------------------------------------ BioLife Solutions, Inc., expects to report record revenue of $1,092,450 for its second quarter ended June 30, 2012, up approximately 76 percent from last year's second quarter, and up 31 percent from the first quarter of this year. This was the eighth consecutive quarter of sequential revenue growth reported by the Company. Chief Executive Officer Mike Rice said, "We're very pleased to have reached this milestone and to have taken another significant growth step as we scale our business and approach positive cash flow from operations. Our platform HypoThermosol and CryoStor biopreservation media products continue to be recognized and adopted as the preferred, best-in-class storage/shipping and cryopreservation freeze media for clinical applications of cells and tissues." As previously forecasted by management, initial shipments to BioLife's recently acquired contract-manufacturing customer commenced in the second quarter of 2012 and also contributed to the record revenue performance. Rice continued, "We demonstrated our expertise and manufacturing capacity to our new partner by successfully delivering numerous batches and by offering several quality and process optimization improvements. The build-out of our second cGMP clean room suite and the hiring of several new team members to support this contract manufacturing agreement are ahead of schedule. We look forward to completing validation and commencing increased production in the fourth quarter of 2012." BioLife expects to report its full financial results for the second quarter of 2012 before Aug. 15, 2012. About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc. develops and markets patented hypothermic storage and cryopreservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. The Company reported a net loss of $1.95 million in 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $13.29 million in total liabilities and a $11.43 million in total shareholders' deficiency. Following the 2011 results, Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about BioLife Solutions' ability to continue as a going concern. The independent auditors noted that the Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of $54 million at Dec. 31, 2011. CHINA UNITED: Posts $149,200 Net Loss in Q3 Ended March 31 ---------------------------------------------------------- China United Insurance Service, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $149,258 on $699,169 of revenue for the three months ended March 31, 2012, compared with a net loss of $171,500 on $876,147 of revenue for the three months ended March 31, 2011. For the nine months ended March 31, 2012, the Company reported a net loss of $458,295 on $2.40 million of revenue, compared with a net loss of $174,946 on $2.02 million of revenue for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $1.74 million in total assets, $1.39 million in total current liabilities, and stockholders' equity of $345,574. The Company stated: "The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net operating losses since inception. The Company faces the risks common to companies that are relatively new, including capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. A t March 31, 2012, the Company had an accumulated deficit of $2,273,799. The Company's recurring losses raise substantial doubt about its ability to continue as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The Company plans to acquire more insurance agency companies in the PRC within the next 12 months, which will require more funding. The Company expects to incur losses from its operations and will require additional funding in the next 12 months. A copy of the Form 10-Q is available for free at: http://is.gd/xbQdwi Zhengzhou, Henan, China-based China United Insurance Service, Inc., operates as an insurance intermediary company in the People's Republic of China. CIRCUS AND ELDORADO: Sets July 23 Hearing on Amended Plan Outline ----------------------------------------------------------------- Circus and Eldorado Joint Venture filed with the U.S. Bankruptcy Court for the District of Nevada a blacklined version of the Disclosure Statement explaining the proposed First Amended Plan of Reorganization dated June 1, 2012. A hearing on July 23, 2012, at 2 p.m., has been set. The blacklined version reflects changes to the Debtors' First Amended Plan. According to the Disclosure Statement, the terms of the Plan include, among other things: Class Claims/Interest Treatment ----- --------------- --------- 1 Other Secured Claims Paid in full in Cash or otherwise left Unimpaired 2 Other Priority Claims Paid in full in Cash or otherwise left Unimpaired 3 Mortgage Note Claims If Class 3 Acceptance occurs, each holder will receive its respective Pro Rata share of (i) the Class 3 Consensual Cash Distribution and (ii) the New Second Lien Notes. If Class 3 Acceptance does not occur, each holder will receive its pro rata share of (i) the Class 3 Cram-Down Cash Distribution and (ii) the Cram-Down Notes. 4 US Foods Secured Claims Paid in full in Cash, but no payment of accrued interest on the Allowed US Foods Secured Claim 5 General Unsecured Claims Paid in full in Cash in four equal quarterly installments, the last of which will occur no later than one year after the Effective Date, with interest accruing at a rate of 5% per annum from the Petition Date through the date that the Allowed General Unsecured Claim is paid in full, provided that, in the event that any distribution to be made to a Holder of an Allowed General Unsecured Claim (on account of the principal amount of such Allowed General Unsecured Claims) in the aggregate totals less than $15,000, the Debtors, the Reorganized Debtors, and the Disbursing Agent, as applicable, will make any distribution in a single lump sum on the Effective Date, without interest. 6 Equity Interests Rights remain unaltered by the Plan. A copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/CIRCUS_ds_1amended.pdf About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, is due and payable. The Debtors have entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplates a proposed plan will be filed no later than June 1, 2012. The plan will contain creditor treatments that have already been negotiated with and agreed to by creditor constituents. The Debtors will seek approval of the explanatory disclosure statement within 45 days after the Petition Date and obtain confirmation of the Plan 60 days later. Judge Bruce T. Beesley presides over the case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture disclosed $264,649,800 in assets and $158,753,490 in liabilities as of the Chapter 11 filing. The petitions were signed by Stephanie D. Lepori, chief financial officer. August B. Landis, Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. CIRCUS AND ELDORADO: Gets Final Approval to Use Cash Collateral --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada, in a final order, authorized Circus and Eldorado Joint Venture to: -- use cash collateral pursuant to that certain stipulation between the Debtors and Bank of New York Mellon Trust Company, N.A. in its capacity as trustee with respect to that certain indenture dated March 5, 2002, as amended, for the Debtors' 10-1/8% Mortgage Notes due 2012; and -- grant the prepetition secured parties replacement liens subject to carve out on certain expenses. A full-text copy of the stipulation is available for free at http://bankrupt.com/misc/CIRCUS_cashcoll_stipulation.pdf About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, is due and payable. The Debtors have entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplates a proposed plan will be filed no later than June 1, 2012. The plan will contain creditor treatments that have already been negotiated with and agreed to by creditor constituents. The Debtors will seek approval of the explanatory disclosure statement within 45 days after the Petition Date and obtain confirmation of the Plan 60 days later. Judge Bruce T. Beesley presides over the case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture disclosed $264,649,800 in assets and $158,753,490 in liabilities as of the Chapter 11 filing. The petitions were signed by Stephanie D. Lepori, chief financial officer. August B. Landis, Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. CIRCUS & ELDORADO: Stutman Treister OK'd as Committee's Counsel --------------------------------------------------------------- The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the District of Nevada authorized The Official Committee of Unsecured Creditors in the Chapter 11 cases of Circus and Eldorado Joint Venture, et al., to retain Stutman, Treister & Glatt Professional Corporation as reorganization counsel, nunc pro tunc as of June 5, 2012. As reported in the Troubled Company Reporter on June 20, 2012, Jennifer A. Smith of Lionel Sawyer & Collins has agreed that her firm will be designated as Nevada counsel to the Committee. ST&G will work cooperatively with LSC to ensure that any duplication of efforts is avoided, and ST&G intends to delegate work to LSC as appropriate. ST&G will, among other things, advise the Committee of its powers and responsibilities under the U.S. Bankruptcy Code. ST&G will, among other things, assist the Committee in protecting and preserving the interests of the unsecured creditors of the Debtors as a class for these hourly rates: Principals $535 - $950 Of Counsels $550 - $895 Associates $285 - $495 Law Clerks $250 - $270 Paralegals $240 Attorneys expected to be most active in these cases: Eve H. Karasik $750 Christine M. Pajak $565 Danielle A. Pham $315 Kendra A. Johnson, paralegal $240 Eve H. Karasik, Esq., a member at ST&G, attests to the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, is due and payable. The Debtors have entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplates a proposed plan will be filed no later than June 1, 2012. The plan will contain creditor treatments that have already been negotiated with and agreed to by creditor constituents. The Debtors will seek approval of the explanatory disclosure statement within 45 days after the Petition Date and obtain confirmation of the Plan 60 days later. Judge Bruce T. Beesley presides over the case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture disclosed $264,649,800 in assets and $158,753,490 in liabilities as of the Chapter 11 filing. The petitions were signed by Stephanie D. Lepori, chief financial officer. August B. Landis, Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. CLARE OAKS: Court OKs DIP Amendment, Sale Extension --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois approved a fourth amendment to Clare Oaks' senior secured superpriority debtor-in-possession loan agreement. As reported in the Troubled Company Reporter on July 6, 2012, the Debtor has agreed to pay a fee of $15,000 to the DIP Lender for the amendment. The bank and the Master Trustee have consented to the proposed amendments to the budget and the final order. Pursuant to the amendment, the Debtor agrees to market and sell substantially all of their assets, in consultation with their advisors, and to meet these milestones, among other things: (i) if applicable, by Aug. 21, 2012, the Debtor will have conducted an auction for the purchase of all or substantially all of the Debtor's assets; (ii) not later than Aug. 23, 2012, the Court will have held a hearing to approve the sale of Debtor's assets to the stalking horse bidder or other bidder making a higher and better offer for the assets; (iii) the Debtor will close the sale of all or substantially all of the Debtor's assets by Sept. 30, 2012. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. COCOPAH NURSERIES: Case Summary & List of Creditors --------------------------------------------------- Debtor: Cocopah Nurseries of Arizona, Inc. c/o Craig D. Hansen, Esq. SQUIRE SANDERS (US) LLP One East Washington Street, #2700 Phoenix, AZ 85004 Tel: (602) 528-4000 Bankruptcy Case No.: 12-15292 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Cocopah Nurseries, Inc. 12-15293 Wm. D. Young & Sons, Inc. 12-15294 William Dale Young & Sons Trucking and Nursery 12-15296 Chapter 11 Petition Date: July 9, 2012 Court: U.S. Bankruptcy Court District of Arizona (Yuma) Judge: Eileen W. Hollowell About the Debtors: 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. Debtors' Counsel: Craig D. Hansen, Esq. SQUIRE SANDERS (US) LLP 1 East Washington Street, Suite 2700 Phoenix, AZ 85004 Tel: (602) 528-4085 Fax: (602) 253-8129 E-mail: craig.hansen@squiresanders.com Cocopah Nurseries of Arizona's Estimated Assets: $10,000,001 to $50,000,000 Cocopah Nurseries of Arizona's Estimated Debts: $100,000,001 to $500,000,000 The petitions were signed by Darl E. Young, authorized representative. A. Cocopah Nurseries of Arizona's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Electrical District No. Eight -- $76,124 P.O. Box 99 Salome, AZ 85348-0099 Crop Production Services -- $18,325 210 S. Pacific Coolidge, AZ 85128-4527 Empire Southwest 2506084 -- $15,025 P.O. Box 29879 Phoenix, AZ 85038-9879 Helena ? Yuma -- $10,612 Urena Farm Labor -- $10,000 Desert Citrus Harvesting -- $10,000 Sellers Petroleum -- $7,586 The Dune Company of Yuma, LLC -- $6,718 Yuma Mesa Fruit Growers Assoc. -- $6,605 Capital One Bank -- $6,097 AR FAB LLC -- $5,000 Fertizona-Buckeye, LLC -- $1,661 Cachon Bros. Construction -- $1,100 Yuma County Water Users? -- $980 Association Republic Services #753 -- $727 APS -- $483 Taglemor, Inc. -- $480 Airpeak -- $269 Yuma County FSA -- $250 Teamtalk Network, LLC -- $162 B. Cocopah Nurseries, Inc.'s List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chuckwalla Farm Land LLC -- $125,000 5700 Wilshire Boulevard Los Angeles, CA 90036 CVWD -- $105,661 P.O. Box 5000 Coachella, CA 92236-5000 Anthony Vineyards, Inc. -- $100,000 52301 Enterprise Way Coachella, CA 92236 C.V.W.D. -- $72,986 Kenny Strickland, Inc. (WDY) -- $71,384 Palo Verde Irrigation District -- $68,076 Latin Lady Ranch LLC -- $62,500 Gomez Farm Labor Contracting, Inc. -- $50,000 Foster-Gardner, Inc. (CR) -- $43,073 Law Office of Gregory R. Oleson -- $40,069 McKeever Water Well -- $39,801 Clympton Ag Services LLC -- $37,348 Imperial Irrigation Dist. -- $32,614 Oasis Ranch Mgt. Inc. -- $31,200 California Funding -- $27,755 The Dune Company of Imperial -- $26,208 Valley M & A Labor Contracting Inc. -- $25,000 Foster-Gardner, Inc. (COCO) -- $19,574 So Calif. Edison -- $17,192 Transwestern Insurance -- $15,839 C. William Dale Young's List of Its Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ General American Life -- $136,153 Insurance Company P.O. Box 790196 St. Louis, MO 63179-0196 WDY & Sons Trucking P.S.P. -- $78,008 81910 Arus Avenue Indio, CA 92201 Midland National Life Ins -- $7,608 Company (Greg) P.O. Box 77065 Minneapolis, MN 55480-7765 Midland National Life Ins -- $5,563 Company (Duane) Robert M. Gagnon -- $5,400 Midland National Life Ins -- $3,841 Company (Darl) American General Life Insurance -- $801 Company Contractors State License Board -- $360 HCC Surety Group -- $195 COMMUNITY HEALTH: S&P Keeps 'B' Rating on Upsized Sr. 2020 Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said that Community Health Systems Inc. senior note transaction, priced July 9, 2012, is $200 million higher than considered in our analysis. "Specifically, the $1.2 billion senior note issue (due 2020) is $200 million higher than the amount we considered. The additional amount does not have any impact on our corporate credit and issue- level ratings, and our recovery rating of '5' is unchanged. The B+/Stable/-- rating on Community Health Systems Inc. reflects our assessment of its business risk profile as "fair" 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. "We continue to expect Community to maintain a "highly leveraged" financial risk profile over the near term, given our expectation that leverage will remain near the present level of 5.3x as we expect reimbursement to pressure earnings and the company will continue to incorporate acquisitions as a key strategy," S&P said. Ratings List Community Health Systems Inc. Corporate credit rating B+/Stable/-- Proposed $1.2 billion senior notes due 2020 B Recovery rating 5 CONNOLLY LLC: Moody's Assigns 'B2' CFR; Outlook Stable ------------------------------------------------------ Moody's Investors Service assigned a B2 Corporate Family Rating ("CFR"), a Ba3 rating to a proposed first lien credit facility and a Caa1 rating to a proposed second lien term loan of Connolly, LLC. This is a first time rating for Connolly. The ratings outlook is stable. Proceeds from the term loans, along with additional equity, will be used to finance the acquisition of Connolly by Advent International Corporation. The sellers will maintain a meaningful ownership stake post-transaction. Moody's assigned the following ratings (and Loss Given Default assessments) to Connolly, LLC: - Corporate Family Rating, B2 - Probability of Default Rating, B2 - Proposed $30 million first lien revolver due 2017, Ba3 (LGD3, 32%) - Proposed $240 million first lien term loan due 2018, Ba3 (LGD3, 32%) - Proposed $130 million second lien term loan due 2019, Caa1 (LGD5, 85%) These ratings are subject to Moody's review of final documentation. Ratings Rationale Connolly's B2 CFR reflects high financial leverage, a relatively small revenue base and the upcoming expiration of a large customer contract. "Nonetheless, we anticipate revenue growth of over 30% in 2012 and over 10% in 2013 which, combined with modest debt reduction, is expected to lower debt / EBITDA to under 5 times over the next 12- 18 months", stated Moody's analyst Suzanne Wingo. The ramp-up of a contract with the Centers for Medicare and Medicaid Services ("CMS") is expected to drive most of the company's near-term growth, supplemented by positive trends with commercial insurance customers. Yet despite such rapid expansion, revenues will still be relatively modest at under $300 million annually. The CMS contract, which is expected to comprise over 25% of consolidated revenues, expires in February 2014. The contract expiration poses risk, although Moody's considers it likely that the CMS will renew Connolly's contract because of Connolly's success so far in recovering over a half billion dollars in Medicare overpayments for the government. "However, pricing concessions are typical in federal government re-competes, and earnings could fall materially even if the contract is renewed", Ms. Wingo added. The B2 CFR reflects Connolly's good liquidity profile, leading positions in each of its niche end markets, and meaningful barriers to entry. The rating is further supported by positive underlying fundamentals in the healthcare recovery vertical in which claims volumes and values are expected to grow because of an aging US population and the rising costs of healthcare. The stable outlook reflects Moody's expectation that Connolly will grow revenues in excess of 30% in 2012, expand its profitability margins, and use excess cash flow to reduce debt. The ratings could be upgraded if Connolly successfully renews large contracts, continues to grow its revenue size and profitability, and demonstrates a track record of debt reduction such that debt / EBITDA can be maintained below 4 times. Conversely, the ratings could be downgraded if Connolly loses a significant customer or if pricing pressure leads to margin compression and a deterioration in liquidity, such that debt / EBITDA is expected to be sustained above 5.5 times or free cash flow to debt falls below 5%. The principal methodology used in rating Connolly 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. Connolly is a leading provider of technology-enabled recovery audit services to health insurers and the Centers for Medicare and Medicaid Services, as well as retail and commercial businesses. In 2011, Connolly reported revenues of just under $200 million. CONNOLLY LLC: S&P Assigns Preliminary 'B' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' preliminary corporate credit rating to Atlanta, Ga.-based Connolly LLC. The outlook is stable. "At the same time, we assigned our preliminary 'B' issue-level rating to Connolly's proposed $30 million senior secured revolving credit facility and $240 million senior secured first-lien loan. The preliminary recovery rating is '3', reflecting our expectations of meaningful (50%-70%) recovery for lenders in case of a payment default," S&P said. "We also assigned our preliminary 'CCC+' issue-level rating to the company's $130 million senior secured second-lien term loan. The preliminary recovery rating is '6', reflecting our expectations of negligible (0%-10%) recovery for lenders in case of a payment default. All ratings are subject to review upon receipt of final documentation. The preliminary ratings on Connolly LLC reflect our view that the company has a "highly leveraged" financial profile and a "weak" business profile," S&P said. "In our view, the company has weak asset protection, and following the leveraged buyout the debt burden will remain high and the sponsor will likely influence financial governance," said Standard & Poor's credit analyst Nalini Saxena. "Because of recent growth trends we expect Connolly's credit measures will improve moderately over the next 12 months, but remain weak." The stable outlook reflects our view that Connolly will continue to increase revenues through its health care businesses and that its margins will remain at least at current levels. We expect Connolly's credit metrics to strengthen because of a combination of growth and debt pay-down, but will remain in line with indicative ratios for a "highly leveraged" financial profile and "weak" business risk profile over the next 12 months," S&P said. CYBRDI INC: Had $206,300 Net Loss in First Quarter -------------------------------------------------- Cybrdi, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $206,344 on $242,333 of revenues for the three months ended March 31, 2012, compared with a net loss of $188,699 on $113,811 of revenues for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $10.46 million in total assets, $5.58 million in total liabilities, and stockholders' equity of $4.88 million. As reported in the TCR on April 23, 2012, KCCW Accountancy Corp., in Diamond Bar, California, expressed substantial doubt about Cybrdi'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, accumulated deficit, and working capital deficit at Dec. 31, 2011, and 2010. A copy of the Form 10-Q is available for free at: http://is.gd/Vbywvu Cybrdi, Inc., located in Xi'an, Shaanxi, People's Republic of China, is holding company incorporated with 80% equity in Chaoying Biotech, which is engaged in biotechnology manufacturing, and research and development. Through Chaoying Biotech, Cybrdi also controls SD Chaoying, a cultural and entertainment company, which is also developing a casino. CUBIC ENERGY: Posts $3.6 Million Net Loss in March 31 Quarter ------------------------------------------------------------- Cubic Energy, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.58 million on $1.27 million of revenues for the three months ended March 31, 2012, compared with a net loss of $2.52 million on $2.26 million 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 $8.84 million on $5.99 million of revenues, compared with a net loss of $6.86 million on $4.44 million of revenues for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $32.31 million in total assets, $36.62 million in total current liabilities, and a stockholders' deficit of $4.31 million. "Our debt to Wells Fargo, with a principal amount of $35,000,000, is due on July 1, 2012, and the Wallen Note, with a principal amount of $2,000,000, is due Sept. 30, 2012, and both are classified as a current debt," the Company said in the filing. "As of March 31, 2012, we had a working capital deficit of $33,162,110. This level of negative working capital creates substantial doubt as to our ability to pay our obligations as they come due and remain a going concern. We are negotiating with Wells Fargo and Mr. Wallen to extend the maturity date of these debts. There can be no assurance that the Company will be able to negotiate such extensions." A copy of the Form 10-Q is available for free at: http://is.gd/9gcEc9 Cubic Energy, Inc., headquartered in Dallas, Tex., is an independent upstream energy company engaged in the development and production of, and exploration for, crude oil and natural gas. Its oil and gas assets and activities are concentrated in Louisiana. DELTA PETROLEUM: Creditors Voting on Joint Venture With Laramie --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of Delta Petroleum Corp. can express their opinions on forming a joint venture with Laramie Energy II LLC by voting for or against Delta's Chapter 11 reorganization plan. Last week the bankruptcy court in Delaware approved disclosure materials for Delta Petroleum, a Denver-based independent oil and natural gas exploration and development company. The confirmation hearing for approval of the reorganization plan will take place Aug. 15. As the result of an auction, Laramie was selected to sponsor a Chapter 11 plan that will create a joint venture two thirds owned by Laramie and one-third by reorganized Delta. According to the report, the disclosure statement reveals that holders of $267.7 million in unsecured note claims against Delta will have a recovery worth between 6% and 11.7% from receiving stock in reorganized Delta. Delta, in turn, will own one-third of the joint venture. Delta's unsecured creditors, with claims of about $3 million, will have the same percentage recovery by receipt of stock. In addition to stock in the joint venture, Delta will receive $75 million cash to be used in paying off about $50 million owing on a loan to finance the Chapter 11 case. The remainder of the cash will be applied toward expenses of the Chapter 11 effort. Delta is contributing all except about $8 million of its property to the joint venture. Laramie is contributing selected assets plus $75 million cash. The reorganization structure preserves some $885 million in net operating tax-loss carryforwards. The joint venture, to be called Piceance Energy LLC, will be financed in part with a $400 million revolving credit. 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. Delta Petroleum in July won approval for its disclosure statement explaining the Chapter 11 reorganization plan. DENNY'S CORP: GCIG to Open 50 New Denny's Restaurants in China -------------------------------------------------------------- Denny's Corporation has signed an agreement with Great China International Group for the development of 50 new Denny's restaurants in southern China over the next 15 years. GCIG has exclusive rights to open units in six Chinese provinces including Guangdong, Fujian, Guizhou, Jiangxi, Chongqing, and Sichuan. The Company expects the first restaurant will open in 2013. John Miller, Denny's President and Chief Executive Officer, stated, "This significant development agreement is Denny's first major expansion in China and is the brand's largest international development agreement to date. This agreement builds upon the success the Company has had in expanding the brand internationally with recent franchise openings in Honduras, Canada, Puerto Rico, and the Dominican Republic. We are thrilled to begin our relationship in China with GCIG and are impressed with their expertise and resources. We believe that the Denny's brand will continue to grow around the world and are focused on finding additional strong partners like GCIG as we continue our global expansion efforts." Sharon Huang, Business Director for GCIG, commented, "As the brand's first franchise partner in China, we are honored to have the opportunity to introduce local residents to Denny's everyday value and craveable menu items served in an inviting, comfortable atmosphere. Today's Chinese consumers are hungry for the variety, quality and value a brand like Denny's represents around the world. Denny's history of success internationally gives us confidence that this partnership will provide both GCIG and Denny's a significant growth opportunity." Denny's Senior Vice President of Global Development Steve Dunn added, "Denny's will be the most recognized American family dining brand to enter China. Denny's has very high standards when it comes to selecting the right franchisee and is excited to be partnering with GCIG, an experienced, dedicated and talented organization uniquely qualified to expand the Denny's brand in China. We will work closely with GCIG to ensure Denny's becomes the family dining brand of choice in southern China." As Denny's approaches its 60th anniversary and 1,700th location, the Company believes that the Denny's brand will become one of the largest American full service brands in the world. Through its America's Diner brand positioning, it is providing current and new guests the promise of everyday value with craveable, indulgent products served in a friendly and inviting atmosphere. Together with its talented and committed franchisees and licensees, the Company will work to continue to expand the Denny's platform through all types of distribution points around the globe. About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. The Company said in its annual report for the year ended Dec. 28, 2011, that as the Company is heavily franchised, its financial results are contingent upon the operational and financial success of its franchisees. The Company receives royalties, contributions to advertising and, in some cases, lease payments from its franchisees. The Company has established operational standards, guidelines and strategic plans for its franchisees; however, the Company has limited control over how its franchisees' businesses are run. While the Company is responsible for ensuring the success of its entire chain of restaurants and for taking a longer term view with respect to system improvements, the Company's franchisees have individual business strategies and objectives, which might conflict with the Company's interests. The Company's franchisees may not be able to secure adequate financing to open or continue operating their Denny's restaurants. If they incur too much debt or if economic or sales trends deteriorate such that they are unable to repay existing debt, it could result in financial distress or even bankruptcy. If a significant number of franchisees become financially distressed, it could harm the Company's operating results through reduced royalties and lease income. The Company's balance sheet at March 28, 2012, showed $336.24 million in total assets, $338.88 million in total liabilities, and a $2.64 million total shareholders' deficit. * * * Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service and a 'B+' corporate credit rating from Standard & Poor's. As reported by the TCR on April 20, 2012, Standard & Poor's Ratings Services withdrew all of its ratings, including the 'B+' corporate credit rating on Spartanburg, S.C.-based Denny's Corp. at the company's request. There is no rated debt outstanding. DEWEY & LEBOEUF: Ex-Partners Have Until July 24 to Settle --------------------------------------------------------- Jennifer Smith, writing for The Wall Street Journal, reports former partners of Dewey & LeBoeuf LLP on Wednesday afternoon were offered a deal to give back as much as $103.6 million in pay and other benefits, or face years of litigation. The report says the "clawback" deal is aimed at more than 700 former Dewey partners, including 371 who retired or left the firm before January 2011 but have since received cash payments for pension benefits or refunds of capital they had invested. The deal would help Dewey pay down its mountain of debt. WSJ also reports the Dewey estate is also going after some $217 million in unpaid client bills; and an estimated $60 million in profits from unfinished legal work that ex-partners took with them to their new firms. The report says ex-partners have until July 24 to accept the law firm's offer, but it was unclear how many would agree to it. The report notes many of the partners have retained lawyers to defend against such claims. Some of them have said they are skeptical of any deal offered by the estate, which they view as beholden to Dewey's former leadership. The report also says former Dewey Chairman Steven Davis isn't eligible for the deal. Mr. Davis, who was stripped of his power in April, was sued last month by a former partner who accused him and other leaders of the firm of running a "Ponzi scheme" that used money invested by new partners to enrich themselves and others. A lawyer for Mr. Davis declined to comment, the report notes. 