TCR_Public/120803.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, August 3, 2012, Vol. 16, No. 214

                            Headlines

AGY HOLDING: Amends Loan and Security Agreement with UBS AG
ALLEGIANT TRAVEL: Moody's Says Fleet Addition Credit Positive
ALLIANT HOLDINGS: S&P Affirms 'B-' Counterparty Credit Rating
ALTRA HOLDINGS: S&P Retains 'BB-' Corporate Credit Rating
ATP OIL: S&P Cuts Corp. Credit Ratings to 'CCC'; Outlook Negative

BENADA ALUMINUM: Files for Bankruptcy Protection in Orlando
BIOZONE PHARMACEUTICALS: Sues Former EVP and Director
CELL THERAPEUTICS: Estimates US$46.2 Million Net Loss in June
CENTRAL EUROPEAN: William Shanahan Resigns from Board
CKE RESTAURANTS: S&P Puts 'B-' Corp. Credit Rating on Watch Pos

CONVERTED ORGANICS: Has 236.3 Million Common Shares Outstanding
CPI CORP: Signs Purchase & Sale and Lease Agreements
CRESCENT RESOURCES: $325MM of 5-Year Bonds to Yield Up to 10.25%
CROWN CASTLE: S&P Affirms 'B+' Corp. Credit Rating; Outlook Pos
DAFFY'S INC: To Shut Stores, Files Full-Payment Plan

DAVITA INC: Fitch Decides to Discontinue Ratings
DEEP PHOTONICS: Sec. 341 Creditors' Meeting Set for Aug. 28
DEEP PHOTONICS: Hiring Tonkon Torp as Bankruptcy Counsel
DENNY'S CORP: Reports $4.6 Million Net Income in Second Quarter
DEWEY & LEBOEUF: UK Firm May Liquidate; German Unit in Insolvency

DEWEY & LEBOEUF: Wins Two Add'l Weeks of Bankruptcy Funding
DOT VN: Delays Form 10-K for Fiscal 2012
ELEPHANT TALK: Martin Zuurbier Resigns as Director
ENTERTAINMENT PROPERTIES: S&P Rates $250MM Sr. Unsec. Notes 'BB+'
EXTERRAN HOLDINGS: S&P Cuts Rating on 4.75% Secured Notes to 'B+'

HORSEHEAD HOLDING: S&P Assigns 'B-' Corporate Credit Rating
HRK HOLDINGS: Aug. 8 Hearing on Cash Use, DIP Loan and Asset Sale
HOTEL AIRPORT: Taps Capital Consulting as Insolvency Advisors
HUGHES TELEMATICS: Suspending Filing of Reports with SEC
IMPERIAL INDUSTRIES: Signs Merger Agreement with Q.E.P.

INTERLEUKIN GENETICS: Pyxis Innovations Owns 55.7% Equity Stake
KEOWEE FALLS: Proposes August 27 Auction Date for Sale of Assets
KV PHARMACEUTICAL: Files Form S-1; Registers 11MM Class A Shares
LEGENDS GAMING: Voluntary Chapter 11 Case Summary
LEHMAN BROTHERS: To Pay Holders of $1.8BB in Japanese Bonds

LEHMAN BROTHERS: Creditors Ask Fee Committee to Rule on Expenses
LEHMAN BROTHERS: FirstBank Seeks Reconsideration on Claim Status
LEHMAN BROTHERS: Makes Progress in Settlement With Swiss Unit
LEVEL 3: Moody's Rates New Term Loan 'Ba3'; Outlook Stable
LEVEL 3: S&P Rates $400MM Senior Notes Due 2020 'CCC'

MF GLOBAL: Clients Could Get All Money Back
MORGANS HOTEL: Incurs $13.5 Million Net Loss in Second Quarter
MUSCLEPHARM CORP: Cancels TCA Equity & Registration Right Pacts
NAVISTAR INT'L: GAMCO Hikes Equity Stake to 5.5%
NAVISTAR INT'L: Moody's Cuts CFR to 'B2'; Outlook Negative

NCR CORP: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Stable
NESBITT PORTLAND: Case Summary & 20 Largest Unsecured Creditors
NORTH BY NORTHWEST: Sec. 341 Creditors' Meeting Set for Aug. 8
PENN TREATY: Has Settlement Agreement with Insurance Commissioner
PEREGRINE FIN'L: Labor Department Initiates Probe

