/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120801.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 1, 2012, Vol. 16, No. 212 Headlines 38 STUDIOS: RI Agency Wants to Seize IP After $75M Loan Default ABSOLUTE LIFE: Had $1.6 Million Net Loss in Feb. 29 Quarter AFA FOODS: Receives More Time to File Bankruptcy Plan AIRPORT HOSPITALITY: Case Summary & 12 Unsecured Creditors ALEXANDER ANOLIK: Case Summary & 3 Unsecured Creditors ALLIED SYSTEMS: U.S. Trustee Objects to Gowler Lafleur Payments ALMA ROSA WINERY: Files for Chapter 11 in E.D. Calif. AMERICAN AIRLINES: Seeks to Expand Paul Hastings Work AMERICAN AIRLINES: Proposes Cooley for Sabre, Travelport Suits AMERICAN AIRLINES: Hiring Kelly Hart for Trademark Issues AMERICAN AIRLINES: Allows Cano to Prosecute Insurance Claim AMERICAN AXLE: Reports $4.7 Million Net Income in Second Quarter AMERICAN WEST: Asks to Settle Buyer Commitment Claims AMES DEPARTMENT: Taps Proskauer Rose as Substitute Attorney AMSCAN HOLDINGS: Parent Party City Now Controlled by Topco ARCHANA HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors ATP OIL: Bondholders Organizing for Potential Restructuring AVENTINE RENEWABLE: Has Forbearance with Lenders Until Sept. 7 AVENTINE RENEWABLE: S&P Cuts Corporate Credit Rating to 'SD' AVISTAR COMMUNICATIONS: Suspending Filing of Reports with SEC AXESSTEL INC: Stockholders Elect Five Members to Board B AND J THRIFTWAY: Case Summary & 20 Largest Unsecured Creditors BERNARD L. MADOFF: Judge Blocks ERISA Claims in Liquidation BERNARD L. MADOFF: Suits Belong in Europe, Banks Tell 2nd Circ. BGC PARTNERS: Moody's Reviews 'Ba1' Senior Rating for Downgrade BICENT HOLDINGS: Judge Tells Debtor to Fix Chapter 11 Plan BLUE SKY ASSOCIATION: Case Summary & 7 Unsecured Creditors BLUEBIRD GARDEN: Case Summary & 20 Largest Unsecured Creditors BOYD ACQUISITION: Moody's Rates $350MM Sr. Unsec. Notes 'Caa1' BROOKE CORP: Lawsuits v. CJD, Davidson-Babcock Proceed to Trial BTA BANK: Loss Widened by $423 Million in June CAMBRIDGE HEART: Files First Amendment to Form S-1 CANO PETROLEUM: Court Confirms Plan of Reorganization CASTAIC PARTNERS: 847-Acre Property Owner Returns to Chapter 11 CELL THERAPEUTICS: CEO James Bianco Named as President CELLFOR CORP: Monitor Seeks to End Chapter 15 Case CENTRAL FALLS, R.I.: Disclosure Statement Gets Judge's Nod CINRAM INTERNATIONAL: U.S. and Canadian Courts Have Okayed Sale CLEAR CHANNEL: Enters Into New Employment Agreement with CEO CLEARWIRE CORP: Files Form 10-Q, Incurs $145.8MM Net Loss in Q2 CONNAUGHT GROUP: Judge Approves Amended Disclosure Statement CONSUMER PORTFOLIO: Incurred $512,000 Net Income in 1st Quarter CONSTRUCTORA DE HATO: Amends Schedules of Assets and Liabilities CONTINENTAL AIRLINES: S&P Gives 'B-' Rating on 2012 Revenue Bonds COPANO ENERGY: S&P Cuts CCR to 'B+' on Lower Natural Gas Prices CPM HOLDINGS: S&P Affirms 'B+' Corp. Credit Rating on Refinancing CPM HOLDINGS: Moody's Rates First Lien Credit Facilities 'Ba3' CROWN MEDIA: Reports $12 Million Net Income in Second Quarter DANL LLC: Case Summary & 8 Largest Unsecured Creditors DELTA PETROLEUM: Wants to Amend Services Agreement DEWEY & LEBOEUF: Cuts Clawback Deal Offer to Ex-Partners to $90MM DEWEY & LEBOEUF: Reports Assets, New Plan for Partner Paybacks DIGITAL POST: Files Chapter 7 Petition DYNEGY INC: Common Stock Delisted from NYSE EAST COAST INVESTMENTS: Bankruptcy Case Stays in M.D. Fla. EASTMAN KODAK: Google, Apple Among Bidders for Patents EASTMAN KODAK: US Trustee Objects to Bonus Plan EASTMAN KODAK: Patent Row With Apple Stays in Bankr. Court EMIGRANT BANCORP: Fitch Affirms 'B-' Issuer Default Ratings EMPIRE LAND: O'Melveny to Pay $2MM in Conflict-Of-Interest Suit ENERGY CONVERSION: Chapter 11 Plan Confirmed FAYCO RENTALS: Case Summary & Unsecured Creditor FENDER MUSICAL: S&P Affirms 'B' CCR After Company Suspends IPO FERRO CORP: S&P Cuts Corp. Credit Rating to 'B+'; Outlook Stable FLETCHER INT'L: Wins Injunction Against Cayman Liquidators FLYING EAGLE: Burr Pilger Raised Going Concern Doubt FRONTIER LAND: Case Summary & 3 Unsecured Creditors FUNCTIONAL RESTORATION: Chapter 7 Trustee Can Recover Legal Fees GATEWAY CASINOS: Moody's Lowers Corp Family Rating to 'B2' GENTA INC: To Amend First Quarter Form 10-Q GENTA INC: Five Directors Elected at Annual Meeting GREENMAN TECHNOLOGIES: Four Directors Elected at Annual Meeting GULF COUNTY: Moody's Affirms 'Ba1' Rating on Ad Valorem Tax Bonds HANMI FINANCIAL: Seven Directors Elected at Annual Meeting HAWKER BEECHCRAFT: Judge Approves $2MM Employee Retention Plan HAWKER BEECHCRAFT: To Pay Subcontractors Amid Sale, Plan Talks HD SUPPLY: Moody's Assigns 'B2' Rating to "Add-On" 1st Lien Notes HD SUPPLY: S&P Retains 'B+' Rating on $1.15BB First-Lien Notes HERCULES OFFSHORE: Incurs $55 Million Net Loss in Second Quarter HMC/CAH CONSOLIDATED: Separate Plans for Hospitals to Keep NOLs HORIZON LINES: Enters Into COC Agreements with Executive Officers ICOP DIGITAL: Suspending Filing of Reports with SEC ISTAR FINANCIAL: Incurs $51.1 Million Net Loss in Second Quarter JACKSON GREEN: U.S. Trustee Withdraws Motion to Convert Case JEFFERSON COUNTY, AL: Bondholders Prepare for Fight While Talking LBI MEDIA: Moody's Says Planned Note Exchange Limited Default LEHMAN BROTHERS: $3.4-Bil. in Claims Traded May to June LEHMAN BROTHERS: Senior Management Blamed for Bankruptcy LEHMAN BROTHERS: Says Cash Flows May Reach $40.5 Billion LEVEL 3 FINANCING: S&P Rates $1.415BB Term Loan Facilities 'B+' LIGHTSTYLES LTD: Can't Use Susquehanna Bank Cash Collateral LSP ENERGY: Judge Strikes Breakup Fee From Stalking Horse Deal M & J: Case Summary & 20 Largest Unsecured Creditors MF GLOBAL: Case Trustee Sees Full Recovery for US Customers MOON VALLEY: Case Summary & 20 Largest Unsecured Creditors MSR RESORT: Winthrop Affiliate Wants More Say in Plan for Resorts NEW ENGLAND BUILDING: No Rival Plan Filed; Plan Hearing Sept. 11 OMEGA OPTICAL: Court to Issue Final Decree Only After Last Payment OSAGE EXPLORATION: P. Hoffman's Stake Slightly Down to 9.9% OXLEY DEVELOPMENT: Only Tangible Asset Foreclosed; Case Dismissed PACESETTER FABRICS: Court Grants 120-Day Exclusivity Extension PATRIOT COAL: Common Stock Delisted from NYSE PENINSULA GAMING: S&P Gives 'CCC+' Rating on $350MM Senior Notes PEREGRINE FIN'L: Trustee Still Investigating Shortfall Amount PEREGRINE FIN'L: Brokerage Trustee Seeks to Reject Leases PHILADELPHIA NEWSPAPERS: 3rd Circ. Nixes $2MM Defamation Claim PINNACLE AIRLINES: AFA Elected as Flight Attendants Union PITTSBURGH CORNING: Posts $462 Million Net Income in 2nd Quarter PRINCE SPORTS: Chapter 11 Plan Wins Court Approval PRIUM SPOKANE: Gets Fourth OK to Access Sterling Savings' Cash RADIOSHACK CORP: S&P Cuts Corp. Credit Rating to 'B-'; Outlook Neg RAINBOW LAND: Plan Proposes 3 More Years of Breathing Space RAINBOW LAND: Aug. 28 Hearing on Bank's Foreclosure Plea RANCHER ENERGY: Incurs $882,928 Net Loss in 2011 RESIDENTIAL CAPITAL: Wiener Wants Stay Relief to Proceed With Suit RESIDENTIAL CAPITAL: Wells Fargo Seeks to Pursue Suit RESIDENTIAL CAPITAL: Aurora Bank Wants to Proceed With Suit RESIDENTIAL CAPITAL: GMAC Sued Over False Claims Act RG STEEL: Judge Denies Massey's Bid to Contract Suit RHODE ISLAND: Pension Lawsuit Seen Risking Bankruptcies RICHARD VAUGHAN: Case Summary & 20 Largest Unsecured Creditors RITZ CAMERA: Court Approves Auction Schedule ROOMSTORE INC: All Officers and Directors Resign ROVI CORP: S&P Revises Outlook on 'BB-' CCR to Neg on Low Earnings SEARCHMEDIA HOLDINGS: Signs MOU for Advertising Network SEQUENOM INC: To Issue 5-Mil. Shares Under 2006 Incentive Plan SIGNATURE GROUP: Fremont Founder Loses Battle for Board Seats SKINNER ENGINE: Plan May Be Found Unconfirmable Without Hearing SOLYNDRA LLC: Files Plan to Return Up to 6% to Unsec. Creditors SP NEWSPRINT: Judges OKs $145 Million Stalking Horse Plan STAR BUFFET: Contested Plan Confirmation Hearing on Oct. 22 STRIKE ENTERTAINMENT: Case Summary & 14 Unsecured Creditors SYMS CORP: To Present Plan for Confirmation on Aug. 29 SYNCORA GUARANTEE: Moody's Review 'Ca' IFS Rating for Upgrade TDS COMMERCIAL: Case Summary & 8 Unsecured Creditors TE ROSLYN: Committee Suffers Setback in Fight Over Lease THELEN LLP: Ex-Partners Settle Compensation Claims THORNBURG MORTGAGE: Trustee Pays Banks $72MM to Settle Suit TRAFFIC CONTROL: Receives OK of Fifth Street Finance Sale TRANS-LUX CORP: Files Form S-1, Registers 31.8MM Common Shares US INFRASTRUCTURE CORP: S&P Affirms 'B+' Corporate Credit Rating UTSTARCOM INC: To Focus on Services and Divest IPTV Business VFRS LLC: Court Freezes Assets Amid Forex Fraud Charges VICTORVILLE, CA: Under SEC Probe Over Financial Practices VOLKSWAGEN-SPRINGFIELD: BB&T Seeks OK of Settlement Agreement W.R. GRACE: 55 Claims Transferred July 1 to 25 W.R. GRACE: Buys Brazilian Admixture Manufacturer WASHINGTON MUTUAL: Liquidating Trust Distributes 927,800 Shares WEST CORP: Files Form 10-Q, Posts $36.7MM Net Income in Q2 WESTMORELAND COAL: Appoints Michael Hutchinson to Board WIZARD WORLD: Posted $303,900 Net Loss in 1st Quarter WM BOLTHOUSE: S&P Keeps 'B' Issuer Credit Rating on Watch Positive WORLD OF FITNESS: Case Summary & 17 Unsecured Creditors WPCS INTERNATIONAL: Sells Two Operation Centers for $5.5 Million ZALE CORP: Signs Second Amendment to BOA Credit Facility ZALE CORP: Z Investment Discloses 25.6% Equity Stake * Moody's Says Some Local Gov'ts May Feel Plant Closure Strain * Moody's Says Pace of Sovereign Defaults Remains Moderate * Canada Bankruptcies Rise 4.8% in May, Government Says * Bankruptcy Vet Evan Hollander Joins Arnold & Porter * Jones Day Adds Ex-Hunton & Williams Finance Partner B. Moorhead * Steptoe & Johnson's George R. Calhoun Moves to Fried Frank * Upcoming Meetings, Conferences and Seminars ********* 38 STUDIOS: RI Agency Wants to Seize IP After $75M Loan Default --------------------------------------------------------------- Peg Brickley at Dow Jones' DBR Small Cap reports that Rhode Island Economic Development Corp. authorities are getting into the videogame business the hard way, grabbing the remnants of former Boston Red Sox pitcher Curt Schilling's troubled company out of bankruptcy. Lance Duroni at Bankruptcy Law360 reports that the Rhode Island Economic Development Corp. asked a Delaware bankruptcy court for permission to seize the intellectual property and other assets backing its $75 million loan to 38 Studios LLC, the bankrupt video game company founded by baseball ace Curt Schilling. In the motion, Bankruptcy Law360 relates that the state agency asked for relief from an automatic stay, primarily so it could retrieve and preserve the only potentially valuable 38 Studios assets ? unfinished video games and other intellectual property stored on the company's computers. 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). ABSOLUTE LIFE: Had $1.6 Million Net Loss in Feb. 29 Quarter ----------------------------------------------------------- Absolute Life Solutions, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.59 million for the three months ended Feb. 29, 2012, compared with net income of $4.78 million for the three months ended Feb. 28, 2011. For the six months ended Feb. 29, 2012, the Company reported a net loss of $5.97 million, compared with net income of $15.83 million for the six months ended Feb. 28, 2011. Total other income decreased from $10,742,217 and $31,430,418 for the three months and six months ended Feb. 28, 2011, respectively to a loss of $1,349,234 and $8,909,317 for the three months and six months ended February 29, 2012, respectively. The Company's balance sheet at Feb. 29, 2012, showed $91.87 million in total assets, $17.49 million in total liabilities, and stockholders' equity of $74.38 million. Marcum LLP, in New York, N.Y., expressed substantial doubt about Absolute Life's ability to continue as a going concern following the Company's results for the fiscal year ended Aug. 31, 2011. The independent auditors noted that the Company that the continued existence of the Company is dependent upon its ability to generate profit from its life settlement investments and to meet its obligations as they become due. "The demand for and selling prices of the Company's products, may not be sufficient to meet cash flow expectations. These conditions raise substantial doubt about the Company?s ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/7dzePV New York, N.Y.-based Absolute Life Solutions, Inc., is a specialty financial services company engaged in the business of purchasing life settlement contracts for long-term investment purposes. AFA FOODS: Receives More Time to File Bankruptcy Plan ----------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that AFA Foods Inc. received bankruptcy-court permission to continue to control its own destiny -- in bankruptcy, at least -- by getting until the end of October to file its Chapter 11 plan. As reported in the Troubled Company Reporter on July 24, 2012, AFA Investment Inc., et al., asked the Bankruptcy Court to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Oct. 29, 2012; and Dec. 27, respectively. The Debtors explain that they continue to market the assets of the New York Facility for sale. The Debtor related that they commenced these chapter 11 cases to pursue an expeditious sale of substantially all of their assets to maximize value for their estates and stakeholders. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor, nunc pro tunc to April 13, 2012. AIRPORT HOSPITALITY: Case Summary & 12 Unsecured Creditors ---------------------------------------------------------- Debtor: Airport Hospitality, LLC 117 Saint Andrews Road Rincon, GA 31326 Bankruptcy Case No.: 12-41433 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: C. James McCallar, Jr., Esq. MCCALLAR LAW FIRM P.O. Box 9026 Savannah, GA 31412 Tel: (912) 234-1215 Fax: (912) 236-7549 E-mail: mccallar@mccallarlawfirm.com Scheduled Assets: $4,189,108 Scheduled Liabilities: $9,587,968 A copy of the Company's list of its 12 unsecured creditors is available for free at http://bankrupt.com/misc/gasb12-41433.pdf The petition was signed by Deepakumar Patel, managing member. ALEXANDER ANOLIK: Case Summary & 3 Unsecured Creditors ------------------------------------------------------ Debtor: Alexander Anolik, a Professional Law Corporation dba Anolik Law Corproation Travellaw.com 280 Round Hill Road Belvedere Tiburon, CA 94920 Bankruptcy Case No.: 12-32196 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Matthew D. Metzger, Esq. BELVEDERE LEGAL, APC 605 Market Street, #505 San Francisco, CA 94105 Tel: (415)513-5980 E-mail: mmetzger@belvederelegal.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/canb12-32196.pdf The petition was signed by Alexander Anolik, president. Related entities that previously sought Chapter 11 protection: Entity Case No. Petition Date ------ -------- ------------- Alexander Anolik and Yami Anolik aka Binyamina Anolik 11-30094 01/09/11 ALLIED SYSTEMS: U.S. Trustee Objects to Gowler Lafleur Payments --------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that the U.S. Trustee on Monday balked at Allied Systems Holdings Inc.'s bid to retain a Canadian law firm, alleging the company made preferential payments to the firm that create a conflict of interest. A Canadian Allied subsidiary paid more than $180,000 to Gowling Lafleur Henderson LLP in the 90 days before the company's Chapter 11 filing, nearly half of which is avoidable as a preference payment, according to an objection filed in Delaware bankruptcy court cited by Bankruptcy Law360. 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. 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 An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. ALMA ROSA WINERY: Files for Chapter 11 in E.D. Calif. ----------------------------------------------------- Alma Rosa Winery & Vineyards, LLC, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-12837) on July 27, 2012. The Buellton, California-based winery is owned by Richard Sanford, dubbed the father of Santa Barbara Pinot Noir and the first to plant the vine there. Stephanie Gleason, writing for Dow Jones Newswires, says Alma Rosa is famous for its Pinot Noirs. Dow Jones says it is not clear what Chapter 11 means for the winery and its wines. Dow Jones notes the filing doesn't provide very much information, but it does list Robert Szerwo among its unsecured creditors with a $110,971 disputed claim for severance pay. According to Mr. Szerwo's LinkedIn page, he?s Alma Rosa?s business manager. Judge Robin Riblet oversees the case. Peter Susi, Esq., at Susi & Gura, a Professional Corp., serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. The petition was signed by J. Richard Sanford, manager. AMERICAN AIRLINES: Seeks to Expand Paul Hastings Work ----------------------------------------------------- AMR Corp. and its affiliates ask the Court to expand the scope of retention of Paul Hastings LLP as special counsel for the Debtors to include services in certain litigation and antitrust matters rendered and to be rendered by attorneys at Dewey & LeBoeuf LLP who recently joined Paul Hastings. The Debtors request approval of Paul Hastings' retention and employment in connection with the litigation and antitrust matters, nunc pro tunc to May 21, 2012. The First Retention Order authorized Paul Hastings to (i) advise the Debtors regarding matters of litigation, labor law, and employment law, including but not limited to grievance arbitrations, employment litigation, and collective bargaining obligations under the Railway Labor Act; (ii) advise the Debtors on all issues relating to labor or employment law as applied to a debtor-in-possession under the Bankruptcy Code, including but not limited to issues arising under Section 1113 of the Bankruptcy Code; (iii) assist and counsel the Debtors in objecting to and litigating any potential bankruptcy claims by employees and/or unions; and (iv) such other issues as may be assigned by the Debtors in relation to (i) through (iii). On April 11, 2012, the Court entered an order approving the Debtors' application to employ and retain Dewey & LeBoeuf as the Debtors' special litigation counsel, nunc pro tunc to the Commencement Date. Pursuant to the Dewey Retention Order, Dewey & LeBoeuf was authorized to continue representing and defending the Debtors on (i) nonbankruptcy litigation against Sabre Inc., Sabre Holdings Corp., and Sabre Travel International, Ltd. d/b/a Sabre Travel Network in state district court in Tarrant County, Texas and a separate but related lawsuit against Travelport Limited and Travelport, L.P., Sabre, and Orbitz Worldwide LLC in the Federal District Court for the Northern District of Texas, (ii) various prepetition litigation matters unrelated to the Debtors' chapter 11 cases, and (iii) antitrust counseling on matters unrelated to these chapter 11 cases. On May 21, 2012, Mary Jean Moltenbrey and certain other former Dewey & LeBoeuf attorneys who were actively engaged in one or more of the American Matters joined Paul Hastings. Accordingly, pursuant to this Supplemental Application, the Debtors request authority to expand the scope of Paul Hastings' retention to include the American Matters nunc pro tunc to May 21, 2012. If the Debtors are unable to retain Paul Hastings in connection with the American Matters, the Debtors, their estates, and all parties in interest will be severely prejudiced, as the Debtors would, among other things, lose the primary attorneys providing invaluable experience and expertise on the American Matters. Certain attorneys formerly with Dewey & LeBoeuf, who are also actively engaged in the GDS Litigation, recently joined Cooley LLP. These attorneys have primary responsibility for working with certain of American's expert witnesses in the GDS Litigation, and it would be most efficient for them to continue in this role. The roles of the former Dewey & LeBoeuf attorneys are, and have been throughout the litigation, fairly defined and separate. The retention of both firms on the GDS Litigation will not result in an increase in the total number of attorneys working on those matters. Accordingly, the Debtors intend to submit a separate application to employ and retain Cooley as special litigation counsel in connection with the GDS Litigation. Scott M. Flicker, Esq., a member of the law firm of Paul Hastings LLP, says Paul Hastings intends to seek compensation for services rendered and expenses incurred in connection with the American Matters in accordance with the Fee Guidelines. Paul Hastings will charge the same hourly rates for the Dewey attorneys working on the American Matters as the rates charged for these attorneys while at Dewey & Leboeuf. Paul Hastings will not seek compensation for services rendered by Dewey & LeBoeuf on the American Matters before May 21, 2012. Mr. Flicker assures the Court his firm does not (a) represent or hold any interest adverse to the Debtors or their estates with respect to the American Matters; or (b) have any connection with the Debtors, any creditors or other Parties in Interest, their respective attorneys and accountants, or the U.S. Trustee or any person employed by the Office of such United States Trustee. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Proposes Cooley for Sabre, Travelport Suits -------------------------------------------------------------- AMR Corp. and its affiliated debtors asked Bankruptcy Judge Sean H. Lane to approve the hiring of Cooley LLP as their special counsel. The move comes after Marc Schildkraut and certain other lawyers of Dewey & LeBoeuf, AMR's special litigation counsel, joined Cooley. The lawyers have represented American Airlines Inc. in its case against Sabre Inc. and another lawsuit against Travelport and Orbitz Worldwide in Texas. As special counsel, Cooley will provide legal assistance in connection with the lawsuits, according to Randall White, AMR's associate general counsel. Cooley will charge AMR for its services on an hourly basis in one-tenth hour increments. It will also seek reimbursement for its expenses. The firm does not hold or represent any interest adverse to AMR, its affiliated debtors and their estates, according to a declaration by Marc Schildkraut, Esq., a partner at Cooley LLP. A court hearing is scheduled for August 8. Objections are due by August 1. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Hiring Kelly Hart for Trademark Issues --------------------------------------------------------- AMR Corp. and its affiliated debtors are seeking court approval to hire Kelly Hart & Hallman LLP as their special litigation counsel. Kelly Hart has served as AMR's "ordinary course" professional. Its fees and expenses, however, have already exceeded the $50,000 monthly cap and are expected to exceed $500,000 over the course of AMR's bankruptcy case. The firm will continue to provide the same services, which include representing AMR in trademark enforcement and labor dispute lawsuits, and documenting aircraft financing deals. In exchange for its services, Kelly Hart will be paid on an hourly basis and will be reimbursed of its expenses. The firm's hourly rates range from $275 to $550 for partners; $195 to $345 for associates; and $150 to $220 for paraprofessionals. In a declaration, Dee Kelly Jr., managing partner at Kelly Hart, disclosed the firm does not represent interests adverse to AMR and its affiliated debtors. A court hearing is scheduled for August 8. Objections are due by August 1. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Allows Cano to Prosecute Insurance Claim ----------------------------------------------------------- AMR Corp. and Luis Cano inked an agreement to modify the automatic stay to allow the claimant to prosecute his insurance claim. Under the agreement, Mr. Cano may only seek to recover any liquidated final judgment or settlement, or may only be paid with respect to his claims from available insurance coverage under AMR's insurance policies. The agreement does not modify the automatic stay to permit the claimant to recover from any party for intentional conduct or punitive damages. Separately, Judge Sean Lane approved another agreement between AMR and Wilmington Trust Company. Under the deal, AMR agreed that WTC won't be required to attach documents to its proofs of claim. Any documents referenced in the proofs of claim will be provided to AMR upon written request, according to the agreement. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AXLE: Reports $4.7 Million Net Income in Second Quarter ---------------------------------------------------------------- American Axle & Manufacturing Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $4.7 on $739.8 million of net sales for the three months ended June 30, 2012, compared with net income of $47.9 million on $686.2 million of net sales for the same period during the prior year. The Company reported net income of $55 million on $1.49 billion of net sales for the six months ended June 30, 2012, compared with net income of $84.5 million on $1.33 billion of net sales for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $2.44 billion in total assets, $2.83 billion in total liabilities and a $394.7 million total stockholders' deficit. "AAM's financial results for the second quarter of 2012 were highlighted by strong sales growth driven by solid profitability and positive free cash flow," said AAM's Co-Founder, Chairman of the Board and Chief Executive Officer, Richard E. Dauch. "AAM is excited about the opportunity to make additional progress on our profitable growth and business diversification initiatives as we continue to support the launch of many new products, processes and systems on a global basis in the near-term. AAM's advanced driveline technologies and high-quality, operationally-flexible global manufacturing, engineering and sourcing footprint are the key factors driving our success in growing AAM's new business backlog, which now stands at approximately $1.2 billion for programs launching from 2012 through 2014." A copy of the Form 10-Q is available for free at: http://is.gd/vTtyCj About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. * * * In January 2012, Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDRs) of American Axle & Manufacturing. Fitch expects leverage to trend downward over the intermediate term, however, as the company gains traction on its new business wins. Looking ahead, Fitch expects free cash flow to be relatively weak, but positive, in 2012 with the steep ramp-up in new business and as the company continues to make investments in both capital assets and research and development work to support growth opportunities in its customer base and product offerings. Beyond 2012, free cash flow is likely to strengthen meaningfully as the new programs coming on line in the near term begin to produce higher levels of cash. AMERICAN WEST: Asks to Settle Buyer Commitment Claims ----------------------------------------------------- Carla Main and Michael Bathon at Bloomberg News report that the American West Development Inc., the bankrupt homebuilder, has asked the U.S. Bankruptcy Court in Las Vegas, Nevada, for leave to settle pricing commitment claims by homeowners without first having hearings or giving notice to the court. More than 25 homeowners have filed claims against the debtor based on price- promise or price-guaranty incentives that the debtor and its units offered from 2006 to 2008, American West said in court papers. While American West disputes the claims, it said that settling them "on fair and consistent terms" will be beneficial to the administration of the bankruptcy estate. According to the report, the Debtor also made a motion asking U.S. Bankruptcy Judge Mike K. Nakagawa to approve a severance agreement it has made with Corey Adcock, the debtor's former chief financial officer until, it said in court papers. Adcock held the position from 2001 to July 20. "Debtor has determined that it would be best to make a management change at this time," and noted that severance payments to Adcock are contingent upon his "continued cooperation in accordance with the severance agreement," it said in court papers. American West was granted permission by the court to file a complete copy of the severance agreement under seal with the court. Both motions are scheduled for hearings on Aug. 23. About American West American West Development, Inc. -- fdba Castlebay 1, Inc., et al. -- is a homebuilder in Las Vegas, Nevada, founded on July 31, 1984. Initially, AWDI was known as CKC Corporation, but later changed its name. AWDI filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 12-12349) on March 1, 2012. Judge Mike K. Nakagawa presides over the case. Brett A. Axelrod, Esq., and Micaela Rustia Moore, Esq., at Fox Rothschild LLP, serve as AWDI's bankruptcy counsel. Nathan A. Schultz, P.C., is AWDI's conflicts counsel. AWDI hired Garden City Group as its claims and notice agent. American West disclosed $55.39 million in assets and $208.5 million in liabilities as of the Chapter 11 filing. James L. Moore, as future claims representative in the Chapter 11 case of American West Development, Inc., tapped the law firm of Field Law Ltd. as his counsel. AMES DEPARTMENT: Taps Proskauer Rose as Substitute Attorney ----------------------------------------------------------- BankruptcyData.com reports that Ames Department Stores filed with the U.S. Bankruptcy Court a motion to retain Proskauer Rose (Contact: Timothy Q. Karcher ) as substitute attorney at these hourly rates: partner at $675 to $1,050, of counsel at $640 to $825, associate at $295 to $750 and paraprofessional at 165 to 315. The Debtors' former attorney, Dewey and LeBoeuf, filed for Chapter 11 protection on May 28, 2012. About Ames Department Stores Rocky Hill, Connecticut-based Ames Department Stores was founded in 1958. At its peak, Ames operated 700 stores in 20 states, including the Northeast, Upper South, Midwest and the District of Columbia. In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the retailer closed 370 stores and emerged from chapter 11 on Dec. 30, 1992. Ames filed a second bankruptcy petition under Chapter 11 (Bankr. S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal & Segal LLP; Weil, Gotshal & Manges; Storch Amini Munves PC; Cadwalader, Wickersham & Taft LLP; and Dewey & LeBoeuf LLP represent the Debtors. When the Company filed for protection from their creditors, they reported $1,901,573,000 in assets and $1,558,410,000 in liabilities. The Company closed all of its 327 department stores in 2002. Ames and its affiliates filed a consolidated Chapter 11 Plan, and a related Disclosure Statement explaining the Plan with the Court on Dec. 6, 2004. A full-text copy of Ames' Chapter 11 Plan is available at no charge at: http://bankrupt.com/misc/ames_chapter_11_plan.pdf and a full-text copy of Ames' Disclosure Statement is available at no charge at: http://bankrupt.com/misc/ames'_disclosure_statement.pdf A hearing to determine the adequacy of the Disclosure Statement explaining Ames' Plan has not yet been scheduled. AMSCAN HOLDINGS: Parent Party City Now Controlled by Topco ---------------------------------------------------------- Party City Holdings Inc., merged with and into PC Merger Sub, Inc., pursuant to the Agreement and Plan of Merger dated as of June 4, 2012, by and among Party City, Merger Sub, PC Topco Holdings, Inc., and the stockholders' representatives party thereto. The merger was completed upon the filing of a Certificate of Merger with the Secretary of State of the State of Delaware. As a result of the merger, Party City is now controlled by Topco Holdings, an affiliate of Thomas H. Lee Partners, L.P. Amscan Holdings, Inc., is a wholly-owned subsidiary of Party City. The aggregate consideration paid in connection with the merger was approximately $2.69 billion, which consideration was funded by a combination of equity financing, the contribution of shares or reinvestment in Holdings by existing holders, and debt financing. Early Tender Offer Results Amscan Holdings, Inc., announced the preliminary results for its cash tender offer for any and all of its 8.75% Senior Subordinated Notes due 2014. Approximately $115.8 million aggregate principal amount of the Notes were validly tendered and not validly withdrawn prior to the early tender time of 5:00 p.m., New York City time, on July 26, 2012. All holders of Notes who validly tendered their Notes prior to the Early Tender Time received total consideration of $1,003.75 per $1,000.00 principal amount of Notes, which includes an early tender payment of $30.00 per $1,000.00 principal amount of Notes, plus any accrued and unpaid interest up to, but not including, July 27, 2012. The Company also is redeeming all outstanding Notes not tendered pursuant to the Tender Offer on Aug. 27, 2012, in accordance with the terms of the indenture governing the Notes. The Notes will be redeemed at a price of 100% of the principal amount of Notes being redeemed plus accrued and unpaid interest on the principal amount up to, but not including, the date of redemption. Upon the completion of the redemption, no principal amount of Notes will remain outstanding. About Amscan Holdings Based in Road Elmsford, New York, Amscan Holdings, Inc., designs, manufactures, contracts for manufacture, and distributes party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts and stationery. The Company also operates retail party goods and social expressions supply stores in the United States under the names Party City, Party America, The Paper Factory, Halloween USA and Factory Card & Party Outlet, and franchises both individual stores and franchise areas throughout the United States and Puerto Rico principally under the names Party City and Party America. The Company is a wholly owned subsidiary of AAH Holdings Corporation. The Company's balance sheet at March 31, 2012, showed $1.73 billion in total assets, $1.36 billion in total liabilities, $52.45 million in redeemable common securities, and $316.16 million in total stockholders' equity. * * * Amscan Holdings carries Moody's Investors Service's 'B2' Corporate Family and Probability of Default Ratings. In the April 19, 2012, edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Elmsford, N.Y.-based Amscan Holdings Inc. to 'B+' from 'B'. "The upgrade reflects our belief that Amscan's credit measures have improved and will remain indicative of those for an 'aggressive' financial risk profile. We anticipate that credit measures will improve modestly through fiscal year-end 2012, through acquisition-related synergies and EBITDA expansion during the next year," said Standard & Poor's credit analyst Stephanie Harter. ARCHANA HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Archana Hospitality, Inc. dba Days Inn Americas Best Value Inn Quality Inn 2086 Highway 71 Marianna, FL 32447 Bankruptcy Case No.: 12-50365 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Northern District of Florida (Panama City) Debtor's Counsel: Brian G. Rich, Esq. BERGER SINGERMAN LLP 125 S. Gadsden Street, Suite 300 Tallahassee, FL 32301 Tel: (850) 561-3010 Fax: (850) 561-3013 E-mail: brich@bergersingerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flnb12-50365.pdf The petition was signed by Jitendra Bhakta, director. ATP OIL: Bondholders Organizing for Potential Restructuring ----------------------------------------------------------- ATP Oil & Gas Corp. fell to a record low July 27 after Bloomberg News reported bondholders are organizing for a potential restructuring, citing two people familiar with the matter. The Houston-based company has lost 81% of its market value this year. One of the people, who declined to be identified because he's involved in the process, said investors interviewed potential advisers last week, Bloomberg reported after regular U.S. trading closed July 26. The process isn't public, he said. "We expect either bankruptcy or an announcement of some sort from somebody on a potential reorganization," Bob Bruce, manager of the $350 million Bruce Fund Inc., which held about $9 million of the 11.875% notes as of March, said in a telephone interview July 26. "We just keep our fingers crossed that a miracle will happen." Mr. Bruce said he hadn't heard from any bondholder group or advisers. 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 Troubled Company Reporter 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. AVENTINE RENEWABLE: Has Forbearance with Lenders Until Sept. 7 -------------------------------------------------------------- Aventine Renewable Energy Holdings, Inc., and each of its subsidiaries, entered into separate forbearance agreements with Citibank, N.A., and Wells Fargo Capital Finance, LLC. Citibank is the administrative agent and collateral agent under the Senior Secured Term Loan Credit Agreement dated Dec. 22, 2010. Wells Fargo is the administrative agent, collateral agent and sole lender under the Amended and Restated Credit Agreement dated July 20, 2011. Under the Forbearance Agreements, the Lenders agreed not to take any action to enforce any rights or remedies under the Loan Agreements which may result from the potential events of default. Both Forbearance Agreements will terminate on the earlier of (i) Sept. 7, 2012, or (ii) the occurrence of a further event of default under the Term Loan Agreement and Revolving Credit Agreement or the occurrence of certain other events specified in the Term Loan and Revolving Credit Forbearance. In consideration for the Term Loan Forbearance, Aventine has agreed to pay to Required Lenders (i) a forbearance fee of 1% of the outstanding principal balance of loans under the Term Loan Agreement, which fee will be paid in kind and (ii) the default interest rate on the outstanding principal balance of the loans under the Term Loan Agreement from the date of the Term Loan Forbearance until Aventine is no longer in default under the Term Loan Agreement, which interest will be paid in kind. Aventine has also agreed to pay to Wells Fargo (i) a cash forbearance fee equal to $91,566.38 which will be payable on Sept. 7, 2012, and (ii) the default interest rate on the outstanding obligations under the Revolving Credit Agreement. About Aventine Renewable Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc. (OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and distributes ethanol to many of the leading energy companies in the U.S. In addition to producing ethanol, its facilities also produce several by-products, such as distillers grain, corn gluten meal and feed, corn germ and grain distillers dried yeast, which generate revenue and allow the Company to help offset a significant portion of its corn costs. The Company and all of its direct and indirect subsidiaries filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case No. 09-11214). The Debtors filed their First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code on Jan. 13, 201. The Plan was confirmed by order entered by the Bankruptcy Court on Feb. 24, 2010, and became effective on March 15, 2010. The Company reported a net loss of $43.39 million for the year ended Dec. 31, 2011, compared with a net loss of $25.46 million for the ten months ended Dec. 31, 2010. The Company's balance sheet at March 31, 2012, showed $384.90 million in total assets, $248.91 million in total liabilities and $135.98 million in total stockholders' equity. * * * As reported by the TCR on July 20, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Aventine Renewable Energy Holdings Inc. to 'CC' from 'CCC+'. "The downgrade reflects the company's uncertain liquidity following its announcement that on July 6, 2012, it entered into an amendment to its credit agreement that could effectively prevent it from drawing on its revolving credit facility and letters of credit," said Standard & Poor's credit analyst Matthew Hobby. In the July 23, 2012, edition of the TCR, Moody's Investors Service downgraded Aventine Renewable Energy Holdings Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating to Caa3 from Caa1. The downgrade reflects Aventine's weakened liquidity due to expected reduction in unrestricted cash balances, dramatic increase in corn prices resulting from ongoing severe drought in the main corn producing areas in the US, decrease in crude oil prices, and reduction in discount between ethanol and gasoline prices that could reduce demand for corn-based ethanol. AVENTINE RENEWABLE: S&P Cuts Corporate Credit Rating to 'SD' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Aventine Renewable Energy Holdings Inc. to 'SD' from 'CC'. "We also lowered our rating on the company's senior secured debt due December 2015 ($215.9 million outstanding as of March 31, 2012) to 'D' from 'CCC-'. The recovery rating on the $225 million senior secured term notes is unchanged at '2'," S&P said. "The rating action follows the waiver of a scheduled interest payment on July 31, 2012. Although Aventine received a debt forbearance with lenders and lenders will not consider a missed interest payment to be an event of default, this constitutes a default under our criteria," S&P said. AVISTAR COMMUNICATIONS: Suspending Filing of Reports with SEC ------------------------------------------------------------- Avistar Communications Corporation filed a Form 15 with the U.S. Securities and Exchange Commission notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock, par value $0.001 per share. There were only 71 holders of the common stock as of July 26, 2012. About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. The Company reported a net loss of $6.43 million in 2011, compared with net income of $4.45 million during the prior year. The Company's balance sheet at March 31, 2012, showed $3.25 million in total assets, $17.31 million in total liabilities and a $14.05 million total stockholders' deficit. AXESSTEL INC: Stockholders Elect Five Members to Board ------------------------------------------------------ Axesstel, Inc., held its annual meeting of stockholders on July 26, 2012. The Company's stockholders elected to the Board of Directors each of Mark D. Fruehan, Richard M. Gozia, Patrick Gray, Osmo Hautanen and Clark Hickock to serve until the next annual meeting of stockholders and until their respective successors are duly elected and qualified. The stockholders also ratified the appointment of Gumber Savett, Inc., to serve as the Company's registered independent accounting firm for the fiscal year ending Dec. 31, 2012. About Axesstel, Inc. San Diego, Calif.-based Axesstel, Inc. (OTC BB: AXST) -- http://www.axesstel.com/-- is a provider of fixed wireless voice and broadband access solutions for the worldwide telecommunications market. The Company's balance sheet at March 31, 2012, showed $13.01 million in total assets, $24.16 million in total liabilities, all current, and a $11.14 million in total stockholders' deficit. The Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 results. Gumbiner Savett Inc., in Santa Monica, Calif., noted that although the Company generated net income in 2011, the Company has historically incurred substantial losses from operations and the Company may not have sufficient working capital or outside financing available to meet its planned operating activities over the next twelve months. Additionally, there is uncertainty as to the impact that the worldwide economic downturn may have on the Company's operations. B AND J THRIFTWAY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: B and J Thriftway, Inc. dba B&J Thriftway, Inc. B&J Country Mart P.O. Box 519 Tonganoxie, KS 66086 Bankruptcy Case No.: 12-22020 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court District of Kansas (Kansas City) Judge: Dale L. Somers Debtor's Counsel: Colin N. Gotham, Esq. EVANS & MULLINIX, P.A. 7225 Renner Road, Suite 200 Shawnee, KS 66217 Tel: (913) 962-8700 Fax: (913) 962-8701 E-mail: colin@evans-mullinix.com Scheduled Assets: $3,008,267 Scheduled Liabilities: $2,133,108 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ksb12-22020.pdf The petition was signed by James Gambrill, president. BERNARD L. MADOFF: Judge Blocks ERISA Claims in Liquidation ----------------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that retirement plans and retirees who invested indirectly in Bernard L. Madoff Investment Securities LLC cannot recover funds from the firm's liquidation under the Employee Retirement Income Security Act, a New York federal judge ruled Wednesday, dealing a blow to Ponzi scheme victims. Bankruptcy Law360 relates that U.S. District Judge Denise Cote said two types of investors -- individuals who participated in ERISA-regulated retirement plans that invested with BLMIS, and retirement plans that invested with BLMIS account holders -- could not be considered customers of the defunct firm. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BERNARD L. MADOFF: Suits Belong in Europe, Banks Tell 2nd Circ. --------------------------------------------------------------- Brian Mahoney at Bankruptcy Law360 reports that Italian bank Unicredit SPA and Austrian banker Sonja Kohn urged the Second Circuit on Tuesday to affirm a district court's dismissal of a previously consolidated class action brought by investors in foreign funds who allegedly lost billions in Bernard L. Madoff's ponzi scheme, saying the underlying suits belong in European courts. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BGC PARTNERS: Moody's Reviews 'Ba1' Senior Rating for Downgrade --------------------------------------------------------------- Moody's Investors Service placed the ratings of Cantor Fitzgerald, L.P. (senior at Baa3) and its affiliate BGC Partners Inc. (senior at Ba1) on review for possible downgrade. Ratings Rationale The review will focus on future profitability at Cantor Fitzgerald and BGC Partners, as well as the risks posed by management's diversification strategy in the current operating environment. Economic uncertainty has reduced origination and trading volumes in many primary and secondary capital markets which has depressed revenues and profitability at many capital markets firms. Therefore executing Cantor's diversification strategy has become more difficult, as many intermediaries compete for a reduced revenue pool. Furthermore, many global financial institutions (many of whom are Cantor and BGC Partners customers) remain under pressure -- particularly within Europe - an important region for Cantor. Over the past several years, Cantor Fitzgerald's strategy has been to expand its investment banking, sales and trading businesses to supplement its traditional inter-dealer brokerage franchise conducted through BGC Partners. Moody's believes management has been pursuing the opportunity presented by the reduction in capacity amongst capital markets intermediaries following the 2008 financial crisis, and also to protect against declining operating margins in the inter-dealer brokerage business. Although management's strategy has added revenues in the past five years, it will also continue to test Cantor's risk and expense control disciplines. While much of the emphasis has been on growing fee-based businesses (such as the acquisition of real- estate broker Newmark in 2011) and on sales and distribution of liquid products, Cantor has also selectively expanded into less- liquid asset classes. For example in 2010, Cantor set up a joint venture to originate, warehouse and securitize commercial mortgage-backed securities. For Cantor Fitzgerald as a whole, annual profitability has declined since 2009. "The difficult operating environment and the cost of investment in new businesses recently has not produced operating margins consistent with an investment grade rating at Cantor Fitzgerald and we do not expect the firm to achieve a low- teens pretax margin in 2012." said Peter Nerby, a Moody's Senior Vice-President. An additional consideration will be the liquidity and granularity of Cantor Fitzgerald's substantial matched repo book, which contributes to its high balance sheet leverage. To date, Cantor has successfully controlled the risks of the matched book by financing high-quality collateral with conservative haircuts and maintaining sources of alternate liquidity for its available collateral. To some extent, these business strategy, leverage and profitability concerns are mitigated by Cantor's generally liquid balance sheet and historically disciplined approach to managing risks, which is supported by the incentives inherent to the firm's partnership structure. For example, when making markets, Cantor emphasizes distribution and limits accumulation of aged inventory and BGC Partners' commission -- driven business model results in limited balance sheet risk. Cantor Fitzgerald L.P. is a private limited partnership and does not make its financial results public. Its publically traded affiliate BGC Partners Inc, suffered from negative operating leverage in 2Q12 (revenues rose 23% but expenses rose 30% compared to the year earlier period) and reported net income of $2 million ($0.01 per share) for the quarter ended June 30, 2012. The principal methodology used in this rating was Global Securities Industry Methodology published in December 2006. BICENT HOLDINGS: Judge Tells Debtor to Fix Chapter 11 Plan ---------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that a Delaware judge held up confirmation of Bicent Holdings LLC's Chapter 11 plan Monday, finding that while the power plant operator's reorganization was confirmable for the most part, the releases and exculpation provided were far too broad as currently written. The prepackaged deal came under fire from two sources, with the U.S. Trustee objecting to the plan's "expansive" releases to nondebtor parties and its exculpation clause encompassing nonfiduciary parties, and creditor Lea Power Partners LLC protesting that the plan took advantage of unsecured creditors. About Bicent Power Bicent Holdings LLC and 12 of its affiliates sought bankruptcy protection under Chapter 11 (Bankr. D. Del. Lead Case No. 12-11304) on April 23, 2012. Bicent, based in Lafayette, Colorado, owns and operates two generating facilities: Hardin, a 120-megawatt coal-fired plant about 40 miles southeast of Billings, Montana, and San Joaquin, a 48-megawatt natural gas- fired facility about 70 miles east of San Francisco in Lathrop, California. Bicent Holdings is owned by non-debtor Bicent Prime Holdings, which is 87.1%-owned by Natural Gas Partners VIII LP, Natural Gas Partners IX LP and NGP IX Offshore Holdings LP and 12.9 percent- owned by Beowulf (Bicent) LLC. Bicent Power LLC disclosed $7.022 million in assets and $308 million in liabilities in its schedules. The schedule was filed before the June 22 deadline. Judge Kevin Gross oversees the case. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; Moelis & Company LLC, as financial advisor, and Paul, Weiss, Rikfind, Wharton & Garrison LLP as corporate counsel. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. Bicent scheduled a July 30 confirmation hearing for approval of a reorganization plan worked out before bankruptcy. The plan calls for transferring ownership of its two power plants in California to secured lenders. The plan is supported by holders of more than two-thirds of the first- and second-lien debt. Holders of mezzanine debt owed $65.2 million are to receive nothing. Likewise, general unsecured creditors with $25.4 million in claims are to have no recovery. BLUE SKY ASSOCIATION: Case Summary & 7 Unsecured Creditors ---------------------------------------------------------- Debtor: Blue Sky Association LLC 6001 E. Edinger Avenue Huntington Beach, CA 92647 Bankruptcy Case No.: 12-18922 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Thomas Christy, Esq. 9750 Miramar Road, Suite 215 San Diego, CA 92126 Tel: (858) 586-0486 Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb12-18922.pdf BLUEBIRD GARDEN: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Bluebird Garden Co, Limited Partnership fdba Blue Housing Concepts, Corp. 2622 Rimpacific Circle Las Vegas, NV 89146 Bankruptcy Case No.: 12-18723 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: A.J. Kung, Esq. KUNG & BROWN 214 South Maryland Parkway, Suite A Las Vegas, NV 89101 Tel: (702) 382-0883 Fax: (702) 382-2720 E-mail: ajkung@ajkunglaw.com Scheduled Assets: $1,820,700 Scheduled Liabilities: $3,097,142 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb12-18723.pdf The petition was signed by Peter Chang, general partner. BOYD ACQUISITION: Moody's Rates $350MM Sr. Unsec. Notes 'Caa1' -------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Boyd Acquisition Sub, LLC's proposed $350 million 5.5-year senior unsecured notes. The company's B2 Corporate Family and Probability of Default ratings were affirmed, along with the Ba2 rating on the its $50 million revolver and B1 rating on its $825 million first lien term loan. The rating outlook is stable. Boyd Acquisition Sub, LLC was created to fund Boyd Gaming Corporation's ("Boyd"; B2, stable) pending acquisition of Peninsula Gaming, LLC ("Peninsula"; B2, stable). On May 16, 2012, Boyd announced that it had signed an agreement to acquire Peninsula for $1.45 billion in cash and debt. At that time, Boyd publicly stated that it intended to fund the transaction with $200 million in cash, approximately $1.2 billion in mostly pre-payable bank debt at Boyd Acquisition Sub, LLC, the subsidiary for which Boyd has obtained committed financing, and a $144 million seller note provided by Peninsula. Proceeds from the proposed $350 million senior notes will be used to partly fund Boyd's acquisition of Peninsula. Moody's ratings on Boyd Acquisition Sub, LLC assume the acquisition will close and be funded according to Boyd's publicly stated financing plan. The proposed credit facility is expected to close and fund simultaneously with the closing of the acquisition, which is currently scheduled to close by December 31, 2012. Upon closing, Boyd Acquisition Sub, LLC will be a 100% wholly-owned unrestricted subsidiary of Boyd, and will be merged into Peninsula Gaming, LLC who will assume all the obligations of Boyd Acquisition Sub LLC. The bond indentures of Peninsula's existing senior secured notes due 2015 and senior unsecured notes due 2017 contain change of control provisions that would require the company to repurchase all bonds outstanding if the proposed acquisition is completed. If the bonds are paid in full, Moody's will withdraw all ratings on Peninsula in accordance with Moody's policies on rating withdrawals. In the interim, Peninsula's ratings will continue to be based on the company's stand-alone fundamentals and underlying credit attributes, adjusted as circumstances warrant. New Rating Assigned: Proposed $350 million 5.5 year senior unsecured notes at Caa1 (LGD 5, 81%) Ratings Affirmed: Corporate Family Rating at B2 Probability of Default Rating at B2 $50 million 5-year super priority revolver at Ba2 (LGD 1, 1%) $825 million 5-year first lien term loan at B1 (LGD 3, 33%) Ratings Rationale The B2 Corporate Family Rating reflects Boyd Acquisition Sub, LLC's high pro forma leverage of about 6.7 times. This is a direct result of the 7.6 times purchase price multiple. This multiple is based on a $200 million run-rate EBITDA amount for Peninsula which incorporates a full-year estimate of its Kansas Star casino facility (opened December 2011) less $10 million of corporate expenses. Positive rating consideration is given to the successful ramp-up and favorable outlook of Peninsula's Kansas Star Casino. Moody's expects this property will continue to benefit from limited amount of direct competition, generate a relatively high property-level EBITDA margin, and soon become Peninsula's largest revenue and EBITDA contributor. Also considered is the strong performance of the company's Iowa casinos that currently account for about 43% of Peninsula's consolidated net revenue and about 38% of the company's consolidated property-level EBITDA. The Caa1 rating on the proposed $350 million term loan, two- notches below Boyd Acquisition Sub, LLC's Corporate Family Rating, considers the $875 million of senior secured bank debt that ranks senior to the proposed notes. The affirmation of the B1 rating on the $825 million term loan, one notch above the B2 Corporate Family Rating, considers the pro forma credit support that will be provided by the proposed $350 million senior unsecured notes and the $144 million seller note (unrated) that will also be part of the acquisition financing. The affirmation of the Ba2 rating on the $50 million revolver considers that while it shares the same collateral as the term loan, it has a super priority status over the term loan. The stable rating outlook incorporates Moody's view that while Peninsula's EBITDA will grow, and the company is expected to generate a meaningful amount of free cash flow, debt/EBITDA will likely remain above 5.5 times during the next two years, a level that is consistent with a 'B' category Corporate Family Rating, according to Moody's Global Gaming methodology. The stable outlook also considers Moody's view that Boyd will ultimately engage in a separate and distinct financing sometime after the initial acquisition closes that will allow the company to fold the Peninsula assets into its restricted group structure. Given Moody's understanding of Boyd's longer-term plans to fold Peninsula into its restricted group structure sometime after the acquisition closes, a higher rating is not likely in the foreseeable future. A lower rating could occur if Peninsula's stand-alone results deteriorate materially for any reason prior to the acquisition becoming effective. Ratings could also be lowered if it appears that Peninsula as a stand-alone entity will not be able to improve its leverage over the next 12-month period. The principal methodology used in rating Boyd Acquisition Sub, LLC was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Boyd Acquisition Sub, LLC, is a 100% wholly owned subsidiary of Boyd Gaming Corporation and was created to fund Boyd Gaming Corporation's pending acquisition of Peninsula Gaming, LLC. Upon acquisition closing, Boyd Acquisition Sub, LLC will remain a 100% wholly-owned unrestricted subsidiary of Boyd, and will be merged into Peninsula Gaming, LLC. Peninsula Gaming, LLC is an owner and operator of five locals- oriented gaming properties, two of which are located in Iowa, two in Louisiana and the recently opened Kansas Star Casino in Mulvane, Kansas. Boyd Gaming Corporation wholly owns and operates gaming and entertainment facilities located in Nevada, Mississippi, Illinois, Louisiana, and Indiana. Boyd also has a 50% partnership interest in Marina District Finance Company, Inc., a non-recourse joint venture that owns and operates the Borgata Hotel Casino in Atlantic City, New Jersey. BROOKE CORP: Lawsuits v. CJD, Davidson-Babcock Proceed to Trial --------------------------------------------------------------- Bankruptcy Judge Dale L. Somers denied the motions for summary judgment filed by defendants in the lawsuit, CHRISTOPHER J. REDMOND, Chapter 7 Trustee of Brooke Corporation, Brooke Capital Corporation, and Brooke Investments, Inc., Plaintiff, v. CJD & ASSOCIATES a/k/a Davidson-Babcock, Defendant; and CHRISTOPHER J. REDMOND, Chapter 7 Trustee of Brooke Corporation, Brooke Capital Corporation, and Brooke Investments, Inc., Plaintiff, v. DAVIDSON- BABCOCK, INC., a/k/a CJD & Associates, Defendant, Adv. Proc. Nos. 11-06236, 11-6238 (Bankr. D. Kan). The Chapter 7 Trustee seeks to avoid allegedly preferential transfers and fraudulent conveyances to CJD of roughly $8.6 million. The complaints against the two Defendants are identical, with the exception of the addition in the Amended Complaint against D-B of allegations that it is liable for the allegedly avoidable transfers to CJD as the successor in interest to CJD. Although discovery is far from complete, the Defendants move for summary judgment on three defenses -- judicial estoppel, strict foreclosure, and waiver. The Chapter 7 Trustee opposes the motions based upon both the substantive law and because of the presence of material factual disputes. CJD is represented in the lawsuit by: Paul D. Sinclair, Esq. Brendan L. McPherson, Esq. POLSINELLI SHUGHART PC Twelve Wyandotte Plaza 120 W. 12th Street Kansas City, MO 64105 Tel: 816-395-0697 Fax: 816-374-0509 E-mail: psinclair@polsinelli.com bmcpherson@polsinelli.com A copy of the Court's July 26, 2012 Memorandum Opinion and Order is available at http://is.gd/yWugzufrom Leagle.com. About Brooke Corp. Based in Kansas, Brooke Corp. -- http://www.brookebanker.com/-- was an insurance agency and finance company. The company owned 81% of Brooke Capital. The majority of the company's stock was owned by Brooke Holding Inc., which, in turn was owned by the Orr Family. A creditor of the family, First United Bank of Chicago, foreclosed on the BHI stock. The company's revenues were generated from sales commissions on the sales of property and casualty insurance policies, consulting, lending and brokerage services. Brooke Corp. and Brooke Capital Corp. filed separate petitions for Chapter 11 relief on Oct. 28, 2008; Brooke Investments, Inc. filed for Chapter 11 relief on Nov. 3, 2008 (Bankr. D. Kan. Lead Case No. 08-22786). Angela R. Markley, Esq., was the Debtors' in-house counsel. Albert Riederer was appointed as the Debtors' Chapter 11 trustee. He acted as special master of Brooke in prepetition federal court proceedings. Benjamin F. Mann, Esq., John J. Cruciani, Esq., and Michael D. Fielding, Esq,, at Husch Blackwell Sanders LLP, and Kathryn B. Bussing, Esq., at Blackwell Sanders LLP, represented the Chapter 11 trustee as counsel. David A. Abadir, Esq., and Robert J. Feinstein, Esq., at Pachulski Stang Ziehl & Jones LLP, Kristen F. Trainor, Esq., and Mark Moedritzer, Esq., at Shook, Hardy & Bacon, represented the Official Committee of Unsecured Creditors as counsel. The Debtors disclosed assets of $512,855,000 and debts of $447,382,000. On Oct. 29, 2008, the Court granted a motion to jointly administer the bankruptcies of Brooke Corporation, Brooke Capital, and Brooke Investment with the Brooke Corporation bankruptcy case being the lead case. The case was converted to Chapter 7 on June 29, 2009. Christopher J. Redmond was named Chapter 7 Trustee. He is represented by: Benjamin F. Mann, Esq. John J. Cruciani, Esq. Michael D. Fielding, Esq. HUSCH BLACKWELL LLP 4801 Main Street, Suite 1000 Kansas City, MO 64112 Tel: 816-983-8126 Fax: 816-983-8080 E-mail: benjamin.mann@huschblackwell.com john.cruciani@huschblackwell.com michael.fielding@huschblackwell.com BTA BANK: Loss Widened by $423 Million in June ---------------------------------------------- Carla Main and Michael Bathon at Bloomberg News report that BTA Bank extended its year-to-date loss last month amid plans to restructure debt for the second time in as many years. The net loss widened by 63.5 billion tenge ($423 million) from May to 1.37 trillion tenge in the year through June, the central bank's financial oversight committee said in a monthly report on its website. Liabilities of 2.66 trillion tenge exceeded assets by 1.21 trillion tenge, according to the Almaty-based regulator. BTA said talks began last month on its proposed debt overhaul with the creditors' steering committee after the state-owned lender failed to make an interest payment on its July 2018 dollar bonds in January. About BTA Bank BTA Bank JSC, a Kazakhstan-based financial institution, again filed for creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 12-12-13081) on July 16, 2012, in U.S. Bankruptcy Court in Manhattan. BTA Bank is asking the U.S. court to recognize the proceeding in the Specialized Financial Court of Almaty City in the Republic of Kazakhstan as a "foreign main proceeding." BTA Bank estimated both debt and assets of more than $1 billion. BTA Group -- comprised of BTA Bank and its subsidiaries and affiliated companies -- is one of the leading banking groups in the Commonwealth of Independent States and has affiliated banks in Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. As of May 1, 2012, BTA Bank was the third largest bank in the Republic of Kazakhstan by total assets with a market share of 10.9%, serving approximately 710,218 retail customers, 73,200 small and middle business customers and 1,397 corporate customers, most of which reside or are registered, or maintain their operations, inside Kazakhstan. As of May 1, 2012, the Bank employed 5,290 people inside and 2 people outside Kazakhstan. In 2009, investigations and proceedings were launched in the Republic of Kazakhstan, the United Kingdom, and elsewhere in relation to fraudulent and unlawful transactions entered into by the Bank's former management prior to February 2009 which, it transpires, caused the Bank very significant losses. On Oct. 7, 2009, the Bank applied to the Financial Court for an order to commence a restructuring. The foreign representative in 2010 filed a petition (Bankr. S.D.N.Y. Case No. 10-10638) in Manhattan and the judge granted a petition for recognition of the Kazakhstan proceeding as "foreign main proceeding. The Kazakhstan proceedings were closed in August 2010 after all distributions were made. The Chapter 15 case was closed in January 2011. Creditors whose claims were restructured received a mixture of cash, senior debt, subordinated debt, other forms of debt, equity and so-called recovery units in consideration for the restructuring of their claims. Since the beginning of 2011, the Bank's financial situation, however, has deteriorated despite measures undertaken by management. A high cost of funding and fierce competition among Kazakhstan banks for business led to a steep deterioration in the Bank's net interest margin, the measure of the difference between the interest income generated by the Bank and the amount of interest paid out to its lenders, relative to the amount of its (interest-earning) assets. Due to the subdued business environment and cumbersome legal procedures, recoveries on non- performing loans were considerably lower than expected. As a result, the Bank showed a total negative equity under International Financial Reporting Standards of KZT 216 billion (US$1.5 billion) by June 30, 2011, which worsened to an estimated IFRS consolidated equity deficit of KZT 367 billion (US$2.5 billion) at year end and has continued to worsen in 2012. Considering the Bank's financial situation and the need to restore the IFRS Tier 1 capital position, the Bank commenced discussions with its creditors in order to effect a second restructuring of all or part of its financial indebtedness under Kazakhstan laws. The Bank on April 5, 2012, formally agreed to the creation of a steering committee of creditors to coordinate further discussions in relation to the Restructuring. The Steering Committee selected Houlihan Lokey and Deloitte as joint financial advisers and Baker & McKenzie as legal adviser. On April 25, 2012, the Bank's board of directors resolved to initiate the Restructuring. On April 28, the Bank entered into an agreement on restructuring with the National Bank of Kazakhstan pursuant to Article 59-3(3) of the Kazakhstan Banking Law. On April 28, after obtaining a review and comments from the Steering Committee's advisers, the Bank submitted a draft restructuring plan to the National Bank of Kazakhstan. After the National Bank of Kazakhstan completed its review, the way was clear for the Bank to seek a Financial Court order opening a restructuring proceeding under Kazakhstan law. The Bank made an application for restructuring under the Banking Law, the Civil Procedural Code and the Amending Law on May 2, 2012. The second restructuring will be effected through the restructuring of the existing claims arising from the financial instruments issued during the first restructuring. The Restructuring is expected to be completed by Sept. 27, 2012. The Chapter 15 petition was filed to prevent creditors from seeking to take action against the Bank or its assets in the United States. The Bank's principal assets in the United States are balances in accounts of correspondent banks located in New York City. Its major American creditors are financial institutions, such as Deere Credit Inc, Goldman Sachs Lending Partners LLC, LM Moore, L.P., PNC Bank N.A. (formerly National City Bank Cleveland). The Steering Committee of Creditors comprises Ashmore Investment Management Limited (as agent for and on behalf of certain funds and accounts for which it acts as investment adviser), the Asian Development Bank, D.E. Shaw Oculus International, Inc. and D.E. Shaw Laminar International, Inc., Gramercy Funds Management LLC, J.P. Morgan Securities Ltd., Nomura International plc, The Royal Bank of Scotland plc, SAM Salute Advisors Ltd., Swedish Export Credits Guarantee Board - EKN and VR Capital Group Ltd. in its capacity as General Partner of VR Global Partners, L.P BTA Bank is represented in the U.S. by Evan C. Hollander, Esq., at White & Case LLP. Judge James M. Peck oversees the Chapter 11 case. CAMBRIDGE HEART: Files First Amendment to Form S-1 -------------------------------------------------- Cambridge Heart, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 1 to the Form S-1 relating to resale by the selling stockholders of up to 65,098,883 shares of the Company's common stock, consisting of: (i) 30,954,536 shares of the Company's common stock currently issuable upon the conversion of senior secured convertible promissory notes that were issued in a private placement that the Company completed in January, February and May 2012; (ii) 3,189,811 shares of the Company's common stock that may be issued as interest on the senior secured convertible promissory convertible notes issued in the 2012 private placement financing; and (iii) 30,954,536 shares of the Company's common stock currently issuable upon the exercise of warrants that were issued in the 2012 private placement financing. The Company is not selling any shares of common stock in this offering and, therefore, will not receive any proceeds from this offering. The Company will, however, receive the exercise price of the warrants if and when these warrants are exercised by the selling stockholders. The Company will bear all of the expenses and fees incurred in registering the shares offered by this prospectus. The Company's common stock is traded on the OTC Bulletin Board under the symbol "CAMH." The last reported sale price for the Company's common stock on the OTC Bulletin Board on June 1, 2012, was $0.069 per share. A copy of the amended prospectus is available for free at: http://is.gd/Kv9rOp About Cambridge Heart Tewksbury, Mass.-based Cambridge Heart, Inc., is engaged in the research, development and commercialization of products for the non-invasive diagnosis of cardiac disease. In its report on the financial statements for the year ended Dec. 31, 2011, McGladrey & Pullen, LLP, in Boston, Massachusetts, expressed substantial doubt about Cambridge Heart's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses, inability to generate positive cash flows from operations, and liquidity uncertainties from operations. The Company reported a net loss of $5.40 million in 2011, compared with a net loss of $5.17 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.54 million in total assets, $4.68 million in total liabilities, $12.74 million in convertible preferred stock, and a $14.89 million total stockholders' deficit. CANO PETROLEUM: Court Confirms Plan of Reorganization ----------------------------------------------------- The Bankruptcy Court entered an order approving and confirming the Second Amended Joint Plan of Reorganization of Cano Petroleum, Inc., and its subsidiaries and approving the Stock Purchase Agreement, dated as of March 7, 2012, by and among NBI Services, Inc., and the Debtors, and authorizing the consummation of the transaction contemplated thereby. A copy of the Plan as confirmed is available for free at http://is.gd/h2kwJf The Plan is not yet effective. Consummation of the Plan is subject to certain conditions that must be satisfied prior to the effective date of the Plan. Prior to filing the Chapter 11 case, the Debtors and NBI Services entered into the Stock Purchase Agreement. The Chapter 11 case contemplated approval of a marketing process in which NBI Services would be the "stalking horse" and the Company would be permitted to solicit higher or better bids for its assets and businesses. As there was not a higher or better bid for the Company's assets or businesses and the Bankruptcy Court approved the Plan, all existing capital stock, including the Company's Common Stock and Series D Convertible Preferred Stock, will be cancelled, and, pursuant to the Stock Purchase Agreement as approved by the Bankruptcy Court under the Confirmation Order, NBI Services will purchase all of the newly issued shares of common stock that will be issued by the reorganized Company pursuant to the Plan in exchange for $47.5 million, which will be distributed to creditors in accordance with the Plan. Upon the occurrence of the Effective Date, the Debtors will be deemed consolidated solely for the limited purposes of distribution. The Plan provides for the creation of a liquidating trust with a term of three years commencing on the Effective Date, subject to early termination or extension with approval of the Bankruptcy Court. On the Effective Date, (a) Donald W. Niemiec, Garrett Smith and James R. Latimer III will cease to be directors of the Company; (b) James R. Latimer III will cease to be Chief Executive Officer of the Company; and (c) John H. Homier will cease to be the Chief Financial Officer of the Company. About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas- based energy producer with properties in the mid-continent region of the United States, filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates also sought bankruptcy protection: Cano Petro of New Mexico, Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O. Production Company, Ltd., and WO Energy, Inc. The cases are jointly administered. The Debtors filed for bankruptcy to pursue a sale under a joint plan of reorganization filed on the petition date. Cano Petroleum have entered into a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under the Plan for $47.5 million. The deal is subject to higher and better offers and a possible auction. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by lawyers at Thompson & Knight LLP, in Dallas Texas. Cano Petroleum's consolidated balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. In schedules filed with the Court, Cano Petroleum disclosed $1.16 million in assets and $82.5 million in liabilities. Union Bank of California, the administrative agent and issuing lender under the Debtors' prepetition senior credit facility; and UnionBanCal Equities, Inc., the administrative agent and issuing lender, under the junior credit facility, are represented by: William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP. CASTAIC PARTNERS: 847-Acre Property Owner Returns to Chapter 11 --------------------------------------------------------------- Castaic Partners, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-36123) in Los Angeles on July 30, 2012. The Debtor disclosed assets of $29.5 million and liabilities of $23.98 million as of the Chapter 11 filing. The Debtor owns 847 acres of unimproved land by Tapia Canyon Road, in Castaic, California. Compass USA SPE LLC has a $22 million claim secured by a deed of trust on the property. The County of Los Angeles is owed $1.98 million for unpaid property taxes on the property. According to the statement of financial affairs, the Debtor did not generate any income from its ownership of the property during the two years immediately preceding the Chapter 11 filing. The Debtor is defendant to a lawsuit field by The Richard & Sheila J. McKnight 2000 Family Trust (D. Nev. Case No. 2:10-cv-0617-RCJ). There's also a lawsuit Barket v. Compass, in U.S. Superior Court Los Angeles County (Case No. BC429649). Affiliate Castaic Partners II also filed for Chapter 11 on July 30 (Case No. 12-36116). Castaic Partners I previously sought Chapter 11 protection in October 2010 (Bankr. C.D. Calif. Case No. 10-53956). At the time, the Debtor said the property was worth $29.5 million. Castaic Partners said during the 2010 filing that it owes $24 million on a mortgage held by Compass USA and almost $2 million in property taxes owing to Los Angeles County. The Debtors are represented in the new Chapter 11 case by: Jennifer J Panicker, Esq. GILMORE WOOD VINNARD & MAGNESS 10 River Park Pl E Ste 240 Fresno, CA 93720 Tel: 559-448-9800 Fax: 559-448-9899 E-mail: jpanicker@gwvm.com CELL THERAPEUTICS: CEO James Bianco Named as President ------------------------------------------------------ The Board of Directors of Cell Therapeutics, Inc., appointed James A. Bianco, M.D., the Company's Chief Executive Officer, as its President, effective immediately. Dr. Bianco will not be receiving any additional compensation as a result of this appointment. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at March 31, 2012, showed US$44.15 million in total assets, US$18.50 million in total liabilities US$13.46 million in common stock purchase warrants, and US$12.18 million in total shareholders' equity. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CELLFOR CORP: Monitor Seeks to End Chapter 15 Case -------------------------------------------------- The Bowra Group, Inc., appointed by the Supreme Court of British Columbia, Vancouver Registry as monitor for CellFor Corp. in its Canadian proceedings, asks the U.S. Bankruptcy Court for the Northern District of Georgia to close the Chapter 15 Case. The monitor relates that an asset purchase agreement dated April 23, 2012, was executed between CellFor Inc. and ArborGen Inc, a Delaware corporation, for the purchase of the assets of CellFor BC and the Company. The APA forms the basis of a Plan of Arrangement and Compromise that was filed jointly by CellFor BC and the Company on May 1, and amended on June 1. On June 12, 2012, the Canadian Court entered orders sanctioning the Amended Plan of Arrangement authorizing the sale transaction contemplated under the APA. In accordance with the Amended Plan of Arrangement, substantially all of the assets of CellFor BC and the Company were sold to ArborGen, and certain contracts were assigned and transferred to ArborGen, in a transaction that closed on June 19. Additionally, on June 26, the monitor filed a motion for order authorizing (a) the sale of certain personal property, and (b) the assumption and assignment of certain executory contracts. The sale and assignment motion is scheduled for a hearing on Aug. 14, at 10:30 a.m. The monitor notes that after the adjudication of the sale and assignment motion, there will be no assets or claims to administer in the case. About CellFor Corp. Atlanta, Georgia-based CellFor Corp. is a Delaware corporation formed for the purpose of contracting with U.S. nurseries at which seedlings and trees developed by CellFor Inc. -- or CellFor BC -- are grown and developed. The Company also serves as a U.S. sales and marketing office for CellFor BC. CellFor BC is a privately held company constituted under the laws of Canada, having its head office in Vancouver, British Columbia. CellFor BC is in the business of research, development and commercial sales of advanced technologies relating to the cloning and genetic modification of superior conifer seedlings for the forestry industry. The objective of CellFor BC was to select, produce and sell forestry seedlings that provided better growth rates, disease resistance and wood quality. CellFor Corp. is entirely funded by CellFor BC, its sole shareholder. The Bowra Group Inc. was appointed Dec. 15, 2011, by the Supreme Court of British Columbia, Vancouver Registry, as monitor for CellFor Corp. in connection with a proceeding under the Companies' Creditors Arrangement Act R.S.C. 1985, c. C-36. As the Company's foreign representative, Bowra Group then filed a petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-86263) on Dec. 20, 2011, seeking recognition of the Canadian proceedings. Judge Paul W. Bonapfel presides in the Chapter 15 case. The Chapter 15 petition estimated $1 million to $10 million in assets and debts for the Company. The Monitor may be reached at THE BOWRA GROUP INC., and Bowra Group is represented in the Chapter 15 case by: W. Neal McBrayer, Esq., William A. DuPre, IV, Esq., Paul M. Alexander, Esq., and Michael A. Coots, Jr., Esq. at Miller & Martin PLLC. By order entered on Jan. 20, 2012, the Court granted recognition of the Canadian Proceeding as a foreign main proceeding and establishing the monitor as a representative of the Company with authority to administer the Company's assets and affairs. CENTRAL FALLS, R.I.: Disclosure Statement Gets Judge's Nod ---------------------------------------------------------- Brian Mahoney at Bankruptcy Law360 reports that a bankruptcy judge on Friday approved the Chapter 9 disclosure statement of Central Falls, R.I., clearing the way for creditors to vote on a plan that protects more than $27 million in municipal bonds while slashing some retiree pensions by as much as 55 percent. As reported in the Troubled Company Reporter on July 20, 2012, the City of Central Falls, Rhode Island filed with the Bankruptcy Court a Second Amended Plan For The Adjustment Of Debts and an explanatory disclosure statement. The Chapter 9 Plan, if confirmed, will restructure the City's debt and its operations and put the City on a path towards fiscal stability. The Amended Plan also addresses and resolves the City's obligations to employees, retirees, and vendors. The Amended Plan does not impair the City's bond obligations. According to the Second Amended Disclosure Statement dated July 10, 2012, payment to holders of general unsecured claims and general unsecured convenience claims will be paid a distribution from a pool totaling $600,000 during the six-year plan horizon. The general unsecured convenience claims will be paid 35% of their allowed claim on or prior to June 30, 2013. Any balance remaining in FY 2013 claims pool will be added to the FY 2014 claims pool, and the general unsecured claims will share pro rata in the claims pool on or prior to the following payment dates: June 30, 2014, June 30, 2015, June 30, 2016 and June 30, 2017. In no event will the amount paid to any general unsecured creditor exceed 45% of the Allowed Claim. In the event there are monies remaining in the General Unsecured Creditor's Pool on June 30, 2017, after distribution as stated herein, such monies will be deposited in the City's Capital Fund. About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The City of Central Falls, Rhode Island, on July 10, 2012, filed with the Bankruptcy Court a Second Amended Plan For The Adjustment Of Debts and an explanatory disclosure statement. The Chapter 9 Plan, if confirmed, will restructure the City's debt and its operations and put the City on a path towards fiscal stability. The Amended Plan also addresses and resolves the City's obligations to employees, retirees, and vendors. The Amended Plan does not impair the City's bond obligations. CINRAM INTERNATIONAL: U.S. and Canadian Courts Have Okayed Sale --------------------------------------------------------------- Cinram International Ltd. won Delaware bankruptcy court approval to sell its assets to private equity firm Najafi Cos. for $82.5 million. Cinram said in a statement that the sale transaction is expected to close in August 2012, subject to satisfaction of closing conditions, although the transfer of portions of the business may occur later in the year. Bankruptcy Law360 relates that U.S. Bankruptcy Judge Kevin J. Carey signed off on the sale during a hearing, joining the court overseeing the company's insolvency proceedings in Canada, which cleared the deal two weeks ago. About Cinram International With headquarters in Toronto, Ontario, Canada, Cinram International Inc. is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. Cinram International reached an agreement to sell substantially all of its assets and operations to Najafi Companies for $82.5 million. To implement sale transactions, the Company has filed for reorganization protection under the Companies' Creditors Arrangements Act (Canada) in the Ontario Superior Court. Concurrently with that filing, Cinram's US subsidiaries filed under Chapter 15 of the United States Bankruptcy Code (Bankr. D. Del. Case Nos. 12-11882 to 12-11890). Pauline K. Morgan Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as U.S. counsel. FTI Consulting is the monitor in the CCAA case. Attorneys at Goodsman LLP represent Cinram in the CCAA case. CLEAR CHANNEL: Enters Into New Employment Agreement with CEO ------------------------------------------------------------ Clear Channel Outdoor Holdings, Inc., and William Eccleshare finalized and entered into the new employment agreement on July 26, 2012. Mr. Eccleshare was named Chief Executive Officer of CCOH and was named Chief Executive Officer-Outdoor of CCOH's indirect parent entities, CC Media Holdings, Inc., and Clear Channel Communications, Inc. Mr. Eccleshare's New Employment Agreement has an initial term beginning on Jan. 24, 2012, and continuing until Dec. 31, 2014, with automatic 12-month extensions thereafter, beginning on Jan. 1, 2015, unless either CCOH or Mr. Eccleshare gives prior notice electing not to extend the New Employment Agreement. The New Employment Agreement replaces Mr. Eccleshare's Contract of Employment dated Aug. 31, 2009. During Mr. Eccleshare's employment with CCOH and for 18 months thereafter, Mr. Eccleshare is subject to non-competition, non- interference and non-solicitation covenants substantially consistent with other senior executives of CCOH. Mr. Eccleshare also is subject to customary confidentiality, work product and trade secret provisions. As provided in the New Employment Agreement, Mr. Eccleshare was awarded 506,329 CCOH restricted stock units on July 26, 2012, in connection with his promotion. A complete copy of the Form 8-K is available for free at: http://is.gd/EhwelV About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. The Company's balance sheet at March 31, 2012, showed $16.48 billion in total assets, $24.29 billion in total liabilities, and a $7.80 billion total members' deficit. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEARWIRE CORP: Files Form 10-Q, Incurs $145.8MM Net Loss in Q2 --------------------------------------------------------------- Clearwire Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $145.81 million on $316.93 million of revenue for the three months ended June 30, 2012, compared with a net loss attributable to the Company of $168.73 million on $322.61 million of revenue for the same period during the prior year. The Company reported a net loss attributable to the Company of $327.63 million on $639.57 million of revenue for the six months ended June 30, 2012, compared with a net loss attributable to the Company of $395.69 million on $559.41 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $8.43 billion in total assets, $5.65 billion in total liabilities and $2.78 billion in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/5AFqBj About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss attributable to the Company of $717.33 million in 2011, a net loss attributable to the Company of $487.43 million in 2010, and a net loss attributable to the Company of $325.58 million in 2009. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CONNAUGHT GROUP: Judge Approves Amended Disclosure Statement ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that Connaught Group Ltd. can now begin soliciting votes for its Chapter 11 plan after U.S. Bankruptcy Judge Stuart M. Bernstein on Monday approved an amended disclosure statement and set a date for a plan confirmation hearing. Bankruptcy Law360 relates that Judge Bernstein approved the debtor's motion as it eyes an end to its bankruptcy stint after reaching a deal in April to sell itself to a joint venture between Tom James Co. and Royal Spirit Group for $22 million. About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. The Connaught Group, Ltd., disclosed $50,644,694 in assets and $61,303,340 in liabilities. Limited Editions for Her LLC disclosed $3,339,174 in assets and $15,888,714 in liabilities. Limited Editions for Her of Nevada LLC disclosed $979,926 in assets and $12,395,949 in liabilities. Limited Editions for Her of Branson LLC listed $3,339,174 in assets and $15,888,714 in liabilities. WDR Retail Corp. disclosed $0 in assets and $12,395,949 in liabilities. Connaught Group Limited was the 100% shareholder of each of LEFH Nevada, LEFH Branson, LEFH, and WDR. Connaught Group filed a Chapter 11 plan in June that could pay unsecured creditors 55% or more. The disclosure statement, up for approval at a July 17 hearing, stated that the recovery for unsecured creditors will range between 21% and 55%. The recovery could be higher still if lawsuits are victorious. Unsecured claims range from $17.5 million to $20 million, according to the disclosure statement. CONSUMER PORTFOLIO: Incurred $512,000 Net Income in 1st Quarter --------------------------------------------------------------- Consumer Portfolio Services, Inc., filed its quarterly report on Form 10-Q, reporting net income of $512,000 on $44.52 million of revenues for the three months ended March 31, 2012, compared with a net loss of $4.21 million on $32.40 million of revenues for the same period of 2011. The Company's balance sheet at March 31, 2012, showed $867.33 million in total assets, $879.905 in total liabilities, and a stockholders' deficit of $12.58 million. "As of March 31, 2012, we have a shareholders' deficit of $12.6 million and our recent operating results include net losses of $14.5 million and $33.8 million in 2011 and 2010, respectively," the Company said in the filing. "We believe that our results have been materially and adversely affected by the disruption in the capital markets that began in the fourth quarter of 2007, by the recession that began in December 2007, and by related high levels of unemployment. Our ability to repay or refinance maturing debt may be adversely affected by prospective lenders' consideration of our recent operating losses." "Although we believe we are able to service and repay our debt, there is no assurance that we will be able to do so. If our plans for future operations do not generate sufficient cash flows and operating profits, our ability to make required payments on our debt would be impaired. Failure to pay our indebtedness when due could have a material adverse effect and may require us to issue additional debt or equity securities." Crowe Horwath LLP, in Costa Mesa, Calif., noted that the Company has incurred significant losses during the last three years. "As a result, the Company has negative shareholders' equity as of Dec. 31, 2011." A copy of the Form 10-Q is available for free at: http://is.gd/Ry2N8I Irvine, California-based Consumer Portfolio Services, Inc., is a specialty finance company focused on consumers who have limited credit histories, low incomes or past credit problems, whom the Company refers to as sub-prime customers. The Company's business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and, to a lesser extent, by select independent dealers in the United States in the sale of new and used automobiles, light trucks and passenger vans. CONSTRUCTORA DE HATO: Amends Schedules of Assets and Liabilities ---------------------------------------------------------------- Constructora De Hato Rey Incorporada filed with the U.S. Bankruptcy Court for the District of Puerto Rico amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $1,817,004 B. Personal Property $8,884,720 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $2,127,037 E. Creditors Holding Unsecured Priority Claims $128,231 F. Creditors Holding Unsecured Non-priority Claims $4,592,425 ----------- ----------- TOTAL $10,701,724 $6,847,693 A copy of the amended schedules is available for free at http://bankrupt.com/misc/CONSTRUCTORA_sal.pdf In the prior iteration of the SALs, the Debtor disclosed $10,761,724 in total assets and $6,855,877 in total liabilities. About Constructora De Hato San Juan, Puerto Rico-based Constructora De Hato Rey Incorporada owns parcels of land in Puerto Rico with an aggregate value of $1.82 million. It filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02876-11) in Old San Juan, Puerto Rico, on April 13, 2012. The petition was signed by Waldemar Carmona Gonzalez, president. The Debtor is represented by Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, in San Juan. CONTINENTAL AIRLINES: S&P Gives 'B-' Rating on 2012 Revenue Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue rating to the New Jersey Economic Development Authority special facility revenue refunding bonds (Continental Airlines Inc. project), series 2012. The bonds will refinance a portion of Continental's (a subsidiary of United Continental Holdings Inc., both rated 'B/Stable') 1999 airport revenue bonds that financed terminal improvements at Newark Liberty International Airport. Issue proceeds, expected to be about $104 million, will defease a portion of the 1999 bonds. "Our 'B-' issue rating reflects our assessment that the bonds are equivalent to senior unsecured debt of Continental, which we rate 'B-', one notch below our corporate credit rating on Continental and parent United Continental Holdings. We do not assign recovery ratings to industrial revenue bonds, including airport revenue bonds. Continental will indirectly service the bonds by paying amounts sufficient to cover principal and interest under a loan agreement with the Authority. The bonds have no security interest in the facilities or a leasehold interest in the facilities, and the Authority has no obligation to service the bonds if Continental does not," S&P said. "Our 'B' corporate credit rating on Continental is based on the consolidated credit quality of parent United Continental Holdings Inc.," S&P said. RATINGS LIST Continental Airlines Inc. Corporate credit rating B/Stable/-- Rating Assigned Continental Airlines Inc. NJ Econ Dev Auth rev bonds ser 2012 B- COPANO ENERGY: S&P Cuts CCR to 'B+' on Lower Natural Gas Prices --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based midstream energy company Copano Energy LLC to 'B+' from 'BB-'. The outlook remains stable. "We also lowered our issue-level rating on Copano's senior unsecured notes to 'B' (one notch below the corporate credit rating) from 'B+'. The recovery rating is unchanged at '5', which indicates our expectation for modest (10% to 30%) recovery if a payment default occurs," S&P said. "We lowered the ratings because the financial risk profile will be considerably weaker than we previously expected because of volatility in realized NGL prices, especially in Oklahoma, and lower NGL recovery rates. As a result, we expect adjusted debt to EBITDA to be about 6.2x, which is considerably higher than our previous expectations of below 5.5x. (Note we treat the company's remaining $300 million preferred issuance as debt. However, we believe total debt to EBITDA, as defined in its bank covenant, could be about 4.9x during the same period), " S&P said. "The stable outlook reflects our view that Copano will successfully execute its 2012 growth strategy in the Eagle Ford Shale, reduce leverage over the next 12 to 18 months, and maintain adequate liquidity. Key credit measures will remain weak during this time," said Standard & Poor's credit analyst Manish Consul. "We could lower the rating if lower NGL prices and throughput levels result in tight liquidity, limited covenant headroom, and weaker financial measures, with debt to EBITDA sustained above 6x. We could raise the ratings if the company successfully executes its 2012 growth strategy increasing scale and geographic diversification and complete its projects on time and within budgets such that total debt to EBITDA is in the mid-4x area." CPM HOLDINGS: S&P Affirms 'B+' Corp. Credit Rating on Refinancing ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Waterloo, Iowa-based CPM Holdings Inc. "At the same time, we assigned our 'B+' issue-level rating to the company's proposed first-lien credit facilities, including a $40 million revolver and a $275 million first-lien term loan. The recovery rating on this debt is '3', indicating our expectation of a meaningful (50%-70%) recovery in a default scenario. We also assigned our 'B' issue rating and '5' recovery rating to the company's proposed new $185 million second-lien credit facility. The '5' recovery rating indicates our expectation of a modest (10%-30%) recovery in a payment default scenario. Crown Acquisition Corp. and CPM Acquisition Corp., subsidiaries of CPM, will co-borrow under the senior secured facilities," S&P said. The issue and recovery ratings on the existing senior secured notes will be withdrawn upon repayment of the notes. "The affirmation reflects our expectation that CPM will maintain credit measures that are commensurate with the rating, specifically total debt leverage of 4x-5x and funds from operations (FFO) to total debt of about 15%," said Standard & Poor's credit analyst Svetlana Olsha. "Prior to the recapitalization, which proposes a dividend to shareholders of about $300 million, CPM's total debt to EBITDA was about 1.7x and FFO to debt was about 45% as of March 31, 2012. Pro forma for the transaction, the company's debt to EBITDA ratio increases to about 5.0x." "The corporate credit rating continues to reflect the company's 'weak' business risk profile, characterized by exposure to cyclical agricultural equipment markets and volatile commodity prices. The company's well-established position in niche markets and good geographic diversification should somewhat offset these weaknesses. The ratings also reflect the company's 'aggressive' financial risk profile, characterized by an aggressive financial policy," S&P said. "CPM supplies process equipment and aftermarket parts for the oilseed, animal feed, biofuel, industrial extrusion, and food- processing industries. Standard & Poor's expects the company to maintain leading (No. 1 or No. 2) positions in its main end markets. Demand for oilseed processing and extraction, as well as animal feed pelleting equipment, should remain somewhat cyclical because it depends on agribusiness companies' capital expenditures and the highly cyclical biodiesel industry. We expect population growth and increasing consumption of animal protein worldwide to continue to drive revenues and that CPM will achieve revenue growth in the low single digits, in line with global GDP, in the next 12 months," S&P said. "CPM's geographic diversity--more than two-thirds of sales come from outside the U.S.--should continue to somewhat mitigate the business cyclicality. Demand is mature in North America and Western Europe, but we believe growth prospects are stronger in emerging markets such as China, South America, and Eastern Europe, where we expect demand for higher efficiency equipment to continue. We also believe the company should continue to derive a fair proportion of revenue from its more stable replacement parts segment," S&P said. "Although we expect the company to pursue long-term growth opportunities in developing regions, these markets are more competitive and tend to offer lower margins. Still, we believe CPM should continue to generate good operating margins by outsourcing a significant portion of its product manufacturing, which results in a relatively variable cost structure with limited maintenance capital expenditures," S&P said. "The company has an aggressive financial risk profile. Pro forma for the transaction, total debt to EBITDA was about 5.0x as of June 30, 2012. We believe credit measures should improve through 2013, with total debt to EBITDA approaching 4.5x and FFO to debt remaining above 10%. For the ratings, we expect debt leverage to be 4x-5x and FFO to total debt to be about 15%," S&P said. "The outlook is stable. We expect stable demand in the company's end markets to continue in the next 12 months. We could lower the ratings if business fundamentals deteriorate, which could happen, for instance, if a global recession were to hurt demand for agricultural and food processing machinery. We could lower the rating if debt to EBITDA deteriorates beyond 5x and FFO to total debt declines to less than 10%," S&P said. "We could raise the rating if private equity ownership meaningfully declines and if more conservative financial policies lead us to expect that debt leverage will decline to and remain less than 4x, taking into account the cyclicality of the company's markets," S&P said. CPM HOLDINGS: Moody's Rates First Lien Credit Facilities 'Ba3' -------------------------------------------------------------- Moody's Investors Service assigned Ba3 ratings to CPM Holdings, Inc.'s proposed first lien credit facilities and Caa1 ratings to the proposed second lien credit facilities. Moody's also affirmed the company's B2 Corporate Family Rating ("CFR") and B2 Probability of Default Rating and revised the rating outlook to stable from positive. Proceeds from the new bank facilities are expected to be used to refinance existing debt and pay a dividend to CPM's private equity sponsor Gilbert Global Equity. The ratings are subject to Moody's review of final terms and conditions of the transaction and related credit documentation. The B2 rating on the existing $161.5 million senior secured notes is unchanged and will be withdrawn following the completion of the proposed transaction. CPM's operating performance remains on track and the proposed transaction would push out CPM's debt maturity profile. However, the rating outlook was changed to stable from positive because, according to Moody's analyst Ben Nelson, "the significant increase in debt to be incurred to finance the dividend suggests mid-cycle credit metrics more consistent with a B2 rating." The transaction would result in a substantive increase in debt to $460 million from $161.5 million and debt service requirements to about $35 million from less than $20 million today. Moody's estimates pro forma leverage near 5 times Debt/EBITDA and interest coverage in the low 2 times EBIT/Interest range for the twelve months ended March 31, 2012, which is somewhat weak for the rating category due to the company's exposure to highly cyclical end markets. However, CPM's order backlog provides good near-term revenue visibility and likely will support strong free cash flow generation through 2013. "The rating assumes that CPM would apply free cash flow to debt reduction to reduce its financial risk profile in advance of any evident weakness in its end markets," added Mr. Nelson. Actions: Issuer: CPM Holdings, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2 $40 million First Lien Senior Secured Revolver due 2017, Assigned Ba3 (LGD3 31%) $275 million First Lien Senior Secured Term Loan B due 2017, Assigned Ba3 (LGD3 31%) $185 million Second Lien Senior Secured Term Loan due 2018, Assigned Caa1 (LGD5 83%) Outlook, Revised to Stable from Positive Rating Rationale The B2 CFR is constrained by modest size, exposure to cyclical end markets, a business mix weighted towards new equipment sales, and financial risk posed by significant absolute debt relative to the cash flow generated by the relatively stable spare parts business. Moody's believes demand for new agricultural and food processing machinery can be influenced significantly by changes in global macroeconomic conditions and credit conditions. The rating incorporates tolerance for significant peak-to-trough declines in EBITDA during downturns of moderate intensity, but, in part due to low capital spending requirements, assumes the company will generate positive free cash flow on a rolling twelve month basis. The rating assumes that in a downturn of moderate intensity financial leverage will not exceed 6 times and interest coverage will not fall below 1.5 times. However, an order backlog with long lead-times and a meaningful spare parts business provide near-term revenue visibility and time for the company to respond to a slackening in demand. Strong competitive positions and an outsourced manufacturing model help maintain profit margins during such periods of weakness. The stable rating outlook reflects expectations for solid operating performance over the next 12-18 months and continued good liquidity. The outlook further assumes that CPM will generate at least $50 million of excess cash available for debt reduction by the end of 2013. Moody's could downgrade the ratings with expectations for financial leverage above 6 times, interest coverage below 1.5 times, negative free cash flow on a rolling twelve month basis, or a deterioration in liquidity. A rating upgrade is unlikely in the near-term due to weak credit measures for the rating category and the magnitude of sustained improvement necessary to warrant a higher rating. An upgrade likely would require sufficient financial cushion such that CPM could withstand a moderate economic downturn without financial leverage exceeding 4.5 times or interest coverage falling below 2 times. The principal methodology used in rating CPM Holdings Inc. was the Global Manufacturing 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. CPM Holdings, Inc. is a leading provider of process machinery and technology for the oilseed, animal feed, breakfast cereal and snack food, and bio-fuels processing industries. CPM has been owned by Gilbert Global Equity since 2003 and generated approximately $500 million of revenue for the twelve months ended March 31, 2012. CROWN MEDIA: Reports $12 Million Net Income in Second Quarter ------------------------------------------------------------- Crown Media Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to common stockholders of $12.05 million on $76.15 million of net total revenue for the three months ended June 30, 2012, compared with net income attributable to common stockholders of $13.47 million on $86.74 million of net total revenue for the same period during the prior year. The Company reported net income attributable to common stockholders of $59.55 million on $149.74 million of net total revenue for the six months ended June 30, 2012, compared with net income attributable to common stockholders of $25.74 million on $170.51 million of net total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $938.61 million in total assets, $680.20 million in total liabilities and $258.41 million in total stockholders' equity. "For second quarter, Crown Media continued to experience impressive revenue and earnings growth," said Bill Abbott, President and CEO of Crown Media Family Networks. "During second quarter, the casting developments for Hallmark Channel were significant. In addition to signing Marie Osmond for our daily talk show, 'Marie', we signed Andie MacDowell as the lead in 'Cedar Cove', the channel's first primetime scripted series and named Mark Steines and Paige Davis as co-hosts for the network's new daytime lifestyle program, 'Home & Family'. We are so proud to welcome this top-notch talent to Crown Media and ultimately to our viewers." A copy of the Form 10-Q is available for free at: http://is.gd/lQOwA2 About Crown Media Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ: CRWN) -- http://www.hallmarkchannel.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes Hallmark Channel in both high definition (HD) and standard definition (SD) to 90 million subscribers in the U.S. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, available in both HD and SD, which focuses on family-friendly movies with a mix of classic theatrical films, presentations from the acclaimed Hallmark Hall of Fame library, original Hallmark Channel movies and special events. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company's senior secured credit facilities and the indenture governing the Notes contain a number of covenants that impose significant operating and financial restrictions on the Company, including restrictions on its ability to, among other things, incur additional debt or issue certain preferred shares, pay dividends on or make distributions in respect of the Company's capital stock or make other restricted payments, and make certain payments on debt that is subordinated or secured on a junior basis. Any of these restrictions could limit the Company's ability to plan for or react to market conditions and could otherwise restrict corporate activities. Any failure to comply with these covenants could result in a default under the Company's senior secured credit facilities and the indenture governing the Notes. Upon a default, unless waived, the lenders under the Company's senior secured credit facilities could elect to terminate their commitments, cease making further loans, foreclose on the Company's assets pledged to those lenders to secure its obligations under the senior secured credit facilities and force the Company into bankruptcy or liquidation. * * * As reported by the TCR on May 28, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Studio City, Calif.-based cable network company Crown Media Holdings Inc. to 'B+' from 'B'. "The upgrade reflects Crown Media's recent operating performance, which achieved higher EBITDA and lower leverage than our expectations," said Standard & Poor's credit analyst Deborah Kinzer. Crown Media carries a B2 Corporate Family Rating from Moody's Investors Service. Crown Media's B2 CFR reflects the company's small size and niche market position among cable network operators, concentration in two Hallmark-branded channels, reliance on licensed third party content for a majority of its programming, and high leverage. DANL LLC: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------ Debtor: DANL, LLC 2856 Lindenmere Drive Merrick, NY 11566-4619 Bankruptcy Case No.: 12-74625 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: Mitchell J. Carlinsky, Esq. CARLINSKY, DUNN & PASQUARIELLO, PLLC 8 Duffy Avenue, 1st Floor Hicksville, NY 11801 Tel: (516) 622-0099 Fax: (516) 622-9280 E-mail: cdplaw@msn.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nyeb12-74625.pdf The petition was signed by David Chait, president. DELTA PETROLEUM: Wants to Amend Services Agreement -------------------------------------------------- BankruptcyData.com reports that Delta Petroleum filed with the U.S. Bankruptcy Court a motion for an order (i) approving the Debtors' entry into amendment to a services agreement and payment of amounts thereunder; (ii) approving its entry into a water disposal agreement and payment of amounts thereunder and (iii) authorizing the Debtors to enter into necessary future amendments to the services agreement and water disposal agreement. The motion explains, "While the Debtors have filed this Motion out of an abundance of caution given the importance of the Sheep Creek Unit to the Debtors' restructuring efforts, the Debtors hope to avoid spending time and resources preparing similar motions in the future to the extent they may be unnecessary." The Court scheduled an Aug. 15, 2012 hearing to consider the motion. 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 has won approval for its disclosure statement explaining the Chapter 11 reorganization plan. There's a hearing to consider confirmation of the Plan on Aug. 15. DEWEY & LEBOEUF: Cuts Clawback Deal Offer to Ex-Partners to $90MM ----------------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that Dewey & LeBoeuf LLP on Thursday reportedly lowered the clawback litigation settlement offer to former partners from $104 million to $90 million and increased the burden on top earners and former Dewey leaders. Bankruptcy Law360 relates that the Dewey estate offered more than 700 partners, including almost 400 who left prior to January 2011, a $90.4 million settlement in a partner meeting Thursday that would shield them from future clawback litigation and addressed the concerns of partners who objected to an earlier $103.6 million deal. 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 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. DEWEY & LEBOEUF: Reports Assets, New Plan for Partner Paybacks -------------------------------------------------------------- Carla Main and Michael Bathon at Bloomberg News report that Dewey & LeBoeuf LLP said JPMorgan Chase & Co. took extra collateral for loans in April and May. Accounts receivable for Dewey were $210.7 million and advances to partners for taxes were $20.5 million, while the amount due from affiliates was $46 million, the firm said in court papers. The unaudited data mostly reflects values as of May 28, Dewey said. According to the report, the firm in court papers also reported gross 2012 revenue of $192.6 million and 2011 revenue of $655 million. The firm said it is fighting 14 lawsuits, including three for malpractice, and two bank accounts in Dubai with HSBC Holdings Plc were seized. The firm reported assets of $368 million and secured debt of $228 million in court papers. Unsecured debt was about $120 million as of May 28, Dewey said. 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 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. DIGITAL POST: Files Chapter 7 Petition -------------------------------------- BankruptcyData.com reports that Digital Post Interactive filed for Chapter 7 protection (Bankr. C.D. Calif. Case No. 12-18936) in Santa Ana, California. The Company, is represented by Babak Samini of ASG Samini Law Group. The Company made a previous bankruptcy filing in March 2011. This Chapter 11 case was dismissed in March 2012. DYNEGY INC: Common Stock Delisted from NYSE ------------------------------------------- The New York Stock Exchange LLC notified the U.S. Securities and Exchange Commission regarding the removal from listing or registration of Dynegy Inc.'s common stock on NYSE. 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. EAST COAST INVESTMENTS: Bankruptcy Case Stays in M.D. Fla. ---------------------------------------------------------- Connecticut Bankruptcy Judge Alan H.S. Shiff denied the requests of Ronald I. Chorches, the Chapter 7 Trustee for the bankruptcy estate of James J. Licata; and Richard Coan, the Chapter 7 Trustee for the bankruptcy estate of First Connecticut Consulting Group, Inc., for an order transferring East Coast Investments LLC's Chapter 11 case from the Middle District of Florida to the District of Connecticut. East Coast, James J. Licata, and his wife, Cynthia Licata, objected. Mr. Licata commenced a Chapter 11 case (Bankr. M.D. Fla. Case No. 02-51167) on June 27, 2002. First Connecticut Consulting Group filed a Chapter 11 petition (Bankr. D. Conn. Case No. 02-50852) on July 12, 2002. Mr. Licata is listed as holding a 50% shareholder interest in First Connecticut. Mr. Licata caused about 25 other affiliated First Connecticut entities to file for bankruptcy protection. On Aug. 30, 2002, the Florida court ordered the transfer of Mr. Licata's case to the District of Connecticut. The transfer occurred on Sept. 20, 2002. On Dec. 30, 2002, those cases were administratively consolidated. On June 28, 2006, they were converted to Chapter 7, and the Trustees were appointed. Mr. Licata commenced an involuntary Chapter 11 petition in the Middle District of Florida against East Coast (Case No. 10-04202) on Feb. 25, 2010. An Order of Relief was entered on July 29, 2010. Mr. Licata is listed as holding a 24.9% general membership interest in East Coast. According to Judge Shiff, it is of no consequence that Mr. Licata's case was later transferred to Connecticut. In addition, while the record supports a finding that First Connecticut and East Coast are each affiliates of Mr. Licata, there was no evidence to demonstrate that First Connecticut and East Coast are affiliates of each other. A copy of Judge Shiff's July 27, 2012 Memorandum of Decision and Order is available at http://is.gd/ZAA1TPfrom Leagle.com. Roy W. Moss, Esq., in Rowayton, Conn., represents James Licata and East Coast Investments, LLC. Attorney for Chapter 7 Trustees Chorches and Coan is: Paul N. Gilmore, Esq. UPDIKE KELLY & SPELLACY PC PO Box 231277 100 Pearl Street Hartford, CT 06123-1277 Tel: (860) 548-2641 Fax: (860) 548-2680 E-mail: pgilmore@uks.com EASTMAN KODAK: Google, Apple Among Bidders for Patents ------------------------------------------------------ The Wall Street Journal's Ashby Jones, Dana Mattioli and Mike Spector, citing people familiar with the matter, reported that Apple Inc. and Google Inc. were lining up on opposite sides ahead of the July 30 deadline for initial bids for Eastman Kodak Co.'s portfolio of 1,100 patents. The sources told WSJ Apple is teaming up with Microsoft Corp. and patent aggregation firm Intellectual Ventures Management LLC to form one bidding group. The other consortium, the people said, includes Google, patent aggregation firm RPX Corp., and three hardware companies that make phones based on Google's Android operating system: Samsung Electronics Co., LG Electronics Inc., and HTC Corp. Kodak has said the patents it is selling could be worth up to $2.6 billion. According to WSJ, people with knowledge of the portfolios, however, said initial bids aren't likely to approach that figure. The auction is set for Aug. 8. On July 2, Kodak obtained approval from the Bankruptcy Court to conduct an auction to sell its Digital Capture and Kodak Imaging Systems and Services (KISS) patent portfolios. Kodak's motion was contested by Apple and FlashPoint Technologies, Inc., which have asserted "ownership" interests in a small number of the 1,100 patents in the portfolios. The Bankruptcy Court, over Apple and Flashpoint's objections, found that all of the patents in the Digital Capture and KISS patent portfolios are property of Kodak's estate. Accordingly, the Court granted Kodak the right to sell these patents free and clear of Apple and FlashPoint's claims at the auction, subject to the applicable provisions of the U.S. Bankruptcy Code. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: US Trustee Objects to Bonus Plan ----------------------------------------------- Jacqueline Palank, writing for Dow Jones Newswires, reports that the U.S. Trustee for Region 2 is moving to block Eastman Kodak Co. from paying almost $9 million in bonuses to nine executives and six other "key management employees." Kodak says the bonuses are tied to performance benchmarks and are therefore legal incentive payments for employees "essential" to its success. According to Dow Jones, U.S. Trustee Tracy Hope Davis, however, contends Kodak hasn't offered any proof of that. Instead, she said the bonuses represent an illegal effort to pay company insiders to induce them to stick with the company while it restructures. The Bankruptcy Code severely restricts a company's ability to pay retention bonuses to insiders. On Monday, Kodak disclosed that it lost $160 million in June. Kodak has said it would pay out bonuses when it exits Chapter 11 protection or sells its still-operating business. The report notes the amount of bonuses would depend on what the company is able to pay its unsecured creditors, who rank low on the priority scale of creditors when it comes time for payment. According to the report, bonuses would kick in once unsecured creditors recover more than 10% of their claims, Kodak said. The company is targeting a recovery of 30%, which would make the 15 employees eligible to share $8.8 million in cash and deferred stock. Under Kodak's proposal, Chief Executive Antonio Perez would receive 200% of his base salary, while Chief Financial Officer Antoinette McCorvey would get 178% of her base salary. Dow Jones also reports the U.S Trustee also objected to a separate bonus plan that Kodak says would pay out $4.5 million to company leaders based on their ability to achieve "meaningful stretch goals" tied to the company's restructuring and operating results. Ms. Davis said these bonuses also appear to be retention-related and called for Kodak to disclose the specific financial benchmarks that would trigger bonuses under this plan. Dow Jones notes Judge Allan L. Gropper will consider the latter bonus plan at an Aug. 6 hearing, but the company said it would push back the hearing on its restructuring bonus plan. It hasn't yet chosen a new date, court papers show. Dow Jones further relates Kodak retirees also have objected to the proposed bonuses, telling the bankruptcy judge that executives shouldn't be rewarded while they face the possible loss or modification of their benefits. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: Patent Row With Apple Stays in Bankr. Court ---------------------------------------------------------- Joseph Checkler, writing for Dow Jones Newswires, reports District Judge George B. Daniels on Thursday declined Apple Inc.'s request to move a patent dispute with Eastman Kodak Co. out of bankruptcy court. Apple and former subsidiary Flashpoint Technologies Inc., argued that the bankruptcy court "does not have the authority or necessary expertise to decide" who owns 10 patents in dispute, which are considered very valuable in Kodak's coming auction of its digital-patent portfolio. Dow Jones also reports the International Trade Commission ruled in July against Kodak in a complaint that Apple and Research in Motion Ltd. infringed on a patent. Kodak is taking an appeal from the decision. Kodak, however, was successful on another ruling a few days later, when a federal appeals court upheld a previous ITC decision that an Apple patent wasn't infringed upon by Kodak. 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. EMIGRANT BANCORP: Fitch Affirms 'B-' Issuer Default Ratings ----------------------------------------------------------- Fitch Ratings has affirmed the long- and short-term Issuer Default Ratings (IDRs) of Emigrant Bancorp, Inc. (Emigrant) at 'B-' and 'B', respectively. The Rating Outlook is Stable. The rating actions follow Emigrant's recent announcement that it plans to sell the majority of its retail deposits to Apple Bank for Savings. The sale will amount to approximately $3.2 billion of Emigrant's $8.5 billion in total deposits; the price has not been disclosed. The closing of the transaction is contingent upon approval from the FDIC. Fitch believes the company is likely to fund the deposit sale with a combination of cash, FHLB borrowings and sales from its securities portfolio. Emigrant plans to keep its two online deposit franchises, EmigrantDirect and DollarSavingsDirect, which have approximately $5 billion in deposits. It will also continue to own its flagship branch in Manhattan and a second branch in Ossining, NY. Fitch views this transaction as an important milestone in the execution of Emigrant's long-term strategic plan. It will allow Emigrant to reduce non-interest expenses and improve its overall cost structure and profitability. Given Emigrant's unique set of lending and fee businesses, having a costly branch network distribution platform no longer fits within its strategy. The sale of the retail deposits will leave Emigrant largely reliant on its two online deposit franchises as well as wholesale funding. Fitch generally views online deposits as relatively less sticky than traditional retail deposits because switching costs for consumers tend to be much lower. However, Fitch recognizes that Emigrant has built up expertise in online deposit gathering and this funding source has proven to be stable over the past seven years. Emigrant will also have the ability to raise some traditional retail deposits via its two remaining branches. Upon closing of this transaction, Emigrant expects to consolidate all of its regional bank subsidiaries under Emigrant Bank. At that time, Fitch would withdraw the ratings of those subsidiaries that are no longer in existence. Fitch continues to rate the holding company one notch below its bank subsidiaries. While debt service coverage at the holding company has improved with the recent $90 million dividend from the bank, the $200 million senior notes are coming due in June 2014. Emigrant's parent, New York Private Bank & Trust (NYPBT), also has $276 million of preferred stock outstanding under the U.S. Treasury's Capital Purchase Program, the interest rate on which will step up to 9% from 5% in 2014. The rating of the holding company would likely be equalized with the bank once these obligations are addressed. Rating Drivers and Sensitivities Factors that could have positive rating implications for Emigrant's ratings and/or Outlook include: -- Sustained improvement in core profitability metrics; -- Demonstrated performance of more recent business strategies; -- Further reduction in NPA levels to get closer to historical levels; -- Reduction of debt obligations at Emigrant at its parent company (NYPBT). Factors that could have negative implications on the ratings and/or Outlook include: -- A material deterioration in asset quality metrics, including NPAs and/or credit losses; -- Weakening of liquidity at the holding company or lack of action on upcoming debt maturity; -- Significant increase in risk appetite in any area of the organization. In accordance with Fitch's policies the issuer appealed and provided additional information to Fitch that resulted in a rating action that is different than the original rating committee outcome. Fitch has affirmed the following ratings: Emigrant Bancorp Inc: -- Long-term IDR at 'B-', Stable Outlook; -- Short-Term IDR at 'B' -- Viability Rating at 'b-'; -- Senior Debt at 'CCC/RR6'; -- Support at '5'; -- Support Floor at 'NF'. Emigrant Bank -- Long-term IDR at 'B', Stable Outlook; -- Short-Term IDR at 'B'; -- Short-Term Deposits at 'B'; -- Viability Rating at 'b'; -- Long-term Deposits at 'B+/RR3'. -- Support at '5'; -- Support Floor at 'NF'. Emigrant Savings Bank - Manhattan -- Long-term IDR at 'B', Stable Outlook; -- Short-Term IDR at 'B'; -- Short-Term Deposits at 'B'; -- Viability Rating at 'b'; -- Long-term Deposits at 'B+/RR3'. -- Support at '5'; -- Support Floor at 'NF'. Emigrant Savings Bank - Brooklyn/Queens -- Long-term IDR at 'B', Stable Outlook; -- Short-Term IDR at 'B'; -- Short-Term Deposits at 'B'; -- Viability Rating at 'b'; -- Long-term Deposits at 'B+/RR3'. -- Support at '5'; -- Support Floor at 'NF'. Emigrant Savings Bank - Long Island -- Long-term IDR at 'B', Stable Outlook; -- Short-Term IDR at 'B'; -- Short-Term Deposits at 'B'; -- Viability Rating at 'b'; -- Long-term Deposits at 'B+/RR3'; -- Support at '5'; -- Support Floor at 'NF'. Emigrant Savings Bank - Bronx/Westchester -- Long-term IDR at 'B', Stable Outlook; -- Short-Term IDR at 'B'; -- Short-Term Deposits at 'B'; -- Viability Rating at 'b'; -- Long-term Deposits at 'B+/RR3'; -- Support at '5'; -- Support Floor at 'NF'. Emigrant Mercantile Bank -- Long-term IDR at 'B', Stable Outlook; -- Short-Term IDR at 'B'; -- Support at '5'; -- Support Floor at 'NF'. Emigrant Capital Trust I Emigrant Capital Trust II -- Preferred Stock at 'CC/RR6'. EMPIRE LAND: O'Melveny to Pay $2MM in Conflict-Of-Interest Suit --------------------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that O'Melveny & Myers LLP on Friday agreed to pay $1.5 million to settle claims by the bankruptcy trustee of Empire Land LLC that the law firm and one of its partners hadn't disclosed the partner's former role as executive at the bankrupt developer's operator before seeking to represent it in its bankruptcy. Headquartered in Ontario, California, Empire Land, LLC, dba Empire Land Development, LLC -- http://www.epinc.com/-- develops communities and other land construction projects located in California and Arizona. As of March 31, 2008, the company owned at least 11,800 lost in 14 separate land projects. The company and seven of its affiliates filed for Chapter 11 protection (Bankr. C.D. Calif. Lead Case No.08-14592) on April 25, 2008. James Stang, Esq., at Pachulski Stang Ziehl & Jones, LLP, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 16 has appointed three creditors to serve on an Official Committee of Unsecured Creditors in these cases. The Committee selected Landau & Berger LLP as its general bankruptcy counsel. Empire Land estimated assets and debts between $100 million to $500 million. ENERGY CONVERSION: Chapter 11 Plan Confirmed -------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Energy Conversion Devices' and United Solar Ovonic's Disclosure Statement related to its Second Amended Chapter 11 Plan of Liquidation and subsequently confirmed the Plan. According to documents filed with the Court, "The Debtors believe that confirmation of the Plan and consummation of the liquidation provided for therein is in the best interests of the Debtors and their creditors. Accordingly, the Debtors urge each creditor that is impaired under and entitled to vote with respect to the Plan to vote to accept the Plan." Documents filed with the Court further state, "the Plan provides the most expedited recovery. Litigation of the intricate issues could delay distribution to any creditors for extensive periods. The Plan, on the other hand, contemplates an initial distribution as to Administrative Expense Claims, Priority Claims, Priority Tax Claims, and Secured Claims on the Effective Date and will facilitate prompt distributions thereafter. The SEC has notified the Debtors of its belief that because the Plan provides for non-Debtor third party releases that are binding on claim and interest holders who do not vote to accept the Plan, in its view the Plan would likely not be confirmable. The non-Debtor third party releases may be challenged at confirmation by the SEC or by other parties. The Committee has asserted that as to ECD creditors, the releases of the Ad Hoc Consortium may violate the Best Interest Test. Further, the Committee has asserted that the release of ECD and USO and the directors and officers of ECD and USO may also violate the Best Interest Test." 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. FAYCO RENTALS: Case Summary & Unsecured Creditor ------------------------------------------------ Debtor: Fayco Rentals, Inc. 495 Connellsville Street Uniontown, PA 15401 Bankruptcy Case No.: 12-23717 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Judge: Carlota M. Bohm Debtor's Counsel: Daniel R. White, Esq. ZEBLEY MEHALOV & WHITE, P.C. 18 Mill Street Square P.O. Box 2123 Uniontown, PA 15401 Tel: (724) 439-9200 Fax: (724) 439-8435 E-mail: dwhite@zeblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 The petition was signed by William E. Young, operations manager. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ PA Department of Revenue Corporate Income $30,000 Bankruptcy Division, Dept. 280946 Taxes Harrisburg, PA 17128-0946 FENDER MUSICAL: S&P Affirms 'B' CCR After Company Suspends IPO -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Scottsdale, Ariz.