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. DOLLAR THRIFTY: Moody's Affirms 'B1' CFR, Rates Revolver 'Ba3' -------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to Dollar Thrifty Automotive Group's $450 million senior secured revolving credit facility. In a related action Moody's affirmed DTG's Corporate Family Rating and Probability of Default Rating at B1. The outlook remains stable. The B1 rating is supported by Dollar's strong position in the value segment of the daily car rental market along with its prudent financial strategy. The rating also anticipates that industry fundamentals will remain strong. Ratings Rationale DTG has an efficient operating structure that yields competitive returns. Unlike its peers, Dollar Thrifty enjoys a capital structure that includes only fleet debt and has no burdensome corporate debt. Consequently, its credit metrics are very strong for the rating level. However, the B1 rating also recognizes that Dollar could pursue share repurchases or other shareholder- friendly actions that could weaken credit metrics or narrow the current liquidity position. Nonetheless, Moody's expects that such actions would be measured and would enable Dollar to maintain credit metrics that remain consistent with the B1 rating while retaining an adequate liquidity position, The stable outlook reflects the company's highly competitive position in the daily car rental market and strong credit metrics balanced against the potential for measured shareholder-friendly actions that might be undertaken. DTG's Speculative Grade Liquidity rating is SGL-3. Moody's believes the company has an adequate liquidity position which is supported by a $450 million secured credit facility that matures during 2017. After letter of credit usage, availability under the facility is about $385 million. As of the end of the second quarter, Dollar's cash position approximates $300 million. In addition, the company had capacity of approximately $100 million under its VFN facility with a revolving usage period extending to October 2013. These liquidity sources, amounting to approximately $800 million provide adequate coverage for the company's fleet purchase requirements and the approximately $83 million in fleet debt maturing during the coming twelve months. The principal methodology used in rating Dollar Thrifty Automotive Group was the Global Equipment and Automotive Rental Industry Methodology published in December 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. DYNEGY INC: Court Approves Merger With Holdings ----------------------------------------------- Judge Cecelia Morris of the U.S. Bankruptcy Court for the Southern District of New York approved the merger of Dynegy Inc. and Dynegy Holdings LLC, bringing the companies a step closer to their emergence from Chapter 11 protection. The approval came after Dynegy Inc. put itself into bankruptcy protection on July 6 to complete the merger and carry out a settlement with creditors holding more than $2.7 billion of claims against Dynegy Holdings. In a July 10 decision, Judge Morris authorized both companies to effectuate the merger on or before the effective date of Dynegy Holdings' proposed restructuring plan. The bankruptcy judge also authorized Dynegy Inc. to effectuate the assignment of the administrative claim, which was granted to the company, to a trust prior to the merger. Dynegy Inc. may change the proposed beneficiaries of the trust if it files and serves a notice of intent to do so, and no objections are filed or those objections are either consensually resolved or overruled by the bankruptcy court, Judge Morris said. She overruled objections to the merger that have not been withdrawn or resolved. A copy of Judge Morris' June 10 order is available without charge at http://bankrupt.com/misc/DynegyInc_OrdMergerJuly10.pdf In connection with the merger, Judge Morris also ordered that her June 1 decision, which approved the settlement and was entered in Dynegy Holdings' Chapter 11 case, be deemed entered in Dynegy Inc.'s own bankruptcy case. Earlier, the U.S. Trustee, a Justice Department agency that oversees bankruptcy cases, opposed the merger, complaining Dynegy Inc. did not provide enough information making it hard for anyone to understand the impact of merging the two companies. The same was echoed by Cleo Zahariades, an investor of Dynegy Inc. who is suing its directors in Delaware Chancery Court over the sale of the coal-powered plant assets. Mr. Zahariades dropped his objection prior to approval of the merger. The merger is part of Dynegy Holdings' proposed Chapter 11 plan of reorganization filed early last month. After the merger, Dynegy Inc. will be the surviving entity and all assets will be held by the company. In a separate order, Judge Morris granted Dynegy Inc.'s request that her July 3 decision approving the outline of Dynegy Holdings' plan or the so-called disclosure statement be made applicable to the company's bankruptcy case. The order handed down also authorizes the solicitation of votes with respect to Dynegy Inc. A copy of the July 10 order is available without charge at: http://bankrupt.com/misc/DynegyInc_DSOrderJuly10.pdf The proposed restructuring plan will be considered for approval by the bankruptcy court on September 5. The deadline for voting on and for objecting to the plan is August 24. 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: Sec. 341(a) Meeting of Creditors Postponed ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York ordered that no meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code will be held prior to September 6 in the Chapter 11 case of Dynegy Inc. Section 341 requires the U.S. Trustee, a Justice Department agency that oversees bankruptcy cases, to convene what is commonly referred to as a "341 meeting" or "meeting of creditors" within a "reasonable time" after a company files for bankruptcy protection. The meeting of creditors is a unique part of bankruptcy proceedings. It offers creditors an opportunity to examine the bankrupt company's representative under oath about its financial affairs and operations that would be of interest to the general body of creditors. 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: Wins Nod to Maintain Bank Accounts ---------------------------------------------- Dynegy Inc. obtained interim court approval to continue using its current cash management system and bank accounts. Earlier, Dynegy Inc. asked Judge Cecelia Morris that certain court decisions including a January 26 order issued in Dynegy Holdings LLC's Chapter 11 case be made applicable to its own bankruptcy case. The move is part of the proposed joint administration of the companies' bankruptcy cases. The interim order issued yesterday authorized Dynegy Inc. to use its current cash management system to continue intercompany transactions and pay non-debtor affiliates under its services agreements. The company was also given the go-signal to use its current bank accounts including those at JPMorgan Chase Bank and Bank of New York Mellon, and to use its disbursement accounts to finance operating expenses with the funds held in those bank accounts. A list of the bank accounts is available without charge at http://bankrupt.com/misc/DynegyInc_BankAccounts.pdf Dynegy Inc. can also close or open new bank accounts but it has to notify the U.S. Trustee and comply with the requirements of Section 345(b) of the Bankruptcy Code. The bank accounts should also be located at an authorized depository designated by the U.S. Trustee. The July 10 order also authorized the company to pay pre- bankruptcy service charges outstanding as of July 6, if any, owed to JPMorgan and BNY Mellon in connection with the maintenance of its cash management system. Dynegy Inc. can print "debtor in possession" or "DIP" on its business forms immediately upon the filing date. In case some business forms were inadvertently sent or issued within five business days of the filing date without the designation, the requirements of the U.S. Trustee Operating Guidelines for the printing of such designation are waived, according to the court order. 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: Aug. 1 Set as Claims Bar Date ----------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York issued an order establishing a deadline for Dynegy Inc.'s creditors to file their proofs of claim. The court order established 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. It also approved the procedures governing the filing of proofs of claim. 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 following 30 days after the mailing of the notice of amendment. The July 10 order does not modify any order establishing bar dates in the Chapter 11 cases of Dynegy Holdings LLC and its affiliated debtors. 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). EAGLE ROCK: Moody's Rates New $250-Million Senior Notes 'B3' ------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Eagle Rock Energy Partners, L.P.'s proposed offering of $250 million senior notes due 2020. The proceeds from the notes offering will be used to repay borrowings on Eagle Rock's senior secured revolving credit facility. Ratings Rationale "This senior notes offering will enhance Eagle Rock's liquidity by refinancing some of its outstanding revolver borrowings on a long- term basis," commented Michael Somogyi, Moody's Vice President -- Senior Analyst. "This will boost the available borrowing capacity on its bank credit facility, giving Eagle Rock more financial flexibility to fund its planned growth capital expenditures." The B3 rating on the proposed $250 million senior notes reflects both the overall probability of default of Eagle Rock, to which Moody's assigns a PDR of B1, and a loss given default of LGD 5 (77%). The senior notes are unsecured and guaranteed by domestic subsidiaries on a senior unsecured basis. All of the outstanding senior notes will be subordinate to the partnership's $675 million senior secured credit facility. The size of this potential priority claim to the assets relative to the amount of the senior notes outstanding results in the notes being rated two notches beneath the B1 Corporate Family Rating (CFR) under Moody's Loss Given Default (LGD) Methodology. Eagle Rock's B1 CFR reflects the partnership's low financial leverage relative to peers. The partnership also has good geographic and basin diversity in its operations. The rating is tempered by Eagle Rock's greater business risk stemming from the high proportion of commodity price risk within its midstream operations, in addition to the inherent commodity price exposure and capital intensity of its E&P segment. Management has targeted 3.5x Debt/EBITDA and it is important for the existing ratings that this level is maintained in order to mitigate the higher business risk. Eagle Rock's ratings could be downgraded if leverage levels increase significantly due to weaker than anticipated earnings and/or large growth capital expenditures or acquisitions. Consolidated Debt/EBITDA sustained meaningfully above 3.5x would pressure the ratings. If Eagle Rock significantly decreases its business risk by either growing the midstream business with a much higher proportion of fee based contracts and significantly increasing its proved reserve and production scale without increasing its financial leverage then the ratings could be upgraded. Fee based revenues approaching 50% of the midstream business or average daily production of 20,000 boe would be supportive of a higher rating. The principal methodology used in rating Eagle Rock Energy Partners, L.P. was the Global Midstream Energy Industry Methodology published in December 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. Eagle Rock Energy Partners, L.P. is publicly traded midstream energy and exploration and production MLP headquartered in Houston, Texas. EAGLE ROCK: S&P Gives 'B' Unsec. Debt Rating to New $250MM Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' senior unsecured debt rating to Eagle Rock Energy Partners L.P.'s proposed $250 million notes due 2020. Eagle Rock Energy Finance Corp. is the co-issuer of the notes. "The recovery rating on the notes is '4', indicating our expectation for average recovery (30% to 50%) if a payment default occurs. Immediately following the issuance, the partnership will have $550 million total principal amount of outstanding notes," S&P said. "The partnership intends to use proceeds from the unsecured notes to pay down outstanding borrowings under its credit facility. Pro forma for the issuance, we expect the company's debt to EBITDA ratio will be below 4x over the next year, however, there could be some volatility in these cash flows depending on market conditions," S&P said. Houston, Texas-based master limited partnership Eagle Rock Energy Partners engages in both the midstream energy business (which includes gathering, processing, and transporting natural gas; fractionating and transporting natural gas liquids; and crude oil logistics and marketing) and the upstream energy business (which includes developing and producing interests in oil and natural gas). Ratings List Eagle Rock Energy Partners L.P. Corporate credit rating B/Stable/-- New Ratings Eagle Rock Energy Partners L.P. Eagle Rock Energy Finance Corp. $250 mil. senior unsecured notes B Recovery rating 4 EASTMAN KODAK: Retirees' Committee Taps Segal Co. as Consultant --------------------------------------------------------------- BankruptcyData.com reports that Eastman Kodak's official committee of retired employees filed with the U.S. Bankruptcy Court a motion to retain Segal Company (Contact: Stuart Wohl) as actuarial consultant at these hourly rates: principal at $440 to $700, actuary at $325 to $485, benefit consultant at $230 to $470 and analyst at $230 to $400. 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. ELPIDA MEMORY: Bondholders Protest Sale to Micron Technology ------------------------------------------------------------ Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that Elpida Memory Inc. bondholders said the integrity of Japan's corporate restructuring is at stake in a brewing dispute over the planned sale of the chip maker to rival Micron Technology Inc. As announced early this month, Micron Technology, Inc., and the trustees for Elpida Memory have signed a definitive sponsor agreement for Micron to acquire and support Elpida. The agreement has been entered into in connection with Elpida's corporate reorganization proceedings conducted under the jurisdiction of the Tokyo District Court. Under the agreement, JPY200 billion -- approximately US$2.5 billion assuming JPY80/US$ -- total consideration, less certain reorganization proceeding expenses, will be used to satisfy the reorganization claims of Elpida's secured and unsecured creditors. Micron will acquire 100% of the equity of Elpida for JPY60 billion -- approximately US$750 million -- to be paid in cash at closing. In addition, JPY140 billion -- approximately US$1.75 billion -- in future annual installment payments through 2019 will be paid from cash flow generated from Micron's payment for foundry services provided by Elpida, as a Micron subsidiary. As a result of the payments, all pre-petition debt obligations of Elpida will be fully discharged under the corporate reorganization proceedings. The agreement also calls for Micron to provide certain financing support for Elpida capital expenditures, subject to specified conditions, and to maintain Elpida's operations and employees. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. ENERGY CONVERSION: Aug. 29 Hearing on Cash Collateral Objections ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan will convene a hearing on Aug. 29, 2012, at 12 noon, to consider objections to the: a) rights granted to Energy Conversion Devices, Inc., under cash collateral order with respect to the prepetition secured claim and the granting of postpetition replacement liens to ECD; b) scheduled prepetition general unsecured claim and prepetition secured claim of ECD against United Solar Ovonic LLC; and c) postpetition unsecured claims of ECD for postpetition advances made to USO. The Court ordered that (i) the hearing will be canceled if the Plan has become effective before the date of the hearing; and (ii) all other actions relating to the objection, including discovery, are stayed through the date of the hearing. On June 21, the Debtors entered into a stipulation agreeing to stay the proceedings relating to the objection pending the outcome of the voting on the Second Amended Joint Plan of Liquidation of the Debtors. The stipulation provides for, among other things: 1. provided that the Plan has not become effective, the hearing on the objection will be on Aug. 15, 2012, at 12 noon; 2. provided that the Plan has not become effective, parties may file a response to the objection no later than Aug. 9; 3. all other actions relating to the objection, including discovery, are stayed through Aug. 15, ; and 4. if the Plan becomes effective and the Debtors' estates are substantively consolidated, the objection will be withdrawn. A full-text copy of the stipulation is available for free at: http://bankrupt.com/misc/ENERGY_CONVERSION_CC_stipulation.pdf About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. Foley and Lardner, LLP represents the Committee. Scouler & Company, LLC, serves as financial advisor. A group of shareholders had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. The Debtors disclosed that they had canceled the auction of the going concern sale of USO and discontinued the court-approved sale process because of the failure to receive an acceptable qualified bid by the bid deadline. Quarton Partners, the companies' investment banker, is continuing to work with prospective buyers on alternative transactions. In addition, the companies have retained auction services provider Hilco Industrial to prepare for an orderly sale of the companies' assets. ESCALON MEDICAL: Had $639,800 Net Loss in March 31 Quarter ---------------------------------------------------------- Escalon Medical Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $639,786 on $6.07 million of revenues for the three months ended March 31, 2012, compared with a net loss of $1.92 million on $6.40 million 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 $5.0 million on $18.37 million of revenues, compared with a net loss of $3.62 million on $19.08 million of revenues for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $10.57 million in total assets, $8.97 million in total liabilities, and stockholders' equity of $1.60 million. "The Company has incurred recurring operating losses, no longer have the benefit of cash inflows from Vascular and on May 11, 2012, the BHH debtholder informed the Company that it intends to declare the BHH debt, which is guaranteed by Escalon, into default, as such, the entire debt of $4,149,516 is recorded as a current liability. These conditions raise substantial doubt about the Company's ability to continue as a going concern." "On Jan. 12, 2012. BH Holdings, S.A.S. ("BHH"); a wholly owned subsidiary of Drew [Drew Scientific, Inc., a wholly owned subsidiary of Escalon] initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court"). The Commercial Court on Jan. 18, 2012, opened the liquidation proceedings with continuation of BHH's activity for three months and named an administrator to manage BHH. Since BHH is no longer controlled by Drew it was deconsolidated in the Dec. 31, 2011, consolidated financial statements and prior period amounts are presented as discontinued operations." "The filing of the insolvency declaration at BHH will have a material effect on results of operations in subsequent periods. BHH's product line revenues from operations were $4,763,056, $5,254,574 and $2,647,877 in fiscal 2011, 2010 and 2009, respectively. Losses from operations, net of taxes, were ($1,232,904), ($635,952) and ($1,068,040) in 2011, 2010 and 2009, respectively." As reported in the TCR on Oct. 18, 2011, Mayer Hoffman McCann P.C., in Plymouth Meeting, Pennsylvania, says that the ongoing debt payments on the debt related to the Biocode Hycel acquisition and continued losses from operations and negative cash flows from operating activities raise substantial doubt about Escalon Medical's ability to continue as a going concern. A complete text of the Form 10-Q is available for free at: http://is.gd/HpuKU3 Wayne, Pa.-based Escalon Medical Corp. operates in the healthcare market, specializing in the development, manufacture, marketing, and distribution of medical devices and pharmaceuticals in the areas of ophthalmology, diabetes and hematology. The Company and its products are subject to regulation and inspection by the United States Food and Drug Administration (the "FDA"). FERRARA CANDY: S&P Assigns 'B' Corp Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Chicago-based Ferrara Candy Co., a company formed through the merger of Farley's & Sathers Candy Co. Inc. and Ferrara Pan Candy Co. Inc. The outlook is stable. The merger closed in June 2012. "At the same time, we assigned our 'B' issue-level rating to Ferrara's $425 million senior secured term loan facility," S&P said. The recovery rating is '4', indicating our expectation for average (30% to 50%) recovery in the event of a payment default. The term loan is issued at the operating company level through its Candy Intermediate Holdings Inc. subsidiary. The company also issued a $125 million asset-based lending (ABL) revolving loan facility due 2017, which is unrated. "We understand that Ferrara received about $330 million of additional equity from existing shareholders, including majority owner Catterton Partners. We are withdrawing all existing ratings on Farley's & Sathers, including the issue-level ratings, as this debt has been fully repaid concurrent with the close of the merger and related financing," S&P said. The ratings on Ferrara reflect Standard & Poor's assessment of the company's financial risk profile as "highly leveraged" and its business risk profile as "vulnerable." "Key credit factors in our business risk assessment include Ferrara's participation in the highly competitive and fragmented nonchocolate confectionary industry, limited international presence, and volatility of raw material costs," S&P said. "We believe the company will benefit from its scale, enabling it to leverage existing supplier and customer relationships to reduce costs, in addition to potential merger synergies. The portfolio of branded products will include legacy Farley's & Sathers brands (including Brach's, Trolli, Bob's, Now and Later, and Sathers) and Ferrara Pan's brands (Lemonhead, Black Forest, Atomic FireBall, among others)," S&P said. "We estimate the combined entity's pro forma ratio of total debt to EBITDA (before merger synergies) is close to 5.5x, and the ratio of funds from operations (FFO) to adjusted total debt is about 5% for the 12 months ended March 31, 2012. Both leverage and FFO-to-debt metrics are within our range of indicative ratios for a highly leveraged financial risk profile, which include leverage above 5x and FFO to debt of less than 12%. However, it is our opinion that Ferrara will likely absorb its merger and integration-related costs, in addition to synergies, over the next 12-18 months, which would allow for improvement in these ratios. The outlook is stable," S&P said. "We expect leverage will approach 5.5x by fiscal year-end 2012, because of ABL borrowings to cover merger and integration-related costs. However, we believe the company will apply its excess free cash flow towards debt reduction beginning in 2013 as cash flow improves from merger-related synergies," S&P said. FIDDLER'S CREEK: Creditors, Lawyers to Pay Damages -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that several creditors of Fiddler's Creek LLC and their attorneys were hammered by the bankruptcy judge in Tampa for knowingly violating the automatic stay that halts lawsuits against a company on filing bankruptcy. According to the report, several creditors filed a lawsuit against Fiddler's Creek's principal, contending he was the bankrupt company's alter ego. The creditors didn't heed a warning from Fiddler's Creek's counsel that the suit violated the automatic stay. After a trial, the bankruptcy judge ruled that the suit "willfully violated" and was in "reckless disregard" of the automatic stay even though the company itself wasn't named as defendant. The report relates U.S. Bankruptcy Judge K. Rodney May signed an order on July 6 requiring the creditors and their lawyers to pay the costs of the automatic stay dispute and legal fees in defending the lawsuit itself. The judge also imposed $50,000 in punitive damages on the creditors' lawyers who had taken the position that the automatic stay never can be violated when the bankrupt company isn't a defendant. The amount of the legal fees to be paid by the creditors and their lawyers will be calculated later. About Fiddler's Creek Fiddler's Creek, LLC, and its affiliates each owns, operates or is otherwise affiliated with the premier, fully integrated, master planned residential community known as "Fiddler's Creek" in southwestern Florida. Fiddler's Creek is located in Collier County, Florida, approximately 12 miles southeast of the city of Naples and six miles north of Marco Island. The Fiddler's Creek development is comprised of nearly 4,000 zoned acres of prime land in Naples, Florida, and is planned for and capable of accommodating up to 6,000 residences upon projected build-out, which is estimated to be in 2020. Fiddler's Creek contains five distinctive neighborhoods known as: Fiddler's Creek, Veneta, Aviamar, Marsh Cove and Meadow Run. Fiddler's Creek filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-03846) on Feb. 23, 2010. Paul J. Battista, Esq., Heather L. Harmon, Esq., and Mariaelena Gayo-Guitian, Esq., at Genovese Joblove & Battista, P.A., Miami; Bart A. Houston, Esq., at Kopelowitz Ostrow; and Mark Woodward, Esq., serve as counsel to the Debtors. Judge Alexander L. Paskay presides over the case. The Company estimated assets and debts at $100 million to $500 million. Paul S. Singerman, Esq., Jordi Guso, Esq., and Debi Evans Galler, Esq., at Berger Singerman P.A., represent the Official Unsecured Creditors Committee as counsel. At the end of August 2011, Fiddler's Creek LLC was given formal approval for its Chapter 11 plan following an eight-day confirmation hearing. The Plan incorporates agreements with the official creditors' committee, an ad hoc group of homeowners, and two lenders, Regions Bank NA and Fifth Third Bank. FRANKLIN CREDIT: McCarter & English Approved as Bankruptcy Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey authorized Franklin Credit Holding Corporation to employ McCarter & English LLC as counsel. About Franklin Credit Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. The Court has established July 18, 2012, as the hearing on the adequacy of the Disclosure Statement. The Debtor filed a First Amended Prepackaged Plan of Reorganization that proposes to change, among other things, the proposed record date to identify stockholders for a proposed distribution of a pro rata share of the Company's 80% interest in its mortgage servicing subsidiary, Franklin Credit Management Corporation. The Debtor now proposes the record date to be a date after a confirmation order has been entered by the Bankruptcy Court. The Debtor also proposes to exclude liability to the Securities and Exchange Commission from the releases proposed to be granted in favor of non-debtors. The Debtor asks the Court to approve those modifications as non-material without the need for further solicitation of votes to accept or reject the Prepackaged Plan. FRANKLIN CREDIT: SNR Denton OK'd as Special Securities Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized Franklin Credit Holding Corporation to employ SNR Denton as special securities and corporate counsel. As reported in the Troubled Company Reporter on June 28, 2012, SNR Denton has acted as the Debtor's corporate and SEC counsel and is the best position to provide excellent and cost effective corporate and SEC-related services. SNR Denton will (a) advise the Debtor with respect to corporate law matters; (b) represent the Debtor in corporate transactions; and (c) represent the Debtor in connection with securities law compliance. To the best of the Debtor's knowledge, SNR Denton is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Franklin Credit Holding Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. The Court has established July 18, 2012, as the hearing on the adequacy of the Disclosure Statement. The Debtor filed a First Amended Prepackaged Plan of Reorganization that proposes to change, among other things, the proposed record date to identify stockholders for a proposed distribution of a pro rata share of the Company's 80% interest in its mortgage servicing subsidiary, Franklin Credit Management Corporation. The Debtor now proposes the record date to be a date after a confirmation order has been entered by the Bankruptcy Court. The Debtor also proposes to exclude liability to the Securities and Exchange Commission from the releases proposed to be granted in favor of non-debtors. The Debtor asks the Court to approve those modifications as non-material without the need for further solicitation of votes to accept or reject the Prepackaged Plan. GLOBAL EQUITY: Had $139,400 Net Loss in 1st Quarter --------------------------------------------------- Global Equity International, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $139,448 on $107,500 of revenue for the three months ended March 31, 2012, compared with a net loss of $19,933 on $22,581 of revenue for the same period last year. The Company's balance sheet at March 31, 2012, showed $1.32 million in total assets, $362,329 in total current liabilities, $480,000 of Redeemable Series A, Convertible Preferred Stock, and stockholders' equity of $477,397 million. As reported in the TCR on April 9, 2012, Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about Global Equity'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 net loss of $1,688,102 and net cash used in operations of $92,780 for the year ended Dec. 31, 2011. "The Company also has a working capital deficit of $185,123 at Dec. 31, 2011." A copy of the Form 10-Q is available for free at: http://is.gd/S0v8HL Dubai, UAE-based Global Equity International, Inc., provides corporate advisory services to companies desiring to have their shares listed on stock exchanges or quoted on quotation bureaus in various parts of the world. GLOBAL SHIP: DePrince Race Owns 10.3% of Class A Shares ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, DePrince, Race & Zollo, Inc., disclosed that, as of June 30, 2012, it beneficially owns 4,871,738 shares of Class A Common Stock of Global Ship Lease, Inc., which represents 10.26% of the shares outstanding. A copy of the filing is available for free at http://is.gd/Vlq6T1 About Global Ship Lease London, England-based Global Ship Lease (NYSE: GSL, GSL.U and GSL.WS) -- http://www.globalshiplease.com/-- is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at June 30, 2010, of 6.