PEREGRINE FIN'L: Seeks to Subpoena Banks on Transfers
POSTMEDIA NETWORK: Moody's Rates C$250MM Sr. Secured Notes 'Ba3'
POSTMEDIA NETWORK: S&P Cuts CCR to 'B-' on Weak Performance
QUANTUM CORP: Incurs $17.5 Million Net Loss in Fiscal Q1
RANCHER ENERGY: Full-Payment Plan Ready for Confirmation Sept. 24

REOSTAR ENERGY: Amends Plan Outline to Include Settlement
RESIDENTIAL CAPITAL: Proposes KPMG as IT and Tax Advisor
RESIDENTIAL CAPITAL: Wins OK for KCC as Administrative Agent
RESIDENTIAL CAPITAL: Can Hire 3 Firms as Special Counsel
RESIDENTIAL CAPITAL: Wins OK for FTI as Financial Advisor

RESIDENTIAL CAPITAL: Can Hire Centerview as Investment Banker
RG STEEL: Delays Auction of Sparrows Point and Warren Assets
RR DONNELLEY: S&P Cuts Corp. Credit Rating to 'BB' on Weak Economy
SABINE PASS: Moody's Rates First Lien Bank Term Loan 'Ba3'
SAN BERNARDINO, CA: Files for Chapter 9 Bankruptcy

SAN BERNARDINO, CA: Voluntary Chapter 9 Case Summary
SELECT MEDICAL: S&P Affirms 'B+' Corporate Credit Rating
SEVEN SEAS: Moody's Affirms B2 CFR/PDR, Rates $40MM Revolver Ba2
STOCKTON, CA: Assured Guaranty Faces $100-Mil. Loss Under Plan
SUN PRODUCTS: Moody's Affirms 'B2' CFR/PDR; Outlook Negative

SYNCORA GUARANTEE: Moody's Corrects Ratings on Certain Securities
TANNIN INC: Plan Confirmed After SEPH Objection Resolved
TRANSALTA CORP: S&P Cuts Global Rating on Preferred Stock to 'BB'
UNI-PIXEL INC: Has Public Offering of 3 Million Common Shares
UNITED RETAIL: To Seek Plan Confirmation on Sept. 13

USEC INC: Incurs $92 Million Net Loss in Second Quarter
USEC INC: S&P Keeps 'CCC+' Issuer Credit Rating on Watch Negative
VALENCE TECH: Sec. 341 Creditors' Meeting Set for Aug. 7
VALENCE TECH: Hearing on Use of Cash Collateral Reset to Aug. 31
WEST CORP: Moody's Rates New $720MM Loan Ba3, New $250MM Bond B3

* S&P: Default Rate Climbs to 2.8% on U.S. High-Yield Debt

* RI Bankruptcy Judge Votolato Retires; Finkle Takes Over

* BOOK REVIEW: Corporate Debt Capacity

                            *********

AGY HOLDING: Amends Loan and Security Agreement with UBS AG
-----------------------------------------------------------
AGY Holding Corp., a wholly-owned subsidiary of KAGY Holding
Company, Inc., AGY Aiken LLC and AGY Huntingdon LLC (collectively
the "Guarantors") and KAGY Holdings entered into a first amendment
to the Second Amended and Restated Loan and Security Agreement,
dated as of June 15, 2012, among KAGY Holdings, AGY Holdings, the
Guarantors, the lenders party thereto, and UBS AG, Stamford
Branch, as Administrative Agent.  The Amendment modified the Loan
Agreement to, among other things, permit the amendment of the
Master Lease Agreement, dated as of Sept. 28, 2009, between AGY
Holdings and DB Energy Trading LLC, to require delivery of certain
additional reports and to add a minimum EBITDA financial covenant.

On July 25, 2012, AGY Holdings also entered into an amended and
restated master lease agreement, with the Guarantors and DB
Energy, providing for leases of precious metals used in the
operations of the continuous filament mat business and the
glassfiber yarns business of AGY Holdings and its subsidiaries.
The A&R Master Lease amended and restated the Master Lease
Agreement to, among other things, extend the scheduled termination
date of the agreement to May 31, 2013, increase rent margins and
add subsidiary guarantees and a minimum EBITDA financial covenant.

The new minimum EBITDA financial covenants require that EBITDA
not be less than $16.5 million for the 12-month period ending
June 30, 2012, $17.25 million for the 12-month period ending
Sept. 30, 2012, $17.75 million for the 12-month period ending
Dec. 31, 2012, and $18.25 million for the 12-month period ending
March 31, 2013.

                          G. DeHuff Resigns

Effective July 27, 2012, George B. DeHuff has resigned as director
of AGY Holdings.