-based Fender Musical Instruments Corp. "At the same time, we removed the ratings from CreditWatch, where they were placed with positive implications on July 18, 2012, because of the start of the company's IPO road show. The outlook is stable," S&P said. "In addition, we affirmed our 'B' issue-level rating on the senior secured debt due 2014. The recovery rating remains unchanged at '3', indicating our expectation that lenders would receive meaningful (50% to 70%) recovery in the event of a payment default. The amount of reported debt outstanding as of April 1, 2012, is about $255 million," S&P said. "The rating affirmation and removal from CreditWatch reflects Fender's decision to indefinitely suspend its IPO citing uncertain market conditions. We had previously expected the company to use a majority of IPO net proceeds to reduce outstanding debt, resulting in stronger credit metrics," said Standard & Poor's credit analyst Stephanie Harter. "The ratings incorporate our view that the company's financial risk profile is 'highly leveraged' and business risk profile is 'weak.'" "Key credit factors in our assessment of Fender's business risk profile include its narrow business focus, customer concentration, the discretionary nature of its products, and the highly competitive musical instruments industry in which it operates. Additionally, we considered the company's good market positions, its well-recognized brand names, and the geographic diversity of its sales," S&P said. Fender's highly leveraged financial risk profile reflects the company's significant debt obligations. "The stable outlook reflects our belief that the company will maintain adequate liquidity and credit measures near current levels, including leverage close to 5x and a ratio of funds from operations to debt near 15%," S&P said. FERRO CORP: S&P Cuts Corp. Credit Rating to 'B+'; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Ferro Corp. to 'B+' from 'BB-'. "We also lowered the issue-level ratings on the company's senior unsecured debt to 'B-' from 'B'. The '6' recovery rating, which remains unchanged, reflects our expectation for negligible (0% to 10%) recovery in the event of a payment default. The outlook is stable," S&P said. "The downgrade follows the company's announcement that it has significantly lowered its earnings guidance for 2012," explained credit analyst Daniel Krauss. "The reduction in earnings expectations reflect the continued weakness in Europe, subdued demand in the electronic materials segment, particularly for the company's conductive pastes used in solar panels, and increased pension expense." "The outlook is stable. Our base case assumes a significant drop in 2012 EBITDA, resulting from depressed demand for solar pastes, coupled with continuing sluggish demand for residential and commercial building and renovation, particularly in Europe. We expect that earnings will improve modestly in 2013, albeit from very weak levels, as the company should benefit from recent cost cutting initiatives. Based on our scenario forecasts, we believe that 2012 free operating cash flow will be neutral, based on our expectations that reduced capital expenditures and lower working capital needs will offset lower earnings," S&P said. "We could lower the ratings within the next 12 months if industry conditions or the company's operating performance are below our expectations. This could occur if the company is unable to successfully improve its position in the Asian solar market, or if fierce competition continues to keep pricing down. Based on our downside scenario, we could lower the ratings if revenues decline by 15% and EBITDA margins decrease by 100 basis points or more below our expectations. In such a scenario, FFO to total adjusted debt would decrease to below 12%. We could also lower the ratings if free cash flow turns negative, or if EBITDA cushions under the covenants decline to about 10%," S&P said. "We could consider a one-notch upgrade if the macroeconomic outlook strengthens, operating results stabilize, and we gain confidence that EBITDA will moderately improve from weak 2012 levels. Specifically, we could consider a modest upgrade if EBITDA margins improve by 150 basis points or more, coupled with a 5% increase in revenues. In such a scenario, we expect that FFO to total adjusted debt would increase to above 20%. The company's end-market concentration in construction and electronics, which are cyclical and have discretionary demand characteristics, could limit further upgrade potential if the company does not take strategic actions to diversify and strengthen its portfolio," S&P said. FLETCHER INT'L: Wins Injunction Against Cayman Liquidators ---------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Robert E. Gerber on Friday granted Fletcher International Ltd. a 60-day preliminary injunction barring Cayman Islands court- appointed liquidators from taking action against the hedge fund and dismantling its assets, declining to grant the motion on a longer basis. About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. FLYING EAGLE: Burr Pilger Raised Going Concern Doubt ---------------------------------------------------- Burr Pilger Mayer, Inc., in E. Palo Alto, California, expressed substantial doubt about Flying Eagle PU Technical Corporation'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 significant losses from operations during the last quarter of 2011 and has significant negative working capital. "As previously disclosed, our current liabilities exceed our current assets. Further, as discussed below, we are in violation of certain financial covenants on one of our loans and have experienced a decline in revenues. Although our consolidated financial statements have been prepared on a going concern basis, because of our lack of liquidity, violation of certain covenants on one of our loans and declining revenues, our independent accountants have raised substantial doubt about our ability to continue as a going concern. We may seek additional financing to provide us capital to address some of these issues. However, no assurance can be given that we will be successful in raising capital." "Some of our banks required us to meet certain financial covenants during the term of a loan. For one of our loans in the amount of $785,583 (RMB 5 million), we did not meet the bank's financial covenants. Although the bank has not declared a default on the loan, in the event the bank does not agree to waive these covenants or otherwise revise the terms of the loan, they can declare a default on our loan and seek immediate repayment which would have an adverse financial effect on us and our operations." The Company reported net income of $774,507 on $27.86 million of revenues in 2011, compared with net income of $5.80 million on $33.06 million of revenues in 2010. The Company's balance sheet at Dec. 31, 2011, showed $49.65 million in total assets, $26.06 million in total current liabilities, and stockholders equity of $23.59 million. A copy of the Form 10-K is available for free at: http://is.gd/zTL8yQ Based in ShiShi City, Fujian, PRC, Flying Eagle PU Technical Corporation, through its operating company Shishi Feiying Plastic Co., Ltd. ("SFP"), manufactures synthetic polyurethane leather ("PU leather") for the shoe industry in Fujian Province, China. FRONTIER LAND: Case Summary & 3 Unsecured Creditors --------------------------------------------------- Debtor: Frontier Land & Livestock, Inc. 1991 Quail Creek Road Reno, NV 89509 Bankruptcy Case No.: 12-51721 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Alan R. Smith, Esq. THE LAW OFFICES OF ALAN R. SMITH 505 Ridge Street Reno, NV 89501 Tel: (775) 786-4579 E-mail: mail@asmithlaw.com Scheduled Assets: $3,325,000 Scheduled Liabilities: $1,023,375 A copy of the Company's list of its three unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb12-51721.pdf The petition was signed by Spencer Hobson, president. FUNCTIONAL RESTORATION: Chapter 7 Trustee Can Recover Legal Fees ---------------------------------------------------------------- Bankruptcy Judge Geraldine Mund awarded David Gottlieb, the trustee for the Chapter 7 bankruptcy estate of Functional Restoration Medical Center Inc., $116,929 in attorney's fees and $383 in costs related to the lawsuit, Corona Radiology Medical Center, Inc., Sepehr Katiraie, Sephehr Katiraie, Dr. Plaintiff(s), v. Functional Restoration Medical Ctr Inc, David K Gottlieb, Chapter 7 Trustee, Ashor Heikali, Ebrahim Heikali, Nasser Heikali, Moossa Heikali, Nato Fund, Inc., Radnet Management, Inc., United Imaging, LLC, United Medical Imaging Healthcare, Inc., United Medical Imaging Inc, United Medical Imaging Management, Inc., Bruce Yasmeh Defendant(s), Adv. Proc. No. 08-01434 (Bankr. C.D. Calif.). The adversary proceeding arises out of the Chapter 11 sale by Debtor of all of its right, title, and interest in a series of radiology centers, including the Corona Center, to United Imaging. Dr. Katiraie and Corona Radiology claimed to be a 2/3 owner of the Corona Center and opposed the sale on the basis that his property was being transferred. In response to several motions for summary adjudication, in May 2012 the Court entered a Memorandum of Opinion on Motions for Summary Judgment and an Order on Motions for Summary Judgment, in which, among other things, the Court granted the Plaintiffs summary adjudication on the first claim for declaratory relief and granted the Chapter 7 Trustee summary adjudication on all other claims and dismissed the Chapter 7 Trustee from further involvement in the adversary proceeding. The Plaintiffs moved for limited reconsideration of the Opinion and Order, asking that the Court reconsider its grant of summary adjudication to the Trustee. The Court denied the Plaintiffs' motion for reconsideration. The Chapter 7 Trustee seeks an award of attorney's fees and costs as prevailing party. Among others, the Chapter 7 Trustee cites a provision in the Asset Purchase Agreement that awards attorneys fees to prevailing parties in actions to enforce the APA or because of dispute, etc. regarding the APA. Counsel for the Plaintiffs signed and approved the Court order approving the APA, so the Plaintiffs became bound by the APA's attorneys' fees clause. In awarding the fees, the Court held that the Plaintiffs "recklessly" continued to keep the Chapter 7 Trustee embroiled in litigation and cannot articulate a proper purpose for doing so. The Court said it is totally clear that the Chapter 7 Trustee was not challenging the Plaintiff's assertion that he had an ownership interest in the Corona Center and there was no reason for the Trustee to care since whatever interest the estate had (be it 100% or 0% or anything in between) was sold and transferred by the Sale Order. "Even if the Trustee stipulated that Katiraie had his claimed interest, if would have no effect on the litigation against the real parties in interest, who were United and Radnet (the buyer under the Sale Order and the later transferee of the Corona Center). Thus naming the Trustee and then fighting to keep him as a party (there had been two motions to dismiss by the Trustee which were opposed by the Plaintiff) was a frivolous litigation tactic, was oppressive, and had real negative results to the professionals and other creditors of the estate who would be forced to bear the cost of the fees expended by the Trustee in his defense. And this amounts to bad faith," Judge Mund said. The Chapter 7 sought $116,929 in attorney's fees and $383 in costs. The Court, however, reduced the requested fees by $11,725.50 for duplicative work. A copy of the Court's July 27, 2012 Order is available at http://is.gd/4eOqSIfrom Leagle.com. About Functional Restoration Medical Center Based in Encino, California, Functional Restoration Medical Center, Inc., is the second largest owner and operator of MRI centers in Southern California. The Debtor filed for chapter 11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-10306). Daniel A. Lev, Esq., at SulmeyerKupetz, represented the Debtor in its restructuring efforts. David K. Gottlieb was appointed as the Chapter 11 trustee. When the Debtor filed for protection from its creditors, its estimated assets and debts between $10 million and $50 million. On Feb. 28, 2007, the Court converted the Debtor's case to a chapter 7 liquidation proceeding. Mr. Gottlieb was appointed as the chapter 7 trustee. Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represents the Trustee. GATEWAY CASINOS: Moody's Lowers Corp Family Rating to 'B2' ---------------------------------------------------------- Moody's Investors Service downgraded Gateway Casinos & Entertainment Limited's Corporate Family ("CFR") and Probability of Default ratings to B2 from B1 and the rating on the company's CAD170 million second lien notes due 2017 to Caa1 from B3. At the same time, Moody's affirmed the Ba3 rating on the senior secured first lien credit facilities, subject to review of final documentation. The rating outlook is stable. The company plans to increase its existing term loan A facility by CAD50 million and the amount of its revolving credit facility commitment to CAD45 million from CAD35 million. The incremental borrowings on the term loan and revolver combined with cash on hand will be used to pay a one-time distribution of approximately CAD75 million to Gateway's shareholders, subject to senior lenders' approval through an amendment process. The rating downgrade reflects the increase in Gateway's financial leverage pro forma for the dividend recap to just below 6.0 times debt/EBITDA from the low 5.0 times, at a time when improvement in future earnings performance remains uncertain, particularly from the three main casinos located in the Great Vancouver area, which combined generate approximately 70% of the company's overall property EBITDA. These casinos have experienced a downward trend in earnings in the recent past largely due to margin deterioration from higher operating costs and volatile table holds at certain casinos. The proposed amendment and dividend also weaken Gateway's liquidity profile. The dividend will absorb a portion of the company's cash balance. In Moody's view, Gateway needs to not only stabilize but also to improve its EBITDA continuously in the coming year in order to: 1) meet the aggressive term loan amortization schedule of about CAD40 million per annum as contemplated by the proposed amendment, 2) maintain adequate cushion for compliance with continually tightening financial covenants as proposed, and 3) fund potentially significant capital requirements to support the new large development project in South Surrey, B.C. While Moody's recognizes that the company has some flexibility to manage its capital spending, delaying the new development project would constrain EBITDA growth. The rating action is as follows: Ratings lowered: Corporate Family Rating to B2 from B1 Probability of Default Rating to B2 from B1 CAD170 million second lien notes due 2017 to Caa1(LGD5, 85%) from B3 (LGD5, 82%) Ratings affirmed and LGD assessments revised: CAD45 million first lien revolver expiring 2015 to Ba3 (LGD 3, 32%) from Ba3 (LGD2, 29%) CAD200 million first lien term loan A due 2015 to Ba3 (LGD 3, 32%) from Ba3 (LGD2, 29%) CAD200 million year first lien term loan B due 2016 to Ba3 (LGD 3, 32%) from Ba3 (LGD2, 29%) Rating Rationale The B2 CFR considers the risks associated with Gateway's small size, limited diversification, and high leverage. The ratings also recognize that approximately 70% of its property-level EBITDA currently comes from the three casinos located in Greater Vancouver area. In addition, the B2 CFR reflects Moody's view that the tepid organic gaming revenue growth in Gateway's primary markets in British Columbia and ever-intensifying competition among existing gaming operators to maintain or increase market share through higher marketing spending, could result in sustained margin erosion in the foreseeable future. These factors could also increase the execution risks at the South Surrey project that are typical for a ground-up new development project, such as potential project delays and cost overruns during construction, uncertain demand and possibly higher than expected opening and operating costs. Positive rating consideration is given to the favorable regulatory environment, including substantial barriers to entry that exist in the Canadian gaming market -- currently there is no plan to issue new gaming licenses in British Columbia and Alberta -- and the company's eligibility for capital spending reimbursement programs in British Columbia. Moody's also recognizes Gateway's significant market position in B.C. in terms of total gaming revenue and market share. The stable outlook incorporates Moody's expectation that the company will still likely generate positive excess cash flow (before growth capex) despite earnings pressure, and continue to pay down debt. It also anticipates that Gateway will continue to benefit from the current moratorium on new gaming licenses in British Columbia. At the same time, the stable rating outlook acknowledges the aggressive term loan amortization schedule and tightening financial covenants as proposed that could become difficult to meet if Gateway's EBITDA does not improve. Ratings could be lowered if it appears that Gateway's debt/EBITDA will rise above 6.5 times and/or the benefits associated with the moratorium on new gaming licenses in British Columbia and/or capital recovery program are no longer in effect. Additionally, ratings could be also lowered if liquidity deteriorates including persistent negative free cash flow or covenant violations. Ratings could be upgraded if it appears that Gateway is able to reverse the downward earnings trend at its main casinos and achieve/sustain debt/EBITDA around 5.0 times (including capital expenditure recoveries). Also required for a rating upgrade would be the continuation of the high barriers to entry and capital recovery program that already exist, more visibility on the company's ability to execute new development projects successfully, and the company's maintenance of a sound liquidity profile. The principal methodologies used in rating Gateway were Global Gaming rating methodology published in December 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Gateway Casinos and Entertainment Limited manages casino properties throughout Canada including three casinos and three community gaming centers in the Greater Vancouver Regional District, four casinos in Thompson-Okanagan region of British Columbia, and two casinos in Edmonton, Alberta. Gateway emerged from a recapitalization on September 16, 2010 pursuant to a Plan of Arrangement. The company is principally owned by the funds managed by The Catalyst Capital Group Inc. and Tennenbaum Capital Partners. Combined, Catalyst and Tennenbaum own approximately 85% of Gateway. Gateway has consolidated annual revenues of approximately CAD258 million. GENTA INC: To Amend First Quarter Form 10-Q ------------------------------------------- Genta Incorporated has determined that for the three-month period ended March 31, 2012, the Company's financial statements included in Form 10-Q will need to be restated. The Company will file an amended 10-Q for such period as soon as practicable. On July 24, 2012, during their review of interim financial statements for the three and six months ended June 30, 2012, the Company's independent registered public accounting firm informed the Company's principal financial and accounting officer of a potential misstatement in the Company's financial statements for the three-month period ending March 31, 2012. After consultation with the Company's independent registered public accounting firm, the Company's principal financial and accounting officer and its Audit Committee concluded that the Company's unaudited financial statements filed for the three-month period ended March 31, 2012, contained a material misstatement pertaining to the Company's calculation of a warrant liability and a resulting non-cash charge to its statement of operations. As previously disclosed, the Company's financial statements have raised substantial doubt about the Company's ability to continue as a going concern and as a result, the Company's independent registered public accounting firm included an explanatory paragraph in their report on the consolidated financial statements for the year ended Dec. 31, 2011, with respect to this uncertainty. The Company has actively sought additional financing and a strategic partner; however, to date those efforts have been unsuccessful. If the Company cannot secure financing or a strategic partner, the Company may file for reorganization under bankruptcy. A copy of the Form 8-K is available for free at: http://is.gd/OxRBO8 About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. In its report on the financial statements for 2011, EisnerAmper LLP, in Edison, New Jersey, noted that the Company's recurring losses from operations and negative cash flows from operations and current maturities of convertible notes payable raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $69.42 million in 2011, compared with a net loss of $167.30 million during the prior year. The Company's balance sheet at March 31, 2012, showed $4.56 million in total assets, $34.74 million in total liabilities and a $30.17 million total stockholders' deficit. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company in September 2011, issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GENTA INC: Five Directors Elected at Annual Meeting --------------------------------------------------- Genta Incorporated held its 2012 Annual Meeting of Stockholders on July 26, 2012. The stockholders elected each of the Board's five director nominees, namely: (1) Raymond P. Warrell, Jr. M.D.; (2) Marvin E. Jaffe, M.D; (3) Brian M. Leyland-Jones, Ph.D.; (4) Richard J. Moran; and (5) Christopher P. Parios. The stockholders voted to approve a change in the corporate domicile for the Company from Delaware to California and ratify the appointment of EisnerAmper LLP as the Company's independent registered public accounting firm for the year ended Dec. 31, 2012. About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. In its report on the financial statements for 2011, EisnerAmper LLP, in Edison, New Jersey, noted that the Company's recurring losses from operations and negative cash flows from operations and current maturities of convertible notes payable raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $69.42 million in 2011, compared with a net loss of $167.30 million during the prior year. The Company's balance sheet at March 31, 2012, showed $4.56 million in total assets, $34.74 million in total liabilities and a $30.17 million total stockholders' deficit. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company in September 2011, issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GREENMAN TECHNOLOGIES: Four Directors Elected at Annual Meeting --------------------------------------------------------------- GreenMan Technologies, Inc., held its 2012 annual meeting of stockholders on July 23, 2012, at which Maury Needham, Lew Boyd, Kevin Tierney, Sr., and Lyle Jensen were elected to the Board of Directors. The Company received approval to amend its Restated Certificate of Incorporation to change the Company's name from GreenMan Technologies, Inc., to American Power Group Corporation, to increase the Company's authorized shares of Common Stock from 100,000,000 to 150,000,000 and eliminate the description of the Class A Convertible Preferred Stock. In addition, the shareholders ratified Schechter, Dokken, Kanter, Andrews & Selcer, Ltd.'s appointment as the Company's independent auditors for the fiscal year ending Sept. 30, 2012. About Greenman Technologies Lynnfield, Mass.-based GreenMan Technologies, Inc. (OTC QB: GMTI) through its two alternative energy subsidiaries, American Power Group, Inc. ("APG") and APG International, Inc. ("APGI"), provides a cost-effective patented dual fuel conversion technology for diesel engines and diesel generators. Schechter Dokken Kanter Andrews & Selcer, Ltd., in Minneapolis, Minnesota, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended Sept. 31, 2011, indicating that the Company has continued to incur substantial losses from operations, has not generated positive cash flows and has insufficient liquidity to fund its ongoing operations that raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $6.81 million for the year ended Sept. 30, 2011, compared with a net loss of $5.64 million the year before. The Company's balance sheet at March 31, 2012, showed $4 million in total assets, $7.92 million in total liabilities, and a $3.92 million total stockholders' deficit. GULF COUNTY: Moody's Affirms 'Ba1' Rating on Ad Valorem Tax Bonds ----------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 rating on Gulf County's (FL) underlying Limited Ad Valorem Tax, Series 2006, affecting $3.5 million in outstanding limited tax debt. The bonds are secured by a limited tax up to 6 mills levied and collected in the Gulfside Front Municipal Services Taxing Unit (MSTU) and up to 4 mills in the Gulfside Interior MSTU. There is a debt service reserve funded one-half with cash and one-half with a surety that equates to 10% of the issue size. There is no authorization to issue additional bonds. Proceeds of the original Series 2006 bonds were for beach renourishment. Summary Rating Rationale The Ba1 rating recognizes that while the MSTU's pledged revenues continue to be insufficient to cover annual debt service requirements and these small and vulnerable MSTU's have experienced a severe decline in taxable values from fiscal 2007 to fiscal 2013, debt service payments over the remaining two years of the debt are reasonably well protected. Additionally, the rating incorporates management's proactive response in adopting an ordinance that allows the operating millage rate to be raised up to 10 mills in each MSTU, generating sufficient operating funds (not pledged) to fully pay the MSTU's debt obligations. Strengths - Officials' proactive response in adjusting tax rates above pledged levels to repay bonds - Availability of non-pledged funds to aid in debt repayment, if needed Challenges - Continuing declines in taxable values - Relative narrow tax and population base and seasonal nature of communities What Could Make The Rating Go Up: - Dramatic increase in taxable values - Significant improvement in debt service coverage What Could Make The Rating Go Down: - Notable slippage in tax collection rates - Reduction in available funds to supplement pledged revenues The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. HANMI FINANCIAL: Seven Directors Elected at Annual Meeting ---------------------------------------------------------- Hanmi Financial Corporation held its 2012 annual meeting of stockholders on July 25, 2012. Joon Ahn, John A. Hall, Paul Seon Hong Kim, Joon Hyung Lee, Joseph K. Rho, William J. Stolte and Jay S. Yoo were elected to serve as directors of the Company. An advisory (non-binding) proposal to approve the compensation of the Named Executive Officers was approved. The stockholders also approved a proposal to ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ended Dec. 31, 2012. About Hanmi Financial Headquartered in Los Angeles, California, Hanmi Financial Corp. (Nasdaq: HAFC) -- http://www.hanmi.com/-- is the holding company for Hanmi Bank, a state chartered bank with headquarters located at 3660 Wilshire Boulevard, Penthouse Suite A, in Los Angeles. Hanmi Bank provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. The Company's balance sheet at June 30, 2012, showed $2.84 billion in total assets, $2.49 billion in total liabilities and $348.45 million in total stockholders' equity. Going Concern At Dec. 31, 2011, the Bank had a tangible stockholders' equity to total tangible assets ratio of 12.48 percent. Accordingly, the Company is in compliance with the Final Order. Pursuant to the Written Agreement, the Company is also required to increase, and is required to maintain, sufficient capital at the Company and at the Bank that is satisfactory to the Federal Reserve Bank. Should the Company's asset quality erode and require significant additional provision for credit losses, resulting in consistent net operating losses at the Bank, the Company's capital levels will decline and the Company will need to raise capital to satisfy its agreements with the regulators and any future regulatory orders or agreements the Company may be subject to. The Bank is subject to additional regulatory oversight as a result of a formal regulatory enforcement action issued by the Federal Reserve Bank and the California Department of Financial Institutions. On Nov. 2, 2009, the members of the Board of Directors of the Bank consented to the issuance of the Final Order from the California Department Financial Institutions. On the same date, the Company and the Bank entered into the Written Agreement with the Federal Reserve Bank. Under the terms of the Final Order and the Written Agreement, the Bank is required to implement certain corrective and remedial measures under strict time frames. HAWKER BEECHCRAFT: Judge Approves $2MM Employee Retention Plan -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Stuart M. Bernstein on Thursday allowed Hawker Beechcraft Inc. to institute a $1.9 million retention plan for 31 management employees, while asking for more information on a $5.3 million incentive plan for eight insiders before he decides that matter. Bankruptcy Law360 relates that Judge Stuart M. Bernstein granted the debtor's request for the so-called key employee retention plan, aimed at keeping noninsider management-level employees on board to help steer the company through the Chapter 11 process. About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker Beechcraft disclosed assets of $1,831,097 plus undetermined amounts, and liabilities of $1,704,736,958 plus undetermined amounts. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee tapped FTI Consulting, Inc., as its financial advisor. HAWKER BEECHCRAFT: To Pay Subcontractors Amid Sale, Plan Talks -------------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that Hawker Beechcraft Inc. won bankruptcy court approval to pay up to $17 million to the subcontractors helping it fill orders from the U.S. Defense Department while the aircraft manufacturer seeks to move forward with its restructuring case. About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker Beechcraft disclosed assets of $1,831,097 plus undetermined amounts, and liabilities of $1,704,736,958 plus undetermined amounts. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee tapped FTI Consulting, Inc., as its financial advisor. HD SUPPLY: Moody's Assigns 'B2' Rating to "Add-On" 1st Lien Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B2 to HD Supply, Inc.'s ("HDS") proposed "add-on" 1st Lien Sr. Sec. Notes due 2015 (spring maturity), increasing the amount of 1st Lien Notes to at least $1.15 billion from $950.0 million. Proceeds from the "add-on" issuance will be used pay down the company's asset-based revolving credit facility by a minimum of $200 million, enhancing the company's liquidity by increasing revolver availability and remaining leverage neutral. Moody's also affirmed the Corporate Family Rating and Probability of Default Rating at Caa1. The company's speculative grade liquidity rating was affirmed at SGL- 3. The rating outlook is stable. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at Caa1; Probability of Default Rating affirmed at Caa1; $1.0 billion 1st Lien Term Loan B due 2015 (springing maturity) affirmed at B2 (LGD3, 30%); $950.0 million 1st Lien Sr. Sec. Notes due 2015 (springing maturity) affirmed at B2 (LGD3, 30%); 1st Lien Sr. Sec. "add-on" Notes due 2015 (springing maturity) assigned B2 (LGD3, 30%); $675.0 million 2nd Lien Sr. Sec. Notes due 2015 (springing maturity) affirmed at Caa1 (LGD4, 54%); $1.8 billion Sr. Sub. Notes due 2015 affirmed at Caa3 (LGD5, 87%). Speculative grade liquidity rating affirmed at SGL-3. Ratings Rationale The B2 rating assigned to the proposed "add-on" 1st Lien Senior Secured Notes due 2015, two notches above the corporate family rating, reflects the collateral securing these notes. These notes will have a first priority interest in substantially all of the company's non-current assets, 65% voting stock of HDS' primary foreign operating subsidiaries, and a second priority interest in the asset-based revolving credit facility's security. The "add-on" Notes will be pari passu to the company's existing $950.0 million 1st Lien Senior Secured Notes due 2015, increasing the amount of 1st Lien Notes to at least $1.15 billion from $950.0 million, and the $1.0 billion 1st Lien Term Loan B due 2017. The maturity of the 1st Lien Notes will be extended to April 2019 and the maturity for the Term Loan would be extended to October 2017 when most of the $1.8 billion Sr. Sub. Notes due 2015 are refinanced. The 1st lien Notes and Term Loan also benefit from approximately $3.3 billion in junior capital. Proceeds from the "add-on" issuance will be used pay down the company's asset-based revolving credit facility by a minimum of $200 million, enhancing the company's liquidity by increasing revolver availability and remaining leverage neutral. HDS drew down its revolving credit facility by about $200 million to acquire Peachtree Business Products, which closed on June 29, 2012. HDS' Caa1 Corporate Family Rating reflects its highly leveraged capital structure. (EBITDA -- CAPEX)/Interest Expense was 0.7 times for the twelve months through April 29, 2012. Also, debt-to- EBITDA was about 9.0 times at 1Q12 and debt-to-book capitalization exceeded 100% at the same period (all ratios incorporate Moody's standard adjustments). Although HDS' operating performance is improving, the company will still have difficulty in generating significant levels of earnings and free cash flow relative to its debt. The construction industry, a key driver of HDS' revenues, is facing slow growth prospects and the maintenance and repair operations ("MRO") business is subject to budgetary constraints of its end users. Moody's believes that HDS may have difficulty generating sufficient free cash flow to address its looming maturities, resulting in the prospects of an untenable capital structure with about $6 billion of committed credit facilities maturing in 2015. Positive rating actions are unlikely until HDS generates substantial levels of earnings and free cash flows so that it can contend with about $6.0 billion of committed facilities coming due in 2015. HDS' maturity profile would be extended once the $1.8 bil. Sr. Subordinated Notes due 2015 are refinanced. A refinancing of the capital structure that substantially improves the maturity profile accompanied by a material improvement in credit metrics could lead to upward ratings momentum. Developments that could lead to downward rating pressures include any erosion in the company's financial performance due to a downturn in its end markets. Deterioration in HDS' liquidity profile could also negatively impact the ratings. The principal methodology used in rating HD Supply was the Global Distribution and Supply Chain Services Industry Methodology, published in November 2011. Other methodologies used include Loss Given Default for Speculative Grade Non-Financial Companies in the US, Canada, and EMEA, published June 2009. HD Supply, Inc., located in Atlanta, GA, is one of the largest North American wholesale distributors supporting residential and non-residential construction and, to a lesser extent, electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations ("MRO") services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Carlyle Group, Bain Capital, and Clayton, Dubilier & Rice, through their respective affiliates (collectively the "Sponsors"), are the primary owners of HDS. The Home Depot, Inc. retains a 12.5% minority ownership in HDS. Revenues for twelve months through April 29, 2012 totaled approximately $7.3 billion. HD SUPPLY: S&P Retains 'B+' Rating on $1.15BB First-Lien Notes -------------------------------------------------------------- Standard & Poor's Ratings Services said its 'B+' secured debt rating on HD Supply Inc.'s 8.125% first-lien notes due 2019 is unchanged. The company announced it will seek to add $200 million to the existing $950 million notes outstanding, bringing the total issue amount to $1,150 million. "The recovery rating on the notes is '2', indicating our expectation of substantial (70% to 90%) recovery in the event of a payment default. The 'B' corporate credit rating and stable outlook on Atlanta-based HD Supply are unaffected. We expect the industrial and maintenance supply company to use proceeds to pay down its outstanding revolving credit balances and for general corporate purposes. Pro forma for the proposed transaction, we expect credit measures to remain unchanged," S&P said. "The ratings on HD Supply reflect the company's 'satisfactory' business risk profile as a major industrial distributor of infrastructure and energy, maintenance, repair and improvement, and specialty construction products. The rating also reflects the company's 'highly leveraged' financial risk profile and the impact on its operating performance arising from the protracted weakness in U.S. construction activity. However, the company's business- line diversity, leading market positions, and operational scale to weather the construction downturn partly offset these factors. Although we remain uncertain about the ultimate depth and duration of the construction cycle's decline, HD Supply continues to expand its share of sales in the maintenance repair and operations and infrastructure markets, and reduce the effect of the weak construction markets on its near- to intermediate-term operating performance. Its capital structure has more than $5 billion of funded debt," S&P said. RATINGS LIST HD Supply Inc. Corporate Credit Rating B/Stable/-- Rating Remains Unchanged HD Supply Inc. $1,150 mil first-lien notes due 2019 B+ Recovery Rating 2 HERCULES OFFSHORE: Incurs $55 Million Net Loss in Second Quarter ---------------------------------------------------------------- Hercules Offshore, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $55.07 million on $178.95 million of revenue for the three months ended June 30, 2012, compared with a net loss of $23.43 million on $170.20 million of revenue for the same period during the prior year. The Company reported a net loss of $93.41 million on $322.27 million of revenue for the six months ended June 30, 2012, compared with a net loss of $37.64 million on $329.57 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $2.04 billion in total assets, $1.13 billion in total liabilities and $913.21 million in stockholders' equity. John T. Rynd, Chief Executive Officer and President of Hercules Offshore stated, "Our second quarter results, excluding the impairment of the Hercules 185, reflect improvements in revenue and operating income for each segment from first quarter 2012 levels. A continuation of the strong drilling fundamentals in the U.S. Gulf of Mexico has led to a fifth consecutive quarter of revenue growth in our Domestic Offshore segment. Discussions with customers suggest solid jackup rig demand in the U.S. Gulf of Mexico well into 2013. We are also encouraged by the strong bidding activity at the latest Central Gulf of Mexico Lease Sale, which is another positive indicator of future rig demand by E&P companies active in the region." A copy of the Form 10-Q is available for free at: http://is.gd/8t5Yxb About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. * * * The Troubled Company Reporter said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc., Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. HMC/CAH CONSOLIDATED: Separate Plans for Hospitals to Keep NOLs --------------------------------------------------------------- HMC/CAH Consolidated, Inc., and 12 of its wholly owned subsidiaries have each filed a plan of reorganization. The Debtors submitted a joint disclosure statement explaining the terms of their reorganization plans, which is not subject to substantive consolidation. The Debtors have structured their respective Plans to ensure the ongoing availability to the Reorganized Debtors of approximately $12.4 million in net operating loss carryforwards which could be lost if there were a "change of control" of the Debtors under Tax Code Sec. 382 and applicable regulations. Under the Plans, secured creditors will be paid their allowed secured claims in full and (if paid over time) with interest. The Plans each contemplate that in a dispute over the value of -- or interest on -- a secured claim, the secured creditor will be paid the value of their collateral as determined by the Bankruptcy Court at an interest rate determined by the Bankruptcy Court. Members of all classes of unsecured creditors may elect to be paid in full the Allowed amount of their Claims over time (for a period of up to 20 years) through acceptance of Class 1 Preferred Stock. Alternately, holders of claims in convenience classes (each unsecured creditor holding a claim up to $1,000) have the option of receiving a 50% cash distribution on their allowed claims on the Effective Date. Certain holders of General Unsecured Claims (those parties holding such claims in the amounts of $1,001 to $4,000) may elect to be treated in the Convenience Class in the applicable Plan by choosing to cap the Allowed amount of their Claims at $1,000 and receive a 50% cash-out option. The Debtors estimate that, of the approximately 1600 holders of unsecured claims, roughly 850 hold Claims which fall into the Convenience Classes. If all eligible holders of General Unsecured Claims also elect to be treated in the Convenience Classes, that number rises to approximately 1200 of the 1600 total claims. Holders of allowed general unsecured Claims against each Debtor also may choose, as an alternative to acceptance of payment in full in Class 1 Preferred Stock, to share in a pro rata distribution of a "pot" of $50,000 per Plan (totaling $650,000 for all Plans) to be distributed by a Creditor Trust administered by a trustee designated by the Committee. The alleged unsecured deficiency claims of mezzanine lender HPCG Hospital Investment LLC -- HHI -- are separately classified in each Plan due, among other things, to its alleged rights as a secured lender, its alleged rights with respect to guaranties, and its prior participation on the Debtors' Board of Directors. HHI's Claims are the subject of a substantial dispute, and the Plans provide for that dispute to be litigated to conclusion after confirmation and the Effective Date. Consequently, HHI's treatment contemplates the various outcomes of the litigation and, if allowed, HHI will receive comparable treatment to the general unsecured classes by being provided a cash-out "pot" option or the long-term payment-in-full option in the form of Class 1 Preferred Stock. Pending resolution of the HHI Litigation, any such distributions would be escrowed by the Debtors. Because all classes of creditors have the option to receive payment in full over time, holders of Old Equity Interests will retain their interest; provided, however, that such holders may not receive any distributions until all payments of Class 1 and Class 2 Preferred Stock are completed in full. A copy of the Joint Disclosure Statement filed July 3, 2012, is available at: http://bankrupt.com/misc/HMC_CAH_Plan_Outline_070312.pdf About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at Husch Blackwell Sanders LLP, represents the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HORIZON LINES: Enters Into COC Agreements with Executive Officers ---------------------------------------------------------------- The Board of Directors of Horizon Lines, Inc., authorized the Company to enter into a Change of Control Severance Agreement, dated July 25, 2012, with Michael T. Avara, executive vice president and chief financial officer, Brian W. Taylor, executive vice president and chief operating officer and Michael F. Zendan II, senior vice president, general counsel and secretary and certain other officers of the Company. The principal executive officer did not enter into a COC Agreement with the Company, but he has an employment agreement with the Company that includes change of control terms. "Change of Control" means the date on which the Corporation experiences a change in ownership. The COC Agreements provide that if the executive is terminated without "Cause", or if the executive terminates his employment for "Good Reason", within 24 months of a "Change of Control", the executive will be entitled to receive: * a cash lump sum severance payment equal to two times the sum of: (A) the executive's annual base salary in effect immediately before his or her termination, and (B) the executive's annual target bonus opportunity for the fiscal year in which the severance payment is triggered; * full vesting of the executive's equity awards outstanding on the termination date and not otherwise vested; * a cash lump sum payment equal to the total premiums the executive would have been required to pay for 18 months of COBRA continuation coverage for himself or herself, plus any eligible dependents; * continued participation for the executive and his or her eligible dependents in the Company's optional life insurance and optional personal accident plans for two years following the executive's termination date; and * outplacement services incurred of up to $25,000 for the period ending one year after the termination date. The executive will be eligible to receive the payments and benefits under the COC Agreement if the executive executes a release in favor of the Company and enters into a noncompete, nonsolicitation and nondisclosure agreement in favor of the Company. The term of each COC Agreement will end on Dec. 31, 2013, and will automatically be extended for additional one-year periods, unless 90 days prior to the end of the term, the Company or the executive will give notice to the other party not to extend the term. However, the term will immediately expire if the executive is terminated by the Company for any reason prior to a Change of Control. Further, in the event of a Change of Control, the term will automatically be extended to the second anniversary of the Change of Control, and the term will not end during the severance period of an executive. Any payments an executive receives under the COC Agreement will be in lieu of any similar severance or termination compensation such that there will be no duplication of severance payments or benefits. A copy of the COC Agreement is available for free at: http://is.gd/jnvFeq On July 25, 2012, the Board authorized the Company to amend the Executive Severance Plan to provide that if an executive is a party to a COC Agreement, it will not preclude the executive from being eligible to participate in the Executive Severance Plan. 2012 Incentive Compensation Plan On July 25, 2012, the Board adopted the 2012 Incentive Compensation Plan to provide employees of the Company and its affiliates the opportunity to earn equity and other incentive compensation. The Board also reserved and authorized 4,450,000 shares of the Company's common stock for issuance pursuant to awards to be granted under the 2012 Plan. The 2012 Plan does not replace or supersede the Company's 2009 Incentive Compensation Plan, and approximately 35,000 shares of the Company's common stock remain authorized and available for issuance under the 2009 plan. The 2012 Plan will terminate on the close of business on the day immediately following the tenth anniversary of the 2012 Plan's effective date and no new awards may be granted after its termination. Generally, the Board may terminate the 2012 Plan at any time and may amend the 2012 Plan at any time. A copy of the 2012 Plan is available for free at: http://is.gd/J5o0Bv Director Restricted Stock Unit Awards On July 25, 2012, the Board granted each non-employee member of the Board 150,000 restricted stock units pursuant to the terms of the 2012 Plan. The restricted stock units will vest on the following dates if the director is continuously a member of the Board on the following dates: 30,000 restricted stock units on March 31, 2013, 60,000 restricted stock units on March 31, 2014, and 60,000 restricted stock units on March 31, 2015. All of the restricted stock units will be settled in shares of the Company's stock. All of the unvested restricted stock units will immediately vest and no longer be subject to restriction immediately prior to a change of control, as defined in the 2012 Plan. All of the restricted stock units carry dividend equivalent rights. Employee Restricted Stock Unit Awards On July 25, 2012, the Committee granted certain officers of the Company restricted stock units, subject to the terms of the 2012 Plan, including the following grants to certain executive officers: Michael T. Avara, 616,667 restricted stock units; Brian W. Taylor, 616,667 restricted stock units; and Michael F. Zendan II, 375,000 restricted stock units. A complete copy of the Form 8-K disclosure is available at: http://is.gd/ifDRYt 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. 