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.6 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for approximately $77 million each that are scheduled to be delivered in the fourth quarter of 2010. The Company also has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option. As reported in the Dec. 1, 2012 edition of the TCR, Global Ship Lease disclosed that it had entered into an agreement with its lenders to waive until Nov. 30, 2012 the requirement under its credit facility to conduct loan-to-value tests. The credit facility requires that loan-to-value, which is the ratio of outstanding borrowings under the credit facility to the aggregate charter-free market value of the secured vessels, cannot exceed 75%. The Company's balance sheet at March 31, 2012, showed US$937.52 million in total assets, US$595.25 million in total liabilities and US$342.26 million in total stockholders' equity. GRUBB & ELLIS: Seyfarth Shaw OK'd as Labor & Employment Counsel --------------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Grubb & Ellis Company, et al., to continue the employment of Seyfarth Shaw LLP as labor and employment counsel to the Debtors in accordance with the prior order authorizing the employment of ordinary course professionals. As reported in the Troubled Company Reporter on June 26, 2012, prior to the Petition Date, the Debtors engaged the Seyfarth Firm to assist with their labor and employment issues. With the pending sale to BGC Partners, Inc., the transfer/termination of over 3,000 employees nationwide, and related employment benefit issues, the Debtors anticipated many labor and employment matters to be addressed in connection with the sale. The Debtors submit that they will require the continued services of the Seyfarth Firm to address labor and employment issues related to the transition of the Debtors' businesses to BGC, including, but not limited to, preparing supplemental WARN Act notices in compliance with various federal and state laws during the transition period contemplated in the TSS, and addressing the orderly transition or termination of employee benefits. The Seyfarth Firm's hourly rates for professionals who will work on matters related to the Debtors range from $595 to $765 per hour for partners, $540 per hour for senior counsel, $360 to $440 per hour for associates, $230 per hour for paralegals, $190 per hour for research librarian, and $85 to $95 per hour for law clerks. To the best of the Debtors' knowledge, the Seyfarth Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. On March 27, 2012, the Court approved the sale to BCG. An auction was cancelled after no rival bids were submitted. Pursuant to the term sheet signed by the parties, BGC would acquire the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC would also pay $16 million in cash because the sale was approved by the March 27 deadline. Otherwise, the cash component would have been $14 million. Approval of the sale was simplified when BGC settled with unsecured creditors by increasing their recovery. Several parties in interest have taken an appeal from the sale order. GUIDED THERAPEUTICS: Warrant Exchange Offer Expires July 5 ---------------------------------------------------------- Guided Therapeutics, Inc., announced the results of its exchange offer for certain of its outstanding warrants to purchase up to an aggregate of approximately 28.4 million shares of its common stock. The warrants eligible for exchange had an exercise price of $0.65 per share and exercise periods ending on July 26, 2012, or March 1, 2013. The exchange offer expired at 5:00 p.m. (Eastern) on Thursday, July 5, 2012. As of that time, holders of eligible warrants exercisable to purchase approximately 15,856,449 shares of the Company's common stock had tendered those warrants for exchange. Those warrants tendered for exchange were exchanged for three classes of new warrants. New warrants exercisable for approximately 7.7 million shares of the Company's common stock have an exercise price of $0.40 per share if exercised on or before July 15, 2012, $0.45 per share if exercised between July 16, 2012, and Aug. 15, 2012, and $0.50 per share if exercised after Aug. 15, 2012. These new warrants expire at the close of business on Sept. 15, 2012. New warrants exercisable for approximately 151,000 shares and 3.9 million shares at $0.65 per share expire on July 26, 2013, and March 1, 2014, respectively. New warrants exercisable for approximately 151,000 shares and 3.9 million shares at $0.80 per share expire on July 26, 2014, and March 1, 2015, respectively. The Company intends to apply any proceeds received in connection with the subsequent exercise of the new warrants received pursuant to the exchange offer to increase inventory of the Company's LuViva Advanced Cervical Device to meet current demand for the product, expand its international marketing and sales efforts, continue to seek FDA approval for the LuViva device and begin Phase 2 multicenter clinical trials of a non-invasive test for Barrett's Esophagus using the same technology platform. About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. In its report on the Company's 2011 Form 10-K, UHY LLP, in Sterling Heights, Michigan, noted that the Company's recurring losses from operations and accumulated deficit raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $6.64 million in 2011, compared with a net loss of $2.84 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.08 million in total assets, $2.17 million in total liabilities and $908,000 in total stockholders' equity. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company's capital-raising efforts are ongoing. If sufficient capital cannot be raised during the fourth quarter of 2012, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support, such as under the Konica Minolta development agreement and additional NCI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In that a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate or file for bankruptcy protection. HALLWOOD GROUP: Posts $9.5 Million Net Loss in Q1 2012 ------------------------------------------------------ The Hallwood Group Incorporated filed its quarterly report on Form 10-Q, reporting a net loss of $9.55 million on $35.88 million of revenues for the three months ended March 31, 2012, compared with a net loss of $996,000 on $26.77 million of revenues for the same period of 2011. The Company's balance sheet at Dec. 31, 2011, showed $92.27 million in total assets, $42.68 million in total liabilities, and stockholders' equity of $49.59 million. "The Company and its subsidiaries are involved in a number of litigation matters, as described in Note 13, and have spent and may continue to spend significant amounts in professional fees in connection with the defense of its pending legal matters. As previously described, on April 24, 2012, the United States District Court in the Adversary Proceeding issued a Judgment awarding damages against the Company totaling approximately $18,700,000 plus prejudgment and postjudgment interest and attorneys' fees as may be requested and awarded pursuant to a subsequent motion. The Company satisfied the Judgment, including prejudgment and post-judgment interest, in two payments; $3,774,000 on May 4, 2012, and $17,947,000 on May 9, 2012. The amount and timing for the payment of legal fees to the plaintiff's attorneys, which will be subsequently determined by the District Court, is currently unresolved." "In addition to its current available cash, to obtain additional funds to satisfy the Judgment, in May 2012, the Company received an $8,000,000 dividend from Brookwood and the $10,000,000 HFL Loan." "The Company's ability to receive additional cash dividends or other advances from Brookwood above the permitted annual discretionary dividend not to exceed 50% of Brookwood's net income to repay the HFL Loan or for other purposes, is dependent upon Brookwood's obtaining consent from BB&T for such payments. Any such payments or advances would also be contingent upon the approval of Brookwood's board of directors and Brookwood's ability to meet the requirements of the Delaware corporate laws for the payment of dividends and compliance with other applicable laws and requirements." "The aforementioned circumstances raise substantial doubt about the Company's ability to continue as a going concern." As reported in the TCR on April 10, 2012, Deloitte & Touche LLP, in Dallas, expressed substantial doubt about The Hallwood 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 award proposed by the court against the Company and the uncertainty related to the ongoing litigation raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/lJFoVZ Dallas, Texas-based The Hallwood Group Incorporated was incorporated in Delaware in 1981 and operates as a holding company. The Company operates its principal business in the textile products industry through its wholly owned subsidiary, Brookwood Companies Incorporated. HOMELAND SECURITY: Two Top Execs' Contracts Extended to 2014 ------------------------------------------------------------ The Board of Directors of Homeland Security Capital Corporation approved an amendment to each of the employment agreements dated June 15, 2011, between the Company and Thomas C. McMillen, the Company's Chairman, President and Chief Executive Officer; and Michael T. Brigante, the Company's Chief Financial Officer, pursuant to which the term of each agreement was extended until June 30, 2014. Previously, the agreements were for one year terms and were automatically renewable for additional consecutive one-year terms, unless at least 90 days written notice is given by either the Company or Messrs. McMillen or Brigante, as applicable, prior to the commencement of the next renewal term. After June 30, 2014, the agreements will again be automatically renewable for additional consecutive one-year terms, unless at least 90 days written notice is given by either the Company or Messrs. McMillen or Brigante, as applicable, prior to the commencement of the next renewal term. No other terms of either of the agreements have been amended. About Homeland Security Homeland Security Capital Corporation is an international provider of specialized technology-based radiological, nuclear, environmental disaster relief and electronic security solutions to government and commercial customers. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Coulter & Justus, P.C., in Knoxville, Tennessee, noted that Related Party Senior Notes Payable totalling $5.55 million are due and payable. As of Dec. 31, 2011, the Company has a net capital deficiency in addition to a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The Company also reported a net loss of $3.98 million on $0 of net revenue for the year ended June 30, 2011. The Company's balance sheet at March 31, 2012, showed $9.92 million in total assets, $12.26 million in total liabilities, $169,768 in warrants payable, and a $2.51 million total stockholders' deficit. HORIZON LINES: Western Asset Mgt. Has 14.4% Stake ------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Western Asset Management Company disclosed that, as of June 30, 2012, it beneficially owns 12,514,047 shares of common stock of Horizon Lines, Inc., which represents 14.39% of the shares outstanding. The percentage ownership is based upon 32,098,752 common stock shares outstanding and 1,149,877,970 warrants outstanding (9,250,000 warrants convert at 1-1 and 1,140,627,970 warrants convert at 25-1) which are able to covert to 54,875,119 common stock shares as of June 30, 2012. Western Asset previously disclosed beneficial ownership of 691,994 common shares or a 21.07% equity stake as of Jan. 31, 2012. A copy of the amended filing is available for free at: http://is.gd/uIvkkS About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. Horizon Lines reported a net loss of $229.41 million in 2011, a net loss of $57.97 million in 2010, and a net loss of $31.27 million in 2009. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. The Company's balance sheet at March 25, 2012, showed $640.74 million in total assets, $828.54 million in total liabilities, and a $187.79 million total stockholders' deficiency. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HOVNANIAN ENTERPRISES: Swaps $6MM Debt With 1.5MM Class A Shares ---------------------------------------------------------------- Pursuant to agreements with bondholders dated June 28, 2012, and July 2, 2012, Hovnanian Enterprises, Inc., issued an aggregate of 1,516,712 shares of the Company's Class A common stock, par value $0.01 per share, in exchange for an aggregate of $6.0 million of the Company's outstanding indebtedness, consisting of $3.0 million aggregate principal amount of the Company's outstanding 7.5% Senior Unsecured Notes due 2016 and $3.0 million aggregate principal amount of the Company's outstanding 8.625% Senior Notes due 2017. The exchanges were effected with existing bondholders and no commission or other remuneration was paid or given directly or indirectly for soliciting those exchanges. Accordingly, the exchanges were effected pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company reported a net loss of $286.08 million on $1.13 billion of total revenue for the fiscal year ended Oct. 31, 2011, compared with net income of $2.58 million on $1.37 billion of total revenues during the prior year. The Company's balance sheet at April 30, 2012, showed $1.51 billion in total assets, $1.97 billion in total liabilities, and a $454.78 million total deficit. * * * As reported by the TCR on Nov. 4, 2011, Fitch Ratings has lowered the Issuer Default Rating (IDR) of Hovnanian Enterprises, Inc., (NYSE: HOV) to Restricted Default (RD) from 'CCC'. The downgrade reflects Fitch's view that the debt exchange of certain of Hovnanian's existing senior unsecured notes for new senior secured notes is a distressed debt exchange under Fitch's 'Distressed Debt Exchange Criteria', published Aug. 12, 2011. Fitch anticipates adjusting the company's IDR to the appropriate level to reflect the new capital structure within the next 14 days. In the Nov. 7, 2011, edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Hovnanian Enterprises Inc. (Hovnanian) to 'CCC-' from 'SD' (selective default). "We also raised our ratings on the company's 10.625% senior secured notes due 2016 to 'CCC-' from 'CC' and senior unsecured notes to 'CC' from 'D'. The '3' recovery rating on the senior secured notes and the '6' recovery rating on the senior unsecured notes remain unchanged," S&P stated. "These rating actions follow our reassessment of Hovnanian's business and financial risk profile following the completion of the company's debt exchange offer, in which the company exchanged $195 million of its seven series of senior unsecured notes for $141.8 million 5% senior secured notes due 2021 and $53.2 million 2% senior secured notes due 2021," said credit analyst George Skoufis. "Our rating on Hovnanian reflects the company's highly leveraged financial risk profile, a less-than-adequate liquidity position, and very weak credit metrics." As reported by the TCR on Sept. 13, 2011, Moody's Investors Service downgraded the corporate family and probability of default ratings of Hovnanian Enterprises, Inc. to Caa2 from Caa1. The downgrade reflects Hovnanian's continued operating losses, weak gross margins, very high homebuilding debt leverage, and Moody's expectation that the weakness in year-over-year revenues, deliveries, and net new contracts experienced by the company will continue for the next one to two years. In addition, the downgrades acknowledge that Hovnanian's cash balance is weakening and cash flow generation is negative as it pursues new land opportunities, which represented about $300 million of investment over the first nine months of fiscal 2011. IMAGEWARE SYSTEMS: 3 Execs. to Continue Services Until Dec. 31 -------------------------------------------------------------- ImageWare Systems, Inc., executed a Sixth Amendment to Change of Control and Severance Benefits Agreement with each of Charles AuBuchon and David Harding, and a Sixth Amendment to Employment Agreement with Wayne Wetherell. Under the terms of the Sixth Amendments, the terms of service for each of Messrs. Wetherell, AuBuchon and Harding will continue through Dec. 31, 2012. The previous terms continued through June 30, 2012. No other terms and conditions were amended under the terms of the Sixth Amendments. About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc. is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. The Company reported a net loss of $3.18 million in 2011, compared with a net loss of $5.05 million in 2010. The Company's balance sheet at March 31, 2012, showed $9.42 million in total assets, $10.20 million in total liabilities and a $776,000 total shareholders' deficit. INDIANA STEEL AND TUBE: Brownstown Steel Mill Files for Chapter 11 ------------------------------------------------------------------ Indiana Steel and Tube, Inc., filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 12-91512) in New Albany, Indiana on July 10, 2012. An initial hearing on the first day motions is scheduled for July 12, 2012 at 10:00 a.m. before Judge Basil H. Lorch III. Motions filed include the Debtor's requests to pay prepetition wages, grant adequate assurance of payment to utilities, maintain its bank accounts, and access DIP financing and use cash collateral. The Debtor is an operator of a cold roll steel mill producing high quality steel tubing. It receives split steel coils and then uses state of the art mills to cut, roll, and weld the steel into tubes of various sizes, shapes, and gauges. The Debtor currently operates three mills at two locations in Brownstown, Indiana. The Debtor employs 57 individuals and had over $40 million in gross revenue in 2011. Notwithstanding strong sales, the Debtor in early January 2012 began to experience some working capital issues and an inventory imbalance. Senior management made a decision to liquidate some inventory in order to create additional working capital liquidity. By the end of February 2012 it became evident to senior management that while a portion of the finished goods inventory had been liquidated the liquidity issue had not improved and that there was a discrepancy between the actual and book inventory. Accounting firm Agresta, Storms & O'Leary, PC, which was enlisted by the Debtor, discovered that the inventory discrepancy was substantial. The Debtor notified its lender Indiana Bank & Trust Co. of the issue, and continued to investigate the issue with Agresta. The Debtor's investigation is still ongoing. As a result of the Debtor's inventory discrepancy, its cash availability with IBT was significantly reduced. Although IBT has worked with the Debtor in stabilizing operations, the Debtor needs additional liquidity to fill customer orders and reach optimal operational efficiency. The Debtor filed the chapter 11 case to obtain a better forum to seek additional operating capital either through a sale or third party investor. The funding allow the Debtor to obtain the raw materials and inventory necessary to operate at full capacity and efficiency, fill all the needs of its customers, and return to profitability, all while protecting 57 jobs and ensuring the Debtor continues to be a vibrant part of the Brownstown economy. INPHASE TECHNOLOGIES: Has OK to Hire Laufer and Padjen as Counsel ----------------------------------------------------------------- InPhase Technologies, Inc., obtained permission from the U.S. Bankruptcy Court for the District of Colorado to employ Laufer and Padjen LLC as its general bankruptcy counsel. As reported by the Troubled Company Reporter on Oct. 26, 2011, Laufer and Padjen will: (a) prepare all schedules, reports, plans, disclosure statements, pleadings, motions and other documents as may be required in the Chapter 11 case; (b) assist Debtor with the refinancing of its secured debt; (c) assist Debtor in negotiating and obtaining confirmation of a plan Of reorganization; and (d) perform all other legal services. About InPhase Technologies Based in Longmont, Colorado, InPhase Technologies -- http://www.inphase-tech.com-- develops holographic data storage recording media and systems. InPhase was founded in 2000. InPhase is led by CEO Art Rancis and senior vice president of engineering James Russo. Initial InPhase customers included Turner Broadcasting. InPhase filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-34489) on Oct. 18, 2011. The Debtor estimated assets of $50 million to $100 million and estimated debts of $10 million to $50 million in its bankruptcy filing. The Debtor is represented by Joel Laufer, Esq. -- jl@jlrplaw.com -- at Laufer and Padjen LLC. INTELLIGENT COMMUNICATION: Posts $195,400 Net Loss in Q1 2012 ------------------------------------------------------------- Intelligent Communication Enterprise Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $195,367 for the three months ended March 31, 2012, compared with a net loss of $1.18 million for the same period last year. The Company had no gross revenue from continuing operations for the three-month periods ended March 31, 2012, and 2011. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $801,980 in total current liabilities, and stockholders equity of $1.06 million. "The Company's consolidated financial statements have been prepared in conformity with GAAP applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. During the year ended Dec. 31, 2011, the Company sold its iCEmms division, which was its only revenue-producing division. The Company used cash received from the sale of its iCEmms division to retire debt and fund the iCEsync business, but the Company's intention is to raise additional equity to finance the further development of markets for its products and services until positive cash flows can be generated from its operations. However, the Company cannot assure that additional funds will be available to the Company when required or on terms acceptable to the Company, if at all. These conditions raise substantial doubt about the Company's ability to continue as a going concern." Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about Intelligent Communication'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 has negative working capital and an accumulated deficit at Dec. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/rLL08Y Singapore-based Intelligent Communication Enterprise Corporation has continuing operations providing multimedia content and integrated media services. The iCEsync business using the Modizo.com platform is distributing video content to website visitors and attracting advertising revenue. INTERLEUKIN GENETICS: Delta Dental Increases Stake to 22.9% ----------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Delta Dental Plan of Michigan, Inc., disclosed that, as of June 29, 2012, it beneficially owns 10,928,962 shares of common stock of Interleukin Genetics, Inc., which represents 22.9% of the shares outstanding. Delta Dental Plan of Michigan, a Michigan nonprofit dental care corporation, was formed for the purpose of expanding the availability of oral and dental care by providing dental insurance benefit programs. DDMI was organized on Oct. 19, 1964. DDMI's business address is 4100 Okemos Road, Okemos, Michigan 48864. On June 29, 2012, DDMI entered into a Stock Purchase Agreement with the Company pursuant to which the Company sold to DDMI 500,000 shares of Series B convertible preferred stock, par value $0.001 per share at a purchase price of $6.00 per share. DDMI has acquired the Series B Preferred Stock for investment purposes and to support its strategic relationship with the Company. The Series B Preferred Stock is initially convertible into 10,928,962 shares of the Company's Common Stock, reflecting a conversion rate calculated by dividing the Original Price by $0.2745, subject to adjustment pursuant to certain antidilution provisions in the Certificate of Designations, Preferences, and Rights of the Series A-1 Preferred Stock and Series B Preferred Stock. A copy of the filing is available for free at: http://is.gd/zVsGop About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Following the Company's financial results for the year ended Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts, expressed substantial doubt about Interleukin Genetics' ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $5.02 million during the year ended Dec. 31, 2011, and, as of that date, the Company's current liabilities exceeded its current assets by $12.27 million and its total liabilities exceeded total assets by $11.4 million. The Company reported a net loss of $5.0 million for 2011, compared with a net loss of $6.0 million for 2010. The Company's balance sheet at March 31, 2012, showed $1.93 million in total assets, $14.72 million in total liabilities, and a $12.79 million total stockholders' deficit. INTERNATIONAL BARRIER: Posts $65,600 Net Loss in March 31 Quarter ----------------------------------------------------------------- International Barrier Technology Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $64,574 on $1.02 million of sales for the three months ended March 31, 2012, compared with net income of $11,126 on $734,503 of sales for the three months ended March 31, 2011. For the nine months ended March 31, 2012, the Company reported net income of $150,886 on $3.12 million of sales, compared with net income of $865,317 on 42.49 million of sales for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $3.79 million in total assets, $1.34 million in total liabilities, and stockholders' equity of $2.45 million. "At March 31, 2012, the Company had an accumulated deficit of $14,439,772 (June 30, 2011 - $14,360,735) since its inception and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company expects to fund short-term cash flow requirements with remaining cash reserves and positive operating cash flow anticipated with increasing sales volume over the next year. While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds for operations." As reported in the TCR on Oct. 20, 2011, BDO Canada LLP, in Vancouver, Canada, expressed substantial doubt about International Barrier'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 had an accumulated deficit of $14,360,735 at June 30, 2011, and had a working capital deficit of $701,934. A complete text of the Form 10-Q is available for free at: http://is.gd/xEOcqq Watkins, Minnesota-based International Barrier Technology Inc. develops, manufactures and markets proprietary fire resistant building materials branded as Blazeguard in the United States of America and, as well, the Company owns the exclusive U.S. and international rights to the Pyrotite fire retardant technology. The Company was incorporated under the British Columbia Company Act and is publicly traded on the TSX Venture Exchange in Canada ("TSX-V") and the OTC Bulletin Board in the United States of America. J.C. PENNEY: Reports Final Phase of Restructuring Effort -------------------------------------------------------- J. C. Penney Company Inc. announced that the restructuring effort it began in April to create a leaner and more simplified operating structure is now fundamentally complete. "One of the most challenging tasks for any leadership team is to reorganize a company. In April, we began right-sizing our headquarters from a people perspective to align our teams with jcpenney's new business model. The actions taken today mark the final phase of those efforts," said CEO Ron Johnson. "We have simplified processes, removed unnecessary work and reduced layers to help us make better and faster decisions. While difficult, these decisions are in the long-term interests of jcp and our stakeholders." The announcement will result in the elimination of approximately 350 positions at jcpenney's headquarters. The savings generated by these actions will contribute to the Company's previously announced expectation to achieve an annual run rate of approximately $900 million in expense savings by the end of 2012, one year ahead of its initial plan. About jcpenney J. C. Penney Company, Inc. (NYSE: JCP) -- http://www.jcpenney.com/ -- provides a variety of apparel for the whole family, jewelry, housewares and home decor, and shoes. Includes a gift registry, employment and credit card. In June 2012, Fitch Ratings affirmed its Issuer Default Rating (IDR) on J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. at 'BB+' but revised the Rating Outlook to Negative from Stable. The ratings, Fitch said, reflect significant execution risk for J.C. Penney over the next 12-18 months given the company's new pricing and promotional strategy and its attempt to address fundamental areas such as merchandising, costs, and investments in its store base. The company should be able to take costs out of the system given a bloated expense structure to fund the much needed investments in its physical store base. However, the jury remains out on whether consumers will buy into the new merchandising and pricing structure to enable J.C. Penney to turn around faltering sales and sustainably improve the profitability of its business once it gets through this transformational year. In May 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on J.C. Penney to 'BB-' from 'BB' and placed it and other Penney ratings on CreditWatch with negative implications. S&P said the downgrade follows J.C. Penney's announcement of its first-quarter results, which were meaningfully below expectations. J.C. Penney announced a 20.1% sales decline and a 18.9% comparable store sales decline for the first quarter of 2012. Moody's, however, opted to keep J.C. Penney's Ba1 Corporate Family Rating. JETSTAR PARTNERS: Has Courts Nod to Hire Bell Nunnally as Counsel ----------------------------------------------------------------- Jetstar Partners Ltd. obtained permission from the U.S. Bankruptcy Court to employ Bell Nunnally & Martin LLP as counsel. As reported by the Troubled Company Reporter on April 23, 2012, Bell Nunnally will, among other things: (a) advise the Debtor of its rights, powers, and duties as debtor and debtor-in-possession; (b) take all necessary actions to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of actions commenced against the Debtor, the negotiation of disputes in which the Debtor is involved and the preparation of objections to claims filed against the estate; and (c) prepare on behalf of the Debtor, as debtor-in- possession, all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the estate. About Jetstar Partners Jetstar Partners, Ltd., was formed on Oct. 14, 1999, for the purpose of owning and developing real property in Dallas County, Texas. Jetstar owns and operates certain real property in Irving, Dallas County. Collinternational IV, Inc., a Texas corporation, is the sole general partner of Jetstar. Jetstar Partners, Ltd., filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-31444) on March 5, 2012. In its schedules, the Debtor disclosed $11,435,476 in total assets and $7,860,399 in total liabilities. Judge Harlin DeWayne Hale oversees the case. KV PHARMACEUTICAL: OrbiMed Advisors No Longer Owns Shares --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, OrbiMed Advisors LLC, OrbiMed Capital LLC and Samuel D. Isaly disclosed that, as of June 30, 2012, they do not beneficially own any shares of Class A common stock of K-V Pharmaceutical Company. Mr. Isaly previously reported beneficial ownership of 6,451,400 shares of Class A common stock representing 13.22% of the shares outstanding as of Dec. 31, 2011. A copy of the amended filing is available for free at: http://is.gd/6W3ih6 About KV Pharmaceutical Company KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. The Company reported a net loss of $102.30 million for the year ended March 31, 2012, a net loss of $271.70 million for the year ended March 31, 2011, and a net loss of $283.60 million for the year ended March 31, 2010. The Company's balance sheet at March 31, 2012, showed $253.40 million in total assets, $734.10 million in total liabilities and a $480.70 million total shareholders' deficit. BDO USA, LLP, in Chicago, Illinois, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that the Company among other things has experienced recurring losses from operations, has a significant shareholders' deficit, and negative working capital; the potential inability of the Company to raise additional capital or debt financing; a potential cash shortfall in meeting near term obligations; significant uncertainties related to litigation and governmental inquiries; and potential debt covenant violations. These factors raise substantial doubt about the Company's ability to continue as a going concern. LANDAMERICA FINANCIAL: $39 Million Settlement Approved ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of LandAmerica Financial Group Inc. will be receiving an additional $39 million as the result of a settlement approved by the U.S. Bankruptcy Court in Richmond, Virginia. The report recounts that LandAmerica's liquidating Chapter 11 plan was implemented in late 2009. The plan created a trust that sued directors and officers in 2011, alleging breaches of fiduciary duty. The parties went to mediation after the district judge denied a motion to dismiss the suit in March. According to the report, mediation resulted in settlement where providers of directors' and officers' liability insurance agreed to pay $36 million. In addition, the insurance companies waived their claims, allowing distribution of an additional $3 million being held in reserve in case the claims was valid. In April the trustee generated $37.9 million through settlement with other insurance companies. About LandAmerica Financial LandAmerica Financial Group, Inc., provided real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services Inc. filed for Chapter 11 protection (Bankr. E.D. Va. Lead Case No. 08-35994) on Nov. 26, 2008. Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP served as co-counsel. Zolfo Cooper served as restructuring advisor. Epiq Bankruptcy Solutions served as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran PLC served as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan served as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG reported total assets of $3.325 billion and total debts of $2.839 billion as of Sept. 30, 2008. On March 6, 2009, March 27, 2009, March 31, 2009, July 17, 2009, Oct. 12, 2009, and Nov. 4, 2009, various LFG affiliates -- LandAmerica Assessment Corporation, LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, Southland Title of San Diego, LandAmerica Credit Services, Inc., Capital Title Group, Inc., and LandAmerica OneStop Inc. -- also commenced voluntary Chapter 11 cases. The Chapter 11 cases of LFG, LES, and the LFG Affiliates are jointly administered under case number 08-35994. LandAmerica filed a Joint Plan of Liquidation on Sept. 9, 2009. The Court on Nov. 23, 2009, entered an order confirming the Joint Chapter 11 Plan of LFG and its Affiliated Debtors, dated Nov. 16, 2009, as to all Debtors other than OneStop. The effective date with respect to the Plan was Dec. 7, 2009. Plan trustees were appointed for LFG and LES. LANTERN PARTNERS: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Lantern Partners LLC filed with the U.S. Bankruptcy Court for the Southern District of Indiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $18,613,600 B. Personal Property $485,951 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $11,371,394 E. Creditors Holding Unsecured Priority Claims $286,617 F. Creditors Holding Unsecured Non-priority Claims $152,161 ----------- ----------- TOTAL $19,099,551 $11,810,172 A full text copy of the schedules of assets and liabilities is available free at: http://bankrupt.com/misc/LANTERN_PARTNERS_sal.pdf 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 is a single asset real estate as defined in 11 U.S.C., Sec. 101 (51B). The Debtor's principal asset is located at 10500 Kincaid Drive, Fishers, Indiana. 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. LARSON LAND: Court Approves $1.6 Million DIP Financing ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Idaho, in a final order, authorized John L. Davidson, Chapter 11 trustee for Larson Land Company, LLC, to: -- enter into the First Amendment to the Postpetition Credit Agreement; and -- borrow up to $1,650,000 under the Credit Agreement. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant the lender superpriority administrative claim status; replacement liens in all now owned or hereafter acquired assets and property of Debtor; and adequate protection payments in an amount equal to interest on Debtor's prepetition obligations to lender. The Credit Agreement will include an amount set aside for the benefit of priority and unsecured creditors of the Debtor as: 1. a minimum of $100,000, plus 3.75% of the net cash proceeds of the sale of the assets of the Debtor that exceed $38 million, up to a cap of $250,000; 2. the trustee will create an Unsecured Creditor Carve Out reserve, in immediately available funds, in connection with the budget prepared by the trustee pursuant to the Credit Agreement; and 3. the distribution of the proceeds of the Unsecured Creditor Carve Out will be subject to the priorities of applicable law, including the Bankruptcy Code, and further order of the Court. Objections The Court also ordered that all objections to the entry of the final order are withdrawn or resolved by the terms hereof or, to the extent not resolved, are overruled. Previously, the U.S. Trustee objected to the trustee's motion for interim and final approval of postpetition financing agreement. According to the U.S. Trustee, among other things, interim relief must be of a limited nature until creditors are given a full opportunity to participate and protect their interests. For example, the proposed financing would subordinate Zions Bank's lien. This can only be done if Zions Bank agrees or if adequate protection is provided. The U.S. Trustee also said that the trustee needed to provide additional information about a carve out for unsecured creditors. Cash Collateral Use According to the Debtor's case docket, the Court also authorized the Chapter 11 trustee's final use of the cash collateral. Sheila Schwager, counsel for the Chapter 11 trustee represented that the remaining issues have all been resolved and there are no further objections written or heard. About Larson Land Company Ontario, Oregon-based Larson Land Company LLC, fka Select Onion Co. LLC -- http://www.selectonion.com/-- a privately held agribusiness company that grows, stores, processes and ships bagged onions, fresh processed onions, whole peel onions, IQF onions, and delicious raw breaded hand packed onion rings, filed a Chapter 11 petition (Bankr. D. Idaho Case No. 12-00820) in Boise, Idaho, on April 12, 2012, estimating assets of up to $100 million and debts of up to $500 million. Judge Terry L. Myers presides over the case. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe, serves as the Debtor's counsel. The petition was signed by Farrell Larson, president. LASER COFINOGA: Moody's Downgrades Standalone BCA to 'Ba2' ---------------------------------------------------------- Moody's Investors Service has downgraded the standalone credit assessment (BCA) of LaSer Cofinoga to ba2, from baa1 previously. At the same time, the rating agency has also downgraded the long- term deposit and senior debt ratings of LaSer Cofinoga to Baa2 from A2, the dated subordinated debt ratings to Baa3 from A3 previously and the preference shares rating of Cofinoga Funding One and Cofinoga Funding Two to Ba2 (hyb) from Baa3 (hyb). LaSer Cofinoga's short-term deposit and debt ratings were also downgraded to Prime-2 from Prime-1. The standalone credit assessment and all long-term ratings carry a negative outlook. The lowering of the institution's standalone credit assessment reflects the pressure on the bank's profitability and asset quality resulting from the weakening macroeconomic outlook and from the more difficult business perspectives following the enforcement of a more stringent regulation on French consumer lending activities. It also reflects the risks stemming from the entity's reliance on wholesale markets for its funding. The Finance Company Global Rating Methodology, published in March 2012, was used as the primary methodology to arrive at Moody's ba2 standalone credit assessment for LaSer Cofinoga. Previously the firm's standalone credit quality was assessed under the Bank Financial Strength Ratings: Global Methodology, published in February 2007, and Moody's had assigned a standalone Bank Financial Strength Rating (BFSR) of C-, mapping to a baseline credit assessment of baa1, which was placed on review for downgrade on June 15, 2011. With the change in primary methodology for Moody's assessment of LaSer Cofinoga's standalone credit quality Moody's will no longer separately disclose a BFSR. LaSer Cofinoga's long-term deposit and debt ratings are Baa2. Although BNP Paribas (A2 deposit rating, C-/baa2 standalone bank financial strength rating/standalone credit assessment, with stable outlook) only owns 50% of LaSer Cofinoga, Moody's assesses the probability of parental support to be very high, as evidenced by the liquidity agreement with BNP Paribas and the ample liquidity provided to LaSer Cofinoga since the beginning of the global financial crisis. This results in a three-notch uplift from LaSer Cofinoga's standalone financial assessment of ba2. Given the high reliance on funding provided by BNP Paribas and the absence of any systemic support in Moody's view, LaSer Cofinoga's debt and deposit ratings are constrained by BNP Paribas' standalone financial strength of baa2. The outlook is negative on LaSer Cofinoga's standalone credit assessment, and reflects Moody's view that LaSer Cofinoga's financial strength may be further pressurized in the event of a more pronounced macro-economic downturn. It also reflects the challenges facing the institution in the implementation of its new strategy and the resulting uncertainty on the benefits associated with it. This action concludes the review on the bank's ratings initiated on June 15, 2011. RATINGS RATIONALE -- Standalone Credit Assessment FIRST DRIVER -- Pressure From A Further Deterioration Of The Macroeconomic Environment As a monoline consumer lender, LaSer Cofinoga is inherently exposed to macroeconomic downturns. This reflects the correlation of the bank's business activity to the levels of households' consumption, which Moody's expects to remain fragile in the context of weak growth. In addition, despite positive developments on new production, Moody's also expects the bank's cost of risk to remain elevated in the short-to-medium term, reflecting (i) the high sensitivity of the issuer's customer base to the deteriorating macroeconomic environment and the level of unemployment, and (ii) the high loss potential associated with consumer lending activities. Moody's anticipates that the French economy, and more generally most European economies, will continue to have a weak performance in the foreseeable future, and Moody's therefore expects LaSer Cofinoga's profitability and asset quality to remain under pressure. At year-end 2011, around two-thirds of LaSer Cofinoga's loan book comprised consumer loans to French households, while the remainder was exposed to households in Poland, the United Kingdom, the Netherlands, Denmark and Norway. On the positive side, Moody's notes that the bank has adopted a new strategy aiming at lowering the risk profile of its lending activities, notably by increasing the proportion of amortizing loans in its loan book. Moody's expects this strategy ultimately to result in a lower cost of risk through the cycle, although it will take some time to be fully implemented. In addition, Moody's also expects the bank to continue to work through a significant book of legacy non-performing loans with a high loss potential, thereby exerting pressure on the bank's profitability and asset quality in the shorter-term. SECOND DRIVER -- More Stringent Rules On Domestic Consumer Lending LaSer Cofinoga, in common with other domestic consumer lenders, is also affected by the enforcement of more stringent rules on consumer lending activities aiming at protecting the consumers. Indeed, following a transition period of two years, the "Loi sur le Cr�dit � la Consommation", also known as the � Lagarde law � which was enacted on 1 July 2010, has now come into full effect. The most notable changes are (i) the convergence of the maximum interest rates charged on consumer loans, which significantly reduces earnings generation capacity, especially on revolving loans; (ii) the reduction to 8 years (from 10 years) of the duration of debt restructuring plans for over-indebted households, which increases the loss potential on restructured loans, and (iii) the significant increase of the administrative burden associated with consumer lending activities. Ultimately these changes are designed to protect consumers and prevent weaker households from excessive indebtedness levels. If successful, the new rules should lead to better asset quality over the long-run for consumer lenders. However in the short-term, while older loans are being worked through, the economics of French consumer lending are negative for lenders due to higher losses and changes to the business model, as evidenced by the impact on the bank's profit levels in 2010 and 2011. In order to adapt to the challenges facing LaSer Cofinoga, the institution made public in early 2012 its decision to reposition its product mix towards more amortizing loans, with a more favorable risk/return profile. However, the French consumer financing market is highly competitive, and consumer lending arms of large French banking groups have a strong positions on domestic amortizing loans, which may make it more difficult for LaSer Cofinoga to implement its strategy, in Moody's view. THIRD DRIVER -- Reliance On Wholesale Funding And Funding From BNP Paribas Moody's considers LaSer Cofinoga's pure wholesale funded profile a credit weakness, as the bank does not benefit from diversified funding sources, and remains dependent on external funding in case of stress. At year-end 2011, LaSer Cofinoga had EUR9.2 billion of wholesale funding (out of a total balance sheet of EUR11.9 billion), comprising EUR 3.9 billion of debt and EUR5.3 billion of interbank funding. The latter was extended by BNP Paribas, and reflects the existence of a funding commitment in the shareholders' agreement between BNP Paribas and Galeries Lafayette, both 50%-shareholders from LaSer, the holding which in turn owns 100% of LaSer Cofinoga. However, Moody's recognizes the tangible benefits to LaSer Cofinoga's liquidity profile of the access to BNP Paribas' funding. In addition, Moody's notes that the bank's policy of matching the duration of its assets and liabilities also mitigates the liquidity risks arising from a wholesale funding profile. Nonetheless, in case of a market stress and of a restricted access to BNP Paribas' funding --e.g. as a result of a funding stress affecting its shareholder--, LaSer Cofinoga would have to operate a significant reduction of its loan production, which would have a material impact on its franchise, in Moody's view. RATINGS RATIONALE -- Deposit and Debt Ratings LaSer Cofinoga's long-term deposit and debt ratings are Baa2, i.e. three notches above the standalone credit assessment of LaSer Cofinoga. This reflects Moody's assessment of a very high probability of parental support, as evidenced by the liquidity commitment from BNP Paribas and effectively the ample liquidity provided to LaSer Cofinoga since the beginning of the global financial crisis. LaSer Cofinoga's ratings do not incorporate any systemic support as the bank does not collect any deposits. In addition, Moody's believes a failure of LaSer Cofinoga would not result in a systemic risk for the French banking system. The short-term ratings have been lowered to Prime-2 from Prime-1, reflecting the downgrade of the long-term ratings. RATINGS RATIONALE -- Subordinated Debt Ratings The downgrade of LaSer Cofinoga's dated subordinated debt to Baa3 (i.e. one notch below its adjusted standalone credit assessment of baa2, which incorporates support from BNP Paribas) from A3 reflects the downgrade of LaSer Cofinoga's ratings. The outlook is negative, in line with the outlook on the bank's standalone credit assessment. In addition, the ratings on the preference shares issued by Cofinoga Funding One and Cofinoga Funding two were downgraded to Ba2 (hyb) from Baa3 (hyb), i.e. three notches below LaSer Cofinoga's adjusted standalone credit assessment of baa2. This reflects (i) their deeply subordinated claim in liquidation; (ii) the issuer's option to skip coupon payments on a non-cumulative basis if no ordinary dividends have been paid in the preceding 12 months; and (iii) the mandatory coupon skip mechanism if no distributable profits are available or in case of breach of minimum regulatory capital requirements. The outlook is negative, in line with the outlook on the bank's standalone credit assessment. Rationale for Negative Outlook The outlook is negative on LaSer Cofinoga's standalone credit assessment, and reflects Moody's view that LaSer Cofinoga's financial strength may come under further pressure in the event of a more pronounced macro-economic downturn. It also reflects the challenges facing the institution in the implementation of its new strategy and the resulting uncertainty on the benefits associated with it. The outlook is also negative on long-term deposit and debt ratings, reflecting the negative outlook on the bank's standalone credit assessment. What Could Change The Rating Up/Down LaSer Cofinoga's standalone financial strength could benefit from an durable improvement of its financial fundamentals, notably by restoring its profitability and improving its asset quality, while improving its standalone liquidity and funding profile. Given the high reliance on funding provided by BNP Paribas and the absence of any systemic support in Moody's view, LaSer Cofinoga's debt and deposit ratings are constrained by BNP Paribas' standalone financial strength of baa2. Conversely, LaSer Cofinoga's standalone financial strength may be negatively impacted by (i) signs of a weakening franchise, notably as a result of a further deterioration of the macroeconomic outlook, of competitive or regulatory pressure or of funding constraints; (ii) a further deterioration of its financial fundamentals; or (iii) any material adverse change in the funding commitment from BNP Paribas. LaSer Cofinoga's debt and deposit ratings may be negatively affected by a deterioration in the issuer's standalone financial strength, or by a change in Moody's perception of LaSer Cofinoga's strategic importance to BNP Paribas. Similarly, a deterioration of BNP Paribas' own standalone financial strength rating would also exert pressure on LaSer Cofinoga's debt and deposit ratings. The principal methodology used in these ratings was Finance Company Global Rating Methodology, published on March 2012. LIFECARE HOLDINGS: Chief Financial Officer Out Effective Aug. 15 ---------------------------------------------------------------- Chris Walker resigned from his position as Chief Financial Officer of LifeCare Holdings, Inc., effective Aug. 15, 2012, in order to pursue other opportunities. The Company has initiated a search for a replacement candidate. About LifeCare Holdings Plano, Tex.-based LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 hospitals located in nine states, consisting of eight "hospital within a hospital" facilities (27% of beds) and 11 freestanding facilities (73% of beds). Through these 19 long-term acute care hospitals, the Company operates a total of 1,057 licensed beds and employ approximately 3,200 people, the majority of whom are registered or licensed nurses and respiratory therapists. Additionally, the Company holds a 50% investment in a joint venture for a 51-bed LTAC hospital located in Muskegon, Michigan. The Company reported a net loss of $34.83 million in 2011, compared with net income of $2.63 million on $358.25 million in 2010. The Company's balance sheet at March 31, 2012, showed $495.99 million in total assets, $546.90 million in total liabilities, and a $50.91 million total stockholders' deficit. * * * LifeCare Holdings carries "Caa1" corporate family and probability of default ratings, with negative outlook, from Moody's Investors Service and a 'CCC-' corporate credit rating, with negative outlook from Standard & Poor's Ratings Services. In November 2010, Standard & Poor's Ratings lowered its corporate credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The downgrade reflects the imminent difficulty the company may have in meeting its bank covenant requirements and the risk of it successfully refinancing significant debt maturing in 2011 and 2012," said Standard & Poor's credit analyst David Peknay. The likelihood of a debt covenant violation is heightened by the company's lack of appreciable operating improvement coupled with a large upcoming tightening of is debt covenant in the first quarter of 2011. Additional equity by the company's financial sponsor may be necessary to avoid a covenant violation. Accordingly, S&P believes the chances of bankruptcy have increased. As reported by the TCR on May 26, 2011, Standard & Poor's Rating Services affirmed its 'CCC-' corporate credit rating and its senior subordinated debt rating on Plano, Texas-based LifeCare Holdings Inc. "The low-speculative-grade rating on LifeCare reflects its narrow focus in a competitive business heavily reliant on uncertain Medicare reimbursement," said Standard & Poor's credit analyst David Peknay, "and its highly leveraged financial risk profile highlighted by very weak cash flow protection measures, slim liquidity, and very high debt level." In the June 6, 2012, edition of the TCR, Moody's downgraded LifeCare Holdings, Inc.'s corporate family rating to Caa3 and probability of default rating to Ca. The downgrade of the corporate family rating to Caa3 reflects heightened refinancing risk, an untenable capital structure, and interest burden that is not covered by cash flows generated from the company's ongoing operations. Moody's believes LifeCare will need to address its entire capital structure in the next twelve months which is reflected in the Ca probability of default rating. LIFECARE HOLDINGS: Adopts Key Employee Retention Plan ----------------------------------------------------- LifeCare Holdings, Inc., adopted a key employee retention plan in order to provide certain employees, including some of the Company's named executive officers, with an incentive to remain with the Company. The KERP expires on June 30, 2013. Under the KERP, Covered Employees will receive bonus payments ranging from 13% to 60% of their base salary for an aggregate payment by the Company of approximately $0.973 million. The Company's Chief Executive Officer, Executive Vice President of Operations, Senior Vice President of Human Resources and General Counsel will receive bonus payments of 60%, 25%, 30% and 50% of their base salary, respectively. In the event that a Covered Employee is terminated with cause or voluntarily resigns other than for good reason prior to June 30, 2013, that Covered Employee will be required to return the full bonus payment to the Company. A portion of the payments made against the KERP will be credited against certain future bonus payments to the Covered Employees, if applicable. Receipt of the bonus payment is conditioned upon each Covered Employee consenting in writing to the terms of the KERP. The Company expects to make bonus payments under the KERP in the first half of July 2012. The KERP also provides for a $200,000 discretionary bonus pool that will be implemented at the discretion of the Company's Chief Executive Officer during the term of the KERP. The Company's Chief Operating Officer (who is also a named executive officer) has not been allocated an initial KERP bonus payment but is eligible to receive a payment from the discretionary bonus pool. About LifeCare Holdings Plano, Tex.-based LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 hospitals located in nine states, consisting of eight "hospital within a hospital" facilities (27% of beds) and 11 freestanding facilities (73% of beds). Through these 19 long-term acute care hospitals, the Company operates a total of 1,057 licensed beds and employ approximately 3,200 people, the majority of whom are registered or licensed nurses and respiratory therapists. Additionally, the Company holds a 50% investment in a joint venture for a 51-bed LTAC hospital located in Muskegon, Michigan. The Company reported a net loss of $34.83 million in 2011, compared with net income of $2.63 million on $358.25 million in 2010. The Company's balance sheet at March 31, 2012, showed $495.99 million in total assets, $546.90 million in total liabilities, and a $50.91 million total stockholders' deficit. * * * LifeCare Holdings carries "Caa1" corporate family and probability of default ratings, with negative outlook, from Moody's Investors Service and a 'CCC-' corporate credit rating, with negative outlook from Standard & Poor's Ratings Services. In November 2010, Standard & Poor's Ratings lowered its corporate credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The downgrade reflects the imminent difficulty the company may have in meeting its bank covenant requirements and the risk of it successfully refinancing significant debt maturing in 2011 and 2012," said Standard & Poor's credit analyst David Peknay. The likelihood of a debt covenant violation is heightened by the company's lack of appreciable operating improvement coupled with a large upcoming tightening of is debt covenant in the first quarter of 2011. Additional equity by the company's financial sponsor may be necessary to avoid a covenant violation. Accordingly, S&P believes the chances of bankruptcy have increased. As reported by the TCR on May 26, 2011, Standard & Poor's Rating Services affirmed its 'CCC-' corporate credit rating and its senior subordinated debt rating on Plano, Texas-based LifeCare Holdings Inc. "The low-speculative-grade rating on LifeCare reflects its narrow focus in a competitive business heavily reliant on uncertain Medicare reimbursement," said Standard & Poor's credit analyst David Peknay, "and its highly leveraged financial risk profile highlighted by very weak cash flow protection measures, slim liquidity, and very high debt level." In the June 6, 2012, edition of the TCR, Moody's downgraded LifeCare Holdings, Inc.'s corporate family rating to Caa3 and probability of default rating to Ca. The downgrade of the corporate family rating to Caa3 reflects heightened refinancing risk, an untenable capital structure, and interest burden that is not covered by cash flows generated from the company's ongoing operations. Moody's believes LifeCare will need to address its entire capital structure in the next twelve months which is reflected in the Ca probability of default rating. LSP ENERGY: Seeks Approval of Settlement With BNY, Bondholders -------------------------------------------------------------- BankruptcyData.com reports that LSP Energy Limited Partnership filed with the U.S. Bankruptcy Court a motion for approval of a settlement agreement between the Debtors and The Bank of New York Mellon (as indenture trustee) and a certain group of bond holders. BankruptcyData.com relates that the settlement resolves a dispute concerning a make-whole premium and provides that the premium shall be allowed in the full amount as calculated under the indenture and entitled to the treatment for distribution from the Debtors' estates by confirmed plan, or otherwise, following payment in full of all allowed secured claims, allowed administrative expense claims and allowed priority claims. About LSP Energy LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville Holding, LLC, and LSP Batesville Funding Corporation filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-10460) on Feb. 10, 2012. LSP owns and operates an electric generation facility located in Batesville, Mississippi. The Facility consists of three gas-fired combined cycle electric generators with a total generating capacity of roughly 837 megawatts and is electrically interconnected into the Entergy and Tennessee Valley Authority transmission systems. LSP's principal assets are the Facility and the 58-acre parcel of real property on which it is located, as well as its rights under a tolling agreements. LSP filed bankruptcy to complete an orderly sale of its assets or the ownership interests of LSP Holding in LSP, LSP Energy and LSP Funding for the benefit of all stakeholders. The remaining three Debtors filed bankruptcy due to their relationship as affiliates of LSP and their ultimate obligations on a significant portion of LSP's secured bond debt. The Debtors also suffered losses due to a mechanical failure of a combustion turbine at their facility and resultant business interruption. LSP Energy is the general partner of LSP. LSP Holding is the limited partner of LSP and the 100% equity holder of LSP Energy and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond debt, and each of LSP Energy and LSP Holding has pledged their equity interests in LSP and LSP Funding as collateral for the bond debt. No statutorily authorized creditors' committee has yet been appointed in the Debtors' cases by the United States Trustee. Judge Mary F. Walrath oversees the case. Lawyers at Whiteford Taylor & Preston LLC serve as the Debtors' counsel. MARKETING WORLDWIDE: St. George Investments Owns 9.99% ------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, St. George Investments, LLC, Fife Trading, Inc., and John M. Fife disclosed that, as of July 5, 2012, they beneficially own 47,542,549 shares of common stock of Marketing Worldwide Corporation which represents 9.99% of the shares outstanding. A copy of the filing is available for free at http://is.gd/1PDMXu About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. The Company reported a net loss of $2.27 million for the year ended Sept. 30, 2011, compared with a net loss of $2.34 million during the prior year. After auditing the financial statements for the year ended Dec. 31, 2011, RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financing results. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of loan certain covenants, and is dependent on securing additional equity and debt financing to support its business efforts. The Company's balance sheet at March 31, 2012, showed $1.31 million in total assets, $5.86 million in total liabilities, $1.69 million in series A convertible preferred stock, and a $6.24 million total stockholders' deficiency. MORGANS HOTEL: To Issue 3MM Add'l Shares Under Incentive Plan ------------------------------------------------------------- Morgans Hotel Group Co. filed with the U.S. Securities and Exchange Commission a Form S-8 registering an additional 3 million shares of common stock issuable under Amended and Restated 2007 Omnibus Incentive Plan. The proposed maximum aggregate offering price is $14.10 million. At the Annual Meeting of Stockholders held on May 16, 2012, the Company's stockholders approved an amendment to the Amended and Restated Plan to increase the number of shares of Common Stock reserved for issuance thereunder by 3,000,000 shares. A copy of the filing is available for free at: http://is.gd/BbZHIC About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company reported a net loss of $87.95 million in 2011, a net loss of $83.64 million in 2010, and a net loss of $101.60 million in 2009. The Company's balance sheet at March 31, 2012, showed $544.25 million in total assets, $642.07 million in total liabilities, $5.41 million in redeemable noncontrolling interest, and a $103.23 million total deficit. MSR RESORT: Has Until Aug. 1 to Propose Chapter 11 Plan ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended MSR Resort Golf Course LLC, et al.'s exclusive periods to propose a Chapter 11 plan and solicit acceptances for such plan until Aug. 1, 2012, and Oct. 1, respectively. MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MT. ZION: Court Continues Plan Confirmation Hearing to July 19 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois continued the hearing to consider the confirmation of Mt. Zion Limited Partnership's plan to July 19, 2012, at 10:30 a.m. As reported in the Troubled Company Reporter on September 1, the Plan provides for the distributions to the holders of allowed claims from funds realized from continued operation of the Debtor's business well as from existing cash deposits and cash resources of the Debtor. To the extent necessary, the balloon payment to PNC Bank, National Association, as required by the Plan, may be paid from the proceeds of the refinancing of the underlying mortgage indebtedness due to PNC. Treatment of Claims and Interests 1. Holders of Class 2 Secured Claims will receive or retain: a) its lien on the real property owned by the Debtor, with the same validity, enforceability, perfection and priority as it had on the petition date, until the claims are paid in full; and b) payment of the entire unpaid balance of the allowed Class 2 claim, including any accrued statutory interest, will be paid on the effective date. 2. Holders of Class 3 Allowed Claims of tenants at Woodspring Apartments will be paid full in cash. 3. Holders of Class 4 Other Secured Creditors Claims will be paid full in cash. 4. Holders of Class 5 General Unsecured Claims will receive 100% of the allowed of the Class 5 claims plus interest. 5. Holders Class 6 interests of the general and unlimited partners will retain their interests in the Debtor after confirmation of the Plan. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/MtZion_Plan.pdf About Mt. Zion Limited Partnership Lake Forest, Illinois-based Mt. Zion Limited Partnership owns and operates a residential apartment project located in Florence, Kentucky, known as Woodspring Apartments. The Company filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-18075) on April 23, 2010. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million as of the Petition Date. NATIONAL VISION: Moody's Assigns 'B2' CFR; Outlook Stable --------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating and a B3 probability of default rating to National Vision, Inc. Moody's also assigned B1 ratings to National Vision's proposed senior secured credit facilities, consisting of a $25 million revolving credit facility and $300 million term loan. The outlook is stable. This is a first time rating for the company. Proceeds from the proposed $300 million senior secured term loan will be used to repay substantially all of National Vision's existing outstanding debt and to pay a $117 million dividend to the company's shareholders. The ratings are subject to the conclusion of the transaction, as proposed, and Moody's review of final documentation. New ratings assigned: - Corporate Family Rating at B2 - Probability of Default Rating at B3 - Proposed $25 million senior secured revolver due 2017 at B1 (LGD 2, 29%) - Proposed $300 million senior secured term loan due 2018 at B1 (LGD 2, 29%) Ratings Rationale The B2 corporate family rating reflects National Vision's small scale, high financial leverage, concentration of sales with Wal- Mart (about a quarter of total sales), and its second tier scale compared to its larger competitors in the US optical retail industry. The rating assumes National Vision's high initial pro forma leverage will improve to the mid-5-times levels over the next twelve to eighteen months as a result of top-line and earnings growth combined with modest debt repayments (all metrics reflect Moody's lease adjustments). At the same time, the rating reflects the stable nature of the optical industry, the non- discretionary nature of the company's products, National Vision's track record of positive same store sales growth, and good liquidity. The stable outlook reflects Moody's expectation that National Vision's earnings and credit metrics will improve modestly over time. It also acknowledges that National Vision will maintain good liquidity. Ratings could be upgraded if operating performance improves or if debt is repaid through excess cash flow sweeps while achieving continued same store sales increases and profitable new store openings. Specifically, ratings could be upgraded if debt/EBITDA approaches 5.0 times and EBITA/interest expense exceeds 2.0 times while maintaining good liquidity. Ratings could be downgraded should operating performance weaken, financial policies become more aggressive, or liquidity deteriorate. Specifically, ratings could be downgraded if debt/EBITDA is sustained above 6.5 times or if EBITA/interest expense falls below 1.5 times. The principal methodology used in rating National Vision, Inc. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. National Vision, Inc., headquartered in Lawrenceville, GA, is an optical retailer with a focus on low price point glasses and contacts. The company operates its own retail chains of America's Best Contacts and Eyeglasses (about 330 stores) and Eyeglass World (about 70 stores). In addition, the company operates at host store locations, including at about 230 Wal-Mart stores as well as Fred Meyer stores and on military bases. The company also sells contacts online. Revenues approximate $670 million for the twelve months through March 31, 2012. Private equity firm Berkshire Partners has owned National Vision since 2005. NATIONAL VISION: S&P Gives 'B+' CCR; 'BB-' Credit Facility Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Lawrenceville, Ga.-based optical retailer National Vision Inc. (NVI). "At the same time, we assigned our 'BB-' issue-level rating to the company's $325 million senior secured credit facility, which consists of a $25 million revolver and a $300 million term loan B. The recovery rating on this debt is '2', indicating our expectation for substantial (70%-90%) recovery of principal in the event of a payment default," S&P said. The outlook is stable. The company plans to use the proceeds to repay existing bank debt and pay about $117 million in dividends to its shareholders. "The ratings on NVI reflect our view that the company's financial risk profile will remain 'aggressive' over the near term," said Standard & Poor's credit analyst Mariola Borysiak. "We expect total lease-adjusted debt to EBITDA will remain elevated, in the high-4x range, as a result of a lower EBITDA base following the new agreement with Wal-Mart Stores Inc. In addition, we view the company's financial policies as "very aggressive," given ownership by Berkshire Partners and a history of debt-financed dividends to the company's shareholders," S&P said. In May 2012, NVI signed a new agreement with Wal-Mart to extend its existing partnership for the next five years. Under the agreement, NVI will manage 227 stores within Wal-Mart, while in the past NVI operated these stores as a tenant. NVI's sales and EBITDA base will be modestly lower in 2012 following implementation of this new agreement. Pro forma for the transaction, total debt to EBITDA is about 5.0x and EBITDA coverage of interest was about 2.7x at March 31, 2012. The stable outlook reflects our expectation that the company's non-discretionary product offering will continue to propel modest profitability gains and drive stable cash flow generation. "Nevertheless, we could consider a lower rating if intensified competitive pressures, or poor execution of the company's growth plans hurt profitability such that leverage increases toward 6x. This could occur, for example, if EBITDA declines about 17% from our projected level at the end of fiscal 2012 and debt remains constant at the pro forma level. Higher leverage could also result from additional debt to fund another dividend to the company's shareholders," S&P said. In this case, the addition of approximately $90 million in incremental debt to fund a dividend would be credit negative. "We are not considering a higher rating in the near term, given our view of the company's financial policies as very aggressive and our anticipation that future debt-financed dividends are likely and will keep credit measures in line with our view of an aggressive financial risk profile," S&P said. NAVISTAR INTERNATIONAL: Franklin Hikes Stake to 18.8% ----------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Franklin Resources, Inc., and its affiliates disclosed that, as of June 30, 2012, they beneficially own 12,911,268 shares of common stock of Navistar International Corporation which represents 18.8% of the shares outstanding. Franklin Resources previously reported beneficial ownership of 8,498,858 common shares or a 12.4% equity stake as of Dec. 31, 2011. A copy of the amended filing is available for free at: http://is.gd/gLvGZy About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Jan. 31, 2012, showed $11.50 billion in total assets, $11.69 billion in total liabilities, and a $195 million total stockholders' deficit. * * * Navistar has 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in summary credit opinion at the end of April 2012 that the B1 Corporate Family Rating of Navistar International reflects the company's highly competitive position in the North American medium and heavy duty truck markets, and the continuing recovery in demand. It also reflects the progress Navistar continues to make in implementing a strategy that should reduce its vulnerability to cyclical downturns and strengthen returns. The key elements of this strategy include: expanding its scale and operating efficiencies by offering a full line of medium and heavy-duty trucks equipped with Navistar engines; building its position in international truck and engine markets through alliance and joint ventures; and, strengthening its domestic dealer network. As reported by the TCR on June 13, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B+', from 'BB-'. "The downgrade and CreditWatch placement reflect the company's operational and financial setbacks in recent months," said Standard & Poor's credit analyst Sol Samson. NAVISTAR INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'B' --------------------------------------------------------------- On July 9, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B' from 'B+'. "At the same time, we removed our ratings on Navistar from CreditWatch, where we had placed them with negative implications on June 7, 2012. The rating outlook is negative," S&P said. Rationale The downgrade reflects the operational and financial challenges resulting from the EPA's refusal to certify Navistar's engines with respect to emissions standards. The truck manufacturer intended its in-cylinder emissions technology to provide a competitive advantage. But without EPA approval, Navistar needed to adopt a fallback approach. Its engines will now incorporate both its current emissions controls and the competing urea-based technology. Executing the transition involves engineering and production changes and added costs. Navistar expects that it will make some of its modified engine offerings available in early 2013; the rest will follow on an unspecified timetable. Market acceptance may be a significant challenge, in our opinion, creating difficulty for the company to recoup the added costs. Navistar's credit ratios are indicative of a highly leveraged financial profile. The company already has an equity deficit, and we estimate the ratio of debt to EBITDA (adjusted for the captive finance operation) will be about 8x. Liquidity Liquidity is less than adequate, as our criteria define this, even while Navistar's cash and credit availability are substantial in absolute terms. Year-to-date, the company has incurred large cash outflows. Total cash and marketable securities fell approximately half a billion dollars in the fiscal first half (ended April 30). Although Navistar has a historical pattern of better performance in its second half, this year may be more unpredictable because of the changes surrounding its engine offerings, previously announced inventory accumulation, and lower levels of military business. "We assume that implementation of the new product strategy will require higher capital spending as well," S&P said. Outlook "The outlook for our rating on Navistar is negative. We consider it increasingly unlikely that Navistar can avoid a full-year operating loss (adjusted for one-time items, such as reversal of tax reserves). The issues facing the company's Class 8 trucks are compounded by declining sales of military vehicles and parts, and deteriorating medium-duty truck demand," S&P said. "We could lower Navistar's ratings further in several scenarios. The first is the engine strategy encountering new setbacks, because that effort is key to re-establishing profitability. Moreover, if the commercial truck recovery takes longer than we expect, we could lower the ratings as financial metrics weaken. We could also lower ratings if liquidity remains near seasonal lows or deteriorates further," S&P said. The equity stakes held by two activist shareholders adds complexity, but is not a ratings consideration at this stage, especially given the level of the current ratings. Ratings List Downgraded; Ratings Off Watch To From Navistar International Corp. Navistar Financial Corp. Corporate credit rating B/Negative/-- B+/Watch Neg/-- Navistar International Corp. Senior unsecured B B+/Watch Neg Recovery rating 4 4 Subordinated CCC+ B-/Watch Neg Recovery rating 6 6 NORTHSTAR AEROSPACE: Court Approves Bayard P.A. as Counsel ---------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Northstar Aerospace (USA) Inc., et al., to employ Bayard, P.A. as counsel. To the best of the Debtors' knowledge, Bayard is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Harris Williams LLC, doing business a s Harris Williams & Co., serves as their investment banker. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, has not appointed a committee of unsecured creditors due to an insufficient response to the U.S. Trustee communication/contact for service on the committee. NORTHSTAR AEROSPACE: Court OKs SNR Denton as Bankruptcy Counsel --------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Northstar Aerospace (USA) Inc., et al., to employ SNR Denton US LLP as bankruptcy counsel. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Harris Williams LLC, doing business a s Harris Williams & Co., serves as their investment banker. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, has not appointed a committee of unsecured creditors due to an insufficient response to the U.S. Trustee communication/contact for service on the committee. NORTHSTAR AEROSPACE: Harris Williams Approved as Investment Banker ------------------------------------------------------------------ The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Northstar Aerospace (USA) Inc., et al., to employ Harris Williams LLC, doing business as Harris Williams & Co., as their investment banker. As reported in the Troubled Company Reporter on June 27, 2012, Harris Williams provides public and private companies primarily with M&A sell-side investment banking and financial advisory services. Harris Williams has successfully completed more than 115 strategic and financial M&A sell-side advisory engagements over the past 24 months. The Debtors first engaged Harris Williams in October 2010 to advise a special committee of the Debtors' parent company Northstar Aerospace, Inc.'s board of directors to provide M&A sell-side investment banking services and financial advice with respect to a possible merger, stock or investment transaction by the company and further described in the Engagement Letter. Harris Williams worked diligently to assist Northstar in undertaking a transaction during the 12 month exclusive period gaining valuable knowledge and background on the company. However, the initial exclusive period for the engagement expired after 12 months on Oct. 15, 2011, without a transaction acceptable to Northstar being achieved. Northstar re-engaged Harris Williams in late January 2012 to continue its M&A sell-side efforts for Northstar and an amendment to the parties' engagement letter was signed in February 2012. The 2012 marketing process was broader than the prior marketing process. Among other things, Harris Williams assisted Northstar with preparation of an updated confidential information memorandum for delivery to potential purchasers. In addition to contacting potential interested bidders from the first process, an additional group of financial and strategic buyers were contacted about a potential transaction and portion bids for specific facilities of Northstar (as opposed to Northstar as a whole) were specifically encouraged. Harris Williams proposes to continue to render its services on the compensation terms set forth in the parties' engagement letter: -- A monthly fee of $25,000 per month; -- In the event of a Transaction, Northstar will pay Harris Williams a cash fee, equal to an amount calculated as 1.5% of the Purchase Price up to $280 million, plus 3.0% of that portion of the Purchase Price between $280 million and $310 million, plus 5.0% of that portion of the Purchase Price in excess of $310 million. If the Purchase Price is less than $250 million then the Closing Fee will be calculated as 1.25% of the Purchase Price; -- In the event of a Recapitalization Transaction, Northstar will pay Harris Williams a cash fee equal to (i) 1.5% of the aggregate committed amount of all new senior notes and new bank debt (regardless of the amount of such capital that is funded as of the closing), plus (ii) 3.5% of the aggregate committed amount of all unsecured or secured, new non-senior and new subordinated debt securities (regardless of the amount of such capital that is funded as of the closing), plus (iii) 6% of the aggregate committed amount of all new equity and new equity-linked securities of Northstar (including without limitation new convertible securities and new preferred stock, regardless of the amount of such capital that is funded as of the closing); and -- Harris Williams will be reimbursed promptly for all reasonable out-of-pocket expenses incurred in connection with the proposed Transaction. Pursuant to the Engagement Letter, "Transaction" means a sale through merger, exchange or sale of all or substantially all of the assets, business or shares of Northstar in a single or series of related transactions as well as any recapitalization of Northstar or other extraordinary dividend of cash, securities or other assets to the shareholders of Northstar. "Recapitalization Transaction" means a private issuance, sale, exchange or placement of new financing in the form of equity, equity-linked, or debt securities, instruments or obligations of Northstar with one or more lenders and/or investors, or any loan or other financing including without limitation any such transaction that are consummated in the context of a proceeding initiated under the CCAA in Canada, whether in connection with a Plan of Arrangement or otherwise. The Debtors have also agreed to indemnify Harris Williams. The Debtors believe that the Fee Structure constitutes market- based, fair and reasonable terms and conditions for the retention by the Debtors of Harris Williams as its investment banker. Jon Nemo, Managing Director of Harris Williams' Aerospace, Defense & Government Services Group, attests that his firm (a) has no connection with the Debtors, their creditors, or other parties-in- interest in the Debtors' cases; (b) does not hold any interest adverse to the Debtors' estates; and (c) is a "disinterested person" as defined by section 101(14) of the Bankruptcy Code. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, has not appointed a committee of unsecured creditors due to an insufficient response to the U.S. Trustee communication/contact for service on the committee. NORTHSTAR AEROSPACE: Court Extends Schedules Filing Until July 16 ----------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended until July 16, 2012, Northstar Aerospace (USA) Inc., et al.'s time to file their schedules of assets and liabilities and statements of financial affairs. Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Harris Williams LLC, doing business a s Harris Williams & Co., serves as their investment banker. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, has not appointed a committee of unsecured creditors due to an insufficient response to the U.S. Trustee communication/contact for service on the committee. NORTHSTAR AEROSPACE: Logan & Co. OK'd as Administrative Advisor --------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Northstar Aerospace (USA) Inc., et al., to employ Logan & Company, Inc., as administrative advisor. As reported in the Troubled Company Reporter on June 27, 2012, as administrative advisor, Logan & Company is expected to handle various administrative tasks in the cases, so that the Debtors can focus their efforts and those of their professionals on facilitating an efficient going-concern sale of assets or confirmation of a plan of reorganization or liquidation. The Debtors have already won authority to employ Logan as claims and noticing agent. Under the parties' Engagement Agreement, the Debtors paid Logan a $10,000 retainer. Kathleen M. Logan attests that her firm (a) is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code, except that Logan & Co. was employed by the Debtors prior to the Petition Date as allowed by section 1107(b) of the Bankruptcy Code and (b) does not hold or represent an interest materially adverse to the Debtors' estates. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Judge Mary F. Walrath oversees the case. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. Logan & Co. Inc. serves as claims and notice agent. Harris Williams LLC, doing business a s Harris Williams & Co., serves as their investment banker. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. debtors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, has not appointed a committee of unsecured creditors due to an insufficient response to the U.S. Trustee communication/contact for service on the committee. OCALA FUNDING: Taylor Bean Unit Files Ch. 11, Probes Freddie Mac ---------------------------------------------------------------- Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor, Bean & Whitaker Mortgage Corp, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. Neil F. Luria, the CRO, explains in a bankruptcy court filing that from 2002 through 2009, Taylor Bean's former CEO Lee Farkas and other employees engaged in a scheme to defraud, among others, Colonial Bank, the Debtor, and the Debtor's secured lenders and other creditors. The purpose of the scheme was to enrich Mr. Farkas and cover up their fraud. Farkas Fraud According Mr. Lauria, Mr. Farkas diverted $1 billion in cash from the Debtor to certain Taylor Bean creditors. Chief among the beneficiaries was Freddie Mac which received $805 million from Ocala. As a result of the improper use of the Debtor's funds, the Debtor was left with substantial shortfalls in collateral to secure or service the funding facility with BNPP and DB. An investigation into the failure of Colonial Bank, which for years was Taylor Bean's primary bank, led to the termination of by the U.S. Department of Housing and Urban Development, Ginnie Mae, and Freddie Mac of TBW's rights to issue, sell, and service laons and securities in early August 2009. TBW was forced to file a voluntary petition for relief under Chapter 11 (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Mr. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In June, a federal appeals court upheld the April 2011 conviction of Mr. Farkas, who is serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. Remaining Assets of Ocala During the TBW case, TBW, the Debtor, Freddie Mac and the FDIC reached several court-approved agreements reconciling the ownership of loans purportedly sold through the Debtor. The Debtor was allocated several hundred mortgage loans and cash proceeds related thereto. The Debtor holds 252 mortgage loans with an unpaid balance of approximately $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds approximately $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. Finally, the Debtor has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The outstanding balance of the Funding Facility is approximately $1.75 billion. Additionally, the FDIC, as receiver for Colonial Bank, has asserted a claim against the Debtor of approximately $900 million on account of loans on Colonial Bank's books that were sold by the Debtor for which it did not pay. The Debtor has liabilities that exceed its assets by more than $2 billion. Nearly half of this shortfall is the result of transfers of the Debtor's assets to Freddie Mac under the direction and control of the Farkas Parties. Claims vs. Freddie Mac The Debtor believes that the $805 million of Ocala's funds transferred by the Farkas Parties in from May 2008 to August 2009 to the Federal Home Loan Corp. -- Freddie Mac -- to satisfy TBW's obligations to Freddie Mac provided no benefit to Ocala and, were executed with the actual intent of hindering, delaying and defrauding Ocala and its creditors, at a time when the Debtor was insolvent or was rendered insolvent as a result of such transfers. The Debtor believes that these transfers may be avoided and recovered for the benefit of the Debtor's estate under applicable provisions of the Bankruptcy Code and state law. The Debtor believes that the claims are of "substantial value to its estate." Freddie Mac is a public company and has disclosed claims of the Debtor as a potential liability in recent quarterly and annual filings with the Securities and Exchange Commission. Plan Support Agreement Prior to the commencement of the Chapter 11 case, the Debtor entered into extensive negotiations with the Prepetition Indenture Trustee, DB, BNPP, the FDIC and the TBW Plan Trust with respect to a consensual plan of liquidation for the Debtor, the funding of the Debtor's Chapter 11 case, and certain related matters relating to the administration of the Chapter 11 case and the settlement of certain disputes, the result of which was the parties' execution of that certain Restructuring and Plan Support Agreement. The terms of the RSA are: (a) $26.3 million of the Debtor's funds on deposit with Platinum Bank will be distributed by the FDIC, as receiver for Platinum, to (a) 19.95% to the FDIC as receiver for Colonial, (b) 59.89% to DB and BNPP, and (c) 20.15% to OF Finance LLC, a newly formed company owned by FDIC and DB and BNPP. OF Finance, as DIP lender, will advance the funds to the Debtor under a proposed DIP financing facility. (b) The parties agreed that the Debtor will file a motion in Ocala's Chapter 11 Case pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure seeking approval of the Debtor's transfer to DB and BNPP of claims it holds against Bank of America, N.A. for conversion of its assets, in exchange for BOA's assignment to the Debtor of certain claims it may have against Deloitte & Touche, as former auditor of TBW. (c) The parties agreed that the Debtor will file a Bankruptcy Rule in both Ocala's and TBW's chapter 11 cases seeking approval of an arrangement in which (i) the net proceeds of all claims and causes of action of Ocala (including claims assigned by BOA) and the TBW Plan Trust against Deloitte will be allocated 75% to Ocala and 25% to TBW, and (ii) the costs of litigating such claims and causes of action will be paid by the TBW Plan Trust. (d) Within 90 days after commencement of the Chapter 11 Case, the Debtor will file a chapter 11 plan of liquidation that will provide, among other things, for (i) the transfer of all remaining mortgage loans and cash collateral proceeds thereof to DB and BNPP, (ii) the increase of the TBW Claim to $1,750,000,000 (recoveries of which shall be allocated 90% to DB and BNPP, and 10% to the FDIC), (iii) payment of up to 25% of the general unsecured claims (excluding unsecured deficiency claims of DB and BNPP and the claims of the FDIC), not to exceed $250,000 in the aggregate, (iv) the allocation of the proceeds of any fraudulent conveyance and other unencumbered actions of the Debtor's estate 25% to the FDIC (as receiver for Colonial) and 75% to DB and BNPP, and (v) the transfer of all claims and causes of action of the Debtor, including with respect to Deloitte and fraudulent conveyances or other avoidance actions, to a post-confirmation litigation trust (the "Ocala Litigation Trust") for prosecution. The Ocala Plan must be confirmed and become effective within 160 days after the Petition Date. (e) The Ocala Litigation Trust shall be governed by an oversight committee consisting of designees from DB, BNPP and the FDIC. Approval of material decisions of the Ocala Litigation Trustee (including retention of counsel and commencement and settlement of any claim of the Debtor's estate) will require the approval of the designee of DB and one or both of the designees of BNPP and the FDIC. Mr. Lauria will be the initial trustee of the Ocala Litigation Trust. Pursuant to the RSA, the Ocala Plan will be unanimously accepted by holders of claims in two of the four impaired classes of claims as described in the RSA, which accepting classes constitute over 97% of all claims against the Debtor. DIP Facility The Debtor intends to file a motion within 10 days after the Petition Date, pursuant to its obligations under the RSA, for authority to obtain $5,200,000 of postpetition financing for the purpose of paying administrative expenses necessary to conduct the Chapter 11 Case, principally the investigation and prosecution of avoidance actions. The $5,300,000 of the Platinum Funds was transferred to OF Finance, for the purpose of providing the DIP Facility to the Debtor ($5,200,000 of which will be used to fund the DIP Facility and $100,000 of which will be used by the DIP Lender for accounting purposes). The DIP Facility will not bear interest; moreover, the DIP Lender will receive no distribution under the Ocala Plan and, upon the consummation of the Ocala Plan, all obligations of the Debtor relating to the DIP Facility will be discharged and released. As of the Petition Date, the Debtor held or otherwise controlled $97.4 million in cash. The Chapter 11 Case Concurrently with the Petition, the Debtor has filed a motion for entry of an order authorizing and directing the examination of Freddie Mac Pursuant to F.R.B.P. Rule 2004. While the Debtor believes that it possesses viable, legitimate and valuable causes of action against Freddie Mac, the Debtor is not certain that such transactions constitute the totality of avoidable transactions between the Debtor and Freddie Mac. Accordingly, the Debtor seeks to investigate the potential of other claims and causes of action against Freddie Mac. As required under the RSA, the Debtor has filed a motion seeking approval of a settlement agreement under which BOA and the Debtor will exchange certain claims against Deloitte related to Deloitte's work for TBW. The conversion claims arise from the alleged conversion and sale by BOA of certain mortgage loans that were allegedly owned by the Debtor and would have served as collateral securing the debt obligations held by the Noteholders. The Debtor also has filed a motion seeking entry of an order approving a settlement agreement among the Debtor, the TBW Plan Trust, and BOA with respect to the allocation of costs and recoveries related to their respective claims against Deloitte. Deloitte, as TBW auditor, certified TBW's financial statements from 2002 to 2008. Each of TBW, BOA and Ocala hold claims against Deloitte related to Deloitte's work for TBW. Deloitte was sued by Ocala and TBW in September 2011, under Case No. 11-30967CA30 (11th Judicial Circuit Court for Miami-Dade County, Florida). The settlement is a negotiated compromise whereby the parties with interests in the Deloitte Litigation agree to share the costs and any award of the Deloitte Litigation. The Debtor has filed applications to employ tapped (i) Navigant Capital Advisors, LLC for the services of Neil F. Luria as CRO, as well as other support personnel, (ii) Proskauer Rose, LLP, as Chapter 11 counsel, and (iii) Stichter, Riedel, Blain & Prosser, P.A., as local bankruptcy counsel. Stietcher Riedel served as bankruptcy counsel to TBW. The Debtor is also seeking approval for (a) Thomas, Alexander & Forrester LLP as counsel for the Deloitte litigation, and (b) and Paul Steven Singerman and Berger Singerman LLP as local co-counsel with TAF in connection with the Deloitte Litigation. The Debtor will also file applications to hire Gonzalo R. Dorta, P.A. and Gamba & Lambana, P.A., as special litigation local counsel in connection wtith the Deloitte litigation, which is pending in Miami-Dade County, Florida. Judge Jerry A. Funk has been assigned to the bankruptcy case. OCALA FUNDING: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ocala Funding, LLC 4901 Vineland Rd. Orlando, FL 32811 Bankruptcy Case No.: 12-04524 Type of Business: Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure the Debtor raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. TBW collapsed into bankruptcy (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. In June 2012, a federal appeals court upheld the April 2011 conviction of TBW CEO Lee Farkas, who is serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. Chapter 11 Petition Date: July 10, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel : Russell M. Blain. Esq. Edward J. Peterson, III, Esq. STICHTER, RIEDEL, BLAIN & PROSSER 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: rblain.ecf@srbp.com epeterson@srbp.com Debtor's Chief Restructuring Officer : Neil F. Luna NAVIGANT CAPITAL ADVISORS, LLC Debtor's Chapter 11 Counsel : PROSKAUER ROSE, LLP Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion The petition was signed by Neil F. Luria, chief restructuring officer. Ocala Funding, LLC's List of Its 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Federal Deposit Insurance Lender $898,873,958 Corp. Cadwalader, Wickersham Trade $1,632,385 & Taft LLP Moody?s Investor Service Trade $25,237 Akerman Senterfitt Trade $15,000 Deutsche Bank Trust Trade $12,600 Company Americas Standard & Poor?s Trade $10,000 Financial Services, LLC ODYSSEY PICTURES: Had $68,400 Net Income in Fiscal 3rd Quarter -------------------------------------------------------------- Odyssey Pictures Corporation filed its quarterly report on Form 10-Q, reporting net income of $68,400 on $395,400 of net sales of services for the three months ended March 31, 2012, compared with net income of $36,500 on $444,000 of net sales of services for the three months ended March 31, 2011. For the nine months ended March 31, 2012, the Company reported net income of $9,100 on $1.09 million of net sales of services, compared with net income of $238,800 on $1.65 million of net sales of services for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $1.01 million in total assets, $3.62 million in total liabilities, and a stockholders' deficit of $2.61 million. "The Company is dependent upon the continued payment of contract obligations from a single customer and while payments have been made under the terms of the contract through the date of this filing, there is no other assurance that such payments will be paid when due. The company has no liquid reserves from which to fund operations in the event that such payments are not made." Michael F. Cronin, in Orlando, Fla., expressed substantial doubt about Odyssey Pictures' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditor noted that the Company has a $1.9 million working capital deficiency. "The Company may not have adequate readily available resources to fund operations through June 30, 2012. This raises 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/7VCD4V Plano, Tex.