Effective July 27, 2012, Robert Isaman was elected to the Board of
Directors of AGY Holdings.  Mr. Isaman will receive compensation
for his services as a director of $50,000 for each fiscal year
served as a director.  In addition, Mr. Isaman will receive a
stock option grant to purchase 10,000 shares of common stock of
AGY Holdings' parent company upon his appointment to the Board.
The stock option award will vest at a rate of 25% per year.

                          About AGY Holding

AGY Holding Corp. -- http://www.agy.com/-- produces fiberglass
yarns and high-strength fiberglass reinforcements used in
composites applications.  AGY serves a range of markets including
aerospace, defense, electronics, construction and industrial.
Headquartered in Aiken, South Carolina, AGY has a European office
in Lyon, France and manufacturing facilities in the U.S. in Aiken,
South Carolina and Huntingdon, Pennsylvania and a controlling
interest in a manufacturing facility in Shanghai, China.

AGY Holding reported a net loss of $66.76 million in 2011, a net
loss of $14.57 million in 2010, and a net loss of $93.51 million
in 2009.

The Company's balance sheet at March 31, 2012, showed $232.85
million in total assets, $280.34 million in total liabilities and
a $47.49 million total shareholders' deficit.

                           *     *     *

As reported by the TCR on Nov. 23, 2011, Moody's Investors Service
lowered AGY Holding Corporation's (AGY) Corporate Family Rating
(CFR) to Caa2 from B3, reflecting the decline in the company's
liquidity and weak operating performance.

In the Dec. 5, 2011, edition of the TCR, Standard & Poor's Ratings
Services lowered its corporate credit rating on Aiken, S.C.-based
AGY Holding Corp. (AGY) to 'CCC-' from 'CCC+'.

"Our rating action reflects our view that AGY's credit quality has
deteriorated due to ongoing weakness in its operating performance,
a decline in liquidity, and the potential for insufficient
liquidity to meet interest payments in 2012.  As of Sept. 30,
2011, the company reported total liquidity of $17 million
including $16.2 million of availability under its unrated
revolving credit facility. AGY reported that it expected liquidity
to decline to levels of around $12.4 million in November following
the payment of nearly $10 million in semiannual interest on its
notes.  It also expects effective availability to be lower than
the reported figures, because the company is also subject to a
fixed-charge coverage ratio covenant if availability under its
revolving credit facility declines to below $6.25 million. We do
not expect to be in compliance if the covenant becomes applicable.
Current liquidity levels have declined from our expectations of a
minimum liquidity of $20 million at the previous rating. Key
credit risks, in our view, are liquidity insufficient to meet
requirements (including approximately $20 million in future
interest payments in 2012). An additional risk is potential
liquidity requirements possibly arising from the put option
available with the seller of AGY Hong Kong Ltd. for the remaining
30% of the company not yet purchased by AGY.  The put option can
be exercised through Dec. 31, 2013.  AGY reports a fair value of
about $0.23 million for the remaining 30% of the AGY Hong Kong
Ltd. as of Sept. 30, 2011 -- a decline from an initial estimated
value of about $12 million in 2009. AGY Hong Kong also has about
$10.5 million of debt, which the company reports it is trying to
extend, and approximately $11.5 million in annually renewable
working capital facilities due in 2012 (debt at AGY Hong Kong is
nonrecourse to AGY)," S&P said.


ALLEGIANT TRAVEL: Moody's Says Fleet Addition Credit Positive
-------------------------------------------------------------
Moody's Investors Service says that the introduction of Airbus
A320 family aircraft by Allegiant Travel Company ("Allegiant", Ba3
stable) is credit positive because these aircraft have a lower
projected per passenger cost relative to that of the McDonnell
Douglas MD-80 aircraft that comprise the company's current fleet.

Allegiant Travel Company, headquartered in Las Vegas, Nevada, is
focused on linking travelers in small cities to world-class
leisure destinations. Through its subsidiary, Allegiant Air, the
company operates a low-cost, high-efficiency, all-jet passenger
airline, and offers other travel-related products such as hotel
rooms, rental cars, and attraction tickets through its website,
allegiant.com.


ALLIANT HOLDINGS: S&P Affirms 'B-' Counterparty Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' counterparty
credit rating on Alliant Holdings I Inc. (Alliant) and revised the
outlook to positive from stable.

"At the same time, we revised our recovery rating on Alliant's
senior secured credit facilities to '2', indicating our
expectation of substantial (70%-90%) recovery for lenders in the
event of a payment default, from '3'. As a result, we raised our
issue ratings on these loans to 'B' from 'B-', in accordance with
our notching criteria for a recovery rating of '2'. A '2' recovery
rating indicates a one-notch uplift to the issue rating from the
counterparty credit rating. The credit facilities consist of a
$385 million senior secured term loan B, a $60 million incremental
term loan, a $160 million second incremental term loan, and a $80
million revolving credit facility," S&P said.