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. 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. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. ICOP DIGITAL: Suspending Filing of Reports with SEC --------------------------------------------------- Digital Systems, Inc., formerly known as ICOP Digital, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock, no par value. There was no holder of the common shares as of July 25, 2012. About ICOP Digital Founded in 2002, ICOP Digital Inc. sells surveillance equipment for law enforcement agencies. Lenexa, Kansas-based ICOP Digital filed for Chapter 11 protection in Kansas City (Bankr. D. Kan. Case No. 11-20140) on Jan. 21, 2011. In its schedules, the Debtor disclosed assets of $1.67 million and debt of $2.74 million. The balance sheet as of Sept. 30, 2010, had assets on the books for $6.7 million and total debts of $4.3 million. Joanne B. Stutz, Esq., at Evans & Mullinix PA, in Shawnee, Kansas, serves as the Debtor's bankruptcy counsel. The Debtor has been renamed as of March 14, 2011, to Digital Systems, Inc. Digital Systems filed with the Court a Disclosure Statement explaining its Plan of Liquidation on Feb. 14, 2012. The Bankruptcy Court confirmed the plan of liquidation of Digital Systems on April 26, 2012. The Bankruptcy Court entered a Final Decree on June 19, 2012, closing the bankruptcy case of Digital Systems. ISTAR FINANCIAL: Incurs $51.1 Million Net Loss in Second Quarter ---------------------------------------------------------------- iStar Financial Inc. reported a net loss of $51.12 million on $96.72 million of total revenues for the three months ended June 30, 2012, compared with a net loss of $26.02 million on $125.42 million of total revenues for the same period a year ago. The Company reported a net loss of $97.17 million on $188.69 million of total revenues for the six months ended June 30, 2012, compared with net income of $57.88 million on $232.98 million of total revenues for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $7.18 billion in total assets, $5.71 billion in total liabilities and $1.47 billion in total equity. A copy of the press release is available for free at: http://is.gd/AYPFyk About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company reported a net loss of $25.69 million in 2011, compared with net income of $80.20 million in 2010. * * * As reported by the TCR on March 29, 2011, Fitch Ratings has upgraded the Issuer Default Rating to 'B-' from 'C'. The upgrade of iStar's IDR is based on the improved liquidity profile of the company, pro forma for the new senior secured credit agreement (the new financing) that extends certain of the company's debt maturities, relieving the overhang of significant secured debt maturities in June 2011. As reported by the Troubled Company Reporter on March 22, 2011, Standard & Poor's said that it raised its counterparty credit rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it from CreditWatch where it was placed with positive implications on Feb. 23. The outlook is stable. "The upgrade reflects the company's closing of a $2.95 billion senior secured credit facility, which it will use to refinance the company's existing secured bank facilities and repay a portion of the company's unsecured debt," said Standard & Poor's credit analyst Jeffrey Zaun. If S&P's analysis of the new secured facility indicates 100% or more collateral coverage, S&P will rate the issue 'BB-'. If S&P's analysis of collateral indicates less than 100% coverage, S&P will rate the issue 'B+'. JACKSON GREEN: U.S. Trustee Withdraws Motion to Convert Case ------------------------------------------------------------ Patrick S. Layng, the U.S. Trustee for Region 11, notified the U.S. Bankruptcy Court for the Western District of Wisconsin that he has withdrawn his motion to convert the Chapter 11 case of Jackson Green, LLC, to one under Chapter 7 of the Bankruptcy Code. The Trustee has also withdrawn his objection to the Debtor's motion to dismiss case. On June 4, the Debtor objected to the Trustee's motion saying that it voluntarily requested for the case dismissal because the real estate and collateral of Wells Fargo Bank N.A., were transferred in the 11 U.S.C. Sec. 363 sale to Wells Fargo, and that there is no need for a Chapter 7 bankruptcy. Wells Fargo is trustee for the registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass- Through Certificates, Series 2006-C4. About Jackson Green Based in Minocqua, Wisconsin, Jackson Green LLC owns a commercial office building and parking lot in Chicago. Jackson Green originally filed for Chapter 11 bankruptcy (Bankr. W.D. Wis. Case No. 09-10099) on Jan. 9, 2009. The Court confirmed the Debtor's chapter 11 plan on May 18, 2010. Jackson Green returned to bankruptcy (Bankr. W.D. Wis. Case No. 11-14038) on June 23, 2011. Judge Thomas S. Utschig presides over the so-called Chapter 22 case. The Law Office of Terrence J. Byrne serves as the Debtor's Chapter 22 counsel. In its schedules, the Debtor disclosed $25.2 million in assets and $22.8 million in liabilities. Secured lender Wells Fargo is represented by lawyers at Foley & Lardner LLP. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Jackson Green have expressed interest in serving on a committee. JEFFERSON COUNTY, AL: Bondholders Prepare for Fight While Talking ----------------------------------------------------------------- Steven Church at Bloomberg News reports that bondholders of Jefferson County, Alabama, who last month won a court ruling shielding them from some payment reductions, face a new battle in the biggest U.S. municipal bankruptcy after starting talks with county officials. According to the report, the trustee for bondholders asked the judge overseeing the case for access to details about the insolvent sewer system, which owes creditors about $3.1 billion. The details will help bondholders determine the value of the system, which serves as their collateral, lawyers for the trustee, Bank of New York Mellon Corp., said July 26 in court papers. The bondholders are preparing for a court battle over the value of the system, while not agreeing that such a discussion is relevant. "The trustee disputes that a valuation of the system or the net system revenues is appropriate or relevant in connection with the county's obligations," the trustee said. Jefferson County is deciding how much to raise sewer rates and whether the value of the system has fallen enough to justify forcing bondholders to take less than they are owed. The county and bondholders started a new round of negotiations last week that will focus partly on the value of the system, Ken Klee, the county's bankruptcy attorney, said in an e-mail July 27, according to the Bloomberg report. According to Bloomberg, should the county decide to push for a reduction of the sewer bond debt, the judge would consider the present value of the bondholders' collateral, which is made up mostly of system assets. The county contends that under Chapter 9 of the U.S. Bankruptcy Code, Judge Thomas B. Bennett in Birmingham, Alabama, has the power to reduce the amount of the bond debt to be in line with the value of the bondholders' collateral. Bondholders disagree. The commission may decide whether to pursue a cut to the sewer debt in October, Mr. Klee said. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. LBI MEDIA: Moody's Says Planned Note Exchange Limited Default ------------------------------------------------------------- Moody's Investors Service said LBI Media Inc. recently announced plans to exchange its 8.5% Senior Subordinated Notes due 2017 and LBI Media Holdings, Inc.'s 11% Senior Discount Notes due 2013 at a combined 48% - 55% discount to par. To the extent the company is able to complete at least a portion of the debt exchanges at a significant discount, Moody's would view the transaction as a limited default. Accordingly, Moody's would likely change the Probability-of-Default Rating (PDR) to Caa2/LD to record the deemed limited default event. Moody's would remove the "LD" approximately three days later. If completed as proposed, the note exchange would eliminate 45% - 52% of the cushion provided by unsecured notes. To the extent 70% or more of the unsecured notes are exchanged, Moody's would likely downgrade the 9.25% senior secured notes two notches from B3 to Caa2, in line with the CFR. To the extent LBI Media is able to exchange only 15% to 70% of the unsecured notes, there would be more cushion of unsecured debt than proposed, and Moody's would likely downgrade the 9.25% senior secured notes only one notch to Caa1. Moody's is monitoring events and will take the appropriate rating actions to reflect results of the proposed exchange. On April 3, 2012, Moody's downgraded the company's ratings to Caa2 and changed the outlook to negative following much weaker than expected results for 4Q2012. The downgrade and outlook change was driven by weakened liquidity, revenue and EBITDA declines for radio stations compounded by EBITDA declines for television operations, and Moody's view that LBI's credit metrics are unsustainable. Headquartered in Burbank, CA, LBI Media, Inc. operates Spanish- language broadcasting properties including 21 radio stations (15 FM and 6 AM generating 47% of 2011 revenue) and 9 television stations plus the EstrellaTV Network (53% of 2011 revenue). EstrellaTV is a Spanish-language television broadcast network that was launched in the fall of 2009. Through EstrellaTV, the company is affiliated with television stations in 39 DMAs comprising 78% of U.S. Hispanic television households. Jose Liberman founded the company in 1987, together with his son, Lenard Liberman. Shareholders include Jose Liberman (20%), Lenard Liberman (41%), Oaktree Capital (26%) and Tinicum Capital (13%). The dual class equity structure provides the Liberman's with 94% of voting control between Jose Liberman (31%) and Lenard Liberman (63%). Revenues for FY2011 totaled $117.5 million. LEHMAN BROTHERS: $3.4-Bil. in Claims Traded May to June ------------------------------------------------------- The value of claims traded in Lehman Brothers Holdings Inc.'s bankruptcy case in May and June increased after recording a year- to-date low in dollar value of claims transferred in April, SecondMarket said in reports. In May, the value of claims traded increased 30% to $1.95 billion mainly fueled by continued interest in LBHI, which accounted for $1.5 billion of total activity across 265 unique transfers. The average amount of claim traded in May in LBHI's case was $5.8 million, SecondMarket reported. In June, LBHI accounted for more than 80% of all claims trading activity, the report added. There were 422 claims that changed hands in LBHI's case in June, with an aggregate amount of $1.9 billion. The average amount of claim that traded in June in LBHI's case was $4.5 million. The Wall Street Journal also reported that distressed investors bought and sold $2.34 billion worth of bankruptcy claims in June, nearly all of which is tied to Lehman Brothers Holdings Inc. and another financial firm, MF Global. For the past 12 months, 13,281 claims with a total amount of $41.146 billion filed in LBHI's bankruptcy cases changed hands, SecondMarket related. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: Senior Management Blamed for Bankruptcy -------------------------------------------------------- J.P. Morgan & Co. said Lehman Brothers Holdings Inc.'s senior management is to blame for its "disastrous" high-risk strategy that resulted in a series of fraudulent transactions and led to its bankruptcy, Fox Business reported. According to Fox Business, J.P. Morgan said in a recent filing in company's $8.6 billion lawsuit against the bank that Lehman's managers made large bets using the company's own balance sheet and "deliberately ignored, overrode, manipulated or otherwise failed to adhere to its own internal risk policies and procedures." Then, as the market began to crash "and Lehman began to feel the impact of what had become a disastrous strategy, Lehman engaged in a series of fraudulent transactions designed to conceal the company's true financial condition," J.P. Morgan said, the report notes. J.P. Morgan further said Lehman's use of Repo 105 "is only one of many such frauds' employed to mislead ratings companies, Wall Street analysts, the market and its creditors." Repo 105 is an accounting technique allegedly used by Lehman to move as much as $50 billion in assets off its balance sheet, which made it appear that the company had reduced its debt levels. Lehman filed the lawsuit to recover billions of dollars that J.P. Morgan allegedly seized as collateral. J.P. Morgan, which served as the company's main clearing bank in the 2008 financial crisis, allegedly threatened to discontinue its services unless the company posted excessive collateral. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: Says Cash Flows May Reach $40.5 Billion -------------------------------------------------------- Lehman Brothers Holdings Inc.'s cash flows may reach $40.5 billion through 2015 and beyond, according to a filing with the U.S. Bankruptcy Court in Manhattan. The new cash flow estimate includes $7.6 billion of payments by affiliates that the company doesn't control, including $2 billion it received through June 30, 2012. It also includes $1.1 billion collected from litigation and excludes any estimates of potential future litigation receipts. The new total, which is $6 billion more than previously estimated, also includes $22.5 billion already paid to Lehman creditors. "Material uncertainties continue to exist regarding the ultimate value realizable from the company's assets, the timing of asset recoveries, future costs, and the eventual level of allowed creditors' claims," Lehman said in the filing. The company further disclosed that sales of its commercial real estate may bring in as much as $12.9 billion or $1.6 billion more than previously estimated. Private-equity investments may contribute $8.8 billion while derivatives are expected to bring in $5.9 billion. Lehman said the new estimates are based on undiscounted cash flows from assets managed in a wind down or sale over the period from Jan. 1, 2012 through the estimated end of its activities. A full-text copy of the July 25 filing is available without charge at http://bankrupt.com/misc/LBHI_2012CashFlowEstimate.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEVEL 3 FINANCING: S&P Rates $1.415BB Term Loan Facilities 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '1' recovery rating to Broomfield, Colo.-based Level 3 Communications Inc. subsidiary Level 3 Financing Inc.'s proposed $1.415 billion secured term loan facilities. The proposed financing consists of two term loan B tranches, including a seven- year tranche of up to $1.115 billion and a 3.5-year tranche of at least $300 million. "The '1' recovery rating reflects our expectation of very high (90% to 100%) recovery of principal in the event of a default. We expect the company to use the proceeds to refinance the existing $1.4 billion term loan A that matures in 2014," S&P said. "The ratings on Level 3 and subsidiaries, including the 'B-' corporate credit rating, and the positive outlook are not affected by the proposed refinancing. Although we expect a small increase in borrowing costs compared to the existing term loan A, the transaction does not change our assessment of the company's financial risk profile as 'highly leveraged.' We expect debt leverage, including our adjustments, mostly for operating leases, to improve to an area above 6x, from recent levels of over 8x," S&P said. "Level 3 provides a range of communications services, including voice, data, and broadband on its extensive long-haul and metropolitan fiber networks. The company's October 2011 $3 billion acquisition of Global Crossing Ltd. expanded its footprint, especially in Latin America. The positive outlook cites the potential for a one-notch upgrade if Level 3 demonstrates that it is successfully integrating Global Crossing and, further, is on track to realize at least the bulk of what the company projects to ultimately be $300 million in annual operating synergies," S&P said. RATINGS LIST Level 3 Communications Inc. Corporate Credit Rating B-/Positive/-- New Ratings Level 3 Financing Inc. Senior Secured B+ Recovery Rating 1 LIGHTSTYLES LTD: Can't Use Susquehanna Bank Cash Collateral ----------------------------------------------------------- Bankruptcy Judge Mary D. France denied the request of LightStyles, Ltd., to use cash collateral of Susquehanna Bank, successor in interest to Graystone Tower Bank. The Bank objected the request, asking the Court to authorize the use of cash collateral only to the extent that the Debtor provided the Bank with adequate protection of its rights. The Bank holds a security interest in all of the Debtor's assets other than motor vehicles, including assets that constitute cash collateral. The Debtor owes the Bank roughly $13 million. According to the Debtor's schedules, on the date the petition was filed, the Debtor held cash, accounts receivable and inventory of roughly $8.4 million. At an emergency hearing on July 9, the Court entered an interim order permitting the Debtor to use cash collateral and directing the Debtor (1) to pay the Bank $20,000 by July 16, 2012; (2) to maintain its accounts at the Bank; and (3) to provide the Bank with certain reports that would allow it to monitor the Debtor's operations. A final evidentiary hearing was held on July 23 at which time the Bank renewed its objection to the further use of cash collateral. At the final evidentiary hearing on July 23, the Bank's witness testified that the value of the collateral securing the Loans was between $3 million and $5 million. He also testified that the value of other assets owned by the Debtor securing the Loans, including equipment, did not exceed $500,000. The Court finds these assessments of value to be credible. Therefore, the Bank's interest in Debtor's collateral is undersecured and any diminution in the value of the collateral will result in a loss to the Bank unless its interests are adequately protected. According to Judge France, the Debtor seeks to use cash collateral without restriction, albeit for a limited duration of 30 days, based on "the thinnest of evidence". According to Judge France, the Court is unable to determine whether or not the contractual monthly payment of $57,924.25 on the loans provides adequate protection because the source for this payment was not specified. If the payments will be made from pre- petition accounts receivable, then no additional protection to the Bank is being afforded. Most of the payment is applied to interest and not to the reduction of principal. However, if the payments were made from post-petition accounts not subject to the Bank's lien, these payments would constitute additional protection to the Bank. The Court also noted that permitting the Bank to retain half of the accounts it has collected is not adequate protection. Rather, from the creditor's perspective, retention by the Debtor of half of the accounts receivable is the dissipation of collateral. The Court also said the Debtor's proposal to transfer the titles to vehicles in which the Bank did not have a pre-petition perfected security interest does provide additional protection to the Bank's interest. However, the amount of protection afforded is small. The Debtor's schedules report a book value for the vehicles of roughly $125,000. Considering the age of some of the vehicles, they probably should be valued at less than $100,000. This value is not substantial when compared against the Debtor's budget and the rate at which cash will be expended. Finally, the Court does not believe that the promissory notes from some customers offer any additional adequate protection to the Bank. Although not directly offered as adequate protection, the Debtor has asserted that the Bank will be protected by increased revenues from the business during the next six months. The Debtor has obtained a new agreement to provide distribution services to a major manufacturer. Because he was bound by a confidentiality agreement with the new company, the Debtor's principal was unable to disclose its identity at the July 23 hearing, but he stated that he would be meeting with the manufacturer over the next few weeks to prepare to launch this new line. Based upon this potential for increased sales, the Debtor's principal stated that he expected the Debtor's sales to double from current levels in the second half of 2012 and then triple from current levels in 2013. Therefore, the Debtor expects to go from a net loss of $655,133 for the first five months of 2012 to a net profit by year's end. "Had this Court been presented with a more realistic and substantiated proposal to afford protection to the Bank, authority to use cash collateral may have been granted. The current proposal, however, is simply inadequate," Judge France said. A copy of Judge France's July 27, 2012 Opinion is available at http://is.gd/gFZXk6from Leagle.com. LightStyles, Ltd., and an affiliate corporation, Marvin Window & Door Showplace, Inc., filed Chapter 11 bankruptcy petitions (Bankr. M.D. Pa. Case No. 12-03711) on June 22, 2012, listing under $1 million in assets. LightStyles is a distributor of windows, doors, and hardware for both residential and commercial construction. Lawrence G. Frank, Esq., at Thomas, Long, Niesen and Kennard, serves as the Debtor's counsel. LSP ENERGY: Judge Strikes Breakup Fee From Stalking Horse Deal -------------------------------------------------------------- Kelly Rizzetta at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Judge Mary F. Walrath on Thursday nixed a controversial $5.5 million breakup fee LSP Energy LP pledged to South Mississippi Electric Power Association, which inked eleventh hour stalking horse agreement that riled other would-be buyers. Marie Beaudette at Dow Jones' DBR Small Cap reported another potential bidder balked at proposed deal sweeteners for LSP Energy's proposed stalking-horse bidder. BankruptcyData.com reported that LSP Energy's informal group of bondholders filed with Court a limited objection to the sale procedures. The bondholders' objection explains, "Due to the magnitude of its claim as well as the length of the Maintenance Contract, Siemens is keenly interested in the manner in which the bidding process is conducted and in the outcome of the auction process. The Stalking Horse Bid does not contemplate an assumption of the Maintenance Contract and is currently in an amount that will not be sufficient to pay the Debtors' unsecured creditors the full amount of their claims. Consequently, it is extremely important to Siemens that other potential purchasers are encouraged to engage in an auction process for the Assets or Equity Interests" 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. M & J: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------- Debtor: M & J Distribution Systems, Inc. aka La Pesca 4000 W. 40th Street Chicago, IL 60632 Bankruptcy Case No.: 12-29350 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtor's Counsel: John F. Hiltz, Esq. HILTZ & WANTUCH LLC 53 West Jackson Boulevard, Suite 205 Chicago, IL 60604 Tel: (312) 566 9008 Fax: (312) 566 9015 E-mail: jhiltz@hiltzlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb12-29350.pdf The petition was signed by Esther Garate, president. MF GLOBAL: Case Trustee Sees Full Recovery for US Customers ----------------------------------------------------------- The Wall Street Journal's Devlin Barrett and Aaron Lucchetti report that Louis J. Freeh, the Chapter 11 trustee for MF Global Holdings Ltd., said in a written testimony submitted to the Senate Agriculture Committee for a hearing on Wednesday that farmers, ranchers, traders and other investors still owed an estimated $1.6 billion "eventually will be made whole." In his testimony, a copy of which was reviewed by The Wall Street Journal, Mr. Freeh said: "It is my belief . . . all of the customers" of the brokerage firm "eventually will be made whole" through the efforts of James Giddens, the trustee of MF Global's U.S. brokerage firm. Prosecutors and regulators are trying to determine who is responsible for withdrawing money from the customer accounts, which under U.S. rules should have been kept separate from MF Global's own money. WSJ notes a full recovery for MF Global customers might ease the criticism that has dogged Jon S. Corzine, the former New Jersey governor and Goldman Sachs Group Inc. chairman who became chief executive of MF Global in 2010. Still, Mr. Corzine and other top executives could face charges if prosecutors and regulators decide that they willingly endangered customer money. Mr. Corzine has repeatedly said he never ordered anyone to misuse customer funds. According to WSJ, Mr. Freeh said his conclusion is based on a review that includes "currently available public data in the United States and reports issued by affiliates and administrators around the world," a reference to Mr. Giddens and other officials who have spent months trying to track down the money missing from customer accounts. WSJ relates a person familiar with Mr. Freeh's analysis said there might even be enough left over once customers are repaid to distribute roughly $500 million or more in additional assets to the company's creditors. WSJ says a spokesman for Mr. Giddens, however, was cautious Tuesday about Mr. Freeh's prediction, saying that the recovery efforts still face daunting obstacles. "There are big challenges ahead for us in getting assets back," said the spokesman. "Of course, our hope continues to be that we'll be able to return 100% to the former customers, but we can't make that prediction right now." The report notes Mr. Freeh didn't indicate in his written testimony how soon the hole might be filled, or even say whether he agreed with Mr. Giddens's estimate that the missing funds total $1.6 billion. Mr. Freeh isn't expected to attend Wednesday's hearing because of a scheduling conflict. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm was also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. MOON VALLEY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Moon Valley Country Club 151 West Moon Valley Drive Phoenix, AZ 85023 Bankruptcy Case No.: 12-16548 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: James M. Marlar Debtor's Counsel: Robert P. Harris, Esq. QUARLES & BRADY LLP One Renaissance Square 2 N. Central Avenue Phoenix, AZ 85004-2391 Tel: (602) 229-5411 Fax: (602) 420-5111 E-mail: robert.harris@quarles.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/azb12-16548.pdf The petition was signed by William Doyle, president. MSR RESORT: Winthrop Affiliate Wants More Say in Plan for Resorts ----------------------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that an affiliate of Michael Ashner's Winthrop Realty Trust that co- invested with Paulson & Co. in a group of well-known resorts is suing the hedge-fund firm, saying that it wants a say in the resorts' restructuring plan or for Paulson to buy its stake. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. NEW ENGLAND BUILDING: No Rival Plan Filed; Plan Hearing Sept. 11 ---------------------------------------------------------------- There's a hearing scheduled Sept. 11, 2012 at 1:30 p.m. to consider the disclosure statements for any entity that files a Chapter 11 plan on or before July 30 for debtor New England Building Materials LLC. According to the scheduling order entered by the bankruptcy judge, the Debtor, the Official Committee of Unsecured Creditors, the Office of the United States Trustee, TD Bank, N.A., and Seaboard International Products, LLC will participate in a mediation session as to issues arising from the Debtor's plan of reorganization and any competing plan with the Honorable Louis H. Kornreich in August 2012. The Debtor will promptly contact Judge Kornreich's chambers to schedule the mediation session. Only the Debtor has so far filed a Chapter 11 Plan and explanatory Disclosure Statement. Objections to the approval of the adequacy of the information in the Disclosure Statement dated June 13, 2012 are due Sept. 4. Sanford Mill Remains According to the Disclosure Statement, the Debtor has continued and substantially completed the divestiture of its retail, building supply business, which originally consisted of nine locations in Maine and Massachusetts. Among other things, the Debtor has consummated the sales of its facilities in Sanford, Springvale, and Windham, realizing approximately $3.6 million dollars in proceeds, most of which have been used, per the terms of the Debtor's DIP Financing, to pay down the Debtor's obligations to the Bank. The Debtor anticipates completing the sale of its retail-related assets and vacating the Lakeville facility (where is it is also a tenant) by the end of July of this year. Once the sales are completed the Debtor will be operating only its Eastern White Pine sawmill in Sanford, Maine, which the Debtor expects will continue to generate positive net income from operations, and will provide the funding necessary for the Debtor to meet its obligations under the Plan. The Debtor's Plan will permit the continued employment of 50 employees in the Sanford, Maine area. The Debtor expects to obtain approval of the Plan in the third quarter of 2012. $1 Million for Unsecured Creditors Under the Plan, the Debtor will receive new equity investment from its owners, up to $250,000 and as necessary for it to fund all of its payment obligations on the Effective Date of the Plan. In addition, the Debtor expects to obtain a revised, revolving line of credit from its prepetition lender, TD Bank, NA. The Debtor will use the proceeds of its new investment, revenues generated by its operations, and the proceeds of causes of action created by the Bankruptcy Code, to pay all of the costs of its Chapter 11 proceedings (administrative expenses), all sales tax obligations owed to state taxing authorities, all unpaid health care claims incurred pursuant to its pre-petition employee health plan (priority claims), and to provide a dividend to unsecured creditors, which the Debtor projects will be at least $1,000,000. Holders of allowed priority unsecured claims, unclassified under the Plan, won't be paid in full on the Plan's effective date. Holders of these claims will receive notes payable in 60 straight, equal monthly installments of principal and interest. Payments will commence on the first day of the month following the Effective Date, and continuing monthly until each allowed priority claim is paid in full. Interest shall be paid at 125% of the Prime Rate, in effect from time to time (or such other interest rate as the Court may order or the Debtor may agree upon with the relevant parties-in-interest). Holders of administrative claims will be paid in full on the effective date. TD Bank, owed $5.97 million as of the Petition Date, has received proceeds from the assets sale and its secured claim has been paid down to $1.02 million as of May 31, 2012. The claims of TD Bank, as well as Seaboard International Forest Products and Gorham Savings Bank, are treated as fully secured. TD Bank and Gorham's claims are unimpaired under the Plan. Seabord's claim, secured by second priority interest in the Debtor's inventory, is impaired. After Seabord exercises its set- off rights, the Debtor will issue a note to satisfy the remaining balance of the allowed claim. The promissory note will be payable in consecutive, equal monthly installments of principal and interest, based upon an amortization schedule calling for the payment of the note in five years from and after the Effective Date. Interest will be paid at 125% of the Prime Rate, in effect from time to time. Holders of unsecured claim will receive distributions from the liquidating trust. The Debtors will pay $70,000 to the liquidating trust on the first day of the month in the month next following the occurrence of the Effective Date. After the initial payment the Debtor will distribute to the Liquidating Trust, annually, commencing with calendar year 2013, a sum equal to its "net cash flow" for that calendar year. The annual payment for any calendar year will be made not later than October 1 of the following calendar year. The aggregate of the initial payment and all annual payments will not exceed the sum of $350,000, subject to adjustment. If professional fees total less than the budgeted $350,000 between June 1, 2012 and the Effective Date, then the dividend to holders of unsecured claims increases. The Debtor believes that the Plan- related professional fees will come in below the $350,000 benchmark and will likely total approximately $200,000. If this is the case, then the Plan Revenue Cap would increase to $500,000, a result that inures to the benefit of all holders of unsecured claims. The Plan Revenue Cap will also be increased by that amount of Net Proceeds, which the Debtor obtains, if any, by final settlement of or final adjudication in the United Healthcare Action. The Debtor will also assign and transfer to the Liquidating Trust all of the Chapter 5 causes of action. The equity interests of the owners will remain unchanged and are unimpaired under the Plan. If unsecured creditors vote against the Plan, the Debtor would cancel the Class 8 (holders of membership interests). In conjunction with any such cancellation of existing membership interests, United Ventures would be issued new membership interests in the Debtor in exchange for an equity investment of up to $250,000 in cash. Those membership interests would constitute 100% of the equity in and to the Debtor, and such membership interests would be deemed fully paid and non-assessable upon investment of said sum of up to $250,000 in accordance with this Plan. The Debtor points out that under the Plan, "as much as $1,000,000, and possibly more" would be returned to unsecured creditors. In contrast, under a Chapter 11 orderly liquidation, the net recovery for unsecured creditors from the liquidation of the Debtor's assets would be $143,832 plus the anticipated recovery on the Chapter 5 causes of action ($545,000) for a total of $688,832. In the Chapter 7 Liquidation, the net recovery is negative, or, in effect, zero, with allowed priority unsecured claims unable to be paid in full and allowed unsecured claims receiving nothing. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/NE_Building_Debtor_Plan_Disclosures.pdf About New England Building Materials Based in Sanford, Maine, New England Building Materials LLC, fka Lavalley Lumber Company LLC and Poole Brothers, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on Feb. 14, 2012. New England Building Materials is engaged in the business of manufacturing and selling, at wholesale, Eastern White Pine lumber and related products. It was also engaged in the business of selling lumber products at retail, through outlets in Maine and Massachusetts, although, as of the bankruptcy filing date, it has made the determination to cease retail activities. Chief Judge James B. Haines Jr. presides over the case. The Debtor has obtained approval to hire Marcus, Clegg & Mistretta, P.A., as counsel, and Windsor Associates as financial consultant. The Official Committee of Unsecured Creditors has obtained approval to retain Bernstein, Shur, Sawyer, and Nelson, P.A. as counsel and Spinglass Management Group, LLC as a financial consultant. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard I. Thompson, chief financial officer. William K. Harrington, the United States Trustee for the District of Maine, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. OMEGA OPTICAL: Court to Issue Final Decree Only After Last Payment ------------------------------------------------------------------ Bankruptcy Judge Bruce Fox denied, without prejudice, the request of Omega Optical Inc. for entry of a final decree under Fed. R. Bankr. P. 3022 closing its Chapter 11 case. Judge Fox also denied the request of Sovereign Bank to amend its proof of claim. The Debtor opposed the bank's request. Philadelphia-based Omega Optical Inc. filed a voluntary Chapter 11 petition (Bankr. E.D. Pa. Case No. 11-13036) on April 14, 2011, listing under $50,000 in assets and under $10 million in debts. The Law Offices of Dimitri L. Karapelou serves as the Debtor's counsel. The petition was signed by Steven Davis, president. On April 17, notice of the debtor's bankruptcy filing was sent to known creditors, including Sovereign Bank. Ten days later, the Debtor filed its bankruptcy schedules. On Schedule D, the Debtor listed Sovereign Bank as a secured creditor with a disputed claim, and valued the collateral for the disputed claim at $10,000. The secured claim relates to a pre-petition business loan that totals $92,229. By order dated May 9, 2011, a bar date of July 18, 2011 was set as the deadline for creditors to file proofs of claim pursuant to Bankruptcy Rule 3003(c)(3). On Dec. 16, 2011, Sovereign Bank filed a proof of claim for $80,662. The amount was asserted as a general, unsecured claim. The proof of claim requested that all notices be sent to Sovereign Bank "c/o Robert L. Saldutti, Esq." On Jan. 31, 2012, the Debtor filed a Chapter 11 Small Business Plan and disclosure statement. The Plan indicates Sovereign Bank's lien is not properly perfected, and that the bank's claim is being re-classified as an unsecured claim in Class 3. On March 7, 2012, the Debtor filed an amended plan. The proposed amended plan, which provided that the Debtor would continue in operation after confirmation and make plan distributions from net operating income, contained identical language regarding the treatment of Sovereign Bank's claim. The plan provides a modest dividend to class 3 unsecured creditors in "full settlement and complete satisfaction [sic] discharge and release of such Allowed Claim and Allowed Interest." A confirmation hearing was held on April 30, 2012. The only objection to confirmation was filed by the Commonwealth of Pennsylvania. By order dated April 30, the Debtor's amended plan was confirmed pursuant to 11 U.S.C. Sec. 1129(b). The plan effective date was 10 days after the confirmation order became final (May 24, 2012). On June 12, 2012, the Debtor filed the motion for a final decree, alleging that its confirmed plan would be substantially consummated by June 30, and seeking to have its case closed under 11 U.S.C. Sec. 350(a). At the hearing held July 11, counsel for the United States trustee stated in open court that his office had no opposition to the entry of a final decree, based upon a review of the Debtor's distribution reports. On June 13, 2012, Sovereign Bank filed the motion seeking to amend its proof of claim, asserting that its Dec. 16, 2011 unsecured proof of claim was "an obvious oversight" and that it actually holds a lien on all of the Debtor's assets. Sovereign Bank further asserts that, if permitted to amend its proof of claim, it will seek relief under Bankruptcy Rule 3012 to value its collateral so as to determine the extent of its allowed secured claim pursuant to 11 U.S.C. Sec. 506(a). Sovereign Bank alleges the Debtor would not be prejudiced by such a proposed amendment, because the Debtor originally scheduled its claim as secured (albeit disputed). According to Judge Fox, Sovereign Bank seeks to amend its unsecured proof of claim to assert a lien against the Debtor's property that had revested in the Debtor upon confirmation of its March 2012 chapter 11 plan. As the bank's lien has been extinguished by virtue of section 1141(c), an amendment to reclassify its claim as secured would now be futile, Judge Fox said. In denying the Debtor's request for final decree, Judge Fox noted that the confirmed plan provides that, "After final distributions are made, the Disbursing Agent [defined in paragraph 5.4 to be the debtor's president, Mr. Steven Davis] shall file a Motion to close the case and request that a final decree be issued. Debtor shall file all interim and final plan implementation reports and pay any fees to the Office of the U.S. Trustee." Judge Fox said there was no evidence that the Debtor has made final distributions. The approved plan permits the Debtor to tender plan payments over 12 quarters, with only the first distribution payable on the plan effective date. Moreover, the docket does not reflect the filing of a final implementation report. "Since the debtor has not yet complied with the terms of its own plan regarding the closing of its case, the better exercise of discretion is to conclude that the entry of a final decree is premature, and so will be denied without prejudice," Judge Fox said. A copy of the Court's July 27, 2012 Memorandum is available at http://is.gd/mkW7ptfrom Leagle.com. OSAGE EXPLORATION: P. Hoffman's Stake Slightly Down to 9.9% ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Peter Hoffman, Jr., disclosed that, as of June 13, 2012, he beneficially owns 4,768,634 shares of common stock of Osage Exploration and Development, Inc., representing 9.9% of the shares outstanding. Mr. Hoffman previously reported beneficial ownership of 5,639,119 common shares or a 11.8% equity stake as of Dec. 20, 2011. A copy of the amended filing is available for free at: http://is.gd/jIIGOh About Osage Exploration Based in San Diego, California with production offices in Oklahoma City, Oklahoma, and executive offices in Bogota, Colombia, Osage Exploration and Development, Inc. (OTC BB: OEDV) -- http://www.osageexploration.com/-- is an independent exploration and production company with interests in oil and gas wells and prospects in the US and Colombia. GKM, LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has an accumulated deficit as of Dec 31, 2011. The Company's balance sheet at March 31, 2012, showed $6.25 million in total assets, $1.60 million in total liabilities, and $4.64 million in total stockholders' equity. OXLEY DEVELOPMENT: Only Tangible Asset Foreclosed; Case Dismissed ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Georgia dismissed the Chapter 11 case of Oxley Development Company, Inc. Donald F. Walton, the U.S. Trustee for Region 21, in an amended motion to dismiss or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code, explained that: 1. the Debtor failed to file any operating reports since the inception of the case -- the lack of information prevents the U.S. Trustee and other parties from monitoring the financial condition of the Debtor; 2. the Debtor has failed to pay quarterly fees to the U.S. Trustee -- the amount owed is $650, subject to adjust when and if the missing operating reports are filed; and 3. on May 18, 2012, the Court granted relief from stay to German American Capital Corporation, allowing the creditor to pursue its state law remedies in connection with the real property that is the subject of this bankruptcy case. The property was the Debtor's only tangible asset which means that there is no reasonable likelihood of rehabilitation or reorganization, the U.S. Trustee said. About Oxley Development Company, LLC Oxley Development Company, LLC, based in Kingsland, Georgia, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No. 11-21338) on Oct. 31, 2011. In its petition, the Debtor scheduled assets of $125,700,000 and debts of $61,289,500. The petition was signed by Carl M. Drury, III, managing member. William S. Orange, III, Attorney at Law, is the Debtor's Chapter 11 counsel. PACESETTER FABRICS: Court Grants 120-Day Exclusivity Extension -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California extended Pacesetter Fabrics, LLC's exclusive periods by an additional 120 days, such that the period during which only the Debtor may file a plan of reorganization will run through and including June 13, 2012, and the period during which only the Debtor may solicit acceptances of a plan will run until Aug. 10, 2012. About Pacesetter Fabrics Based in City of Commerce, California, Pacesetter Fabrics, LLC, dba Pacesetter Off Price and Pacesetter Garments, is a distributor of quality textile and garment fabrics in the United States and international markets. The Company has been in business for over 14 years. The Company is owned 98% by Net, LLC, a California limited liability company, 1% by Leora Namvar (Ramin Namvar's wife), and 1% by Massoud Poursalimi (Leora Namvar and David Poursalimi's father). Net LLC is in turn owned 99% by Ramin Namvar and 1% Leora Namvar. Pacesetter Fabrics filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-36330) on June 17, 2011. Judge Ernest M. Robles presides over the case. The Debtor disclosed $33,695,869 in assets and $28,599,582 in liabilities as of the Chapter 11 filing. Brian Wygle president of Lazarus Resources Group, LLC, a corporate turnaround consultant, assists Pacesetter with its turnaround and reorganization efforts and the financial affairs and management of the Company. PATRIOT COAL: Common Stock Delisted from NYSE --------------------------------------------- The New York Stock Exchange LLC notified the U.S. Securities and Exchange Commission regarding the removal from listing or registration of Patriot Coal Corp. common stock on the NYSE. About Patriot Coal Corp. St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. The case has been assigned to Judge Shelley C. Chapman. PENINSULA GAMING: S&P Gives 'CCC+' Rating on $350MM Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' issue-level rating to Dubuque, Iowa-based casino operator Peninsula Gaming LLC's planned $350 million senior notes due 2018 to be issued jointly by Boyd Acquisition Sub LLC and Boyd Acquisition Finance Corp. "The recovery rating is '6', indicating our expectation for negligible (0 to 10%) recovery for noteholders in the event of a payment default. Proceeds from the notes represent a portion of the financing for Boyd's $1.45 billion acquisition of Peninsula. In addition to the notes, financing will include a $200 million cash contribution from Boyd, about $144 million in a seller's note, and $875 million senior secured credit facility at Peninsula," S&P said. "Proceeds from the notes will initially be deposited into an escrow account and will be released concurrently with the consummation of the acquisition. The acquisition remains subject to various closing conditions and receipt of required regulatory approvals, and Boyd management expects the transaction to close by the end of 2012. After the completion of the acquisition, Peninsula Gaming LLC and Peninsula Gaming Corp. will be the co- issuers of the senior notes, as the co-issuers listed above will be merged with and into them," S&P said. "Our 'B+' corporate credit rating on Peninsula Gaming remains on CreditWatch with negative implications. The CreditWatch listing on Peninsula reflects our expectation that in the event that Boyd completes its acquisition of the company under the terms proposed, consolidated leverage would exceed 7x over the intermediate term under our performance expectations for both companies. (We include the planned seller's note when measuring consolidated leverage.) Additionally, the contemplated financing at Peninsula is a leveraging transaction at that entity, given that its debt balances were about $700 million as of March 31, 2012. Although we believe the acquisition of Peninsula would strengthen Boyd's business risk profile, as Peninsula's assets face imited competition, have high EBITDA margins compared with other commercial gaming operators, and are relatively good quality assets, we would view this level of leverage as aligned with a 'B' corporate credit rating," S&P said. "Following the acquisition, our corporate credit rating on Peninsula will reflect our view of the consolidated Boyd and Peninsula portfolio of properties, despite the fact that different assets secure different pieces of the capital structure. Given our perception of the strategic relationships that will exist between these entities and common management following the acquisition, we expect management to make decisions regarding operating and financial strategies with a view toward the collective group of companies. We believe that if a payment default were to occur at either Boyd or Peninsula, management would most likely consider alternatives regarding the capital structure of the consolidated group, which could include a comprehensive restructuring or a bankruptcy filing," S&P said. "In resolving the CreditWatch listing, we will monitor Boyd's progress toward addressing various closing conditions and receiving required regulatory approvals. We expect to lower our corporate credit rating on Peninsula to 'B' once the acquisition closes," S&P said. RATINGS LIST Peninsula Gaming LLC Corporate credit rating B+/Watch Neg/-- Boyd Acquisition Sub LLC Boyd Acquisition Finance Corp. Rating Assigned $350 mil. senior notes due 2018 CCC+ Recovery rating 6 PEREGRINE FIN'L: Trustee Still Investigating Shortfall Amount ------------------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that the trustee liquidating Peregrine Financial Inc. said he had hired PricewaterhouseCoopers LLP to do a forensic accounting of the brokerage firm, as he continues to narrow down how much money is missing from customer accounts. About Peregrine Financial Peregrine Financial Group Inc. on July 10, 2012, filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488), disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier on July 10, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's Chief Executive Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial Group Inc. is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PEREGRINE FIN'L: Brokerage Trustee Seeks to Reject Leases --------------------------------------------------------- Carla Main and Michael Bathon at Bloomberg News report that the trustee liquidating futures brokerage Peregrine Financial Group Inc. asked a judge to let him reject unneeded leases and contracts, including monthly payments of $7,154 to CME Group Inc. and $232 a month to rent furniture. About Peregrine Financial Peregrine Financial Group Inc. on July 10, 2012, filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488), disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier on July 10, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's Chief Executive Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial Group Inc. is the regulated unit of the brokerage PFGBest. At a quickly convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PHILADELPHIA NEWSPAPERS: 3rd Circ. Nixes $2MM Defamation Claim -------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that the Third Circuit ruled in a precedential decision Thursday that a charter school company alleging defamation against Philadelphia Newspapers LLC is not entitled to a $1.8 million administrative expense claim in the publisher's long-concluded bankruptcy. Prior to the 2009 bankruptcy filing, Charter School Management Inc. sued Philadelphia Newspapers over allegedly offending articles that appeared in the Philadelphia Inquirer. CSMI later asserted that a post-petition news item on the debtors' website linking back to the original articles gave rise to the administrative expense claim, according to Bankruptcy Law360. About Philadelphia Newspapers Philadelphia Newspapers, LLC -- http://www.philly.com/-- owned and operated numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications were the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 09-11204) on Feb. 22, 2008. Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. Philadelphia Newspapers estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. The Debtors proposed a plan of reorganization which would sell substantially all of their assets at an auction. The Philadelphia Media Network, which was formed by the Debtors' secured lenders, acquired the Philadelphia Inquirer, the Daily News and Philly.com for $105 million in cash. The Court approved the sale and confirmed a revised plan at a hearing on Sept. 30. Philadelphia Newspapers previously won confirmation of a plan based on the sale of the business to the same group of lenders for $139 million. The sale failed to close because the buyers weren't able to reach agreement on a new labor contract with the Teamsters union. After another auction on Sept. 23, the lenders again emerged as the winning bidder but with a lower offer. The Plan became effective and the sale closed on Oct. 8, 2010. PINNACLE AIRLINES: AFA Elected as Flight Attendants Union --------------------------------------------------------- Flight Attendants at the new Pinnacle Airlines elected the Association of Flight Attendants-CWA (AFA) as their union following the merger of Pinnacle, Mesaba and Colgan. "We are unified. In voting for AFA, Flight Attendants recognize that AFA's vast experience is the best choice for protecting the jobs and contracts of our sisters and brothers at the new Pinnacle Airlines," said Veda Shook, AFA International President. "We welcome our flying partners from pre-merger Pinnacle and Colgan, whose experience and contributions to our profession will further strengthen our Flight Attendant Union. Together we will meet the challenges in the Pinnacle bankruptcy and set a strong foundation for a better future. Together we are better." While election results are certified by the NMB, AFA has initiated its transition procedure for representing Pinnacle/Colgan Flight Attendants. AFA already represents the approximately 500 Flight Attendants at pre-merger Mesaba. USW Urges Solidarity The United Steelworkers (USW) in a July 16 statement urged unity and solidarity for the employees of Pinnacle Airlines Corp. as the National Mediation Board (NMB) announced the results of a representation election between the USW and AFA. USW International Vice President at Large Carol Landry said that Pinnacle workers cannot be expected to continue paying the price for management's failure to implement a business plan or develop a realistic strategy to adapt to changes in the industry. USW pointed out that Pinnacle announced that the wind-down of Colgan Air's United Express flights would be complete three months sooner than previously announced after United Air Lines asked to end all operations by Sept. 5, 2012 instead of Dec. 1 as indicated in the Company's annual report. USW hopes to see Pinnacle emerge from bankruptcy as a more stable employer built with a strategic vision for long term viability so that the workers who remain after restructuring completes can participate in the company's success. "In order for that to happen," Landry said, "Pinnacle employees must be united in solidarity and purpose, and management must include them in planning for the future of the airline." 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. PITTSBURGH CORNING: Posts $462 Million Net Income in 2nd Quarter ---------------------------------------------------------------- Corning Incorporated, an affiliate of Pittsburgh Corning Corporation, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to the Company of $462 million on $1.90 billion of net sales for the three months ended June 30, 2012, compared with net income attributable to the Company of $755 million on $2 billion of net sales for the same period a year ago. The Company reported net income attributable to the Company of $924 million on $3.82 billion of net sales for the six months ended June 30, 2012, compared with net income of attributable to the Company of $1.50 billion on $3.92 billion of net sales for the same period during the prior year. Corning Incorporated's balance sheet at June 30, 2012, showed $28.75 million in total assets, $7.35 billion in total liabilities and $21.40 billion in total equity. Reflecting on Corning's second-quarter performance, Wendell P. Weeks, chairman, chief executive officer, and president, said, "We had a solid second quarter in terms of sales and earnings performance. We achieved much more moderate price declines for our LCD glass as set forth in our goals that we shared in February. Additionally, LCD glass retail and supply chain market statistics were generally in line with our expectations. As a whole, our other businesses grew 2% year-over-year." A copy of the Form 10-Q is available for free at: http://is.gd/6C1BvA About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. The Hon. Judith K. Fitzgerald presides over the case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when it denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. According to the report, a hearing to consider the new plan is scheduled for June 21. PRINCE SPORTS: Chapter 11 Plan Wins Court Approval -------------------------------------------------- Prince Sports Inc. won approval of its Chapter 11 confirmation plan in Delaware bankruptcy court Friday, sealing a deal that will transfer control of the reorganized company to creditor Authentic Brands Group LLC for $65 million of secured debt. Michael Bathon at Bloomberg News reports that U.S. Bankruptcy Judge Kevin J. Carey at a July 27 hearing in Wilmington, Delaware, gave the racket-maker approval of the plan, allowing it to exit court protection in less than three months, according to court documents. As reported in the Troubled Company Reporter on July 2, 2012, the plan calls for an affiliate of Authentic Brands Group LLC to take ownership in exchange for $67.2 million in secured debt it purchased. The plan proposes to give cash and lawsuit recoveries to unsecured creditors, for an expected recovery of 29% on $13.8 million in claims. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/PRINCESPORTS_ds_2Amended.pdf About Prince Sports Prince Sports, Inc. and its U.S. affiliates filed voluntary petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that contemplates the transfer of ownership to Authentic Brands Group (ABG)-Prince LLC. Founded in 1970, Prince Sports has a 42-year track record of developing premium quality products for the racquet sports industry. The Company pioneered many innovative designs, including the "oversized" racquet, the "longbody" racquet, and technology for racquet applications such as Triple Threat, 03 and EX03. Prince sells its products through brands like "Ektelon," which sells racquetball racquets, footwear and gloves and "Viking Athletics," through which it sells platform tennis paddles, balls and gloves. Prince is distributed in over 100 countries. Lincolnshire Management Inc. acquired Prince from Benneton Group, the parent company of United Colors of Benneton, in 2003. Lincolnshire Management sold Prince to Nautic Partners in August 2007. The Debtor has a Chapter 11 plan where (ABG)-Prince LLC, which acquired the secured debt from GE Capital and Madison Capital, will be acquiring 100% of the new equity in exchange of the discharge of the debt. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. The Debtors have also tapped FTI Consulting Inc., to provide David J. Woodward as Chief Restructuring Officer, and provide additional personnel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case. PRIUM SPOKANE: Gets Fourth OK to Access Sterling Savings' Cash -------------------------------------------------------------- The Hon. Frank L. Kurtz of the U.S. Bankruptcy Court for the Eastern District of Washington, for the fourth time signed an order Prium Spokane Buildings, L.L.C., to use cash collateral of Sterling Savings Bank. The court-approved stipulation between the Debtor and Sterling Savings Bank provides for the use of cash collateral to fund the payment of ordinary operating expenses or administrative expenses. The Debtor's access to the cash collateral will terminate through the earlier of (1) an event of default under the terms of the fourth order, or (2) the conclusion of the property foreclosure pursuant to the settlement and release agreement and the amendment to settlement and release agreement, as authorized by the order authorizing compromise of claims and approving settlement and release agreement, and denying motion for order of dismissal entered on May 25, 2012. The stipulation also provides that any funds remaining after the payment of items in the cash collateral budget will be disbursed to Sterling, up to a maximum amount that is equal to accrued postpetition interest under the Intervest Note, at the non-default rate of 5%), and including interest on the additional advance at an annual rate of 6.50%. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant Sterling a replacement lien upon all postpetition collateral of the same priority, nature, and extent as held prepetition by that entity. Previously, the Court approved a stipulation authorizing use of Sterling's cash collateral until April 30. About Prium Spokane Buildings Bellevue, Washington-based Prium Spokane Buildings, L.L.C., filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wash. Case No. 10-06952) on Dec. 16, 2010. Davidson Backman Medeiros PLLC, represents the Debtor. Berreth, Lochmiller & Associates, PLLC, serves as accountants. The Debtor disclosed $17,042,743 in assets and $34,723,584 in liabilities as of the Chapter 11 filing. There was no creditors committee appointed in the case. The Debtor's Plan provides that Davis and Silesky will subordinate their claims arising from the Mastro Note to the payment of all allowed general unsecured claims, and agree to reconvey the Mastro Deed of Trust. Davis and Silesky will contribute the sum of $100,000 as a new capital contribution to Prium Spokane, in exchange for all New Membership Interests. RADIOSHACK CORP: S&P Cuts Corp. Credit Rating to 'B-'; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Fort Worth, Texas-based RadioShack Corp. to 'B-' from 'B+'. The outlook is negative. "The recovery rating on the senior unsecured debt remains '4', indicating our expectations for average (30% to 50%) recovery in the event of a payment default," S&P said. "The downgrade of RadioShack reflects our view that it will be very difficult for the company to improve its gross margin in the second half of the year," said Standard & Poor's credit analyst Jayne Ross, "given the highly promotional nature of year-end holiday retailing in the wireless and consumer electronic categories. It is our belief that all segments of the company's business will remain under margin pressure for 2012 and into 2013." "The ratings on RadioShack reflect Standard & Poor's assessment that the company's financial risk profile is 'highly leveraged.' This reflects, in our view, increased debt leverage, weaker credit metrics, and modest cash flow generation. We characterize the company's business risk profile as 'vulnerable,' because of the short product cycles, the secular change in the products offered, the fiercely competitive nature of the retail consumer mobility industry and its much lower margins, and the company's vulnerability to weak consumer spending due to limited discretionary income," S&P said. "Our negative outlook on RadioShack reflects our expectation that the company's operating trends will remain at their new lower level. We expect flat to modest sales growth in the wireless and signature segments as well as mixed sales performance in the company's other segments for the remainder of 2012, given the weak industry dynamics in consumer electronics. We are not estimating any meaningful improvement in margins in 2012," S&P said. "We would consider a downgrade if the company does not refinance a portion of the convertible notes due 2013 within the next 90 days. Furthermore, if operating performance and credit metrics continue to deteriorate, with debt leverage of more than 9.6x, and EBITDA interest coverage of 1.5x or less. This could occur if gross margin contracts by about 100 bps, or revenues decline by about 2% or more, or some combination of both," S&P said. "Although unlikely, we could consider a stable outlook if we begin to see stabilization in sales results in the company's signature segment, solid results in RadioShack's mobility platform, and sustained credit metrics. For this to occur, we would have to see gross margin improvement of at least 50 bps and revenue growth of 1% or more, or some combination of higher gross margin and sales growth. We would also consider an upgrade if the company reduced its debt levels such that total debt to EBITDA remained at less than 5.5x, other credit metrics improved, and operating performance stabilized," S&P said. RAINBOW LAND: Plan Proposes 3 More Years of Breathing Space ----------------------------------------------------------- Rainbow Land & Cattle Company, LLC, is seeking approval of a plan that proposes to defer payments to Zions Bank, other secured creditors, and unsecured creditors for three years or earlier if a refinancing or sale of its property is obtained. According to the Disclosure Statement filed July 2, 2012, Zion's First National Bank, holder of an allowed secured claim of $1.32 million, will retain its security interest, and interest will accrue on the unpaid principal sum at 3.50% per annum from and after the effective date. It will be paid in full at the conclusion of the deferral period. While interest is accruing during the deferral period, payment will be deferred during the period. The Debtor though has agreed to pay taxes and insurance for the collateral during the period. F. Heise Land & Livestock Company, holder of an $809,000 secured claim, will be treated in the same manner as Zions. The Debtor has scheduled unsecured claims of $375,000. The Court set a May 10 deadline for proofs of claim and an Oct. 1 deadline for governmental entities. The Disclosure Statement did not provide details other than saying "The allowed unsecured claims shall be paid on or before the conclusion of the deferral period." Under the Plan holders of equity interests will retain their membership interests. They won't receive distribution until creditors are paid in full. The equity owners of the Debtor will contribute funds as are necessary during the deferral period to fund the Debtor's obligations to secured lenders. A balance sheet attached to the Disclosure Statement says that the Debtor has $0 cash and the Debtor's property is worth $15.43 million. Total liabilities are estimated at $2.50 million. The liquidation analysis implies that there won't be funds for unsecured creditors in a Chapter 7 liquidation scenario. The analysis assumes that Zions First National Bank will foreclose and credit bid the amount owed under its secured claim which is estimated to be $1.32 million. Given current market conditions, the likelihood of F. Heise Land or a third party overbidding is questionable. A hearing on the disclosure statement was scheduled for July 31. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/Rainbow_Land_DS_070212.pdf About Rainbow Land Rainbow Land & Cattle Company, LLC, owns 466 undeveloped acres of real property located in Caliente, Nevada, along with 133 acre fee of water rights. Rainbow Land filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-14009) on April 4, 2012. It scheduled $15.43 million in assets and $2.50 million in liabilities. The Debtor owns land and water rights in Caliente with a combined value of $15.4 million. The properties secure $2.4 million of debt. Judge Bruce A. Markell presides over the case. The Debtor is represented by Alan R. Smith, in Las Vegas, Nevada. The petition was signed by John H. Huston, managing member. RAINBOW LAND: Aug. 28 Hearing on Bank's Foreclosure Plea -------------------------------------------------------- Rainbow Land & Cattle Company, LLC, will have three more years of breathing space from creditors if it obtains approval of its reorganization plan. However, if the Debtor fails to move forward with the Plan, Zion's First National Bank, holder of an allowed secured claim of $1.32 million, may take over the Debtor's property. On July 25, Zions Bank filed a motion seeking relief from stay so that it may recover the collateral that secures its claim. Zions said that while the fair market value of the Debtor's property is $2.275 million, the disposition value is $1.365 million, according to appraiser Eric Van Drimmelen. As the secured debt to Zions and F. Heise exceed $2.1 million, the Debtor has no equity in the property. Prepetition Zions initiated non-judicial foreclosure with respect to the property but the trustee's sale was deferred due to the bankruptcy filing. The Debtor is funding the Chapter 11 case through the use of cash collateral. In mid-July, Zion's First National Bank signed a stipulation allowing the Debtor to use cash collateral. The parties agreed to a cash use budget for the period June to December 2012. The Debtor agreed to grant Zion's monthly adequate protection payments equal to the monthly net income derived from the property after payment of ongoing operating and maintenance expenses. A hearing on the stay relief motion has been scheduled for Aug. 28, 2012, at 10:00 a.m. Zions Bank is represented by: Michael B. Wixom, Esq. SMITH LARSEN & WIXOM Hills Center business Park 1935 Village Center Circle Las Vegas, NV 89134 E-mail: mbw@slwlaw.com About Rainbow Land Rainbow Land & Cattle Company, LLC, owns 466 undeveloped acres of real property located in Caliente, Nevada, along with 133 acre fee of water rights. Rainbow Land filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-14009) on April 4, 2012. It scheduled $15.43 million in assets and $2.50 million in liabilities. The Debtor owns land and water rights in Caliente with a combined value of $15.4 million. The properties secure $2.4 million of debt. Judge Bruce A. Markell presides over the case. The Debtor is represented by Alan R. Smith, in Las Vegas, Nevada. The petition was signed by John H. Huston, managing member. RANCHER ENERGY: Incurs $882,928 Net Loss in 2011 ------------------------------------------------ Rancher Energy Corp. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $882,928 on $0 of revenue for the year ended March 31, 2012, compared with a net loss of $674,059 on $0 of revenue during the prior fiscal year. The Company's balance sheet at March 31, 2012, showed $4.96 million in total assets, $2.32 million in total liabilities and $2.64 million in total stockholders' equity. Borgers & Cutler CPA's PLLC, in Denver, Colorado, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2012. The independent auditors noted that uncertainties inherent in the bankruptcy process, as well as recurring losses from operations raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/I4RoUh About Rancher Energy Denver, Colorado-based Rancher Energy Corp. (OTC BB: RNCHQ) -- http://www.rancherenergy.com/-- explores for and develops produces, and markets oil and gas in North America. Through March 2011, the Company operated four oil fields in the Powder River Basin, Wyoming. The Company was formerly known as Metalex Resources, Inc., and changed its name to Rancher Energy Corp. in 2006. Rancher Energy filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 09-32943) on Oct. 28, 2009. In its petition, the Company estimated assets and debts of between $10 million and $50 million each. The Debtor is represented by Michael J. Guyerson, Esq. and Christian C. Onsager, Esq., at Onsager, Staelin & Guyerson, LLC. The Company sold substantially all of its assets effective March 1, 2011, to Linc Energy Petroleum (Wyoming), Inc. in exchange for $20 million cash plus other potential future consideration up to $825,000, and subject to other adjustments. The deal was approved Feb. 24, 2011. RESIDENTIAL CAPITAL: Wiener Wants Stay Relief to Proceed With Suit ------------------------------------------------------------------ The representative of Roland Wiener's estate asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay that was applied to a lawsuit he filed against GMAC Mortgage LLC. Gerard Wiener, who serves as the estate's representative, sued GMAC Mortgage before a federal court in Michigan after the company issued a notice of foreclosure sale on a real property in Michigan. GMAC Mortgage, a debtor affiliate of Residential Capital LLC, is the servicer of the mortgage securing the loan, which the late Wiener availed from Homecomings Financial Network to finance the purchase of the property. The Michigan case, which was automatically halted by GMAC's bankruptcy filing, is already in the final pretrial stages, according to court papers. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wells Fargo Seeks to Pursue Suit ----------------------------------------------------- Wells Fargo Bank, N.A., asks the U.S. Bankruptcy Court in Manhattan to lift the automatic stay as to Debtor Executive Trustee Services, LLC, to permit Wells Fargo to continue to prosecute its cross-complaint in the matter entitled Franciska Susilo v. Wells Fargo Bank, N.A., et al., Case No. CV11-1814-CAS (RJWx), currently pending in the U.S. District Court for the Central District of California until final judgment. The allegations of the plaintiff's complaint center around plaintiff's attempt to reinstatement of a residential real estate loan before foreclosure. Wells Fargo also seeks permission to enforce any final judgment by collecting upon any available insurance in accordance with applicable non-bankruptcy law and proceeding against the Debtor as to non-estate property or earnings. Executive Trustee responds that the Debtors have determined that it is far too early in their Chapter 11 cases for the Court to grant the relief that Wells Fargo is requesting. Granting such relief at this point would undoubtedly invite similar requests for relief from the automatic stay from the Debtors' numerous other prepetition claimants, opening the "floodgates" to litigation, which would impose a burden on the Debtors and their estate at a time when their limited resources should be devoted to disposing of their remaining assets in an orderly and value maximizing manner and proceeding with the Chapter 11 process. Wells Fargo, however, maintains it should be permitted to prosecute its cross-complaint against Executive Trustee. "[Wells Fargo] will be prejudiced in its ability to fully defend the action without the benefit of discovery," said the bank's lawyer, Jeremy Shulman, Esq., at Anglin Flewelling Rasmussen Campbell & Trytten LLP, in Pasadena, California. "With ETS in sole control of critical information and witnesses, Wells Fargo will be put in the impossible position of being unable to rebut certain facts alleged by Susilo unless ETS, at minimum, participates as a fact witness," Mr. Shulman said in court papers. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Aurora Bank Wants to Proceed With Suit ----------------------------------------------------------- Aurora Bank FSB, as plaintiff or plaintiff-in-intervention in declaratory relief and slander of title actions stemming from GMAC Mortgage, LLC's wrongful reconveyance of several security instruments securing loans against real property in California, asked the U.S. Bankruptcy Court in Manhattan to lift the automatic stay to allow the actions to continue in the El Dorado and Los Angeles County Superior Courts of California. The Debtors pointed out that the two California actions are one of the numerous actions stayed by the automatic stay of the Bankruptcy Code and granting Aurora Bank's relief would open the floodgates to litigation which would burden the Debtors and their estates at a time when their time and resources should be devoted to a successful reorganization. In reply to the Debtors, Aurora Bank maintained that the automatic stay should be lifted as both GMAC Mortgage LLC and Executive Trustee Services LLC are using their bankruptcy filing "to evade responsibility for their wrongful actions." The bank said it was not able to enforce several security instruments, resulting in a loss of security in excess of $1.406 million because of GMAC Mortgage's and ETS' alleged wrongful actions. "The balance of harms weighs in favor of modifying the automatic stay to allow the California actions to proceed in the California courts to judgment," said the bank's lawyer, James Lloyd, Esq., at Green & Hall, APC, in Santa Ana, California. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: GMAC Sued Over False Claims Act ---------------------------------------------------- Sidney and Yvonne Lewis sued debtor GMAC Mortgage Co. over allegations on behalf of the U.S. Government under the False Claims act. The plaintiffs seek to avoid the Debtor's preferential transfers to Fannie Mae on June 4, 2012, by virtue of a "Writ of Possession" by a state court, and to Fortress Investment Company on May 18, 2012 by virtue of the Bankruptcy Court's Interim DIP Order. The complaint was filed in the U.S. District Court for the Southern District of Iowa, Central Division. According to the plaintiffs, the adversary complaint is not a core proceeding in the Bankruptcy Court and the plaintiffs do not consent to entry of final New York bankruptcy court orders under Section 363(m) of the Bankruptcy Code for the "at issue" seized and uncompensated subdivision aviation easements for said Lots 11 and 17, as real properties in Argyle Park Subdivision. The plaintiffs ask the transfer of the adversary proceeding to Ohio due to the fact that GMAC concealed the "set-off" of claims, "repurchase agreement by Huntington National Bank," and "unpaid transfer gain taxes" in their Ohio bankruptcy cases "so as to cure a defect of personal jurisdiction over the defendants." Sidney Lewis and Yvonne D. Lewis also filed a separate motion for contempt and to vacate the interim order for relief dated May 14, 2012. The Debtors, including GMAC Mortgage, filed petitions under Chapter 11 of the Bankruptcy Code on May 14. Bankruptcy puts an automatic stay on actions filed against the Debtors prior to the Petition Date. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RG STEEL: Judge Denies Massey's Bid to Contract Suit ---------------------------------------------------- Pete Brush at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Kevin J. Carey on Friday denied Massey Energy Co.'s bid to stay a $31.8 million contract suit brought against it in West Virginia court by a nonbankrupt business partially controlled by debtor RG Steel LLC. Bankruptcy Law360 relates that Judge Carey denied the stay motion with prejudice, finding that plaintiff Mountain State Carbon LLC is not a debtor despite being 50 percent owned by RG Steel. 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. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. RHODE ISLAND: Pension Lawsuit Seen Risking Bankruptcies ------------------------------------------------------- Michael McDonald at Bloomberg News reports that Rhode Island Treasurer Gina Raimondo championed an overhaul last year of one of the nation's worst-funded public pensions, setting out a road map for states and cities by curbing benefits and delaying retirements. Now the revamp, which took effect this month, is facing a legal challenge from unions. If successful, the lawsuit could produce fiscal "devastation" by spurring more municipal bankruptcies in a state already on the verge of falling back into recession, according to Ms. Raimondo, a 41-year-old Democrat. According to the report, while the court action may take months or years, it's being closely watched as it may provide guidance in other states where similar legal battles have arisen, said Amy Monahan, who teaches law at the University of Minnesota in Minneapolis. Rhode Island is also unusual because, unlike in California, where court rulings have sided with labor to protect benefits, there is little precedent to guide the outcome, she said. The report relates that in Rhode Island, five unions representing state and municipal workers, teachers, firefighters and police claim that the law violates their constitutional rights by breaking contracts and taking away benefits earned by retirees and workers. The groups also say Ms. Raimondo manufactured a crisis by lowering pension investment-return assumptions, increasing unfunded liabilities and forcing lawmakers to back the cuts. By delaying retirement, suspending cost-of-living increases and offering workers 401(k)-type savings plans, Rhode Island cut its pension obligations by $3 billion, to $4.3 billion, and lowered the state's required annual contribution by $275 million, to $414 million. Labor leaders promised to sue to block the changes as soon as Governor Lincoln Chafee, elected as an independent in 2010, signed the overhaul law in November. They made good on their threats last month, taking the issue to court days before the law took effect July 1. Rhode Island Superior Court Judge Sarah Taft-Carter rejected a request to block the changes while the dispute is litigated. The complaints brought by the five unions have been consolidated into a single action, according to Craig Berke, a court spokesman. The stakes are high in Rhode Island, which has dealt with six- straight budget deficits and has the second-highest unemployment rate in the U.S., according to Labor Department data. Union leaders in Rhode Island say the state can find other ways to balance its budget, improve pension funding, and help local governments, by raising taxes or making other changes. In Providence, the state capital, the City Council sought to prevent insolvency by passing a law in May modeled on Ms. Raimondo's plan. The agreement cut the unfunded pension liability by $170 million and reduced the required annual contribution by $18.5 million. The case is Rhode Island Public Employees Retiree Coalition v. Chafee, 12-3166, State of Rhode Island Superior Court (Providence). RICHARD VAUGHAN: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Richard Vaughan Associates, Ltd. dba Va Media 6029 Deacon Road Sarasota, FL 34238 Bankruptcy Case No.: 12-11316 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Timothy W. Gensmer, Esq. TIMOTHY W. GENSMER, P.A. 2831 Ringling Boulevard, Suite 202-A Sarasota, FL 34237 Tel: (941) 952-9377 Fax: (941) 954-5605 E-mail: timgensmer@aol.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-11316.pdf The petition was signed by Richard E. Allen, Jr. RITZ CAMERA: Court Approves Auction Schedule -------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that a Delaware bankruptcy court approved bidding procedures for Ritz Camera & Image LLC on Monday, paving the way for the Company to market a streamlined version of itself as it attempts to escape Chapter 11 for a second time. In the motion, the Debtors related that under the terms of the senior secured superpriority debtor-in-possession revolving credit agreement by and among the Debtors, the DIP agent -- Crystal Financial, LLC, as administrative agent and collateral agent, and the lenders party thereto, among other things: -- the Debtors are required to meet certain milestones, including that by Sept. 14, 2012, the Debtors will have either (i) consummated a sale of substantially all of their assets as a going concern; or (ii) consummated a liquidation of substantially all of their assets by approved liquidators; and -- execute agency documents or other relevant documents with a stalking horse bidder by Aug. 16. The Debtors proposed this timeline in relation to the sale: Event Date ----- ---- Deadline to object to proposed bid procedures July 23 Hearing to approve bid procedures July 30 Deadline for potential buyers to submit bids Aug. 28 Auction Sept. 4 Deadline to object TBD Hearing to approve sale No later than Sept. 10 The Debtors, with the cooperation of their professional advisors, has already begun to solicit expressions of interest in the assets. 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. ROOMSTORE INC: All Officers and Directors Resign ------------------------------------------------ Steven Giordano resigned as President and CEO of Roomstore, Inc., and also resigned from the Board of Directors of the Company. Effective June 27, 2012, Ned Crosby's employment with the Company ended. Mr. Crosby was the Chief Merchandising Officer for the Company. Effective July 11, 2012, Brian Bertonneau resigned as Senior VP, General Counsel and Secretary of the Company. Effective July 24, 2012, all remaining officers and directors of the Company resigned. Given that the Company has ceased all operations, a Chapter 7 Trustee has been appointed, and there are no remaining officers and directors as of July 24, 2012, the Company does not anticipate filing any further reports with the United States Securities and Exchange Commission. About RoomStore Inc. With more than $300 million in net sales for its fiscal year ending 2010, Richmond, Virginia-based RoomStore, Inc., was one of the 30 largest furniture retailers in the United States. RoomStore also offers its home furnishings through Furniture.com, a provider of Internet-based sales opportunities for regional furniture retailers. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. At the time of the filing, the Company operated a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also had five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. RoomStore also owns 65% of Mattress Discounters Group LLC, which operates 80 mattress stores (as of Nov. 30, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore acquired the MDG stake after MDG's second bankruptcy in 2008. MDG sought Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on March 14, 2003. Judge Douglas O. Tice, Jr., presides over RoomStore's case. Lawyers at Lowenstein Sandler PC serve as the Debtor's bankruptcy counsel. Kaplan & Frank, PLC, serves as local counsel. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. American Legal Claims Services, LLC, serves as its notice and claims agent. Lucy L. Thomson of Alexandria, Virginia, was appointed as consumer privacy ombudsman. RoomStore filed a plan of liquidation in June 2012 that provides for the sale of inventory and remaining assets to generate sufficient cash to pay secured and unsecured creditors in full. RoomStore's balance sheet at Nov. 30, 2011, showed $59.57 million in total assets, $57.75 million in total liabilities, and stockholders' equity of $1.82 million. The Debtor disclosed $44,624,007 in assets and $34,746,919 in liabilities as of the Chapter 11 filing. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. The Creditors Committee tapped Hunton & Williams LLP as its counsel. ROVI CORP: S&P Revises Outlook on 'BB-' CCR to Neg on Low Earnings ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on 'BB-' rated Santa Clara, Calif.-based Rovi Corp. to negative from stable. "Rovi lowered its revenue and earnings outlook for the full year 2012, citing delays in adding new patent licensees in the U.S. and Europe, delays in launches of some products and services, and softness in the global consumer electronics and interactive TV advertising markets. Rovi lowered full-year revenue guidance to between $650 million and $680 million, down from between $755 million and $785 million. Rovi expects second-quarter revenues to be $158 million, down from 11% million one year ago, partly on the continuing decline in its analog copy protection product (ACP)," S&P said. "We believe Rovi's competition position within its key markets is stable, but see potential continuing risks related to the significant downward revision of revenue and profit guidance," said Standard & Poor's credit analyst Andy Liu. "It is possible that the global economic weakness is having a greater impact on service providers and consumer electronic product shipments than Rovi expected, causing potential new licensees and others to resist signing new patent licenses." "Our 'BB-' corporate credit rating reflects our expectation that Rovi will return to steady growth in 2013 as it signs new licensees and as new product rollouts offset a decline in analog copy protection products. Rovi's new entertainment store could open up another revenue stream for the company, but it will indirectly compete against several sizable firms, including Netflix Inc., Amazon.com, and Apple Inc.'s iTunes," S&P said. SEARCHMEDIA HOLDINGS: Signs MOU for Advertising Network ------------------------------------------------------- SearchMedia Holdings Limited and Home Inns & Hotel Management have entered into a memorandum of understanding to reach a definitive agreement giving SearchMedia certain rights to create a nationwide advertising network at Home Inns' hotels throughout China. As of March 31, 2012, Home Inns operated 1,479 hotels in 219 different cities in China and had over 7.9 million unique individual members. The definitive agreement, the terms of which are still under discussion, is expected to include a variety of advertising formats including billboards, elevator advertising and lobby advertising at certain existing Home Inns locations and future new hotels. SearchMedia will be responsible for managing all marketing, advertising and resources related to the agreement. Peter W. H. Tan, Chief Executive Officer of SearchMedia, remarked, "We believe the agreement will enhance shareholder value for both companies. Home Inns has an extensive network of hotels throughout China, with a strong presence in heavily trafficked urban locations. It is widely anticipated that over 60% of China's population would live in urban locations by the year 2020. We believe the agreement will allow us to provide a very attractive long term advertising solution for our international, national and local advertisers, through the nationwide consumer reach of the network. We will also be able to offer comprehensive campaigns that include rooftop billboards, lobby displays, elevator posters and other forms of advertising. We anticipate that the agreement will apply to certain Home Inns locations in Beijing, Shanghai and Guangzhou initially and be rolled out to lower tier cities later." Home Inns Chief Executive Officer David Sun added, "We are pleased to be partnering with SearchMedia and to generate additional revenue opportunities from our hotel network while providing valuable marketing information to our guests. We expect the agreement to be mutually beneficial." The memorandum of understanding is subject to the signing of a definitive agreement. SearchMedia is expected to complete a new financing to support this agreement and it is currently evaluating various financing proposals to support this new network and other nationwide concession opportunities. About SearchMedia SearchMedia is a leading nationwide multi-platform media company and one of the largest operators of integrated outdoor billboard and in-elevator advertising networks in China. SearchMedia operates a network of high-impact billboards and one of China's largest networks of in-elevator advertisement panels in 50 cities throughout China. Additionally, SearchMedia operates a network of large-format light boxes in concourses of eleven major subway lines in Shanghai. SearchMedia's core outdoor billboard and in- elevator platforms are complemented by its subway advertising platform, which together enable it to provide a multi-platform, "one-stop shop" services for its local, national and international advertising clients. Marcum Bernstein & Pinchuk LLP, in New York, issued a "going concern" qualification on the consolidated financials statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses and has a working capital deficiency of approximately $31,000,000 at Dec. 31, 2011, which raises substantial doubt about its ability to continue as a going concern. Searchmedia Holdings reported a net loss of $13.45 million in 2011, a net loss of $46.63 million in 2010, and a net loss of $22.64 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $50.45 million in total assets, $63.90 million in total liabilities and a $13.45 million total shareholders' deficit. SEQUENOM INC: To Issue 5-Mil. Shares Under 2006 Incentive Plan -------------------------------------------------------------- Sequenom, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registering 5 million shares of common stock issuable under the Company's 2006 Equity Incentive Plan. The proposed maximum aggregate offering price is $18.7 million. A copy of the prospectus is available at http://is.gd/uCWyWm About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. The Company reported a net loss of $74.15 million in 2011, a net loss of $120.84 million in 2010, and a net loss of $71.01 million in 2009. The Company's balance sheet at June 30, 2012, showed $161.05 million in total assets, $59.03 million in total liabilities and $102.02 million in total stockholders' equity. SIGNATURE GROUP: Fremont Founder Loses Battle for Board Seats ------------------------------------------------------------- Signature Group Holdings, Inc. (Nasdaq: SGGH) held its annual meeting of stockholders on July 24, 2012. Based on the preliminary voting results, the Company was successful in having each of its recommended director nominees elected at the Annual Meeting and receiving approval for the three (3) Company recommended proposals voted on at the Annual Meeting. The Company's stockholders: (i) elected the Company's five (5) director nominees listed below under Proposal 1 to serve as director of the Company for a term that will continue until the 2013 annual meeting of stockholders or until their successors have been elected and qualified; (ii) approved an amendment to the Amended and Restated Signature Group Holdings, Inc. 2006 Performance Incentive Plan that increased the authorized number of shares of common stock of the Company that may be issued under the 2006 Plan; (iii) ratified the appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company's independent registered public accounting firm; and (iv) approved an adjournment of the Annual Meeting to a later date or dates, if necessary, to permit further solicitation of proxies to approve Proposals 2, which seeks approval of an amendment to the Company's Amended and Restated Articles of Incorporation to increase the authorized number of shares of Company common stock. Mc. Intyre Notes of Proposal 2 James A. McIntyre said July 28 that based on information available, including the Company's recently filed litigation against its former president, Kenneth Grossman, the GOLD card nominees believe that a significant majority of unaffiliated, independent stockholders supported the GOLD card nominees. Mc.Intyre said that while the bulk of attention in this proxy contest has been focused on the battle for board seats, this was not the only item of contention on the agenda. The GOLD Card nominees also opposed the proposal to approve an 84% increase in the authorized shares outstanding ("Proposal 2"). At the 2012 stockholder meeting, Mr. Craig Noell, the Company's CEO, announced that they did not have enough votes at the time of the meeting to pass Proposal 2 and they would adjourn the meeting "indefinitely". Notably, Signature has had over six weeks to solicit votes and has spent considerable resources and money ? stockholders' money -- soliciting votes. The Gold card nominees believe wasting more stockholder money in this effort further illustrates the manner in which the board has and continues to turn a deaf ear to the owners of the Company. The GOLD Card nominees call on Mr. Noell and the Signature board to acknowledge the will of the owners of the Company and discontinue further solicitation efforts. Since the GOLD card nominees believe it is almost certain the board will ignore this request, they urge stockholders to reject any future solicitation efforts by the Signature management related to Proposal 2 and vote against it. Giving the board the additional shares, with the unfettered ability to further dilute shares by up to 20% without stockholder approval, including to further enrich themselves is, in the opinion of the GOLD Card nominees, very dangerous. Mr. McIntyre and the GOLD card nominees are extremely grateful to the many stockholders who supported them. "This proxy contest was all about protecting the value of Signature stock for all stockholders, not just ours. Despite the almost overwhelming number of shares owned and influenced by the current board members, nominees and their paid consultants, it is evident from the high level of support we received that independent stockholders are not satisfied with the current state of affairs at Signature," commented Mr. McIntyre. Three Proxy Voting Services Signature Group wooed shareholders by announcing that three leading independent proxy voting advisory services -- Egan-Jones Proxy Services, ISS, and Glass Lewis -- have recommended that stockholders vote FOR all of the individuals nominated by the Company's Board of Directors. In concluding that voting the management ballot (WHITE PROXY CARD) is in the best interest of the Company and its stockholders, Egan- Jones said it considered, among other factors, the following: "Our belief that the dissidents have provided no substantive new ideas or valid reasons to change the Company's strategic direction which would lead to enhancement of stockholder value." "Our belief that under the current management and board the Company has made significant progress since emerging from bankruptcy, in the form of increasing revenues, diminishing losses, and improvements in internal control surrounding financial reporting which were not resolved in bankruptcy." "Our belief that the current management and board, having been presented with the financial and legal situation which, ironically, occurred on the watch of Mr. McIntyre prior to bankruptcy, deserve more time to deliver additional, improved results." About Signature Group Signature Group Holdings, Inc. -- http://www.signaturegroupholdings.com/-- is a diversified0 business and financial services enterprise with principal activities in industrial distribution and special situations debt. Signature has significant capital resources and is actively seeking acquisitions as well as growth opportunities for its existing businesses. The Company was formerly a $9 billion in assets industrial bank and financial services business that reorganized during a two year bankruptcy period. The reorganization provided for Signature to maintain Federal net operating loss tax carryforwards in excess of $850 million. Fremont General Corp. filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 08-13421) on June 18, 2008. Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represented the Debtor as counsel. Kurtzman Carson Consultants LLC was the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represented the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. Fremont General emerged from bankruptcy and filed Amended and Restated Articles of Incorporation with the Secretary of State of Nevada on June 11, 2010, which, among other things, changed the Debtor's name to Signature Group Holdings, Inc. Signature's plan of reorganization became effective on June 11, 2010. The name change also took effect as of that date. SKINNER ENGINE: Plan May Be Found Unconfirmable Without Hearing --------------------------------------------------------------- Carla Main and Michael Bathon at Bloomberg News report that the U.S. Court of Appeals in Pittsburgh ruled that the bankruptcy court may find a reorganization plan is unconfirmable without holding a hearing first when the disclosure statement shows the plan is "patently unconfirmable and cannot be cured by creditor voting," the court said in its opinion. The court heard an appeal from the U.S. Bankruptcy Court in Pittsburgh in the case of American Capital Equipment and Skinner Engine Co., a maker of steam engines for merchant ships. Before the bankruptcy, Skinner contended with claims for asbestos-related illnesses from merchant mariners that its insurers defended against. The report relates that Skinner proposed five plans of reorganization. The first plan proposed selling the company's assets to American Capital's parent company and creating a trust for payment of insurance money to asbestos claimants. When the plan met with creditor objections, a series of plans followed in an attempt to address the objections of non-asbestos-related creditors to provisions made for insurance proceeds and asbestos creditors. Skinner's fifth plan proposed a surcharge be paid to the debtor of 20% of cash from insurance and policies that it would use to pay creditors through a plan payment fund. It eliminated the Sec. 524(g) asbestos trust fund and provided for a trustee who would make decisions about asbestos claims. Claimants could also opt to use the tort system. The bankruptcy court held hearings on the disclosure statement and found it was "facially unconfirmable because it was not proposed in good faith and was forbidden by law in contravention" of Sec. 1129(a)(3) of the Bankruptcy Code. According to the report, the Circuit Court held that the trial court is within its equitable powers of discretion to reject the plan without a hearing "where it is obvious at the disclosure statement phase that a later confirmation hearing would be futile." The case is In re American Capital Equipment, LLC, 10-2239, U.S. Court of Appeals, Third Circuit (July 25, 2012). About Skinner Skinner Engine Company, Inc., one of Erie, Pa.'s oldest industrial companies, and American Capital Equipment, Inc., filed for chapter 11 protection (Bankr. W.D. Pa. Case Nos. 01-23987 and 01-23988) in 2001. The Bankruptcy Court denied confirmation of the Companies' Fifth Amended Plan on May 26, 2009, and the cases will be converted to Chapter 7 liquidation proceedings. SOLYNDRA LLC: Files Plan to Return Up to 6% to Unsec. Creditors --------------------------------------------------------------- Solyndra LLC's unsecured creditors with total claims of up to $120 million can expect to recover 2.5% to 6% and up to $24 million of a $527 million U.S. government loan will be repaid, if the bankruptcy judge confirms the solar power company's Chapter 11 plan. Solyndra will begin soliciting votes on the Plan and schedule a plan confirmation hearing if it obtains approval of the explanatory disclosure statement at a Sept. 7 hearing. The Plan became possible after Solyndra, certain prepetition lenders, creditors, interest holders, and the statutory unsecured creditors' committee reached a settlement. The Plan provides for holders of allowed administrative expenses and priority claims to be paid in full, and assets of Solyndra will be vested in the Solyndra Residual Trust. Among other things, the Plan creates a mechanism for the funding of a $3 million Solyndra Settlement Fund to be made available to the holders of general unsecured claims through the mechanism of a Solyndra Settlement Trust, plus the satisfaction of the claims asserted by a settlement class of the Debtors' former employees under the WARN Act pursuant to a settlement of $3.5 million. According to its Chapter 11 recovery analysis, Solyndra is expected to record $54.9 million to $114.7 million in net proceeds from assets disposition. It will also obtain from Plan sponsors (i) $3.5 million for the Employee WARN claimants, (ii) $3.50 million for the benefit of other and (iii) $3.175 million for the benefit of general unsecured creditors. In the projections, there will be $65.06 million to $124.8 million in net proceeds available for distribution to all creditors. In contrast, in a Chapter 7 liquidation scenario, net proceeds available for distribution are estimated to be between $38.8 million and $81.5 million. In this scenario, the first lien debt would have a 38% to 97.6% recovery. Other creditors, including the U.S. Department of Energy and unsecured creditors, would be wiped-out. The Plan's sponsors are identified as Argonaut Ventures I LLC and Madrone Partners LP. Argonaut Ventures is the investment arm of billionaire George Kaiser's charitable organization. The Plan, according to the Debtors, proposes to fairly and efficiently restructure their liabilities and distribute the Debtors' assets in a manner that will allow the Chapter 11 cases to be promptly concluded. According to the Disclosure Statement, creditors and interest holders will have the following recovery under the Plan: Description/ Estimated Estimated Amount Recovery Treatment ------------ --------- --------- Administrative Expenses $10,633,000 100% Paid in full in cash on the effective date of Plan Tax Claims $1,000,000 100% Paid in full on Effective Date Priority Non-Tax Claims $864,000 plus $3,500,000 for WARN Priority Claims 100% Not impaired Prepetition Tranche A Claims (First Lien) Of Private Investors $69,715,800 50% to 100% Will receive payment after payment of Tranche I Exit Facility and Solyndra Settlement Fund Prepetition Tranche B Claims (Second Lien) on account of Department of Energy Loan $142,808,500 0% to 17% Will receive pro rata share of Net Lender Distributable Assets after payment of Tranche A facility Prepetition Tranche D Claims (Third Lien) on account of Department of Energy Loan $385,000,000 0% plus outcome of liquidation Will receive pro rata share of Net Lender Distributable Assets after payment of Tranche A and Tranche B Claims Prepetition Tranche E Secured Claims (Third Lien) On account of Conv. Notes Issued July 2010 $186,644,300 0% plus Outcome of Liquidation Will receive pro rata share of Net Lender Distributable Assets after payment of Tranche A and Tranche B Claims General Unsecured Claims vs. 360 Degree Solar Holdings Inc. Holdings $27,000,000 3% Will receive payment from the settlement fund General Unsecured Claims vs. Solyndra $150,000,000 to $200,000,000 2.5% to 6.0% Will receive pro rata share of settlement trust interests, which will entitle holder to a share of the settlement fund and Solyndra residual trust interests Interests In Holdings N/A Unimpaired. Holders to retain interests Interests In Solyndra N/A Deemed to reject. Interests will be extinguished A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Solyndra_Plan_Outline.pdf About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. SP NEWSPRINT: Judges OKs $145 Million Stalking Horse Plan --------------------------------------------------------- Brian Mahoney at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Christopher S. Sontchi on Friday approved SP Newsprint LLC's $145 million stalking horse agreement but delayed the auction date by one week, clearing the way for a wind-down of the embattled papermaker while mollifying creditor concerns over the auction's curtailed bidding period. In an order approving the sales procedure, Judge Sontchi greenlit the stalking horse agreement with SPN AcquisitionCo LLC, an entity formed and owned proportionately by the prepetition lenders for the purpose of acquiring the company's assets, according to Bankruptcy Law360. Bankruptcy Law360 earlier reported that reports that unsecured creditors of SP Newsprint Holdings asked the Delaware judge to modify the paper maker's $145 million stalking horse agreement with its lenders, saying the sale schedule it proposes is too short to allow for other bidders to emerge. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $318 million in assets and $323 million in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. STAR BUFFET: Contested Plan Confirmation Hearing on Oct. 22 ----------------------------------------------------------- Star Buffet, Inc. disclosed that the United States Bankruptcy Court for the District of Arizona scheduled a contested confirmation hearing for Oct. 22, 2012, in connection with the Company's proposed First Amended Joint Plan of Reorganization dated May 24, 2012. The official unsecured creditors' committee and certain of its members objected to confirmation of the Plan and voted to reject it. Certain other unsecured creditors objected to confirmation of the Plan, despite the fact that the Plan calls for full repayment of all allowed unsecured creditors' claims. Stockman Bank of Montana, which holds two secured claims, voted in favor of the Plan, and Wells Fargo Bank, N.A., which holds the largest secured claim, announced at the hearing that it will be voting in favor of the Plan. About Star Buffet Based in Arizona, Star Buffet, Inc. filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 11-27518) on Sept. 28, 2011. Judge George B. Nielsen Jr. presides over the case. S. Cary Forrester, Esq., at Forrester & Worth, PLLC, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. None of the Company's subsidiaries were included in the bankruptcy filing except for Summit Family Restaurants, Inc. STRIKE ENTERTAINMENT: Case Summary & 14 Unsecured Creditors ----------------------------------------------------------- Debtor: Strike Entertainment Group, LLC P.O. Box 12489 Jackson, MS 39236-2489 Bankruptcy Case No.: 12-02391 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Edward Ellington Debtor's Counsel: J. Walter Newman, IV, Esq. NEWMAN & NEWMAN 248 East Capitol Street, Suite 539 Jackson, MS 39201 Tel: (601) 948-0586 Fax: (601) 948-0588 E-mail: wnewman95@msn.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 14 unsecured creditors is available for free at http://bankrupt.com/misc/mssb12-02391.pdf The petition was signed by John W. Christopher, owner/general manager. SYMS CORP: To Present Plan for Confirmation on Aug. 29 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has approved the Disclosure Statement for the Second Amended Joint Chapter 11 Plan for Syms Corp and its wholly owned subsidiary Filene's Basement, LLC. The court also set a solicitation schedule and a date of Aug. 29, 2012 for the confirmation hearing. The Plan has the support of the Debtors, the Official Committee of Unsecured Creditors, and the Official Committee of Equity Security Holders, which represents minority shareholders. The Disclosure Statement was approved by the Court on July 13, 2012. If the Plan is approved, Syms creditors will be paid in full. The Plan will allow Filene's Basement creditors to receive a recovery from Syms' assets. Filene's trade creditors will be paid in full, while landlords with lease rejection claims will receive a recovery of 75%. The Plan creates a newly constituted company with a new capital structure, which will dispose of Syms real estate assets over time in a way that maximizes their value for the benefit of creditors and shareholders. The current majority shareholder (Marcy Syms and entities with which she is affiliated) will sell her shares in their entirety to the newly constituted Syms on the Plan's Effective Date at a price of $2.49 per share. Since early in the bankruptcy proceedings, the Equity Committee has expressed its desire for this transfer of control. Under the Plan, Syms will offer to sell to existing shareholders, other than the majority shareholder, who qualify as accredited investors under the plan, the right to purchase a total of more than 10 million new shares at a price equal to $2.49 per share, or approximately $25 million in the aggregate. Proceeds from this rights offering, along with proceeds from any real estate dispositions, will be used for payment of exit and other costs, with any remaining proceeds to be split between creditors and the majority shareholder, with creditors receiving 60% and the majority shareholder receiving 40%, until the majority shareholder is paid $10,725,761. The balance of Syms' payment obligation to the majority shareholder, in the amount of $7,065,907, will be paid after reorganized Syms has satisfied all its obligations to creditors under the Plan. A key component of this transaction is that while, on the Effective Date, the majority shareholder will relinquish her shares in their entirety and relinquish control of the company, and Syms will have raised funds from third parties sufficient to pay for those shares, she will be paid for those shares over time, without interest, assuming that assets are disposed of, funds are available, and all obligations to creditors have been satisfied. On the Effective Date, reorganized Syms' board of directors will be comprised of three designees of the Equity Committee, one designee of the Creditors' Committee, and one independent director agreeable to both the Equity Committee and the Creditors' Committee. The Debtor's assets currently include cash from the store closing sales; parcels of real estate owned by Syms; long-term ground leases; intellectual property owned by Filene's; and various estate claims and causes of action. About Filene's Basement & Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors disclosed assets of $236 million, including real estate of $97.7 million, and liabilities of $94 million, including $31.1 million owing on a revolving credit with Bank of America NA as agent. In addition, there were $11.1 million in letters of credit outstanding on the revolver. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. SYNCORA GUARANTEE: Moody's Review 'Ca' IFS Rating for Upgrade ------------------------------------------------------------- Moody's Investors Service has placed the Ca insurer financial strength (IFS) rating of Syncora Guarantee Inc. (SGI) on review for upgrade following the firm's announcement, on 17 July 2012, of a $375 million settlement of RMBS-related claims and other claims with Countrywide and Bank of America. The rating action has implications for the various transactions wrapped by SGI. Rating Rationale Moody's believes that the recently announced $375 million settlement with Countrywide and Bank of America is a material positive development for SGI, as it substantially improves the firm's liquidity and statutory surplus position. Being in excess of SGI's Q1 2012 aggregate putback receivable of $233 million, the settlement should, in itself, improve the firm's statutory capital position, which stood at $295 million at the end of the first quarter of 2012. In its announcement SGI stated that it had remediated other credits after the end of the first quarter, paying approximately $96 million in the process. The following rating was placed on review for upgrade: Syncora Guarantee Inc. - Insurance financial strength rating: Ca Moody's rating of Syncora Guarantee (U.K) Ltd. was not part of this rating action. Scope of the Review During its review Moody's will evaluate the risks embedded in SGI's insured portfolio, with a focus on downside risk sensitivities given the firm's large exposure to sectors and issuers adversely affected by the financial crisis and the current weak economic environment. SGI's ongoing risk mitigation efforts, including potential further loan put-backs and servicing transfers, will also be considered in this context. The rating agency will also assess the extent to which SGI's ownership of Syncora Capital Assurance Inc. (SCAI, unrated) contributes to its financial flexibility and claims paying resources. As of Q1 2012, SCAI had assets of $724.0 million and had assumed approximately $58 billion of risk from SGI. The rating agency stated that if a ratings upgrade were to occur upon conclusion of the review, SGI's rating could go up by more than one notch. Treatment of Wrapped Transactions Moody's ratings of securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of the following: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). Moody's approach to rating wrapped transactions is outlined in a special comment titled "Assignment of Wrapped Ratings When Financial Guarantor Falls Below Investment Grade" (May 2008) and an announcement titled "Moody's Modifies Approach to Rating Structured Finance Securities Wrapped by Financial Guarantors" (10 November 2008). As a result of the action, the Moody's-rated securities that are guaranteed or "wrapped" by SGI have also been placed on review for upgrade, except those with equal or higher published underlying ratings (and for structured finance securities, except those with equal or higher published or unpublished underlying ratings). Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) provides credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. Its wholly-owned subsidiary, Syncora Capital Assurance Inc. (SCAI, unrated), was created as part of a 2009 restructuring and reinsures a portion of SGI's US public finance and global infrastructure portfolio on a cut-through reinsurance basis. SGI also novated its non-commuted CDS exposures to SCAI. The principal methodology used in this rating was Moody's Rating Methodology for the Financial Guaranty Insurance Industry published in September 2006. TDS COMMERCIAL: Case Summary & 8 Unsecured Creditors ---------------------------------------------------- Debtor: TDS Commercial Construction, Inc. 4239 63rd Street West Bradenton, FL 34209 Bankruptcy Case No.: 12-11322 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Sacha Ross, Esq. GRIMES GOEBEL GRIMES HAWKINS, ET AL 1023 Manatee Avenue West Bradenton, FL 34205 Tel: (941) 748-0151 Fax: (941) 748-0158 E-mail: sross@grimesgoebel.com Scheduled Assets: $81,924 Scheduled Liabilities: $1,002,499 A copy of the Company's list of its eight largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-11322.pdf The petition was signed by David Scherer, president. TE ROSLYN: Committee Suffers Setback in Fight Over Lease -------------------------------------------------------- Bankruptcy Judge Alan S. Trust denied the request of the Official Committee of Unsecured Creditors in the Chapter 11 case of TE Roslyn LLC seeking to stay the Court's June 18, 2012 Order pending the outcome of the Committee's appeal of the June 18 Order to the District Court. The June 18 Order determined, among other things, that TE Roslyn had breached the terms of a Stipulation and Order dated April 26, 2012, between the Debtor and its landlord, ONB Realty, LLC, regarding the premises at which the Debtor had operated a restaurant. The Stipulation provided for a reinstatement of the prepetition lease of the Premises and provided the Debtor an opportunity to find a buyer for the Premises, conditioned, inter alia, on the Debtor paying its postpetition rent on a timely basis. However, the Debtor failed to make timely rent payments which, by virtue of the Stipulation, resulted in the Lease terminating. The Committee raises two arguments in support of its request for a stay pending appeal: first, that the Landlord's motion for relief from the automatic stay and the Stipulation were not properly served under Fed. R. Bankr. Proc. 40012; and second, that the balance of harms weighs in favor of granting a stay pending appeal. In denying the Committee's request, according to Judge Trust, the Committee has failed to establish a likelihood of success on appeal, irreparable harm, absence of substantial injury to the Landlord, or a compelling public interest. On July 17, the Debtor filed a motion to sell its interest in the leasehold and the personalty therein on an expedited basis. On July 19, the Committee filed a Stipulation [dkt item 100] signed by Debtor, counsel to the Committee and the Landlord, extending the deadline for the Debtor to hold an auction sale or remove its assets from the premises until Aug. 6, and extending the deadline for abandonment of the premises to Aug. 7. However, the Stipulation did not provide for reinstatement of the Lease. The hearing on bid procedures was conducted on July 23, at which time the parties announced that, while the parties agreed in principle to the auction process and procedures, the Lease had not been reinstated, the Landlord was under no obligation to accept the purchaser of Debtor's assets as an assignee of the Lease, and the pending appeals from the June 18 Order would still be prosecuted. On July 24, the Court entered an Order approving the Debtor's bid procedures, scheduled an auction sale for Aug. 6, 2012, at 10:00 a.m., and scheduled a hearing to consider approval of the sale for Aug. 6, 2012, at 2:00 p.m. The Debtor's now pending proposed sale of assets is conditioned on the purchaser being able to negotiate a reinstatement and assignment of the Lease. A copy of the Court's July 26, 2012 Decision and Order is available at http://is.gd/Wg1J12from Leagle.com. About TE Roslyn TE Roslyn LLC operated a restaurant at 1446 Old Northern Boulevard, Roslyn, in New York. It filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 12-71112) on Feb. 27, 2012, after receiving a notice of termination of the lease for the restaurant premises. Judge Alan S. Trust oversees the case. Jonathan S. Pasternak, Esq., at Rattet Pasternak, LLP, serves as the Debtor's counsel. The petition estimates under $1 million in assets and under $10 million in debts. The petition was signed by Christos Giorgou, managing member. An official committee of unsecured creditors was formed on May 7, 2012. THELEN LLP: Ex-Partners Settle Compensation Claims -------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Allan L. Gropper on Friday approved a settlement between the trustee of collapsed law firm Thelen LLP and two of its partners to resolve claims over the compensation the partners received in the firm's final years. Bankruptcy Law360 relates that Judge Gropper approved the deal between Thelen's Chapter 7 trustee Yann Geron and former Thelen partners Jeffrey Rosenstein and Edward Gartenberg, who agreed to pay roughly $4,350 to settle the claims. About Thelen LLP Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner -- http://thelen.com/-- is a bicoastal American law firm in process of dissolution. It was formed as a product between two mergers between California and New York-based law firms, mostly recently in 2006. Its headcount peaked at roughly 600 attorneys in 2006, and had 500 early in 2008, with offices in eight cities in the United States, England and China. In October 2008, Thelen's remaining partners voted to dissolve the firm. As reported by the Troubled Company Reporter on Sept. 22, 2009, Thelen LLP filed for Chapter 7 protection. The filing was expected due to the timing of a writ of attachment filed by one of Thelen's landlords, entitling the landlord to $25 million of the Company's assets. The landlord won approval for that writ in June 2009, but Thelen could void the writ by filing for bankruptcy within 90 days of that court ruling. Thelen, according to AM Law Daily, has repaid most of its debt to its lending banks. THORNBURG MORTGAGE: Trustee Pays Banks $72MM to Settle Suit ----------------------------------------------------------- Lana Birbrair at Bankruptcy Law360 reports that Joel I. Sher of Shapiro Sher Guinot & Sandler PA, the trustee for TMST Inc., agreed Friday to pay $72 million to Credit Suisse Securities LLC and several other financial institutions to settle proceedings alleging they have liens on the proceeds from certain mortgage servicing rights under a series of repurchase and swap agreements. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by his firm, Shapiro Sher Guinot & Sandler. TRAFFIC CONTROL: Receives OK of Fifth Street Finance Sale --------------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that the U.S. Bankruptcy Court in Wilmington, Del., approved the sale of Traffic Control and Safety Corp. to a company controlled by Fifth Street Finance Corp. As reported in the Troubled Company Reporter on July 23, 2012, the auction was cancelled after no other party submitted a bid that would rival the stalking horse offer by the company's lenders. Second-lien creditors have signed a deal to buy the company in exchange for $20 million of the junior secured debt. In addition, they will assume the first-lien obligations of about $18.5 million, pay expenses of the Chapter 11 case, and provide $500,000 toward expenses not paid with financing for the reorganization. When the sale is completed, the second-lien lenders will waive the remainder of their claim. About Traffic Control Traffic Control and Safety Corporation and six subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on April 20, 2012. TCSC is the largest independent provider of safety services and products in California and Hawaii. Formed by Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full- time employees and serves state and local agencies, public works organizations, general contractors, the motion picture industry, and provide services at special events. TCSC estimated assets of up to $50 million and debts of up to $100 million as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. Latham & Watkins LLP serves as the Debtors' bankruptcy counsel and Young Conaway Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC serves as financial advisors, and Epiq Bankruptcy Solutions LLC as the claims and notice agent. TRANS-LUX CORP: Files Form S-1, Registers 31.8MM Common Shares -------------------------------------------------------------- Trans-Lux Corporation filed with the U.S. Securities and Exchange Commission a Form S-1 relating to the sale by Peter L. and Jonnet Abeles, Richard V. Aghababian, James Anglim, et al., of up to 31,835,000 shares of the Company's common stock. The prices at which the selling stockholders may sell shares will be determined by the prevailing market price for the shares or in negotiated transactions. The Company will not receive any proceeds from the sale of these shares by the selling stockholders. The Company will bear all costs relating to the registration of these shares of its common stock, other than any selling stockholders' legal or accounting costs or commissions. The Company's common stock is quoted on the OTCQB under the symbol "TNLX.PK". The last reported sale price of the Company's common stock as reported by the OTCQB on July 25, 2012, was $0.32 per share. A copy of the Form S-1 prospectus is available for free at: http://is.gd/C1uQcS About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. The Company reported a net loss of $1.42 million in 2011, compared with a net loss of $7.03 million in 2010. The Company's balance sheet at March 31, 2012, showed $26.72 million in total assets, $24.45 million in total liabilities, $6.13 million in redeemable convertible preferred stock, and a $3.86 million total stockholders' deficit. US INFRASTRUCTURE CORP: S&P Affirms 'B+' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on United States Infrastructure Corp. (USIC). The outlook is stable. "At the same time, we raised our issue-level rating on the company's $250 million senior secured credit facility to 'BB-' from 'B+', and revised our recovery rating to '2' from '3', indicating our expectation of a substantial (70% to 90%) recovery in the event of a payment default. The higher issue-level rating is based on our assumption of a higher gross enterprise value at emergence, reflecting lesser uncertainty regarding integration costs and synergies from its acquisitions," S&P said. "The ratings on USIC reflect Standard & Poor's view of its 'weak' business risk profile and 'aggressive' financial risk profile. We assume that the company will benefit from a slow but steady recovery in end markets that require its line-locating services," said Standard & Poor's credit analyst Nishit Madlani. Cost synergies from its acquisition of Consolidated Utility Services Inc. (CUS) should enable the company to achieve an EBITDA margin of about 15% and reduce leverage to less than 5x adjusted total debt to EBITDA over the next year. The company participates in the niche $1.6 billion market for utility line-locating services. In about half of the market, utilities locate and mark their own lines. The utility companies outsource the rest of the market, mainly to two principal players (USIC is one). "USIC's end-market diversity is limited, with revenues split about equally among infrastructure, residential, and commercial construction-related activity, which drives utility line locating. USIC serves customers in the telecom, electric, gas, cable, and other utility markets. We expect the company to continue to have a high customer concentration with almost one-third of its revenues coming from AT&T Inc. (A-/Stable/A-2). Although historically USIC has been able to renew the majority of its contracts, the company could lose business if customers put expiring contracts out to bid. The regulatory requirement to locate and mark utility infrastructure before the initiation of underground excavations, and contractual relationships with several large customers help offset our assessment of USIC's weak business risk profile," S&P said. "Recurring revenues from infrastructure maintenance and government spending somewhat offset the company's exposure to the highly cyclical construction market. Although public construction remains soft, private construction was up 13.1% year over year in May on strength in both the residential and private nonresidential markets. In our base case we expect a slight decline in nonresidential activity in 2013, which low double-digit growth in residential construction and a slow recovery in infrastructure spending would offset. Despite the company's limited service offerings, the capability to respond within the utilities' 48- to 72-hour window provides a barrier to entry for potential competitors. We believe the CUS acquisition has further increased geographic density and allowed more line locates per stop, which should support improvement in profitability compared with prior years," S&P said. S&P said its base-case scenario assumptions (over the next two years) for USIC include: - Organic revenue growth will be in the low to mid single-digit area over the next two years as a result of the recovery in some end-markets. S&P expects USIC to somewhat improve market penetration across regions through new customers. - EBITDA margins will remain at about 15%, reflecting post acquisition-related cost synergies with lower labor expense (as a percent of sales) and a potential improvement in mix as the construction activity recovers. - Funds from operation to debt will improve over the cycle. Free operating cash flow to debt will be in the low to mid single digits given modest capital expenditures will average about 2% of revenues. "We view USIC's financial risk profile as aggressive given our expectation for leverage of 4.5x-5x and FFO to total debt of 10%- 15%. We expect these metrics to improve over the