-based Odyssey Pictures Corp., during the nine months ended March 31, 2012, realized revenues from the sale of branding and image design products and media placement services. As of the date of the filing of this report, the Company's ongoing operations have consisted of the sale of these branding and image design products, increasing media inventory, productions in progress and development of IPTV Technology and related services. OMEGA HEALTHCARE: Fitch Assigns 'BB+' Subordinated Debt Rating -------------------------------------------------------------- Fitch Ratings has assigned initial credit ratings to Omega Healthcare Investors, Inc. (NYSE: OHI) as follows: -- Issuer Default Rating (IDR) at 'BBB-'; -- Unsecured revolving credit facility at 'BBB-'; -- Senior unsecured notes at 'BBB-'; -- Subordinated debt at 'BB+'. The Rating Outlook is Stable. The ratings reflect the strength of the company's metrics (low leverage, high fixed-charge coverage, stable cash flows and exceptional liquidity due to no near-term maturities), which offset the largest credit concern -- the focus on skilled nursing and assisted living facilities. The high percentage of government reimbursement and the corresponding regulatory risk to operators of these facilities may place pressure on operator earnings. Additionally, Fitch notes the company's small size ($2.5 billion in assets), moderate geographic concentration (Florida and Ohio collectively comprise 35% of total investments) and exposure to smaller, un-rated operators. Fixed-charge coverage is strong for the 'BBB-' rating. For the trailing 12 months ended March 31, 2012, OHI's fixed-charge coverage ratio was 3.1x, compared with 2.7x and 3.2x in full-year 2010 and 2009, respectively. Contractual rental escalators drive Fitch's expectation of fixed-charge coverage improving to 3.4x by 2014. Fitch defines fixed-charge coverage as recurring operating EBITDA less straight-line rents divided by total interest incurred and preferred dividends. Leverage is also strong for the 'BBB-' rating and continues to decline. Leverage was 4.8x as of March 31, 2012 (1Q'12 annualized), between the 4.5x and 5.1x as of Dec. 31, 2009 and 2010. Fitch forecasts that leverage will migrate to the mid-4.0x range through 2014 as the company acquires additional facilities funded evenly through debt and equity. Fitch calculates leverage as net debt-to-recurring operating EBITDA. OHI's liquidity is exceptionally strong with no debt maturities before 2020 other than amounts outstanding on the unsecured revolving line of credit in 2015. The next maturity is $200 million of senior unsecured notes in 2020. OHI's back-ended debt maturities, coupled with the lack of recurring capital expenditures (due to the triple-net nature of the leases) provide exceptional liquidity coverage. Offsetting the credit positives is OHI's focus on skilled-nursing facilities and assisted-living facilities, which are highly reliant upon federal and state reimbursement. More than 91% of OHI's operator revenues are derived from public sources as of Dec. 31, 2011. Operators have experienced greater financial volatility and stress when rates and/or reimbursement formulas have changed. Healthcare legislation, together with budgetary concerns at both the federal and state levels will likely continue to pressure operator margins and operators' capacity to honor lease obligations. OHI's operators' coverage remains solid but not robust at 2.2x and 1.8x for EBITDARM and EBITDAR as of March 31, 2012. Master leases with cross-collateralization and EBITDAR coverage covenants improve OHI's security but OHI remains at risk for potential tenant defaults or requests for rental relief concessions. OHI's operators have been offsetting revenue declines through non- rent operating expense cost savings. Coverage metrics have declined moderately but Fitch expects they will stabilize modestly below current levels. A hypothetical analysis shows that operators' revenues would need to decline another 7.0%-8.0%, with all other operating costs unchanged before EBITDAR coverage breaks 1.0x, which provides some context to the challenging but manageable operating environment. Contingent liquidity as measured by unencumbered assets-to- unsecured debt is adequate, ranging between 1.7x and 2.3x at capitalization rates of 9.0% to 12.0%. This ratio will likely remain flat as the company acquires properties on a leverage neutral basis. The one-notch differential between Omega's IDR and the subordinated debt assumed as part of the CapitalSource transaction considers the relative subordination within OHI's capital structure. The Stable Outlook reflects Fitch's expectation that metrics will improve but remain appropriate for the current rating and that any reimbursement pressures at the operator level will have a minimal impact on OHI cash flows given lease length, covenants and coverage. The following factors could result in positive momentum in the ratings and/or Outlook: -- Increased scale; -- Net debt-to-recurring operating EBITDA sustaining below 4.0x (leverage was 4.8x as of end March 31, 2012); -- Fixed-charge coverage sustaining above 3.5x (coverage was 3.1x for the 12 months ended March 31, 2012). Conversely, the following factors may result in negative momentum in the ratings and/or Outlook: -- Further pressure on operators through reimbursement cuts; -- Leverage sustaining above 5.5x; -- Fixed-charge coverage sustaining below 2.5x. OMEGA NAVIGATION: Has Until Sept. 3 to File Reorganization Plan --------------------------------------------------------------- The Hon. Karen K. Brown of the U.S. Bankruptcy Court for the Southern District of Texas signed a fifth amended agreed scheduling order on order to show cause and agreed order extending the exclusive period of Baytown Navigation Inc., et al. The agreement provides for, among other things: 1. HSH Nordbank, AG, as senior facilities agent, the senior lenders, White & Case LLP, the junior lenders, and the Official Committee of Unsecured Creditors will file their respective responses and briefs to the show cause order by Aug. 2, 2012. 2. The Debtors may file a response to the briefs of the Responding Parties on or before Aug. 9. 3. The Responding Parties may file any briefs responding to the brief of the Debtors on or before Aug. 16. 4. The Court will set a hearing on the order to show cause by separate order. 5. The exclusive period during which only the Debtors may file a plan of reorganization is extended to Sept. 3, 2012. If the Debtors file plans of reorganization by Sept. 3, 2012, then the period under which only the Debtors may solicit votes on the plans is extended to Nov. 5, 2012. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. PARKERVISION INC: Incurred $4.1 Million Net Loss in 1st Quarter --------------------------------------------------------------- ParkerVision, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $4.07 million for the three months ended March 31, 2012, compared with a net loss of $3.37 million for the same period of 2011. The Company had no product or royalty revenue for the three months ended March 31, 2012, or 2011. The Company's balance sheet at March 31, 2012, showed $12.30 million in total assets, $1.69 million in total liabilities, and stockholders' equity of $10.61 million. As reported in the TCR on April 10, 2012, PricewaterhouseCoopers LLP, in Jacksonville, Florida, expressed substantial doubt about ParkerVision'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. A copy of the Form 10-Q is available for free at: http://is.gd/Dha2HS Jacksonville, Florida-based ParkerVision, Inc., was incorporated under the laws of the state of Florida on Aug. 22, 1989. The Company is in the business of innovating fundamental wireless technologies. It designs, develops and markets its proprietary radio frequency ("RF") technologies and products for use in semiconductor circuits for wireless communication products. PARTY CITY: Moody's Assigns 'B2' Corp. Family Rating ---------------------------------------------------- Moody's Investors Service assigned B2 corporate family and probability of default ratings to Party City Holdings, Inc. ("Party City," initially "PC Merger Sub, Inc.") and assigned a B1 rating to the company's proposed $1.05 billion senior secured term loan. The ratings outlook is stable. In addition to the proposed term loan, Moody's expects that the company will issue up to $700 million of additional unsecured debt as part of the transaction. Proceeds from the proposed term loan, unsecured debt and $100 million of revolver borrowing, along with $584 million of new common equity, will be used by Thomas H. Lee Partners, L.P. ("THL") to fund the acquisition of a majority stake in the company from Advent International, Berkshire Partners and Weston Presidio and repay existing debt. The transaction is valued at approximately $2.7 billion. Upon consummation of the transaction, PC Merger Sub, Inc. will be merged with and into Party City Holdings, Inc and its subsidiary, Amscan Holdings, Inc. (the current rated entity). Party City will be the surviving entity and obligor under the credit facilities. The assigned ratings are subject to the completion of the transaction and Moody's review of final documentation. "At over 7.0 times, Party City's lease adjusted leverage (including eight times rent expense) will be very high following the acquisition," stated Moody's analyst, Mike Zuccaro. "However, the company continues to report solid revenue and earnings growth, led by positive same store sales in retail, new store openings and conversions, increased wholesale demand and acquisitions. Given Moody's view that party goods and accessories have relatively stable demand characteristics, we expect operating performance to remain relatively stable in the near to intermediate term, and that the company will reduce leverage to below 6.5 times by the end of 2013." Ratings (LGD assessments) assigned: - Corporate family rating at B2 - Probability of default rating at B2 - $1.05 billion senior secured term loan due 2019 at B1 (LGD 3, 37%) The ratings outlook is stable. The following ratings of Amscan Holdings, Inc. were affirmed and will be withdrawn upon completion of the acquisition and repayment of existing debt: - Corporate family rating at B2 - Probability of default rating at B2 - $675 million senior secured term loan due 2017 at B2 (LGD 4, 52%); - $175 million subordinated notes due 2014 at Caa1 (LGD 6, 91%); Ratings Rationale Party City's B2 corporate family rating reflects the company's high pro forma leverage stemming from the proposed transaction, its narrow business focus on party goods and accessories, and small scale relative to other global retailers despite meaningful overall size in the fragmented party supply industry. The rating favorably reflects the company's strong market presence in both retail and wholesale, growing geographic diversification, and relative demand stability of party goods and accessories as a high portion of sales are tied to regularly recurring events, such as birthdays, and the majority of products are sold at moderate price points. The stable outlook reflects Moody's expectation for gradual improvement in debt protection metrics over time, driven by continued steady earnings growth and debt reduction with excess cash flow. The outlook also reflects the expectation for good liquidity. Given the company's very high pro forma leverage, a ratings upgrade is not likely over the near term. However, over time, sustained growth in revenue and profitability while demonstrating conservative financial policies, including the use of free cash flow for debt reduction, could lead to a ratings upgrade. Quantitatively, the ratings could be upgraded if debt / EBITDA is sustained below 5.25 times and EBITA /interest expense is sustained above 1.75 times. Ratings could be downgraded if the company's liquidity were to erode, or if heightened competition began to negatively impact operating margins or credit metrics. Quantitatively, ratings could be lowered if it appears that debt/EBITDA will not fall below 6.5 times by the end of 2013 or if EBITA/interest falls below 1.25 times. The B1 rating on Party City's proposed $1.05 billion senior secured term loan reflects both the overall probability of default of the company, to which Moody's has assigned a PDR of B2, and a loss given default assessment of LGD 3, 37%. The facilities benefit from a first priority lien on substantially all domestic assets of the company except cash, accounts receivable and inventory, on which it has a second lien behind the proposed $400 million ABL revolver (not rated by Moody's). The term loan also benefits from a first lien pledge on 65% of the stock of first- tier foreign subsidiaries, and from a sizeable level of unsecured debt in the capital structure. The principal methodology used in rating Party City was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Elmsford, NY, Party City is a designer, manufacturer, distributor and retailer of party goods and related accessories. The company's retail brands principally include Party City and Halloween City. Total revenues approached $1.9 billion for the latest twelve month period ended March 31, 2012. PATRIOT COAL: Moody's Cuts Probability of Default Rating to 'D' --------------------------------------------------------------- Moody's Investors Service lowered Patriot Coal's Probability of Default Rating to D from Caa1 and the corporate family rating to Ca from Caa1. The downgrades were prompted by the company's July 9, 2012 announcement that it voluntarily filed for relief under Chapter 11 of the United States Bankruptcy Code. Moody's took the following rating actions and intends to withdraw all ratings: Downgrades: Issuer: Patriot Coal Corporation Probability of Default Rating, Downgraded to D from Caa1 Corporate Family Rating, Downgraded to Ca from Caa1 Senior Unsecured Regular Bond/Debenture, Downgraded to C, LGD5, 71% from Caa2, LGD4, 60% Outlook Actions: Issuer: Patriot Coal Corporation Outlook, Changed To Negative From Ratings Under Review Withdrawals: Issuer: Patriot Coal Corporation Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-4 The LGD rate on senior unsecured notes reflects Moody's expectations of an average firm-wide recovery rate and a lower recovery rate on senior unsecured notes due to the large proportion of secured debt in the capital structure. Ratings Rationale The downgrade follows the July 9 announcement that Patriot and substantially all of its wholly owned subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York. Subsequent to the actions, Moody's will withdraw the ratings because Patriot has entered bankruptcy. The principal methodology used in rating Patriot Coal Corporation was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Patriot Coal Corporation is a producer of thermal coal and metallurgical quality coal in the eastern U.S., with operations and coal reserves in Appalachia and the Illinois Basin. Operations consist of fourteen current mining complexes, which include company-operated mines, contractor-operated mines and coal preparation facilities. The Appalachia and Illinois Basin segments consist of operations in West Virginia and Kentucky, respectively. Patriot controls approximately 1.9 billion tons of proven and probable coal reserves and ships coal to electric utilities, industrial users, steel mills and independent coke producers. The company generated $2.3 billion of revenues through the 12 months ended March 31, 2012. PATRIOT COAL: S&P Cuts Corp. Credit Rating to 'D' Over Bankruptcy ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on St. Louis, Mo.-based Patriot Coal Corp. (Patriot) to 'D' from 'CCC'. "At the same time, we lowered our issue rating on the company's senior unsecured debt to 'D' from 'CCC'. We removed the ratings from CreditWatch, where we placed them with negative implications on Jan. 23, 2012," S&P said. "The 'D' rating on Patriot follows the company's filing of a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code to implement its restructuring plan," said Standard & Poor's credit analyst Maurice Austin. During recent months, the cancellation of customer contracts, lower thermal coal prices, and rising expenditures for environmental and other liabilities have severely constrained the company's liquidity and financial flexibility," S&P said. However, Patriot expects its mining operations and customer shipments to continue in the ordinary course of business throughout the reorganization process and has obtained a commitment for $802 million in debtor-in-possession financing. Upon the Bankruptcy Court's approval, the company will use the new financing and cash generated from Patriot's ongoing operations to support the business during the reorganization process. PEREGRINE FINANCIAL: To Liquidate Under Chapter 7 Bankruptcy ------------------------------------------------------------ Reuters reports Peregrine Financial Group Inc. on July 10 filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code, disclosing between $500 million and $1 billion of assets, between $100 million and $500 million of liabilities, and between 10,000 and 25,000 creditors. According to the report, a board resolution authorizing the bankruptcy was signed by President Russell Wasendorf Jr, who also signed on behalf of Chairman Russell Wasendorf Sr. The resolution said Russell Wasendorf Jr was empowered to act for Russell Wasendorf Sr in the event the latter became incapacitated, under a power of attorney dated July 3. Peregrine Financial Group Inc. is the regulated unit of the brokerage PFGBest. PINNACLE AIRLINES: Wants More Time to Decide on Unexpired Leases ---------------------------------------------------------------- Pinnacle Airlines Corp., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to extend their time to assume or reject the unexpired leases of nonresidential real property until Oct. 28, 2012. The Debtors operate a business with operations and financial interests throughout the United States. As part of their operations, the Debtors estimate that, as of the Petition Date, they were party to more than 70 unexpired leases of nonresidential real property, including lease agreements for office space, hanger space and points of presence in airports. The Debtors relate that they have not yet had an opportunity to identify or make final determinations regarding the assumption or rejection of many of the leases. In a separate filing, the Debtors request for authorization to (i) reject the license agreement dated May 23, 2011, between the Houston Airport System of the City of Houston, Texas, and Colgan Air, Inc. for Hanger S570, located at 17231 John F. Kennedy Blvd., George Bush Intercontinental Airport/Houston; and (ii) the abandonment of certain personal property located on the premises associated with the lease, effective as of July 18, 2012. The Debtors note that the lease for the exclusive use of hanger space that is no longer necessary, and the lease imposes potentially onerous obligations. The Debtors gave notice of termination under the terms of the lease, effective July 18, but seek to reject the lease out of an abundance of caution and to avoid any associated burden to the estate. A hearing on July 18, at 9:45 a.m. has been set. Objections, if any, are due July 11, at 4 a.m. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PINNACLE AIRLINES: Wants Until Sept. 28 to File Chapter 11 Plan --------------------------------------------------------------- Pinnacle Airlines Corp., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to extend their time to (i) propose a Chapter 11 plan of reorganization until Sept. 28, 2012, and (ii) solicit acceptances of such plan until March 27, 2013. According to the Debtors, the extensions will enable them to formulate a plan that best addresses the interests of the Debtors, their employees, creditors and estates. A hearing on July 18, at 9:45 a.m. has been set. Objections, if any, are due July 11, at 4 a.m. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PINNACLE AIRLINES: Wants Ernst & Young to Audit 2012 Financials --------------------------------------------------------------- Pinnacle Airlines Corp., et al., filed the U.S. Bankruptcy Court for the Southern District of New York a supplemental application requesting entry of an order expanding the scope of the Debtors' employment of Ernst & Young LLP pursuant to the terms and conditions of the additional engagement letter dated as of May 9, 2012. EY LLP will provide these additional audit services: -- auditing and reporting on the consolidated financial statements of Pinnacle for the year ending Dec. 31, 2012; -- auditing and reporting on the effectiveness of Pinnacle's internal control over financial reporting as of Dec. 31, 2012; and -- reviewing Pinnacle's unaudited interim financial information before Pinnacle files its Form 10-Q for each quarter of the year ending Dec. 31, 2012. The billing rates of EY LLP's personnel are: Title Hourly Rate ----- ----------- National Office and Specialist Partner $785 Specialist Senior Manager $630 Partner $525 Executive Director $450 Senior Manager $360 Manager $300 Senior $195 Staff $135 To the best of the Debtors' knowledge, EY LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A hearing on July 18, 2012, at 10 a.m., has been set. In a separate filing, Delta Air Lines, Inc., has withdrawn its limited objection dated June 11, 2012, to the Debtor's Notice of Election pursuant to Section 1110(a) of the Bankruptcy Code. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PINNACLE HOLDCO: S&P Assigns '(P)B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned a preliminary 'B' corporate credit rating to Pinnacle Holdco S.a.r.l. The outlook is stable. "We also assigned a preliminary 'B+' issue-level rating with a preliminary recovery rating of '2' to the company's proposed $40 million senior secured revolving credit facility and $290 million first-lien term loan. In addition, we assigned a preliminary 'CCC+' issue-level rating with a preliminary recovery rating of '6' to Pinnacle's proposed $130 million second-lien term loan," S&P said. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery of principal in the event of a payment default by the borrower and the '6' recovery rating indicates expectations for negligible (0% to 10%) recovery. Standard & Poor's ratings on Pinnacle, parent company of the group of companies that composed Paradigm Ltd. prior to its acquisition by Apax Partners and JMI Equity in June 2012, reflect the company's "weak" business profile, characterized by its position in a fairly narrow segment of the exploration and production (E&P) market and its "highly leveraged" financial profile. Offsetting some of these issues is the critical role the company's products play in the E&P process, a strong and rising position in its segment, and a highly recurring revenue base. Pinnacle is a provider of software solutions for the worldwide oil and gas E&P industry. The industry uses Pinnacle's products to accurately and cost-effectively locate and optimally produce oil and gas, with over 700 customers worldwide including majors, independents, national oil companies, universities, and research institutes. Core services include interpretation and modeling products, seismic processing and imaging, and reservoir characterization. The company has over 3,000 active contracts and 15,000 seats. Revenues are geographically diversified, in line with the E&P industry. Its products target and are used by geophysicists and others in the evaluation of E&P potential. The company offers an integrated suite of products -- on Linux -- and most recently Windows-based platforms, representing the culmination of 10 years and a significant amount of research and development (R&D) spending. In addition, the company has made acquisitions to further complement its own offerings. "We view the company's business profile as weak, reflecting its significant market position in a relatively small market, competing with several major and long- established players with greater financial and product resources," said Standard & Poor's credit analyst Jacobs Schlanger. However, this is partly offset by its suite of integrated software products that spans the full E&P cycle, an emphasis on establishing relationships with new geoscientists and engineers, and a significant patent portfolio. The company's relationship strategy creates a growing base of future users and enables them to increase penetration of existing customers. "The outlook is stable, reflecting the company's recurring revenue base and good cash flow generation, which we expect to lead to a slow decrease in leverage. However, if competitive pressures lead to margin compression and leverage approaches the mid- to high-6x level, we could lower the rating. We expect minimal leverage reduction, so we do not foresee an upgrade in the next 12 to 18 months," S&P said. PRESSURE BIOSCIENCES: Posts $1.1 Million Net Loss in Q1 2012 ------------------------------------------------------------ Pressure BioSciences, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.06 million on $305,661 of revenue for the three months ended March 31, 2012, compared with a net loss of $833,365 on $180,643 of revenue for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $1.72 million in total assets, $2.35 million in total liabilities, and a stockholders' deficit of $635,838. As reported in the TCR on March 2, 2012, Marcum LLP, in Boston, Massachusetts, expressed substantial doubt about Pressure Biosciences' 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/wUQ4xa Pressure BioSciences, Inc., headquartered in South Easton, Massachusetts, holds 14 United States and 10 foreign patents covering multiple applications of pressure cycling technology in the life sciences field. R.E. LOANS: Plan of Reorganization Confirmed -------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas confirmed R.E. Loans, LLC, et al.'s Modified Fourth Amended Plan of Reorganization dated June 1, 2012, as supplemented on June 8, 2012. As reported in the Troubled Company Reporter on June 13, 2012, the Modified Fourth Amended Joint Plan contemplates the reorganization of the Debtors' businesses and the resolution of outstanding Claims against and Interests in the Debtors through the formation of a Liquidating Trust intended to hold and own the equity in the Reorganized R.E. Loans, to pursue litigation recoveries of claims owned by the Debtors and the Reorganized Debtors, and distribute the proceeds to the holders of Allowed Claims pursuant to the Plan and the Trust Agreement. Generally, the Plan provides that: (1) all Notes Receivable and REO Property, will re-vest in the Reorganized Debtors; and (2) all Causes of Action that are not settled or released by the Plan and the equity of the Reorganized R.E. Loans will vest in the Liquidating Trust. All Causes of Action, including all Avoidance Actions, will be transferred to the Liquidating Trust, except Causes of Action against Wells Fargo and Causes of Action against Holders of Allowed Claims in REL Class 8 if REL Class 8 votes to accept the Plan and implement the Plan Compromise. In addition, New Equity Interests in Reorganized R.E. Loans will be issued to the Liquidating Trust and held by the Liquidating Trustee for the benefit of holders of Allowed Claims. Accordingly, the Liquidating Trustee will be the sole member of Reorganized R.E. Loans. The Plan will be financed through the secured Wells Fargo Exit Facility, which will be provided by Wells Fargo in an amount sufficient to (i) repay in full Wells Fargo's Prepetition Claims and Wells Fargo's DIP Facility Claim; (ii) satisfy all Allowed Administrative Expenses, Priority Tax Claims and Priority Non-Tax Claims; and (iii) provide the Reorganized Debtors with sufficient liquidity to administer and dispose of their Assets, exclusive of the retained Causes of Action. Net Cash proceeds from the sale or disposition of Notes Receivable and REO Property will be used first to fund the operations of the Reorganized Debtors and repay the Wells Fargo Exit Facility, pursuant to the terms of the Wells Fargo Exit Facility. A full-text copy of the Modified Fourth Amended Joint Plan is available for free at: http://bankrupt.com/misc/RE_LOANS_plan_modifie4amended.pdf About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713.6 million in assets and $886.0 million in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. RG STEEL: Judge Clears Enviros to Pursue Appeal in Pollution Case ----------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Kevin J. Carey on Tuesday permitted environmental advocates to pursue an appeal concerning RG Steel LLC's pollution-monitoring obligations at its Sparrows Point, Md., steel mill. At a court hearing in Wilmington, Judge Carey granted The Chesapeake Bay Foundation Inc. and allied environmentalists relief from the automatic stay to take their appeal to the Fourth Circuit, rejecting the debtors' argument that the appeal would be a costly distraction from ongoing efforts to sell the mill and other assets, Bankruptcy Law360 relates. 