"We also affirmed our '6' recovery rating and 'CCC' issue-level
rating on Alliant's unsecured $265 million senior notes. The '6'
recovery rating indicates our expectation of negligible (0%-10%)
recovery for lenders in the event of a payment default," S&P said.

"Our rating actions are in response to the company's improved
financial profile as a result of favorable revenues and earnings
growth," said Standard & Poor's credit analyst Ying Chan.

"In 2011, Alliant increased adjusted EBITDA to $141 million
(adjusted EBITDA margins of 30.4%), from $135 million in 2010
(37.6%), through a combination of acquisition-related earnings,
new business volume from experienced producer hires, and strong
base performance, as demonstrated by high client retention rates
of over 90% and strong organic revenue growth of 7%," S&P said.


ALTRA HOLDINGS: S&P Retains 'BB-' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating
upward to '3' from '4' on Braintree, Mass.-based Altra Holdings
Inc.'s 8.125% senior secured notes. The mechanical power
transmission product manufacturer recently redeemed $21 million of
its senior secured notes, and about $177 million remains
outstanding.

The issue rating remains 'BB-', the same as the corporate credit
rating on subsidiary Altra Industrial Motion Inc.

"We expect the lower amount of outstanding debt to result in
greater recovery for lenders in a payment default. The '3'
recovery rating indicates our expectation for meaningful (50%-70%)
recovery for noteholders following a payment default," S&P said.

"Our 'BB-' corporate credit rating and stable outlook on Altra
Industrial Motion Inc. remain unchanged," S&P said.

RATINGS LIST

Altra Industrial Motion Inc.
Corporate Credit Rating      BB-/Stable/--

Recovery Rating Revised
                              To          From
Altra Holdings Inc.
Senior Secured               BB-         BB-
  Recovery Rating             3           4


ATP OIL: S&P Cuts Corp. Credit Ratings to 'CCC'; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on Houston-based ATP Oil & Gas Corp. ((ATP) to
'CCC' from 'CCC+' The outlook is negative.

"At the same time, we raised our issue rating on the company's
senior unsecured notes to 'CCC' from 'CCC-' (same as the corporate
credit rating). We revised the recovery rating on these notes to
'4', indicating our expectation of average (30% to 50%) recovery
in the event of a payment default, from '6'," S&P said.

"The downgrade reflects our expectation that ATP's liquidity is
currently limited relative to projected fixed charges over the
next three months," said Standard & Poor's credit analyst
Christine Besset. "Because of various operational issues faced by
the company, we believe that cash flow in second-quarter 2012 will
be below our forecasts, leaving ATP with lower-than-expected
liquidity at the end of the quarter. We estimate that current
liquidity and operating cash flow over the next three months will
be insufficient to cover capital expenditures (capex), royalty
interest payments and November bond interests without a cut in
capital spending or outside financing."

"The recovery rating revision reflects a change in our valuation
of the company's reserves," added Ms. Besset. "Given the
heightened risk of a near-term default, we are now valuing the
reserves using price assumptions which are close to the current
price environment rather than the low commodity prices we
generally assume for most E&P companies."

"The ratings on ATP Oil & Gas Corp. (ATP) reflect our assessment
of its 'weak' liquidity, the execution risk related to developing
reserves and production on a consistent basis (particularly in the
deepwater Gulf of Mexico), high capital spending requirements,
exposure to volatile commodity prices, and very high debt
leverage," S&P said.

"The negative outlook reflects the looming liquidity shortfall. We
could take a negative rating action if the company is unable to
secure additional funding this year or is unsuccessful in
developing planned 2012 wells, jeopardizing its liquidity
situation for 2013. We may revise the outlook to positive if ATP
finds additional financing and increases production, cash flow,
and liquidity to fund 2012 and 2013 fixed charges--likely in
conjunction with continued high commodity prices," S&P said.


BENADA ALUMINUM: Files for Bankruptcy Protection in Orlando
-----------------------------------------------------------
Benada Aluminum Products LLC, a full service maker of custom
aluminum extruded products with more than 60 years of industry
experience, filed a Chapter 11 bankruptcy petition (Bankr. M.D.
Fla. Case No. 12-10518) on Aug. 1, 2012.

Benada said that as a result of the weak economy, it has not been
able to make payments to creditors and is experiencing significant
cash flow issues.  The Debtor said it has filed for bankruptcy to
gain liquidity and restructure its debts while continuing
operations.