next year or so as the company benefits from cost reductions. It has limited capacity at the rating for large debt-financed acquisitions. Also, we believe financial policies will remain aggressive given its concentrated ownership by financial sponsors," S&P said. "The stable rating outlook reflects our belief that USIC would continue to benefit from improving demand for its line-locating over the next 12 months, coupled with cost synergies from its acquisition of CUS in 2011. We expect the company to achieve an EBITDA margin of about 15% and reduce leverage to less than 5x over the next year," S&P said. "We could lower the ratings if USIC's operating performance appears likely to weaken or if the company pursues a more aggressive financial policy than we expect. For example, we could lower the ratings if the company loses a large customer, causing earnings to decline to an extent that is likely to result in negative free cash flow or leverage greater than 5x for a sustained period," S&P said. "We consider an upgrade unlikely during the next year based on our assessment of the company's business and financial risks and USIC's concentrated ownership by financial sponsors, which we believe indicates that financial policies will remain aggressive," S&P said. UTSTARCOM INC: To Focus on Services and Divest IPTV Business ------------------------------------------------------------ UTStarcom Holdings Corp. announced strategic initiatives that together advance its efforts to transition into higher growth, more profitable areas and enhance the value of the business. Specifically, these strategic initiatives include: * The acceleration of the growth of the Company's media operational support services business. * The divestiture of the Company's IPTV equipment business which will become a privately-held, standalone company. * The appointment of former Board member and technology industry veteran Mr. William Wong as Chief Operating Officer, effective immediately. Mr. Wong will transition into the Chief Executive Officer role at UTStarcom upon close of the divestiture transaction. * Mr. Jack Lu will leave UTStarcom to lead the IPTV equipment business once the divestiture transaction closes. These initiatives stem from decisions made by a Strategy Committee of the Company's Board of Directors. The Strategy Committee, led by independent Directors, was convened in the first quarter of 2012 to identify opportunities to accelerate revenue growth, bolster profit margins, improve operational cash flow, and increase shareholder value. After evaluating several potential strategic options, the Strategy Committee determined the best way to achieve these goals is to concentrate capital and resources on building out value-added services, divest non-profitable parts of the business, and move into high-growth areas, such as media operational support services. As part of this strategy, the Company will divest its IPTV equipment business, which will become a privately-held standalone company. Once the divestiture transaction closes, Mr. Jack Lu will lead the new IPTV equipment business, thus leaving his position as UTStarcom's Chief Executive Officer. The divestiture is a means of effectively redeploying capital to support higher return opportunities, particularly in the value-added services area. It accelerates UTStarcom's ongoing transition into a higher growth business and will have an immediately positive effect on the Company's margin structure and profitability profile. The IPTV business currently accounts for approximately one-third of revenue and is expected to negatively contribute to the overall Company results. This strategic initiative will significantly reduce UTStarcom's expenses by US$17 million per year. "A result of an extensive review of potential options, this transaction offers the best solution for the Company to exit a non-strategic business segment and leaves UTStarcom with a dynamic core business well-positioned for future transformational initiatives," said Mr. Xiaoping Li, Lead Independent Director and Chair of the Strategy Committee. "Importantly, the divestiture preserves the parts of the revenue base that have higher profitability and stable growth prospects. It also provides excellent continuity for IPTV customers, who can expect the same level of service and commitment from the new company. Lastly, it helps provide clarity for business partners, employees, and shareholders on UTStarcom's priorities and strategic direction." Mr. Wong joins the Company today as Chief Operating Officer and will lead the efforts to separate the businesses. He will assume the role of Chief Executive Officer upon close of the transaction. Mr. Wong brings over 25 years of technology industry experience spanning consumer technology, telecommunications infrastructure and semiconductors and has served in many executive positions, including as Chief Executive Officer of Borqs International, which produces software platforms for mobile operators and chip manufacturers. From September 2010 until December 2011 Mr. Wong served as director on UTStarcom's Board. Most recently, he helped lead Yellowstone Capital, a strategy and financial advisory firm supporting technology companies in China. Mr. Wong earned a bachelor degree in electrical engineering from Northwestern University and master degrees in electrical engineering and business administration from the University of California, Berkeley. "We are delighted that Mr. William Wong has agreed to lead UTStarcom," continued Mr. Li. "William's professional expertise in the technology sector and his deep familiarity with our business and our objectives make him the ideal candidate to help transform the business. He has shown a longstanding and tireless commitment to UTStarcom through his tenure as a Board member and special advisor to the Company and we believe he will bring UTStarcom to new levels of success." "Also, on behalf of the Board I would like to thank Mr. Jack Lu for his exceptional stewardship of the Company for the past two and a half years during which he turned around the Company after six years of losses. After the divestiture, Mr. Lu will lead the new IPTV business. Based on his proven outstanding performance, we believe that he is the best candidate to lead the new business, bringing his passion, ability and vision to make the business an industry leader. We wish him every success and will give the new company the best necessary support in further developing the IPTV business as a market leading technology provider." "I would like to thank the Board, the management team and employees for their confidence and support since I joined UTStarcom," Mr. Jack Lu said. "With our leading technology, solid foundation in the IPTV market and strength in resources, we will continue to improve our support and services to our customers. We will continue to abide by our mission statement of 'we succeed as our customers succeed,' and actively drive IPTV technology development and the new company's sustainable growth." UTStarcom will divest the IPTV business, transferring all assets, liabilities and managerial duties to a new ownership team headed by Mr. Jack Lu. UTStarcom will purchase a US$20 million convertible bond that will be convertible into 33% of the new IPTV business's common stock in five years. The transaction immediately strengthens UTStarcom's balance sheet, removing aggregated liabilities such as customer advances and accrued service costs that are currently associated with the IPTV business. The new standalone IPTV business will have access to a greater range of options to adapt to competitive conditions. At the same time, it will enter into a brand licensing arrangement with UTStarcom to ensure business continuity for customers and business partners. The transaction is expected to close by the end of August. As a result of the transaction, the Company will begin reporting results from the IPTV division as discontinued operations in the third quarter of 2012 and for all comparable periods. The Company noted that based on current information, it expects second quarter results to be in line with initial internal expectations and to reflect strong sequential improvement versus the first quarter of 2012. Also, this strategic initiative is expected to immediately improve UTStarcom's profitability by removing a business with rates of return that are lower than those generated by the rest of the Company. UTStarcom will release its second quarter earnings in August 2012. At that time, the Company will also provide an update on the outlook for the remainder of the year. Mr. William Wong, Chief Operating Officer, concluded, "I am excited about the opportunity to work with UTStarcom's talented managers, engineers and service professionals to reposition the Company around services that better align us with our customers' needs and make us a more valuable partner. In addition, I am looking forward to building on the initial steps being taken today to truly transform our business. I will work to collaborate closely with the Board and management team to stay true to a set of core priorities, create the most effective long-term plan to grow the business, and deliver enhanced shareholder value." About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company reported a net loss of $4.72 million on $46.65 million of net sales for the three months ended March 31, 2012, compared with a net loss of $10.51 million on $61.26 million of net sales for the same period during the prior year. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. The Company's balance sheet at March 31, 2012, showed $590.27 million in total assets, $328.11 million in total liabilities and $262.16 million in total equity. VFRS LLC: Court Freezes Assets Amid Forex Fraud Charges ------------------------------------------------------- The Honorable Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California on July 27, 2012, entered an emergency order freezing the assets of defendants Victor Yu of San Jose, Calif., and his company, VFRS, LLC, based in Alameda, Calif. The court's order also prohibits the destruction or alteration of books and records, and grants the U.S. Commodity Futures Trading Commission immediate access to such documents. The judge set a hearing on the CFTC's motion for a preliminary injunction for August 10, 2012. The order arises out of a civil enforcement action filed by the CFTC on July 26, 2012, charging defendants Yu and VFRS with defrauding at least 100 clients in connection with off-exchange foreign currency (forex) trading. The CFTC's complaint also charges Yu with failure to register with the CFTC as a commodity trading advisor (CTA). According to the CFTC complaint, since at least August 2009 to the present the defendants' clients invested more than $5 million in forex trading accounts and lost more than $2 million, while defendants received fees of more than $270,000 from their clients. The defendants allegedly fraudulently solicited clients to open forex accounts that allowed the defendants to place trades in their accounts using trading software that Yu claimed to have developed. Further, defendants misrepresented to clients that the trading software made forex trading "extremely safe," prevented clients from ever reaching certain loss thresholds, and guaranteed that clients will not have a losing trade, according to the complaint. In addition, defendants allegedly misrepresented to some prospective customers that their trading software had shown positive returns on every trade it had ever made and has successfully predicted activity in the currency markets back to the 1920s. To solicit new clients, Yu and VFRS, by and through Yu, held face- to-face meetings with prospective clients in various clients' homes, obtaining leads primarily through word-of-mouth, according to the complaint. Yu allegedly promised existing clients a referral fee or a percentage of any profits earned in the new clients' forex accounts. When opening accounts, clients signed agreements promising to pay the defendants a service fee of 30 percent of their net profits, and the defendants provided log-in and password information so that clients could "hook up" to the defendants' trading software. The complaint alleges that by this conduct, Yu acted as a CTA and was required to register with the CFTC. In its continuing litigation, the CFTC seeks civil monetary penalties, restitution, trading and registration bans, and preliminary and permanent injunctions against further violations of the federal commodities laws, as charged. The CFTC Division of Enforcement staff members responsible for this case are Robert Howell, Jennifer Smiley, Joseph Patrick, Susan Gradman, Scott Williamson, Rosemary Hollinger, and Richard Wagner. VICTORVILLE, CA: Under SEC Probe Over Financial Practices --------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that joining the flurry of California cities facing serious economic problems, the city of Victorville is under investigation by the U.S. Securities and Exchange Commission and could face a lawsuit over its financial practices, Victorville's city attorney confirmed Thursday. Bankruptcy Law360 relates that City Attorney Andre de Bortnowsky said that Victorville had received subpoenas from the SEC and had submitted thousands of pages of documents to the commission, adding that the investigation seems to have "no immediate end in sight." VOLKSWAGEN-SPRINGFIELD: BB&T Seeks OK of Settlement Agreement ------------------------------------------------------------- Branch Banking and Trust Company asks the U.S. Bankruptcy Court for the Eastern District Of Virginia to approve a settlement agreement resolving a certain motion for relief from stay in the Chapter 11 case of Volkswagen-Springfield, Inc. On May 22, 2012, BB&T filed a motion for relief from stay relating to certain property. According to BB&T, the Debtor has acknowledged that it cannot pay its debt to BB&T, that it has no equity in the property and the property is not necessary for an effective reorganization unless it is sold, and BB&T is entitled to relief from stay. About Volkswagen-Springfield Springfield, Virginia-based Volkswagen-Springfield, Inc., filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 12-12905) in Alexandria on May 7, 2012. The Debtor operates one of the largest Volkswagen franchised dealerships in the Mid-Atlantic region. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Judge Robert G. Mayer oversees the case. The Debtor is represented by Dylan G. Trache, Esq., and John T. Farnum, Esq., at Wiley Rein LLP, in McLean, Virginia. Pursuant to recent default notices, Branch Banking and Trust Company has asserted that it is owed $19.6 million. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, represents BB&T. No creditors' committee has yet been appointed in the case. W.R. GRACE: 55 Claims Transferred July 1 to 25 ---------------------------------------------- The Clerk of Court recorded 55 claims transferred from July 1 to July 25, 2012. Sierra Asset Management, LLC transferred 42 claims to Sierra Liquidity Fund, LLC. Sierra Nevada Liquidity Fund transferred six claims to Sierra Liquidity Fund, LLC. Sierra Capital transferred one claim to Sierra Liquidity Fund, LLC. Main Plaza, LLC transferred two claims to CIM Urban REIT 211 Main St. (SF), LP, as assignee of CIM REIT Acquisition, LLC. SGH Enterprises, Inc., formerly known as Samson Hydrocarbons C, transferred one claim to the United States of America. Domnern Somgiat & Boonma Law Office Ltd. transferred one claim to Tannor Partners Credit Fund, LP. Intex Plastics Corporation transferred one claim to Southpaw Koufax LLC. Madison Complex Inc. transferred one claim to Tannor Partners Credit Fund, LP. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Buys Brazilian Admixture Manufacturer ------------------------------------------------- W. R. Grace & Co. acquired Rheoset Industria e Comercio de Aditivos Ltda. Rheoset is a leading manufacturer of concrete admixtures in Brazil. Financial terms of the transaction were not disclosed. Rheoset specializes in quality concrete admixtures based on proprietary, value-added concrete technologies that enhance the performance of concrete and contribute to higher quality, longer lasting structures. These technologies help customers across the value chain achieve efficient production and enhanced productivity. This acquisition adds manufacturing capacity at Rio de Janeiro and Recife, complementing Grace's existing operations at Sorocaba and Bahia. "Rheoset's product lines are highly complementary to Grace's concrete admixture product and technology portfolio," said Craig Merrill, Vice President and General Manager, Americas for Grace Construction Products, a business segment of Grace. "The acquisition will accelerate the pace of product and technology development, enabling the more rapid creation of new customer solutions and new value in this segment." Andrew Bonham, President of Grace Construction Products adds, "This acquisition is part of Grace's strategy of growth in high margin segments, investing in manufacturing capacity to serve emerging regions, and extending the Grace brand in our core business segments." About Grace Construction Products Grace Construction Products is a world-leading provider of construction chemicals and building materials that are used to enhance the durability, strength, and appearance of structures all over the world. Products include concrete admixtures, fibers, surface treatments and liquid pigments, additives for cement processing and fire protection, waterproofing and masonry products. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Liquidating Trust Distributes 927,800 Shares --------------------------------------------------------------- WMI Liquidating Trust, which was formed pursuant to the Seventh Amended Joint Plan of Affiliated Debtors under Chapter 11 of the United States Bankruptcy Code of Washington Mutual, Inc., disclosed that on Aug. 1, 2012, it will distribute 927,862 shares of WMI Holdings Corp. to Class 22 claimants. In connection with the Distribution, eligible claimants in Class 22 who held shares of common stock issued by WMI prior to September 25, 2008, will receive 0.00076346 of a share of the Company's new common stock for each share of WMI common stock they previously held. The common stock issued by WMI prior to September 25, 2008 was cancelled on March 19, 2012, the Effective Date of the Plan. The Distribution is possible as a result of a release of equity reserves held on account of recently disallowed equity claims and it supplements the share distribution that occurred shortly after the effective date on March 23, 2012. In the Initial Distribution, newly issued shares of the Company's common stock were distributed to claimants who elected to receive such common stock, as well as claimants in each of Classes 19, 21 and 22 under the Plan. Class 19 included holders of preferred securities identified as the REIT Series, Series K Perpetual Non-Cumulative Floating Rate Preferred Stock and Series R Non-Cumulative Perpetual Convertible Preferred Stock, in each case as defined in the Plan. The chart below summarizes shares issued to claimants in Classes 19, 21 and 22 and the conversion ratios for each class. Security Description Class Shares Issued Conversion Ratio -------------------- ----- ------------- ---------------- REIT Series 19 73,849,313 19.80058 Series K Preferred Stock 19 8,992,818 0.4950145 Series R Preferred Stock 19 57,548,706 19.8005825 Dime Warrants 21 4,165,700 0.0546370 Common Equity Interests 22 40,702,317 0.03349842 About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. In March 2012, the Debtors' Seventh Amended Joint Plan of Affiliated, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the chapter 11 restructuring process. The Plan is based on a global settlement that removed opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu established a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. WEST CORP: Files Form 10-Q, Posts $36.7MM Net Income in Q2 ---------------------------------------------------------- West Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $36.69 million on $661.89 million of revenue for the three months ended June 30, 2012, compared with net income of $34.37 million on $622.82 million of revenue for the same period during the prior year. The Company reported net income of $70.73 million on $1.30 billion of revenue for the six months ended June 30, 2012, compared with net income of $68.95 million on $1.23 billion of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $3.33 billion in total assets, $4.15 billion in total liabilities and a $823.98 million total stockholders' deficit. Bankruptcy Warning The Company said in its quarterly report for the period ended June 30, 2012, that if it cannot make scheduled payments on its debt, the Company will be in default, and as a result: * the Company's debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under the Company's new senior secured credit facilities could terminate their commitments to lend the Company money and foreclose against the assets securing its borrowings; and * the Company could be forced into bankruptcy or liquidation. A copy of the Form 10-Q is available for free at: http://is.gd/AXNO8A About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. * * * West Corp. carries a 'B2' corporate rating from Moody's and 'B+' corporate rating from Standard & Poor's. Moody's Investors Service upgraded the ratings on West Corporation's existing senior secured term loan to Ba3 from B1 and the rating on $650 million of existing senior notes due 2014 to B3 from Caa1 upon the closing of its recent refinancing transactions. Concurrently, Moody's affirmed all other credit ratings including the B2 Corporate Family Rating and B2 Probability of Default Rating. The rating outlook is stable. Standard & Poor's Ratings Services assigned Omaha, Neb.-based business process outsourcer West Corp.'s proposed $650 million senior unsecured notes due 2019 its 'B' issue-level rating (one notch lower than the 'B+' corporate credit rating on the company). The recovery rating on this debt is '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. The company will use proceeds from the proposed transaction and some cash on the balance sheet to redeem its $650 million 9.5% senior notes due 2014. WESTMORELAND COAL: Appoints Michael Hutchinson to Board ------------------------------------------------------- The Board of Directors of Westmoreland Coal Company has appointed Mr. Michael G. Hutchinson as an independent director effective Aug. 1, 2012. Mr. Hutchinson recently retired from Deloitte & Touche. His Deloitte career spanned nearly 35 years, leading their Denver Energy and Natural Resources Practice for the last fifteen years while at the same time managing the Audit and Enterprise Risk Management practice of the Denver office. Mr. Hutchinson is a native of Colorado having graduated from the University of Northern Colorado in 1978 with a Bachelor's degree specialization in Accounting. "We are pleased that Mike has agreed to join our board," commented Richard Klingaman, Chairman of the Board of Westmoreland. "His professional public accounting experience and broad engagement in the energy and financial sectors will serve us well." On July 27, 2012, the board of directors of Westmoreland Coal increased the number of directors that constitute the Board from six to seven members. About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. The Company reported a net loss of $36.87 million in 2011, a net loss of $3.17 million in 2010, and a net loss of $29.16 million in 2009. The Company's balance sheet at March 31, 2012, showed $955 million in total assets, $1.20 billion in total liabilities and a $249.08 million total deficit. * * * In March 2011, Standard & Poor's Ratings Services said that it assigned a 'CCC+' corporate credit rating to Colorado Springs, Colorado-based Westmoreland Coal Co. In January 2012, S&P revised its outlook on Westmoreland to positive from stable and affirmed its 'CCC+' credit rating. "The outlook revision reflects our expectation that the acquisition, improved reserve position, and stronger coal pricing could bring WLB's credit metrics in line with a higher rating over the next several quarters," said Standard & Poor's credit analyst Gayle Bowerman. The rating and outlook for WLB also incorporate the combination of what S&P considers to be its 'vulnerable' business risk profile and 'highly leveraged' financial risk profile. The ratings also reflect WLB's high-cost position in the Powder River Basin (PRB) and Texas, relatively short reserve life, high customer concentration, challenges posed by the inherent risks of coal mining, and liquidity that's less than adequate to meet the company's near-term obligations. WIZARD WORLD: Posted $303,900 Net Loss in 1st Quarter ----------------------------------------------------- Wizard World, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $303,903 on $520,155 of convention revenue for the three months ended March 31, 2012, compared with net income of $573,124 on $536,656 of convention revenue for the same period last year. "Other income (expense) for the three months ended March 31, 2012, was $51,121, as compared to $1,589,491 for the three months ended March 31, 2011," the Company said in the filing. "The decrease is primarily attributable to the Company realizing a gain on fair market value - derivative liability in the amount of $1,408,000 during the three months ended March 31, 2011, as compared to a $225,778 gain during the three months ended March 31, 2012." The Company's balance sheet at March 31, 2012, showed $1.44 million in total assets, $4.67 million in total liabilities, and a stockholders' deficit of $3.23 million. "As reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit at March 31, 2012, and had a net loss and net cash used in operating activities for the interim period then ended, respectively," the Company said in the filing. "These factors raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/FUp3yN Based in New York, N.Y., Wizard World, Inc., is a producer of pop culture and multimedia conventions ("Comic Cons") across North America that markets movies, TV shows, video games, technology, toys, social networking/gaming platforms, comic books and graphic novels. These Comic Cons provide sales, marketing, promotions, public relations, advertising and sponsorship opportunities for entertainment companies, toy companies, gaming companies, publishing companies, marketers, corporate sponsors and retailers. WM BOLTHOUSE: S&P Keeps 'B' Issuer Credit Rating on Watch Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BBB+' senior unsecured debt ratings to Camden, N.J.-based Campbell Soup Co.'s (BBB+/Stable/A-2) proposed senior unsecured debt securities expected to total about $1.25 billion, consisting of two-year floating rate notes, 10-year and a 30-year tranche (actual amounts and maturity dates to be finalized at the closed of the transaction). The notes will be issued under the company's Rule 415 shelf registration. Net proceeds of this offering are expected to be used toward the financing of the company's pending acquisition of Wm. Bolthouse Farms Inc. (B/WatchPos/--). "The ratings on Campbell reflect our opinion of the company's 'strong' business risk profile and 'intermediate' financial risk profile. Key credit factors in our business risk assessment include Campbell's product and brand diversification across soups, premium cookies and crackers, sauces, and vegetable-based juices; strong (albeit declining) market share in the wet soup category; and some geographic diversification. Our assessment of Campbell's financial risk profile incorporates our view that the company will maintain adequate liquidity and key credit measures that we expect to remain consistent with those of an intermediate financial risk profile, including leverage in the 2x to 3x area and funds from operations to total debt improving back to at least 30% during the next few years," S&P said. Ratings List Campbell Soup Co. Corporate credit rating BBB+/Stable/A-2 Rating assigned Campbell Soup Co. Proposed Senior Unsecured Debt Securities 'BBB+' WORLD OF FITNESS: Case Summary & 17 Unsecured Creditors ------------------------------------------------------- Debtor: World of Fitness, Inc. 9652 S. Roberts Road Hickory Hills, IL 60457 Bankruptcy Case No.: 12-29401 Chapter 11 Petition Date: July 25, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtor's Counsel: Forrest L. Ingram, Esq. FORREST L. INGRAM, P.C. 79 W. Monroe Street, Suite 900 Chicago, IL 60603 Tel: (312) 759-2838 Fax: (312) 759-0298 E-mail: fingram@fingramlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 17 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb12-29401.pdf The petition was signed by Ernest A. Wachs, president. WPCS INTERNATIONAL: Sells Two Operation Centers for $5.5 Million ---------------------------------------------------------------- WPCS International Incorporated sold substantially all of the assets and liabilities of two operation centers to Kavveri Telecom for $5.5 million in cash of which $4.9 million was received at closing with the remaining $600,000 to be placed in escrow pending the completion of certain post closing matters. WPCS sold the assets and liabilities of the Hartford Operations in Connecticut and the Lakewood Operations in New Jersey. Both the Hartford and Lakewood Operations provide wireless product integration services which is different from the wireless services provided by the other WPCS operation centers that focus on design-build engineering services for communications infrastructure. The proceeds will be used to extinguish bank debt and for future working capital. With the sale of the assets and liabilities of the two operation centers, WPCS has updated its revenue and EBITDA goals for fiscal year 2013, which ends on April 30, 2013, and is providing guidance for the current fiscal year. For the fiscal year, WPCS is projecting approximately $60 million in revenue and $1 million in EBITDA. The financial performance will be generated by the three domestic operation centers in Suisun City, Trenton and Seattle as well as the international operations in Australia and China. "The last two fiscal years have been challenging due to economic conditions and certain projects that experienced substantial cost overruns. Due to these issues, the company was unable to achieve its EBITDA projections for fiscal year 2011 and 2012. However, the management team is working to strengthen the balance sheet and income statement so that we can target positive revenue and EBITDA results for this fiscal year," said Andrew Hidalgo, CEO of WPCS. "With the sale of the assets and liabilities of these two operation centers, it allows us to replace liquidity lost due to the project overruns and gives us a core group of operation centers that can take advantage of the communication infrastructure opportunities in the healthcare, public services and energy markets." A copy of the Asset Purchase Agreement is available at: http://is.gd/vghz4F About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. The Company reported a net loss attributable to WPCS of $12.02 million for the nine months ended Jan. 31, 2012, compared with a net loss attributable to WPCS of $9.80 million for the same period during the prior year. The Company's balance sheet at Jan. 31, 2012, showed $37.69 million in total assets, $23.21 million in total liabilities, and $14.48 million in total equity. ZALE CORP: Signs Second Amendment to BOA Credit Facility -------------------------------------------------------- Zale Corporation and certain of its subsidiaries, entered into a Second Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent, and the various other parties thereto. The New Bank Facility amends and extends Zale's revolving credit facility that was scheduled to mature on April 30, 2014. The New Bank Facility provides for revolving borrowings of up to $665 million (which includes a $15 million, first-in, last-out facility) and matures on July 24, 2017. The New Bank Facility bears interest at LIBOR plus an applicable percentage based upon Zale's average availability. The FILO facility bears interest at LIBOR plus an applicable percentage based on Zale's average availability. A copy of the New Bank Facility is available for free at: http://is.gd/DrfSN8 In addition, on July 24, 2012, Zale (i) used proceeds of borrowings under the New Bank Facility to prepay $60.5 million of the $140.5 million outstanding principal amount under Zale's senior secured term loan with Z Investment Holdings, LLC, an affiliate of Golden Gate Capital, and (ii) entered into an Amended and Restated Credit Agreement with Z Investment with respect to the Term Loan. Under the terms of the Amended Term Loan Agreement, the maturity date of the remaining $80 million outstanding principal amount under the Term Loan was extended from May 10, 2015, to July 24, 2017. In addition, the interest rate was reduced from 15% per annum to 11% per annum. Under the Amended Term Loan Agreement, the Term Loan may be prepaid with a make-whole call premium during the first year and a fixed call premium thereafter, declining from 4% in the second year to 0% in the fifth year. A copy of the Amended Term Loan Agreement is available at: http://is.gd/nVr68W About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ The Company reported a net loss of $7.56 million on $1.45 billion of revenue for the nine months ended April 30, 2012, compared with a net loss of $79.66 million on $1.36 billion of revenue for the same period during the prior year. The Company's balance sheet at April 30, 2012, showed $1.22 billion in total assets, $1.01 billion in total liabilities and $202.13 million in stockholders' investment. ZALE CORP: Z Investment Discloses 25.6% Equity Stake ---------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Z Investment Holdings, LLC, and its affiliates disclosed that, as of July 24, 2012, they beneficially own 11,064,684 shares of common stock of Zale Corporation representing 25.6% of the shares outstanding. A copy of the filing is available for free at http://is.gd/UPdOdE About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ The Company reported a net loss of $7.56 million on $1.45 billion of revenue for the nine months ended April 30, 2012, compared with a net loss of $79.66 million on $1.36 billion of revenue for the same period during the prior year. The Company's balance sheet at April 30, 2012, showed $1.22 billion in total assets, $1.01 billion in total liabilities and $202.13 million in stockholders' investment. * Moody's Says Some Local Gov'ts May Feel Plant Closure Strain -------------------------------------------------------------- The credit impact on Moody's-rated communities with recent or announced plant retirements should be limited, though some local governments may experience negative pressures if prospective plant closings go forward, says Moody's Investors Service in a new report. "A growing number of plants are expected to announce accelerated retirements given the cost of compliance with new environmental regulations and their inability to compete with low-cost natural gas generation," said Moody's Analyst Andrea Stenhoff, author of the report, "Local Governments Are Well Positioned to Manage Coal- Fired Power Plant Retirements." "Selected plants located within the jurisdictions of Moody's-rated local governments that appear to be approaching closure, and have high tax base concentration in the respective plants, would face fiscal impact if the plants were to close," said Ms. Stenhoff. These include Dunkirk City School District, NY (GO rated A2), Lansing Town, NY (Aa3), Lansing Central School District, NY (Aa3), Barker Central School District, NY (A1/NEG), and Homer-Center School District, PA (A3). "The negative impact to local governments with sizeable plant retirements can be mitigated by several factors, including delays in fiscal impact, prior limited usage of retiring plants, and intervention by regulators and politicians," said Ms. Stenhoff. "For communities with sizeable plant retirements, strong planning and budgeting practices to mitigate the impact of lost tax revenues and jobs will help maintain credit quality." Also, communities with power plants that continue to operate can capture an even greater share of the market, according to Moody's. These could include plants retrofitted to run on other energy sources such as natural gas, or those whose coal-fired plants undergo upgrades that allow them to attain regulatory compliance. * Moody's Says Pace of Sovereign Defaults Remains Moderate ---------------------------------------------------------- Despite the stressful environment since the onset of the global financial crisis, the pace of sovereign defaults has remained moderate, says Moody's Investors Service in its eighth annual sovereign bond default study. The report, "Sovereign Default and Recovery Rates, 1983-2012H1," highlights that from the over 110 Moody's-rated sovereigns, Greece was the only one to default since the start of 2011. Jamaica defaulted in 2010, there were no rated sovereign defaults in 2009, and Ecuador defaulted in late 2008. Since 1983, all defaulters were among the 25% lowest-rated sovereign issuers. The global financial crisis has, however, continued to put pressure on sovereign creditworthiness, increasing the share of sovereign issuers in the lower tier of investment grade, says the Moody's study. Nevertheless, the share of issuers rated Aa and above is still substantially larger for sovereign issuers than for corporate issuers. A comparison between sovereign and corporate default rates by the rating agency shows that sovereign default rates have generally been, on average, modestly lower than those for corporates overall and by like rating symbol. However, the differences are not likely significant as the overall size of the sovereign sample is small. Further, over the 1983-2012H1 period of study, sovereign ratings have exhibited greater stability than their corporate counterparts. The study presents an analysis of all sovereign defaults since 1983 and compares and contrasts sovereigns and corporates with regard to default, migration, and recovery rates as well as ratings accuracy measures. * Canada Bankruptcies Rise 4.8% in May, Government Says ------------------------------------------------------- Bankruptcies in Canada rose 4.8% in May from a month earlier, the Office of the Superintendent of Bankruptcy said, according to Bloomberg News. Bankruptcies fell 1.7% in May from the previous year to 7,112, the agency said in a statement on its Web site. * Bankruptcy Vet Evan Hollander Joins Arnold & Porter ----------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that Arnold & Porter LLP has lured a longtime White & Case LLP bankruptcy partner in New York to bolster its offerings to debtors and financial institution creditors, the firm announced Wednesday. Evan Hollander started in Arnold & Porter's Manhattan office July 18 after an 18-year career at White & Case, calling the move "an opportunity that I really couldn't pass up." * Jones Day Adds Ex-Hunton & Williams Finance Partner B. Moorhead ----------------------------------------------------------------- Jones Day has announced that Bruce W. Moorhead Jr. has joined as a Banking & Finance Practice partner. Formerly a partner with Hunton & Williams, he will be based primarily in the Atlanta Office, but will spend a portion of his time in Jones Day's New York Office as well. Mr. Moorhead's practice focuses on the representation of financial institutions in leveraged and asset based lending transactions and in workouts and bankruptcies. He has extensive experience in all areas of bank and non-bank financing, with particular focus on leveraged lending and cross-border financing. Mr. Moorhead also represents financial institutions and intermediaries as administrative and collateral agents in connection with syndicated loans, leveraged acquisition lending, cash flow lending, asset based lending, and cross-border financing as well as resolution of problem loans, debtor-in-possession financing, and exit financing facilities. "Bruce's work for lenders in the area of asset based finance and leveraged finance, as well as his particular skills in important areas like DIP facilities and cross-border financings, will make him a very welcome addition to our global practice," said Brett Barragate, co-leader of Jones Day's Banking & Finance Practice. "While Bruce's work will be global, and will include significant time in our New York Office, I'm very happy that he will be working principally out of Atlanta," said Lizanne Thomas, Partner- in-Charge of Jones Day's Atlanta Office. "This city has become a true financial hub, and this office has amassed a remarkable world-class banking practice with more than a dozen lawyers serving clients in the Southeast and beyond." Prior to joining Jones Day, Mr. Moorhead represented agents in a $350 million Term B and revolving credit facility for the leveraged acquisition of the largest private company in the nuclear waste disposal industry; a $215 million credit facility for a large integrated telecommunications company; a $160 million facility for the acquisition and working capital financing for a multistate drug store chain; a $130 million facility for the refinancing of a multistate retail clothing chain and a $75 million multiple tranche DIP financing credit facility for a retail jewelry chain; and a $60 million multiple tranche DIP financing credit facility, providing bridge financing for the orderly liquidation of a memory chip manufacturer. A graduate of the University of Wisconsin (B.B.A. with distinction 1977) and Emory University (J.D. with distinction 1980) who has been recognized by Chambers USA as a leading lawyer in the area of Banking & Finance (2006-2011), Mr. Moorhead is admitted to the bars of Georgia, New York, and the U.S. Bankruptcy Courts for the Northern District of Georgia and the Southern District of New York. * Steptoe & Johnson's George R. Calhoun Moves to Fried Frank ------------------------------------------------------------ Fried, Frank, Harris, Shriver & Jacobson LLP disclosed that George R. Calhoun V has joined the Firm's litigation practice as special counsel resident in the Washington, DC office. Mr. Calhoun is a noted commercial litigator specializing in complex commercial disputes, insolvency and creditors' rights. He joins Fried Frank from Steptoe & Johnson LLP. Mr. Calhoun's practice primarily focuses on the litigation of complex disputes for clients in a broad array of disciplines, including contracts, real estate, fraud and bankruptcy. He has an extensive background in dispute resolution, having appeared before numerous state and federal courts on behalf of clients ranging from large multinational corporations to individuals. He also regularly appears before bankruptcy courts on behalf of creditors and other interested parties. "We are pleased to welcome George to our litigation practice," said Fried Frank litigation partner Howard Stahl. "The depth of his experience in complex commercial disputes and insolvency related litigation will be a tremendous asset to our clients across practice areas." "George's expertise will be a valuable complement to our commercial litigation practice, which continues to flourish and expand in the United States and internationally. We welcome him to the Firm," added Valerie Ford Jacob, Fried Frank's Chairperson. Mr. Calhoun received his JD, with honors, from University of Maryland School of Law (Order of the Coif) in 1997, and his BA from Vanderbilt University in 1994. He is admitted to practice in the District of Columbia and Maryland. Fried Frank's litigators represent clients across multiple jurisdictions in a broad range of matters, including complex contract, bankruptcy, financial services, insurance, real estate and antitrust litigation. Fried FrankFried, Frank, Harris, Shriver & Jacobson LLP is a leading international law firm. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800 ; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800 ; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***