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. RG STEEL: Bonus Program Defective, U.S. Trustee Says ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that RG Steel LLC will face opposition from the U.S. Trustee at a July 18 hearing for approval of a program to pay bonuses to the 10 top executives if the business is sold before the year's end. The bonus pool would consist of 2.5% of the sale price for the assets in excess of the amount necessary to pay off funding for the Chapter 11 case and first-lien debt. In her papers, the U.S. Trustee said the threshold "is easily achievable" because the company previously said the senior lenders are "oversecured." According to the report, in the opinion of the U.S. Trustee, the program in reality is "little more than a key employee retention plan" that Congress prohibited for senior executives. The objection by the Justice Department's bankruptcy watchdog points out that the participants' job titles and responsibilities aren't disclosed, leaving the court unable to determine whether any potential bonus recipients are "insiders" for whom the program is prohibited. 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. 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. An official committee of unsecured creditors has been appointed in the case. The court has approved the sale of a non-operating plant in Steubenville, Ohio, for $15 million. The bids for assets including the three main plants in Sparrows Point, Maryland; Warren, Ohio, and Wheeling, West Virginia, are due July 25. Assuming a prospective buyer signs a contract to be a so-called stalking-horse and submits the first bid at auction, the auction will take place Aug. 21, with a hearing to approve the sale on Aug. 23. If no buyer signs a contract, the auction will take place July 31, with a sale-approval hearing on Aug. 8. RITZ CAMERA: To Liquidate Remaining 137 Locations ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ritz Camera & Image LLC has decided to liquidate its remaining 137 camera stores. The company had begun going-out-of- business sales immediately before bankruptcy at the stores it didn't intend to restructure and continue operating. According to the Bloomberg report, Ritz, in papers filed at the end of last week, said the decision was made to sell the remaining stores either as a going concern or through sales run by liquidators. There will be a hearing on July 30 in bankruptcy court for approval of auction and sale procedures. If the judge goes along, bids will be due Aug. 28, in advance of an auction on Sept. 4. Offers will be accepted from liquidators and operators. 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. RIVER CANYON: Can Hire Sender Wasserman as Bankruptcy Counsel ------------------------------------------------------------- The Bankruptcy Court for the District of Colorado has authorized River Canyon Real Estate Investments, LLC, to employ Sender & Wasserman, P.C., as its Chapter 11 counsel. David V. Wadsworth, Esq., at Sender & Wasserman, P.C., attests the firm does not hold or represent any interest adverse to the Debtor and the bankruptcy estate, and is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14) of the Bankruptcy Code. From February 2008 through the Petition Date, Sender & Wasserman billed the Debtor $47,309 in attorneys' fees and $1,046 in costs. The firm was paid in full for such fees and costs from the pre- petition retainer provided the firm. As of the Petition Date, Sender & Wasserman was holding $116,519 as balance of the retainer. Sender & Wasserman asserts a security interest in the retainer from the Debtor. In the event the case is converted to a chapter 7 proceeding, the security interest in the retainer may enable Sender & Wasserman to receive payment of its fees and expenses to the extent of the retainer while other administrative expenses remain unpaid. Any sums remaining at the close of the representation will be refunded to the Debtor. There are no liens or interests in the retained funds other than the security interest claimed by Sender & Wasserman. The professionals' hourly rates for the services are: Harvey Sender $450 per hour John B. Wasserman $450 per hour David V. Wadsworth $325 per hour David J. Warner $240 per hour Katherine Swan $240 per hour Gina Ries $210 per hour Aaron Conrardy $210 per hour Paralegals $115 per hour About River Canyon Real Estate Investments River Canyon Real Estate Investments, LLC, is the developer of the Ravenna residential real estate project in Douglas County, Colorado and the owner of The Golf Club at Ravenna, among other assets. River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-20763) on May 23, 2012, in Denver as part of its settlement negotiations with lender Beal Bank Nevada, and to preserve the value of its assets. At the behest of Beal Bank, Cordes & Company was named, effective Oct. 15, 2010, as receiver for the 643-acre real estate development with golf course in Douglas County, Colorado. The Debtor disclosed assets of $19.7 million and liabilities of $45.3 million in its schedules. The property and golf course are estimated to be worth $11 million, and secures a $45 million debt. Judge Elizabeth E. Brown presides over the case. The Debtor is represented by David Wadsworth, Esq., at Harvey Sender, Esq., in Sender Wasserman, in Denver. Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of the Debtor. Mr. Jacks, which has a 12.8% membership interest, signed the Chapter 11 petition. RT MIDWEST: Ruby Tuesday Restaurants Allowed to Use Cash -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that RT Midwest Holdings LLC was given interim authority to use cash until a final hearing on July 25. About RT Midwest RT Midwest Holdings, LLC and three affiliates sought Chapter 11 protection (Bankr. D. Minn. Case No. 12-43626 to 12-43629) in Minneapolis on June 20, 2012. RT Midwest disclosed in its schedules $835,600 in assets and $28.8 million in liabilities, of which $2.434 million is secured. Affiliate RT Chicago Franchise, LLC, disclosed $3.936 million in assets and $23.72 million in liabilities, including $23.54 million of secured debt to General Electric Capital Corp. and related entities. RT Midwest Real Estate LLC reported that it has debt in excess of $60 million. RT Northern Illinois Franchise LLC disclosed less than $30 million in debt. The Debtors own or lease 13 properties from which they operate Ruby Tuesday's franchise restaurants. SAN BERNARDINO, CA: To Seek Creditor Protection Under Chapter 9 --------------------------------------------------------------- Reuters reports the city council of San Bernardino, California, voted on July 10, 2012, to file for bankruptcy, marking the third time in recent weeks a city in the most populous U.S. state has opted to seek protection from its creditors. According to the report, the decision by the leaders of San Bernardino, a city of about 210,000 residents approximately 65 miles (104 km) east of Los Angeles, followed a report by city staff that projected city spending would exceed revenue by $45 million in the current fiscal year. The Troubled Company Reporter previously reported the Chapter 9 bankruptcy filings of the city of Stockton and the town of Mammoth Lakes. The Wall Street Journal's Tamara Audi and Erica E. Phillips report that unlike Stockton and Mammoth Lakes, San Bernardino's bankruptcy vote came as a surprise, setting off alarm bells throughout the state. Economists and elected officials say other California cities with similar dynamics -- falling revenue and pricey police and fire departments -- could seek bankruptcy protection. WSJ reports that Jim Morris, chief of staff at the Office of the Mayor, said San Bernardino will run out of cash to pay its 800 employees within 90 days. He said San Bernardino expects its deficit to rise to $45 million in this fiscal year. WSJ notes San Bernardino is among the hardest hit cities in a region that is still making a slow and uneven comeback from the recession. The city is part of the Inland Empire, a collection of communities that stretches from the edge of Los Angeles County to the Arizona border. The unemployment rate in the region is 11.8%, compared with 8.2% nationwide. According to the report, Gwendolyn Waters, a police captain who was assigned to speak for the city manager's office, said San Bernardino is considering bypassing a new state mediation process under which a distressed city negotiates with creditors for up to 90 days before filing for bankruptcy. According to WSJ, San Bernardino is hamstrung by a decades-old, voter-approved amendment to its charter that disallows the mayor or City Council from negotiating salaries with its police and fire unions. Those salaries instead are based on salaries of police and firefighters in cities of similar size -- except the cities used for comparison are much more affluent. WSJ relates city and union officials said city unions have agreed to concessions and salary cuts over the past two years. WSJ also says another blow to the city was a state decision to abolish California's redevelopment agencies. San Bernardino obtained about $6 million a year in such funds, which it used to repair roads, trim trees and "back fill" its general fund, city officials said. Michael B. Marois and Alison Vekshin, writing for Bloomberg's BusinessWeek, report the City Council voted 4 to 2 to place the city in bankruptcy protection. The city of 209,000, about 65 miles (105 kilometers) east of Los Angeles, is so broke it can't cover its payroll, interim City Manager Andrea Travis-Miller said, according to BusinessWeek. Ms. Travis-Miller said a filing could take a month to prepare. "If the employees are not paid on Aug. 15, on Aug. 16 there will be a mass exodus of city employees," City Attorney James Penman told the council before the vote, according to BusinessWeek. BusinessWeek, citing data compiled by Bloomberg, reports Taxable Build America Bonds sold by the San Bernardino Joint Powers Financing Authority in December 2010 and maturing in 2030 traded on July 11 at a record average yield of almost 11%, up from 7% the previous day, before falling back to average about 9.5%. According to Bloomberg Fair Value indexes, general-obligation debt from state and local California issuers yielded 1.02 percentage points more than top-grade securities on average on July 11, after reaching 1.04 percentage points on July 10, matching the most since Jan. 12. Late Wednesday, Standard & Poor's lowered its credit rating on the city's lease revenue bonds 12 steps to CC, or "junk" status, from BBB+, third-lowest investment grade, saying San Bernardino has depleted its cash, which could impair its ability pay its bills. It put the credit on watch for future cuts. SBA TELECOMS: Moody's Rates New $650MM Sr. Unsecured Notes 'B1' --------------------------------------------------------------- Moody's Investors Service has assigned a B1 (LGD5-81%) rating to the proposed $650 million senior unsecured notes due 2020 to be issued by SBA Telecommunications, Inc. (SBAT), an indirect wholly- owned subsidiary of SBA Communications Corporation. The note proceeds are expected to be utilized for repaying existing debt, including repaying the Mobilitie bridge loan and the outstandings under its revolver and for general corporate purposes. Moody's notes that the LGD assessments and point estimates for the individual debt instruments will be subject to further volatility depending on how the company finances the maturing convertible notes due in May 2013 and the bridge loan it will take on in connection with the TowerCo acquisition, expected to close later in 2012. As such, Moody's is concerned that the company may be exposed to financing and market risks given the company's significant near- to intermediate-term debt maturities, which total approximately $1.6 billion over the next two years. The company's upcoming maturities include $535 million of the 1.875% convertible notes due May 2013, $500 million 4% Convertible Notes due October 2014 and the proposed TowerCo 24-Month bridge loan due at end of in 2014. Downgrades: Issuer: SBA Communications Corporation Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Issuer: SBA Senior Finance II, LLC Senior Secured Bank Credit Facility, Downgraded to 41 - LGD3, from 40 - LGD3 Issuer: SBA Telecommunications, Inc. Senior Unsecured Regular Bond/Debenture, Downgraded to 81 - LGD5, from 75 - LGD5 Assignments: Issuer: SBA Telecommunications, Inc. Senior Unsecured Regular Bond/Debenture, Assigned a range of 81 - LGD5 to B1 Ratings Rationale SBAC's Ba3 CFR reflects the company's high adjusted Debt/EBITDA leverage relative to peers, which is due in large part to debt- financed acquisitions, capital expenditures and increasing stock buy-backs. The rating does consider the company's scale as well as the stability of much of its revenues and cash flow generation, which are predominantly derived from contractual relationships with the largest wireless operators in the U.S. Moody's believes that the fundamentals of the wireless tower sector will remain favorable through the next several years. Finally, the rating reflects Moody's view that SBAC will likely temper its acquisition activity for the near term, as it takes time to integrate the two large acquisitions of Mobilitie and TowerCo. Moody's expects SBAC's adjusted Debt/EBITDA leverage to remain above 9.0x (Moody's adjusted) levels at the end of 2012 due to the additional debt taken on as part of the TowerCo acquisition, before reducing to the low 8x range by 2014 through a combination of EBITDA growth and debt repayment. In addition, TowerCo has high exposure to the Sprint iDen towers which are scheduled to be decommissioned in 2015 and 2018. As a result, future revenue growth could be hampered if the company cannot offset the iDen revenue losses with revenues from new tenants or carriers augmenting their cell site equipment as they upgrade to fourth generation (4G) wireless networks. Moody's also notes that the individual debt instruments are subject to potential near-term variability especially if they are in close proximity to the expected loss assumptions underlying the rating breakpoints in Moody's Loss Given Default ("LGD") rating framework for high-yield corporates, as well as dependent on the specific levels of debt at various legal entities. In rating SBAC's debt instruments, Moody's has taken a forward look with respect to the composition of the company's debt obligations. As the TowerCo bridge loan is not permanent financing, it is probable that traditional debt financing may be used to refinance this debt, which may cause further changes in the capital structure and lead to near-term ratings volatility among the individual instruments. The senior secured debt of SBA Senior Finance II ("SBAF") are rated Ba2 (LGD3-41%) and the senior unsecured notes at SBA Telecommunications, Inc ("SBAT") are rated B1 (LGD5-81%) reflecting the perceived collateral coverage of these debt obligations relative to the overall waterfall of debts, including the securitizations. The SGL-3 liquidity rating reflects Moody's view that SBAC will have adequate liquidity over the next 12-18 months. The company will have significant cash needs over the next year, as it needs to fund the pending TowerCo acquisition and the $535 million 1.875% convertible notes maturing in May 2013, which will necessitate further capital raising activity over the next twelve months. On the other hand, if the convertible notes are converted into equity, SBAC should have ample liquidity over the next 12 months. Moody's notes that if SBAC addresses the refinancing issues over the next twelve months, its liquidity rating could be upgraded. Moody's also expects the company to have ample head room in its maintenance covenants. Rating Outlook The negative outlook reflects the additional risk that SBAC will face in restoring its financial profile that supports its Ba3 corporate family rating. Coming on the heels of the acquisition of Mobilitie in April, the purchase of TowerCo will raise SBAC's adjusted Debt/EBITDA leverage above 9.0x. In addition, as the recently acquired properties have a lower tenancy ratio, the company's cash generation relative to debt will remain near the downgrade triggers until SBAC is able to add more wireless carriers on the newly acquired towers. What Could Change the Rating - Up While unlikely in the near-term, ratings may be considered for an upgrade if SBAC delivers the following adjusted key credit metrics on a sustained basis: Debt/EBITDA of 7x, (EBITDA-Capex)/Interest approaching 2x, Free Cash Flow/Debt greater than 5%. What Could Change the Rating - Down The ratings may face downward ratings pressure if weakening industry fundamentals or the Company's aggressive expansion plans result in the following adjusted key credit metrics on a sustained basis: Debt/ EBITDA over 8.5x, (EBITDA-Capex)/ Interest coverage remaining in the 1.0x range and Free Cash Flow/ Debt in the low single digits on a sustained basis. The principal methodology used in rating SBA Telecommunications, Inc was the Global Communications Infrastructure Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SBA TELECOM: S&P Rates New $650MM Senior Unsecured Notes 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue level rating and '4' recovery rating to SBA Telecommunications Inc.'s proposed $650 million of senior unsecured notes. The '4' recovery rating indicates Standard & Poor's expectation of average (30% to 50%) recovery in the event of a default. Proceeds will be used to repay the $400 million bridge loan which funded the Mobilitie acquisition, and partly repay revolving credit drawdowns. Parent SBA Communications Corp.'s 'B+' corporate credit rating and stable outlook are not affected by this issuance, which does not change the company's financial profile. "We still expect leverage, including our adjustments for operating leases to be around 8.5x at the end of 2013 under our base case scenario. Given the magnitude of SBA's other cash requirements over the next 12 months, including, most notably, the cash requirements for the TowerCo acquisition, our assessment of the company's liquidity remains "less than adequate," because sources of liquidity remain below 1.2x. For the company's liquidity to be reassessed as "adequate," SBA would have to access the capital markets to complete its funding needs for the TowerCo transaction, as well as the $535 million of convertible debt maturing in May 2013," S&P said. Ratings List SBA Communications Corp. Corporate credit rating B+/Stable/-- Rating Assigned SBA Telecommunications Inc. $650 mil. senior unsecured notes B+ Recovery rating 4 SCI REAL ESTATE: First Amended Joint Plan of Liquidation Confirmed ------------------------------------------------------------------ The Bankruptcy Court for the Central District of California has confirmed the first amended joint plan of liquidation filed by SCI Real Estate Investments LLC dated April 19, 2012. The Court also approved an exit financing, and the exit lender is granted first priority security interests and liens in and to all of the Liquidating Trust Assets to secure the $3,000,000 revolving credit facility. The security interests and/or liens in favor of the Exit Lender will be first, prior and senior to the holders of all Allowed Claims and Interests, including, without limitation, Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Class 1-4 Claims and Allowed Class 5 Interests. The Exit Lender is granted an Allowed Super-Priority Administrative Claim with priority over any and all Allowed Administrative Claims to further secure repayment of the Facility. Notwithstanding any other provision of the Plan or the Court's Order, the Exit Lender is authorized to take any and all actions to perfect its liens that will be granted to secure the Debtors' obligations under the Exit Financing pursuant to the terms as set forth in the Indicative Term Sheet. William Hoffman is appointed as the Liquidating Trustee for the Liquidating Trust. He will serve subject to the terms and condition of the Liquidating Trust Agreement and the Plan until removed or he resigns. Under the liquidating plan filed by the Debtors, all of the Debtors' assets will be transferred to a Liquidating Trust on the Effective Date. The Plan's objective is for the Liquidating Trustee to liquidate the Liquidating Trust Assets and distribute the proceeds of the liquidation to the Holders of Allowed Claims in satisfaction of the Debtors' obligations. The Plan provides for the substantive consolidation of the two Debtors into a single entity, divides Holders of Claims and Interests into Classes based on their legal rights and interests, and provides for the treatment of each of those Classes. The Plan provides that the Liquidating Trust will be administered by the Liquidating Trustee under the supervision of the Post-Confirmation Oversight Committee that will be comprised of the members of the Committee who choose to serve. The Holders of Interests will not receive or retain anything on account of their Interests. Only Classes 1, 2 and 4 are impaired and deemed eligible to vote under the plan. The Plan designates four Classes of Claims and one Class of Interests. The classification and treatment of claims under the Plan are: A. Class 1 (2009 Pledge and Security Agreements) will be paid at such time and from the Net Proceeds generated from the disposition of the Collateral securing the Claims. These claims are estimated to be $7.44 million and recovery is estimated to be 100%. B. Class 2 (SCICG Mezzanine Fund I, LLC) will be paid from the Net Proceeds generated from the disposition of the Collateral securing the Claims. These claims are scheduled for $10.8 million and recovery is estimated to be 100%. C. Class 3 (Claims for Wages) will be paid in full on the later of (1) the Effective Date or as soon as practicable thereafter and (2) if the Priority Unsecured Claim is a Disputed Claim, after the dispute is resolved by agreement of the parties or a Final Order. These claims are scheduled for $23,500 and recovery is estimated to be 100%. D. Class 4 (All Allowed General Unsecured Claims) will be made by the Liquidating Trustee as follows: (1) On the Effective Date, or as soon as practicable thereafter, the Liquidating Trustee will distribute the sums then available to the Holders of Allowed Class 4 General Unsecured Claims on a pro rata basis. (2) If at any time after the Effective Date the Liquidating Trustee is holding more than $1,000,000 in Available Cash or at such times as instructed by the Post-Confirmation Oversight Committee, the Liquidating Trustee will distribute the Available Cash to the Holders of Allowed Class 4 General Unsecured Claims on a pro rata basis; and (3) Upon the resolution of all Claims and litigation, and the liquidation of all Liquidating Trust Assets, the Liquidating Trustee will distribute all Cash remaining in the Liquidating Trust by making a final distribution to the Holders of Allowed Class 4 General Unsecured Claims. These claims are scheduled for $44.85 million and percentage recovery is unknown. E. Class 5 (Membership Interests) will receive no value under the plan. A full-text copy of the disclosure statement is available for free at http://bankrupt.com/misc/SCI_ds_2nd.pdf About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of SCI Real Estate Investments. Levene, Neale, Bender, Yoo & Brill L.L.P., represents the Committee as its general bankruptcy counsel. SEARS HOLDINGS: 2013 Pension Contribution of Up to $430-Mil. ------------------------------------------------------------ In its annual report on Form 10-K for the fiscal year ended Jan. 28, 2012, Sears Holdings Corporation disclosed that its estimated minimum contribution to its domestic pension plan for fiscal 2013 was approximately $740 million. As a result of federal legislation signed into law on July 6, 2012, which allows pension plan sponsors to use higher interest rate assumptions in valuing plan liabilities and determining funding obligations, the Company now estimate that the fiscal 2013 minimum required domestic pension contribution will be between $380 million and $430 million. This estimate and the actual timing and amount of required plan contributions are dependent upon many factors, including returns on invested assets, the level of certain market interest rates, the discount rate used to determine pension obligations, the regulations to be adopted that implement the legislation, and other regulatory actions. In addition, the Company may elect, in its discretion, to contribute more to the Company's pension plan than the minimum amounts required under applicable law. About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at April 28, 2012, showed $21.60 billion in total assets, $17.02 billion in total liabilities and $4.57 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SEDONA DEVELOPMENT: Taps Stinson Morrison as Bankruptcy Counsel --------------------------------------------------------------- Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, ask the U.S. Bankruptcy Court for the District of Arizona for permission to employ Stinson Morrison Hecker LLP to represent the Debtors effective June 26, 2012. On June 7, Polsinelli Shughart, PC, notified the Court that it has withdrawn as counsel of record for the Debtors in all further proceedings. The firm explained that the Debtor had not paid the approved fees. Alan A. Meda, a partner at SMH, tells the Court that the hourly rates for attorneys range from $190 to $650 and for paralegals and other legal assistants from $95 to $225. On June 26, the Debtors provided SMH with a $100,000 retainer. SMH will retain all funds received from the Debtors in its trust account pending this Court's approval of SMH's interim applications for compensation. Mr. Meda discloses that SMH represents Granite Dells Ranch Holdings, LLC as bankruptcy counsel in a pending Chapter 11 bankruptcy case. The Debtors and Granite Dells are related through common management and may be considered affiliates. SMH has also previously represented and may represent GECC and Colonial Leasing on matters unrelated to the representation of the Debtors in their bankruptcy cases. SMH has requested a waiver of any potential conflicts and special conflicts counsel will be retained to represent the Debtors relative to any matter arising adverse to GECC and/or Colonial Leasing. To the best of the Debtors' knowledge, SMH is a "disinterested person" as that term is defined in Section 101 (14) of the Bankruptcy Code. The firm can be reached at: C. Taylor Ashworth, Esq. Alan A. Meda, Esq. Christopher C. Simpson, Esq. STINSON MORRISON HECKER LLP 1850 N. Central Avenue, Suite 2100 Phoenix, AZ 85004-4584 Tel: (602) 279-1600 Fax: (602) 240-6925 E-mail: ameda@stinson.com csimpson@stinson.com About Sedona Development Partners Sedona Development Partners owns an 18-hole golf course and related properties, including luxury villas, a practice park, range house, tennis courts and related facilities in Sedona, Arizona, known generally as Seven Canyons. The Club at Seven Canyons, LLC, operates the golf course and related facilities for SDP. SDP is the manager and sole member of the Club. Sedona Development Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-16711) on May 27, 2010. The Club At Seven Canyons filed a separate Chapter 11 petition (Bankr. D. Ariz. Case No. 10-16714). John J. Hebert, Esq., Philip R. Rudd, Esq., and Wesley D. Ray, Es., at Polsinelli Shughart PC, in Phoenix, Ariz., assist the Debtors in their restructuring efforts. Lender Specialty Trust is represented by Joseph E. Cotterman, Esq., and Nathan W. Blackburn, Esq., at Gallagher & Kennedy, P.A. Sedona disclosed $29,171,168 in assets and $121,679,994 in liabilities. Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona on June 17, 2011, a second amended joint disclosure statement in support of their second amended joint pan of reorganization. The Debtors' disclosure statement was approved on June 28, 2011. SEMCRUDE LP: Creditors' Trust Sues Barclays Over $143MM Fee ----------------------------------------------------------- Howard Goodman at Bankruptcy Law360 reports that a litigation trustee representing creditors of SemGroup LP sued Barclays Bank PLC on Monday, seeking to get back a $143 million fee the bank collected when it took over the troubled energy company's commodities trading positions during its 2008 slide into bankruptcy. Bankruptcy Law360 relates that the lawsuit, filed in New York federal court, says Barclays knew that SemGroup was in desperate straits and took the opportunity to grab inordinate profits. About SemGroup, L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup LP won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on Nov. 30, 2008. As part of the Plan, the Reorganized Debtors entered into two new credit facilities aggregating $625 million in financing; entered into a $300 million Second Lien Term Facility; created a new corporate structure, including issuing shares of common stock and warrants; and distributed approximately $500 million of cash and approximately $1 billion in value of new common stock and warrants to thousands of creditors in accordance with the Plan. SKINNY NUTRITIONAL: Trim Capital Reports 11.3% Equity Stake ----------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Trim Capital LLC; Dachshund, LLC, the managing member of Trim; and Marc Cummins, the managing member of Dachshund disclosed that, as of June 28, 2012, they beneficially own 100,000,000 shares of common stock of Skinny Nutritional Corp. which represents 11.3% of the shares outstanding. A copy of the filing is available for free at http://is.gd/mTmK5B On June 28, 2012, the Company and Trim entered into a Securities Purchase Agreement relating to a financing transaction for a maximum of $15,000,000 in total proceeds to the Company. The Unit Financing is structured to occur in three separate closings, with each of the second and third closings subject to certain conditions. At the first closing, which was completed on June 28, 2012, the Company sold a $1,000,000 senior secured bridge note to Trim. About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. The Company reported a net loss of $7.66 million in 2011, compared with a net loss of $6.91 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.15 million in total assets, $4.62 million in total liabilities, all current, and a $2.47 million stockholders' deficit. In its audit report for the 2011 financial statements, Marcum LLP, in Bala Cynwyd, Pennsylvania, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a working capital deficiency of $3.17 million, an accumulated deficit of $45,492,945, stockholders' deficit of $1.74 million and no cash on hand. The Company had net losses of $7.67 million and $6.91 million for the years ended Dec. 31, 2011, and 2010, respectively. Additionally, the Company is currently in arrears under its obligation for the purchase of trademarks. Under the agreement, the seller of the trademarks may choose to exercise their legal rights against the Company's assets, which includes the trademarks. STUDIO ONE: Posts $1.45-Mil. Net Loss in March 31 Quarter --------------------------------------------------------- Studio One Media, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.45 million on $88,400 of revenues for the three months ended March 31, 2012, compared with a net loss of $1.99 million on $135,130 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 $4.72 million on $199,277 of revenues, compared with a net loss of $5.53 million on $369,440 of revenues for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $2.35 million in total assets, $3.58 million in total liabilities, and a stockholders' deficit of $1.23 million. As reported in the TCR on Nov. 17, 2011, SingerLewak LLP, in Los Angeles, expressed substantial doubt about Studio One Media'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 historically suffered recurring losses from operations, has a substantial accumulated deficit and has limited revenues. A copy of the Form 10-Q is available for free at: http://is.gd/VbOk7V Scottsdale, Ariz.