Benada estimated assets and debts of up to $50 million in filings
submitted in U.S. Bankruptcy Court in Orlando, Florida.

The Debtor on the Petition Date filed emergency motion to pay
prepetition wages and access DIP financing and use cash
collateral.  Judge Karen S. Jennemann will hold a preliminary
hearing on the motions on Aug. 6, 2012 at 9:30 a.m.

According to the case docket, a meeting under 11 U.S.C. Sec.
341(a) is scheduled for Aug. 27, 2012, at 3:00 p.m.  Creditors are
required to submit proofs of claim by Nov. 26, 2012.  The Debtor
is required to submit a Chapter 11 plan and disclosure statement
by Nov. 29, 2012.

Benada owns an aluminum products manufacturing facility in
Sanford, Florida.  It has 135 employees

Benada was formed in 2011 to purchase assets of two aluminum
products manufacturing companies.  It purchased via 11 U.S.C. Sec.
363 the Sanford facility of Florida Extruders International (Case
No. 08-07761).  It also purchased the assets Miami, Florida-based
Benada Aluminum of Florida Inc.  The Debtor has since consolidated
operations and operates only out of its location in Sanford.

Hydro Aluminum of Linthicum, Maryland, owed about $1.4 million, is
the biggest unsecured creditor.


BIOZONE PHARMACEUTICALS: Sues Former EVP and Director
-----------------------------------------------------
Biozone Pharmaceuticals, Inc., on July 18, 2012, commenced an
action in New York Supreme Court entitled Biozone Pharmaceuticals,
Inc., v. Daniel Fisher and 580 Garcia Properties, LLC., alleging
breach of contract, breach of fiduciary duty, fraud and
negligence.  The Company is seeking to recover damages, past wages
and cancellation of 6,650,000 shares of its common stock issued to
Mr. Fisher.

Meanwhile, Mr. Fisher commenced an action in the United States
District Court for the Northern District of California, entitled
Daniel Fisher v. Biozone Pharmaceuticals, Inc. et al., seeking
damages and injunctive relief, which claims among other things,
conversion, wrongful termination, tortious interference,
violations of securities laws, whistleblower statutes, his
employment agreement and stock purchase agreement.

Mr. Fisher resigned from the Company's Board of Directors on
Feb. 3, 2012.  Prior to his resignation, the Board of Directors,
on Jan. 30, 2012, following a meeting called for that purpose,
removed Mr. Fisher from all positions with the Company for "cause"
and terminated his employment agreement.  The basis for the
removal included unresolved accounting and business questions
related to certain companies acquired by the Company in 2011.  The
Company also has exercised its clawback rights, seeking to cancel
shares and other payments made to Mr. Fisher in connection with
the businesses acquired and shares of our common stock issued to
Mr. Fisher.  Mr. Fisher is also the guarantor of certain
intercompany debts owing the Company for which the Company is
seeking repayment.

                   About Biozone Pharmaceuticals

Biozone Pharmaceuticals, Inc., formerly, International Surf
Resorts, Inc., was incorporated under the laws of the State of
Nevada on Dec. 4, 2006, to operate as an internet-based provider
of international surf resorts, camps and guided surf tours.  The
Company proposed to engage in the business of vacation real estate
and rentals related to its surf business and it owns the Web site
isurfresorts.com.  During late February 2011, the Company began to
explore alternatives to its original business plan.  On Feb. 22,
2011, the prior officers and directors resigned from their
positions and the Company appointed a new President, Director,
principal accounting officer and treasurer and began to pursue
opportunities in medical and pharmaceutical technologies and
products.  On March 1, 2011, the Company changed its name to
Biozone Pharmaceuticals, Inc.

Since March 2011, the Company has been engaged primarily in
seeking opportunities related to its intention to engage in
medical and pharmaceutical businesses.  On May 16, 2011, the
Company acquired substantially all of the assets and assumed all
of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an
Asset Purchase Agreement dated as of that date.  Aero manufactures
markets and distributes a line of dermatological products under
the trade name of Baker Cummins Dermatologicals.

On June 30, 2011, the Company acquired the Biozone Labs Group
which operates as a developer, manufacturer, and marketer of over-
the-counter drugs and preparations, cosmetics, and nutritional
supplements on behalf of health care product marketing companies
and national retailers.

In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack,
N.J., expressed substantial doubt about the Company's ability to
continue as a going concern.  The independent auditors noted that
the Company does not have sufficient cash balances to meet working
capital and capital expenditure needs for the next twelve months.
In addition, as of Dec. 31, 2011, the Company has a shareholder
deficiency and negative working capital of $4.37 million.  The
continuation of the Company as a going concern is dependent on,
among other things, the Company's ability to obtain necessary
financing to repay debt that is in default and to meet future
operating and capital requirements.

Biozone reported a net loss of $5.45 million in 2011, compared
with a net loss of $319,813 in 2010.

The Company's balance sheet at March 31, 2012, showed $8 million
in total assets, $13.76 million in total liabilities and a $5.76
million total shareholders' deficiency.


CELL THERAPEUTICS: Estimates US$46.2 Million Net Loss in June
-------------------------------------------------------------
Cell Therapeutics, Inc., provided information pursuant to a
request from the Italian securities regulatory authority, CONSOB,
pursuant to Article 114, Section 5 of the Unified Financial Act,
that the Company issue at the end of each month a press release
providing a monthly update of certain information relating to the
Company's management and financial situation.

The Company estimates a net loss attributable to common
shareholders of US$46.20 million on US$0 of revenue for the month
ended June 30, 2012.  The Company reported a net loss attributable
to common shareholders of US$7.23 million on US$0 of revenue
during the prior month.

Estimated research and development expenses were $2.5 million for
the month of May 2012 and $3.5 million for the month of June 2012.

A copy of the press release is available for free at:

                        http://is.gd/CkTz9h

                      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.


CENTRAL EUROPEAN: William Shanahan Resigns from Board
-----------------------------------------------------
William S. Shanahan, a member of the board of directors of Central
European Distribution Corporation notified the Board of his
resignation from the Board effective immediately.  Mr. Shanahan,
who has served as an independent director of the Company since
April 2010, was a member of the Board's Compensation Committee and
Nominating and Corporate Governance Committee.

                             About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.

The Company's balance sheet at March 31, 2012, showed
US$2.033 billion in total assets, US$1.674 billion in total
liabilities, and stockholders' equity of US$358.45 million.

According to the regulatory filing, "[C]ertain credit and
factoring facilities are coming due in 2012, which the Company
expects to renew.  Furthermore, our Convertible Senior Notes are
due on March 15, 2013.  Our current cash on hand, estimated cash
from operations and available credit facilities will not be
sufficient to make the repayment on Convertible Notes and, unless
the transaction with Russian Standard Corporation is completed as
scheduled, the Company may default on them.  The Company's cash
flow forecasts include the assumption that certain credit and
factoring facilities that are coming due in 2012 will be renewed
to manage working capital needs.  Moreover, the Company had a net
loss and significant impairment charges in 2011 and current
liabilities exceed current assets at March 31, 2012.  These
conditions raise substantial doubt about the Company's ability to
continue as a going concern unless the transaction with Russian
Standard is completed as scheduled."

Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed
substantial doubt about Central European'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
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.


CKE RESTAURANTS: S&P Puts 'B-' Corp. Credit Rating on Watch Pos
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Carpinteria, Calif.-based restaurant operator and franchisor CKE
Restaurants Inc., including its 'B-' corporate credit rating, on
CreditWatch with positive implications.

"The CreditWatch placement follows CKE Restaurants' parent's (CKE
Inc.) announced plans to execute an IPO to raise capital that it
plans to use for debt reduction. According to the SEC filing, the
target is to raise gross proceeds of about $92 million," S&P said.

"Currently, we assess the company's financial risk as 'highly
leveraged' because of elevated debt associated with its
acquisition history and debt-financed dividends, and thin cash
flow protection measures," said Standard & Poor's credit analyst
Andy Sookram.

"We expect the company to use the proceeds from the prospective
IPO to reduce leverage on the balance sheet, resulting in improved
credit protection measures. Pro forma for the planned debt
reduction, leverage fall to about 6.4x from 7x on May 21, 2012,
and funds from operations to debt increases to slightly over 11%
from 10%," S&P said.

"We aim to resolve the CreditWatch listing when the IPO is
complete, with the possibility of a one-notch upgrade to 'B' from
'B-'. Additional support for an upgrade emanates from our forecast
for good operating performance on product promotion initiatives
and our expectation that CKE will likely pass on commodity cost
inflation through sales price increases. We will also review
the company's financial policies in the next year," S&P said.