-based Studio One Media, Inc., is a diversified media and technology company. The Company's wholly-owned subsidiaries include MyStudio, Inc., and AfterMaster HD Audio Labs, Inc. The Company and its subsidiaries are engaged in the development and commercialization of proprietary, leading-edge audio and video technologies for professional and consumer use, including MyStudio(R) HD Recording Studios and AfterMaster(TM) HD Audio. TURBOSONIC TECHNOLOGIES: Had $326,700 Loss in March 31 Quarter -------------------------------------------------------------- TurboSonic Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of US$326,702 on US$3.13 million of contract revenue and sales for the three months ended March 31, 2012, compared with a net loss of US$35,099 on US$4.03 million of contract revenue and sales for the three months ended March 31, 2011. For the nine months ended March 31, 2012, the Company reported a net loss of US$2.21 million on US$11.38 million of contract revenue and sales, compared with a net loss of US$1.41 million on US$8.30 million of contract revenue and sales for the nine months ended March 31, 2011. The Company has incurred significant losses during the current fiscal period and previous two fiscal years, which have reduced the Company's cash and stockholders' equity. "These conditions raise substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/Jh7Y46 Based in Waterloo, Ontario, Canada, TurboSonic Technologies, Inc., designs and supplies air pollution control technologies to industrial customers worldwide. SUGARMADE INC: Incurred $625,400 Net Loss in Fiscal Q3 ------------------------------------------------------ Sugarmade, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $625,418 on $84,498 of sales revenues for the three months ended March 31, 2012, compared with a net loss of $278,609 on $1,538 of sales revenues for the three months ended March 31, 2011. For the nine months ended March 31, 2012, the Company reported a net loss of $3.22 million on $123,996 of sales revenues, compared with a net loss of $546,220 on $26,531 of sales revenues for the nine months ended March 31, 2011. The Company's balance sheet at March 31, 2012, showed $1.26 million in total assets, $331,925 in total current liabilities, and stockholders' equity of $933,179. As reported in the TCR on Oct. 19, 2011, Anton & Chia, LLP, in Newport Beach, California, expressed substantial doubt about Sugarmade'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 incurred net losses since inception and has an accumulated deficit at June 30, 2011. A complete text of the Form 10-Q is available for free at: http://is.gd/6Nu8oE San Jose, Calif.-based Sugarmade, Inc., is a publicly traded company incorporated in the state of Delaware. The Company's previous legal name was Diversified Opportunities, Inc. The Company is principally engaged in the business of selling and distributing environmentally friendly non-tree-based paper products. VYCOR MEDICAL: Richard Denness Succeeds Kenneth Coviello as CEO --------------------------------------------------------------- Vycor Medical, Inc., announced that Richard P. Denness will be joining Vycor as its new Chief Executive Officer, replacing Kenneth Coviello on his departure following a transition period; Ken will retain a role with the company on a consultancy basis. Since the acquisitions of NovaVision, Inc., and Sight Science Limited, Vycor has become an international group of greater complexity with several businesses. Mr.Denness is a healthcare executive with global experience who has held senior management positions at UCB, Inc., Schwarz Pharma US, Schering-Plough and IVAX Corporation. On July 2, 2012, Mr. Coviello notified the Company that he was resigning his position as CEO of the Company effective Aug. 3, 2012. Mr. Coviello's decision to resign was for personal reasons and did not arise or result of any disagreement with the Company on any matters relating to the Company's operations, policies or practices. At the same time, Mr. Coviello advised the Company that he will also resign from his position on the Company's board of directors. Mr. Coviello has played a crucial role in the development of Vycor and its VBAS product line, which has been achieving excellent growth and progress in US and international markets. Ken had indicated to the Board a desire to pursue personal interests and pass the role onto a new executive to take Vycor forward to the next level, once an appropriate successor could be found. Adrian Liddell, Chairman of Vycor stated: "We are delighted to welcome Richard as the new CEO of Vycor; Richard has the operations, strategic, and management leadership experience required to run a fast moving healthcare company such as Vycor. We believe he is ideally equipped to take Vycor forward into the next exciting phase of its development. At the same time, Vycor owes a huge debt of gratitude to Ken, who has led the company from inception and we wish him all the best with his future plans." The Company's board of directors has approved Mr. Denness' Employment Agreement and the compensation for his services set forth therein. Until the Company completes a planned funding and contemporaneous listing on NASDAQ Global Capital Markets, Mr. Denness will receive a salary $10,000 per month and reimbursement of certain travel and business-related expenses. Following the Funding Completion Mr. Denness will receive a salary of $250,000 per year and will be granted certain stock options. In connection with the appointment, the Company has entered into an indemnification agreement with Mr. Denness. A copy of the Company's Employment Agreement with Mr. Denness is available for free at http://is.gd/Ja9zuh About Vycor Medical Boca Raton, Fla.-based Vycor Medical, Inc. (OTC BB: VYCO) -- http://www.VycorMedical.com/-- is a medical device company committed to making neurological brain, spinal and other surgical procedures safer and more effective. The Company's flagship, Patent Pending ViewSite(TM) Surgical Access Systems represent an exciting new minimally invasive access and retraction system that holds the potential for speedier, safer and more economical brain, spinal and other surgeries and a quicker patient discharge. Vycor's innovative medical instruments are designed to optimize neurosurgical site access, reduce patient risk, accelerate recovery, and add tangible value to the professional medical community. The Company reported a net loss of $4.77 millionin 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.41 million in total assets, $3.03 million in total liabilities, all current, and $383,410 in stockholders' equity. Paritz & Company, P.A., in Hackensack, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 annual results. The independent auditors noted that the Company has incurred a loss since inception, has a net accumulated deficit and may be unable to raise further equity. WIDEOPENWEST FINANCE: S&P Rates $32MM Sr. Subordinated Notes CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' issue-level rating and '6' recovery rating to the $320 million of senior subordinated notes due 2019 to be co-issued by WideOpenWest Finance LLC (WOW) and WideOpenWest Capital Corp. WOW is a cable service provider based in Englewood, Colo. "The '6' recovery rating indicates our expectation for negligible (0%-10%) recovery in the event of payment default," S&P said. "At the same time, we affirmed our 'CCC+' issue-level rating on the existing senior unsecured notes due 2019, which are being reduced in size to $700 million from $1.02 billion. The '6' recovery rating on this debt is unchanged," S&P said. "The 'B' corporate credit rating and stable outlook on WOW remain unchanged and reflect a "highly leveraged" financial risk profile, including what we consider an aggressive shareholder-oriented financial policy. Pro forma debt to EBITDA is elevated, at around 6.8x, and our rating assumes that leverage will remain at 7.0x or lower over the next two years," S&P said. The ratings also reflect a "fair" business risk profile characterized by the company's demonstrated ability to increase revenue and EBITDA through effective bundling of its products and its reputation for good customer service. Moreover, its profitability measures are comparable with larger incumbent cable operators. These factors somewhat overshadow significant competitive pressures from financially stronger incumbent cable operators and telephone companies, including AT&T Inc. and Verizon Communications Inc., as well direct-to-home satellite providers in the video market. "Our business risk profile assessment is also based on WOW's cost disadvantages compared with larger cable operators, particularly in negotiating programming contracts," S&P said. Ratings List WideOpenWest Finance LLC Corporate Credit Rating B/Stable/-- New Ratings WideOpenWest Finance LLC WideOpenWest Capital Corp. Subordinated $320 mil notes due 2019 CCC+ Recovery Rating 6 Ratings Affirmed WideOpenWest Finance LLC WideOpenWest Capital Corp. Senior Unsecured CCC+ Recovery Rating 6 YOU ON DEMAND: Incurred $4.8 Million Net Loss in First Quarter -------------------------------------------------------------- YOU On Demand Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $4.78 million on $2.04 million of revenue for the three months ended March 31, 2012, compared with a net loss of $2.65 million on $1.70 million of revenue for the same period last year. The Company's balance sheet at March 31, 2012, showed $27.98 million in total assets, $12.41 million in total liabilities, $5.21 million of convertible redeemable preferred stock, and stockholders' equity of $10.36 million. UHY LLP, in Albany, New York, expressed substantial doubt about YOU On Demand'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 significant losses during 2011 and 2010 and has relied on debt and equity financings to fund their operations. A copy of the Form 10-Q is available for free at: http://is.gd/g4vKBA New York, N.Y.-based YOU On Demand Holdings, Inc., operates in the Chinese media segment, through its Chinese subsidiaries and VIEs, (1) a business which provides integrated value-added service solutions for the delivery of PPV, VOD, and enhanced premium content for cable providers, (2) a cable broadband business based in the Jinan region of China and (3) a television program guide, newspaper and magazine publishing business based in the Shandong region of China. Z TRIM HOLDINGS: Revenue Grows 56% in Second Quarter ---------------------------------------------------- Z Trim Holdings, Inc., recorded, in the second quarter of 2012, its highest second quarter revenues in Company history -- growth of 56% over second quarter 2011, and growth of 41% over the first two quarters of 2011. "We plan on continuing to increase our sales volume, quarter over quarter," said Steve Cohen, Z Trim CEO. "With our outside manufacturer, Aveka Nutra Processing, set to come on line in the next quarter, we anticipate being able to service an even greater number of customers in the coming months." About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. M&K CPAs,PLLC, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company had a working capital deficit and reoccurring losses as of Dec. 31, 2011. The Company reported a net loss of $6.94 million in 2011, compared with a net loss of $10.91 million in 2010. The Company's balance sheet at March 31, 2012, showed $4.54 million in total assets, $15.28 million in total liabilities, $5.05 million in total commitment and contingencies and a $15.79 million total stockholders' equity. * Moody's Says Global Spec-Grade Corp. Default Rate Ends at 2.7% ---------------------------------------------------------------- Moody's Investors Service trailing 12 month global speculative- grade default rate ended the second quarter of 2012 at 2.7%, up from its 2.5% level at the end of the first quarter, says Moody's Investors Service in its monthly default report. A total of 33 Moody's rated corporate debt issuers have defaulted so far this year, two of which defaulted in June. Moody's "June Default Report" is now available, as are Moody's other default research reports, in the Ratings Analytics section of Moodys.com. "Despite weak economic fundamentals, corporate default rates have held steady at historically low levels for quite some time," notes Albert Metz, Managing Director of Moody's Credit Policy Research. "Adequate funding and liquidity remain available to low-rated issuers who are able to avoid payment defaults on their debt obligations." In the US, the speculative-grade default rate ended June at 3.1%, up from the previous quarter's level of 2.9%, while in Europe the rate eased to 2.6% from 3.0% in the previous quarter. The drop in the European default rate mainly stemmed from a larger denominator as some European investment-grade issuers were downgraded into speculative-grade about a year ago. The default count itself did not fall. At this time last year, the US rate was 2.6% and the European default rate was 2.1%. Based on its forecasting model, Moody's expects the global speculative-grade default rate will end the year at 3.0%. This is relatively low compared to the historical average of 4.8% since 1983. Across industries, Moody's expects default rates to be highest in the Consumer Services sector in the US and the Hotel Gaming & Leisure sector in Europe. By dollar volume the global speculative-grade bond default rate closed at 1.7% in the second quarter, unchanged from the level from the previous quarter. Last year, the global dollar-weighted default rate stood at 1.6%. In the US, the dollar-weighted speculative-grade bond default ended the second quarter at 1.6%. The comparable rate was 1.5% in the prior quarter as well as a year ago. In Europe, the dollar-weighted speculative-grade bond default rate fell from 2.4% in the first quarter of 2012 to 2.3% in the second quarter. Last year, the European speculative-grade bond default rate was at 2.1%. Moody's distressed index arrived at 19.5% at the end of the second quarter, up from 17.2% in the previous quarter. A year ago, the index was lower at 9.5%. The trailing 12 month U.S. leveraged loan default rate ended the second quarter at 2.0%, down from 2.1% from the prior quarter. A year ago, the loan default rate was 1.7%. * Moody's Says N.A. Pipelines Face Increased Business Risk ---------------------------------------------------------- The shale gas phenomenon and the resulting expansion of the North American pipeline network of the last three years also raises business risk for the sector over the next several years, says Moody's Investors Service in a new report. "Natural gas is currently a fuel of choice, which is good for the pipeline industry in the long term," said Moody's VP-Senior Credit Officer Mihoko Manabe, author of the report, "Gas Pipelines Navigate Shifts in Supply and Demand." She said North American gas resources "have proven to be robust, but the fast pace of development in many areas is causing natural gas to be transported in new directions, providing expansion opportunities for some, but upending the reason why some other pipelines were built." Still, credit metrics are solid, stable, and generally sufficient to offset these uncertainties, thanks to diversification, long- term contracts, and rate cases, according to Moody's. "The risk of a pipeline asset becoming stranded is low," said Mr. Manabe. "However, pipelines with higher-than-average risk, such as those facing a wall of contract renewals, need more-than- average financial flexibility to absorb a potential reduction in revenue." She added that the trend toward more aggressive financial strategies -- as seen from the trend of using more leverage and putting pipelines into master limited partnerships -- is inconsistent with the current, less-stable business conditions. Shale is now established as the principal source of new gas and oil supply in North America as hydraulic fracturing or "fracking," and horizontal drilling techniques have been perfected and successfully applied, resulting in rising throughput and revenues as connections are made with new shale plays. "We recently undertook a study to assess the changes that have taken place since 2009," said Mr. Manabe. "Our study focused on the four factors that comprise our pipeline rating methodology grid: quality of supply sources, market position, contract quality, and financial strength." She said the study will be the basis for an update of Moody's gas pipeline rating methodology this fall. The current report analyzes the potential credit implications of how the gas pipelines will contend with shifting flow patterns and adapt to new supply and demand locations. Other observations in the Moody's report include: -- Pipelines will see new demand from power generation, but it will take several years to materialize. New power revenues will be concentrated in regulated electric markets, like the Southeast, where utilities are willing to enter into long-term contracts. Merchant power generators in unregulated markets are less likely to do so. Significant changes will need to be made between the gas and electric industries for pipelines to realize the full potential from gas-fired power generation. -- Rate case activity will pick up as pipelines seek recovery of rising costs and tariff design changes to account for shifts in throughput. Moody's considers regulatory relations to be a core competency of pipeline operators the rating agency rates. * Moody's Revises Outlook for North American Railroads to Stable ---------------------------------------------------------------- The outlook for North American railroads is stable as slowing freight volume and core pricing declines weigh on the sector, says Moody's Investors Service in its latest industry outlook, "North American Railroads Outlook Revised to Stable from Positive on Slowing Growth." Moody's has held a positive outlook on the sector since December 2009. US railroads are still experiencing modest growth in overall volume this year as pricing remains strong. But volume and pricing growth are expected to slow to about 1%-2% and 2%-3%, respectively, in 2013, says Moody's. After a sharp rebound in the wake of the late-2000s recession, freight volumes are reasonably strong but the sluggish economic recovery and resultant cooling demand will eventually slow volumes down, says Moody's. "Still, while volume growth is flattening, pricing remains strong, and should still outpace inflation," says David Berge, Senior Credit Officer at Moody's. "However, if freight demand remains soft going into 2013, slower pricing growth should follow." The outlook update also notes that coal, the largest freight category, will remain weak in 2012 as stockpiles remain high after the mild winter and soft demand as a result of low natural gas prices. Even coal exports, which had offset domestic decline in coal volumes, appear poised to decline in the second half of 2012 as China's economy slows. Grain exports, while off slightly from a record-high 2011, will still be an important contribution to overall freight volume, says Moody's, although the current drought in the Midwest and impact on harvests could dampen freight demand. Moody's industry outlooks reflect the rating agency's expectations for fundamental business conditions in the industry over the next 12 to 18 months. * Easterbrook Creates Circuit Conflict Over Lubrizol ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a long-criticized appeals court decision at the intersection of trademark and bankruptcy law could be headed to the U.S. Supreme Court next year. The federal courts of appeals are now in disagreement over the effect of rejection of a contract granting a trademark license, as the result of an opinion July 9 from the U.S. Court of Appeals in Chicago. Mr. Rochelle relates that the case involved a fan maker and a contract made before bankruptcy allowing a manufacturer to produce and sell fans using the soon to be bankrupt's patents and trademarks. After bankruptcy, the trustee rejected the contract and sued to stop the manufacturer from using the trademarks. The parties didn't disagree with the ruling of the bankruptcy court that Section 365(n) of the U.S. Bankruptcy Code allowed the manufacturer to continue using the patents. The question before the 7th Circuit in Chicago was whether the manufacturer could continue using the bankrupt's trademarks. The July 9 opinion enabled the 7th Circuit to decide whether it agrees with a 1985 decision from the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, named Lubrizol Enterprises v. Richmond Metal Finishers Inc. In Lubrizol, the 4th Circuit ruled that rejection of an executory contract licensing intellectual property halted the non-bankrupt's right to use patents, trademarks and copyrights. Three years later, Congress changed the law so rejection of a contract doesn't halt the right to use patents and copyrights. The new section, 365(n), was silent about trademarks. Some courts since then interpreted the omission to mean that rejecting a license for trademarks terminates the right to use the marks. According to Mr. Rochelle, Circuit Judge Frank Easterbrook looked at Section 365, which governs rejection of contracts. Unlike Lubrizol, he found nothing in the section that forces the non- bankrupt party to stop using trademarks when the contract is rejected. Judge Easterbrook based his conclusion on the proposition that a licensor's breach outside of bankruptcy does not preclude the licensee from continuing to use a trademark license. He said that rejecting a contract converted unfulfilled obligations to damages. "But nothing about this process implies than any other rights of the other contracting party have been vaporized," Judge Easterbrook said. Judge Easterbrook said that Lubrizol has been "uniformly criticized" by scholars and commentators. The opinion ended by saying that it "creates a conflict of circuits" and was circulated among all other active judges on the 7th Circuit. "No judge favored a hearing en banc," the opinion said. The case is Sunbeam Products Inc. v. Chicago American Manufacturing LLC, 11-3920, 7th U.S. Circuit Court of Appeals (Chicago). * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Michael Cordovana Bankr. D. Ariz. Case No. 12-14860 Chapter 11 Petition filed July 3, 2012 In re William Russell Bankr. D. Ariz. Case No. 12-14865 Chapter 11 Petition filed July 3, 2012 In re Harry Derderian Bankr. C.D. Calif. Case No. 12-18172 Chapter 11 Petition filed July 3, 2012 In re Leonardo Corona Bankr. C.D. Calif. Case No. 12-33121 Chapter 11 Petition filed July 3, 2012 In re Michael Panesi Bankr. N.D. Calif. Case No. 12-31987 Chapter 11 Petition filed July 3, 2012 In re H.O. Ferguson DVM, P.A. dba Ferguson & Associates Equine Hospital Bankr. M.D. Fla. Case No. 12-04428 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/flmb12-04428.pdf represented by: Lisa C. Cohen, Esq. RUFF & COHEN, P.A. E-mail: mcourtruff@bellsouth.net In re Subhash C. Sethi Sushma K. Sethi Bankr. S.D. Ga. Case No. 12-11185 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/gasb12-11185.pdf represented by: James T. Wilson, Jr., Esq. JAMES T. WILSON, JR. P.C. E-mail: brooke@jtwilsonlaw.com In re Francesco Fortunato Bankr. E.D.N.Y. Case No. 12-44893 Chapter 11 Petition filed July 3, 2012 In re aitdigital, LLC Bankr. S.D.N.Y. Case No. 12-23246 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/nysb12-23246.pdf represented by: Rosemarie E. Matera, Esq. KURTZMAN MATERA, PC E-mail: law@kmpclaw.com In re CS Auto Parts, Inc. Bankr. E.D. Pa. Case No. 12-16345 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/paeb12-16345.pdf represented by: John G. Takacs, Esq. LAW OFFICE OF JOHN G. TAKACS E-mail: jgtakacs@jgtesq.com In re Clem Properties, Inc. Bankr. E.D. Pa. Case No. 12-16346 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/paeb12-16346.pdf represented by: John G. Takacs, Esq. LAW OFFICE OF JOHN G. TAKACS E-mail: jgtakacs@jgtesq.com In re Empresas Vicmar Inc. Bankr. D.P.R. Case No. 12-05292 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/prb12-05292.pdf represented by: Juan Carlos Bigas Valedon, Esq. JUAN C. BIGAS LAW OFFICE E-mail: jcbigas@yahoo.com In re Fowlers Furniture, Inc. Bankr. E.D. Tenn. Case No. 12-51232 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/tneb12-51232p.pdf http://bankrupt.com/misc/tneb12-51232c.pdf represented by: Dean B. Farmer, Esq. HODGES, DOUGHTY & CARSON PLLC E-mail: dfarmer@hdclaw.com In re R.C. Hospitality, Inc. Bankr. E.D. Tex. Case No. 12-10421 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/txeb12-10421.pdf In re Jonathan Newton Bankr. S.D. Tex. Case No. 12-35105 Chapter 11 Petition filed July 3, 2012 In re IHS Hotels, Inc. Bankr. S.D. Tex. Case No. 12-35106 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/txsb12-35106.pdf Filed Pro Se In re Magnolia Shell Truck Stop, Inc. Bankr. S.D. Tex. Case No. 12-35107 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/txsb12-35107.pdf Filed Pro Se In re JSTB Property Management LLC Bankr. S.D. Tex. Case No. 12-35116 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/txsb12-35116.pdf represented by: James Patrick Brady, Esq. E-mail: notices@bradylaw.comcastbiz.net In re J & PK, Inc. Bankr. W.D. Tex. Case No. 12-60741 Chapter 11 Petition filed July 3, 2012 See http://bankrupt.com/misc/txwb12-60741.pdf Filed Pro Se In re Judy Titus Bankr. D. Ariz. Case No. 12-44990 Chapter 11 Petition filed July 4, 2012 In re Miguel Tapia Bankr. C.D. Calif. Case No. 12-33204 Chapter 11 Petition filed July 5, 2012 In re Pedro Canales Guerrero Bankr. C.D. Calif. Case No. 12-33203 Chapter 11 Petition filed July 5, 2012 In re Shinko International, Inc. Bankr. C.D. Calif. Case No. 12-33306 Chapter 11 Petition filed July 5, 2012 See http://bankrupt.com/misc/cacb12-33306.pdf represented by: Douglas A Crowder, Esq. Crowder Law Center E-mail: Notices@crowderlaw.com In re Zakia Shehadeh Bankr. E.D. Calif. Case No. 12-32524 Chapter 11 Petition filed July 5, 2012 In re Jeffrey Sisk Bankr. M.D. Fla. Case No. 12-04436 Chapter 11 Petition filed July 5, 2012 In re Thomas Thompson Bankr. M.D. Fla. Case No. 12-10371 Chapter 11 Petition filed July 5, 2012 In re The Downtown Dentist, LLC Bankr. D. Nebr. Case No. 12-81483 Chapter 11 Petition filed July 5, 2012 See http://bankrupt.com/misc/neb12-81483.pdf represented by: David Grant Hicks, Esq. Pollak & Hicks PC E-mail: dhickslaw@aol.com In re Mark McGarry Bankr. D. Nev. Case No. 12-17910 Chapter 11 Petition filed July 5, 2012 In re Markel Perez-Diaz Bankr. D. Nev. Case No. 12-17881 Chapter 11 Petition filed July 5, 2012 In re Marsa Ellison Bankr. D.N.M. Case No. 12-12543 Chapter 11 Petition filed July 5, 2012 In re Donnamarie Weaver Bankr. E.D. Pa. Case No. 12-16375 Chapter 11 Petition filed July 5, 2012 In re Paul Weaver Bankr. E.D. Pa. Case No. 12-16375 Chapter 11 Petition filed July 5, 2012 In re Kevin Janda Bankr. W.D. Pa. Case No. 12-23441 Chapter 11 Petition filed July 5, 2012 In re Dakota Landing, LLC Bankr. M.D. Tenn. Case No. 12-06145 Chapter 11 Petition filed July 5, 2012 See http://bankrupt.com/misc/tnmb12-06145.pdf represented by: Steven L. Lefkovitz, Esq. Law Offices Lefkovitz & Lefkovitz E-mail: slefkovitz@lefkovitz.com In re Burkel-Piette, Inc. Bankr. E.D. Wis. Case No. 12-30188 Chapter 11 Petition filed July 5, 2012 See http://bankrupt.com/misc/wieb12-30188p.pdf See http://bankrupt.com/misc/wieb12-30188c.pdf represented by: David J. Winkel, Esq. Winkel Law Office E-mail: dave@winkellaw.com In re Anne Calvin Bankr. D. Ariz. Case No. 12-15153 Chapter 11 Petition filed July 6, 2012 In re Ernest Graves Bankr. D. Ariz. Case No. 12-15178 Chapter 11 Petition filed July 6, 2012 In re Mark Wibbing Bankr. D. Ariz. Case No. 12-15164 Chapter 11 Petition filed July 6, 2012 In re Cenoz Enterprises Bankr. C.D. Calif. Case No. 12-26068 Chapter 11 Petition filed July 6, 2012 See http://bankrupt.com/misc/cacb12-26068.pdf represented by: Christopher S. Hammatt, Esq. Law Offices of C.S. Hammatt In re Francisco Saez Bankr. C.D. Calif. Case :No. 12-33364 Chapter 11 Petition filed July 6, 2012 In re Eagle Castle Winery, LLC Bankr. N.D. Calif. Case No. 12-55056 Chapter 11 Petition filed July 6, 2012 See http://bankrupt.com/misc/canb12-55056.pdf represented by: Steven J. Sibley, Esq. Law Offices of DiNapoli and Sibley E-mail: sjs@dslaw.net In re Haig Harris Bankr. N.D. Calif. Case No. 12-32012 Chapter 11 Petition filed July 6, 2012 In re George Daniels III Bankr. D. Colo. Case No. 12-24243 Chapter 11 Petition filed July 6, 2012 In re Daryll Futch Bankr. M.D. Fla. Case No. 12-00475 Chapter 11 Petition filed July 6, 2012 In re WP Management, LLC Bankr. D. Maine Case No. 12-20849 Chapter 11 Petition filed July 6, 2012 See http://bankrupt.com/misc/meb12-20849.pdf Filed Pro Se In re Bert's Landing, LLC Bankr. D. Mass. Case No. 12-15797 Chapter 11 Petition filed July 6, 2012 See http://bankrupt.com/misc/mab12-15797p.pdf See http://bankrupt.com/misc/mab12-15797c.pdf represented by: Stephen M. Kaplan, Esq. Law Office of Stephen M. Kaplan E-mail: stevekaplanECF@aol.com In re Claudia Dorsey Bankr. D. Md. Case No. 12-22646 Chapter 11 Petition filed July 6, 2012 In re Lloyd Tucker Bankr. D. Md. Case No. 12-22613 Chapter 11 Petition filed July 6, 2012 In re Phillip Dorsey Bankr. D. Md. Case No. 12-22646 Chapter 11 Petition filed July 6, 2012 In re Tameka Tucker Bankr. D. Md. Case No. 12-22613 Chapter 11 Petition filed July 6, 2012 In re D & T Emerald Creek, Inc. Bankr. E.D. Mich. Case No. 12-56027 Chapter 11 Petition filed July 6, 2012 See http://bankrupt.com/misc/mieb12-56027p.pdf See http://bankrupt.com/misc/mieb12-56027c.pdf represented by: Robert N. Bassel, Esq. E-mail: bbassel@gmail.com In re J Faw Bankr. M.D.N.C. Case No. 12-50970 Chapter 11 Petition filed July 6, 2012 In re Avalon Farming, Inc. Bankr. D.P.R. Case No. 12-05359 Chapter 11 Petition filed July 6, 2012 See http://bankrupt.com/misc/prb12-05359.pdf represented by: Alexis Fuentes Hernandez, Esq. Fuentes Law Offices E-mail: alex@fuentes-law.com In re Melissa Carter-Coursen Bankr. D.S.C. Case No. 12-04215 Chapter 11 Petition filed July 6, 2012 In re Anita Brooks Burleson Bankr. W.D. Tex. Case No. 12-11552 Chapter 11 Petition filed July 6, 2012 In re Brian Burleson Bankr. W.D. Tex. Case No. 12-11552 Chapter 11 Petition filed July 6, 2012 In re Michael Broussard Bankr. D. Utah Case No. 12-28736 Chapter 11 Petition filed July 6, 2012 In re Randy Lindquist Bankr. W.D. Wash. Case No. 12-17027 Chapter 11 Petition filed July 6, 2012 ********* 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 ***