CONVERTED ORGANICS: Has 236.3 Million Common Shares Outstanding
---------------------------------------------------------------
As previously disclosed on Jan. 3, 2012, Converted Organics Inc.
entered into an agreement with an institutional investor whereby
the Company agreed to sell to the investor twelve senior secured
convertible notes.  The initial January Note was issued on Jan. 3,
2012, in an original principal amount of $247,500.  The remaining
eleven January Notes will each have an original principal amount
of up to $237,600.  Each January Note matures eight months after
issuance.  The total face value of the twelve notes under this
agreement will be $2,861,100, assuming each note is sold for the
full face value, to the investor, of which there is no assurance.
The January Notes are convertible into shares of the Company's
common stock at a conversion price equal to 80% of lowest bid
price of the Company's common stock on the date of conversion.
Also, as previously reported on March 12, 2012, the Company
entered into an agreement with two investors, pursuant to which
the Company agreed to effect an additional closing under the
January 12, 2012, convertible note in which the Company issued the
buyers new notes having an aggregate original principal amount of
$550,000.  As of July 19, 2012, the total principal outstanding on
these notes was $1,890,160.

As of July 27, 2012, the principal amount of the Notes has
declined to $1,805,160.  From July 20, 2012, until July 27, 2012,
a total of $85,000 in principal had been converted into 26,994,193
shares of common stock.  Since the issuance of the Original Note
and the addtional closing, a total of $197,500 in principal has
been converted into 56,560,372 shares of common stock (after
effect of the November 2011 and March 2012 reverse stock splits).
The Note holders are accredited investors and the shares of common
stock were issued in reliance on Section 3(a)(9) under the
Securities Act of 1933, as amended.

As of July 27, 2012, the Company had 236,284,647 shares of common
stock outstanding.

                     About Converted Organics

Boston, Mass.-based Converted Organics Inc. utilizes innovative
clean technologies to establish and operate environmentally
friendly businesses.  Converted Organics currently operates in
three business areas, namely organic fertilizer, industrial
wastewater treatment and vertical farming.

After auditing the 2011 results, Moody, Famiglietti & Andronico,
LLP, noted that the Company has suffered recurring losses and
negative cash flows from operations and has an accumulated deficit
that raises substantial doubt about its ability to continue as a
going concern.

Converted Organics reported a net loss of $17.98 million in 2011,
compared with a net loss of $47.81 million in 2010.

The Company's balance sheet at March 31, 2012, showed $7.18
million in total assets, $6.81 million in total liabilities and
$367,679 in total stockholders' equity.


CPI CORP: Signs Purchase & Sale and Lease Agreements
----------------------------------------------------
CPI Corp. entered into a Purchase and Sale Agreement with Harris
Teeter, Inc., to sell real estate located at 815 Matthews Mint
Hill Road, Matthews, North Carolina.  A copy of the Purchase and
Sale Agreement is available for free at http://is.gd/IwvcuG

On July 27, 2012, CPI entered into a Lease Agreement with 1706
Washington Avenue, LLC, to lease real estate located at 1600,
1706, 1726 and 1801 Washington Avenue and 1701, 1731 and 1733
Lucas Avenue in St. Louis, Missouri.  A copy of the Lease
Agreement is available for free at http://is.gd/ZnKnZL

                          About CPI Corp.

Headquartered in St. Louis, Missouri, CPI Corp. provides portrait
photography services at more than 2,500 locations in the United
States, Canada, Mexico and Puerto Rico and offers on location
wedding photography and videography services through an extensive
network of contract photographers and videographers.

The Company's balance sheet at April 28, 2012, showed $90.37
million in total assets, $153.68 million in total liabilities and
a $63.31 million total stockholders' deficit.

The Company reported a net loss of $56.86 million for the fiscal
year ended Feb. 4, 2012, compared with net income of $11.90
million for the fiscal year ended Feb. 5, 2011.

KPMG LLP, in St. Louis, Missouri, issued a "going concern"
qualification on the consolidated financial statements for the
period ended Feb. 4, 2012, noting that the Company has suffered a
significant loss from operations, is not in compliance with the
financial covenants under its credit agreement, and has a net
capital deficiency, all of which raise substantial doubt about its
ability to continue as a going concern.

                         Bankruptcy Warning

Since late in fiscal 2011, the Company has been in active
discussions with its lenders to obtain a short-term covenant
compliance waiver to cure its existing defaults.  On May 23, 2012,
the Company entered into a forbearance agreement with its lenders
that, among other items, suspended the lenders rights and remedies
under the Credit Agreement through July 21, 2012.  Based on the
Company's default status under the Credit Agreement, the lenders
had the right to provide the Company with notice to call the loan.
Under the forbearance agreement, that right was relinquished until
July 21, 2012, and certain restrictions were placed on the Company
during the forbearance period.  On June 6, 2012, the Company
entered into the Second Amendment to the Credit Agreement, which
waived the existing defaults and terminated the forbearance
period.

The Second Amendment provides for revolving commitment limits of
$90 million on June 6, 2012, $94.0 million on June 12, 2012, $95.0
million on July 22, 2012, $94.0 million on Sept. 15, 2012, $90.0
million on Nov. 10, 2012 and $85.0 million on Dec. 11, 2012, and
thereafter, subject to the Company's satisfaction of certain
conditions and covenants.  The Credit Agreement, as amended by the
Second Amendment, now matures on Dec. 31, 2012, and bears interest
at an annual base rate of 3.25% payable in cash on a monthly
basis.  Additionally, under the Second Amendment, all outstanding
revolving loans (including both base-rate loans and LIBOR loans)
and all outstanding accumulated and unpaid interest other than the
3.25% cash interest are now defined as Payment in Kind Obligations
and accrue interest at a rate of 14% per annum.

"Management is implementing plans to improve liquidity through
improvements to results from operations, store closures, cost
reductions and operational alternatives.  However, there can be no
assurance that we will be successful with our plans or that our
future results of operations will improve.  If sales trends do not
improve, our available liquidity from cash flows from operations
will be materially adversely affected.  There can be no assurance
that we will be able to improve cash flows from operations, or
that we will be able to comply with the terms of the Second
Amendment.  Therefore, there can be no guarantee that our existing
sources of cash and our future cash flows from operations will be
adequate to meet our liquidity requirements, including cash
requirements that are due under the Credit Agreement and that are
needed to fund our business operations.  If we are unable to
address our liquidity shortfall or comply with the terms of our
Credit Agreement, as amended, then our business and operating
results would be materially adversely affected, and the Company
may then need to curtail its business operations, reorganize its
capital structure, or liquidate," the Company said in its
quarterly report for the period ended April 28, 2012.

"Should the Company not be able to sell its business by
December 31, 2012, in accordance with the Second Amendment, it
could be forced to seek additional financing, which may not be
available, curtail its business operations and/or reorganize its
capital structure, or be forced into bankruptcy.  An orderly
liquidation may also be required under the Second Amendment, which
could result in the wind down of all or part of the Company's
operations.  The outcome of restructuring and sale initiatives
required by the Credit Agreement is uncertain and an unfavorable
outcome would have a detrimental impact on the business.  The
amounts owed under the Credit Agreement are due December 31, 2012.
If the Company is not able to refinance its indebtedness at that
time, the Company may then need to curtail its business
operations, liquidate or be forced into bankruptcy."


CRESCENT RESOURCES: $325MM of 5-Year Bonds to Yield Up to 10.25%
----------------------------------------------------------------
Crescent Resources LLC's $325 million of five-year bonds, the
real-estate company's first sale since emerging from bankruptcy
two years ago, may yield between 10% and 10.25%, Bloomberg News
reported, citing a person familiar with the transaction.

According to the report, proceeds from the notes, originally set
to mature in seven years, will be used, along with $50 million of
equity from sponsors, to repay debt and for general corporate
purposes.  The new bonds may be rated Caa2, the fourth-lowest
level of speculative grade, by Moody's Investors Service, the
person said. Jefferies Group Inc., Credit Suisse Group AG and
JPMorgan Chase & Co. are managing the sale.

                      About Crescent Resources

Crescent Resources, LLC -- http://www.crescent-resources.com/--
is a real estate development and management organization which
developed, owned, leased, managed, and sold real estate since
1969.  Crescent Resources and its debtor-affiliates filed for
Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 09-11507) on
June 10, 2009, estimating more than $1 billion in assets and
debts.  Judge Craig A. Gargotta presided over the case.  Eric J.
Taube, Esq., at Hohmann, Taube & Summers, L.L.P., served as the
Debtors' bankruptcy counsel.  The Official Committee of Unsecured
Creditors in Crescent Resources tapped Martinec, Winn, Vickers &
McElroy, PC, as counsel.  On Dec. 20, 2010, the Court signed an
order confirming the Debtors' Revised Second Amended Joint Plan of
Reorganization.


CROWN CASTLE: S&P Affirms 'B+' Corp. Credit Rating; Outlook Pos
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Crown
Castle International Corp., including the 'B+' corporate credit
rating, and revised our outlook on the company to positive from
stable.

"We affirmed our 'B+' rating on Crown Castle Operating Co. Inc.'s
$3.1 billion of combined credit facilities, including a $1 billion
revolving credit, a $1.6 billion term loan B, and a $500 million
term loan A. The '4' recovery rating on the debt remains unchanged
and indicates prospects for average (30%-50%) recovery in the
event of a payment default," S&P said.

"We affirmed our 'BB' rating on the secured notes at subsidiaries
CC Holdings GS V LLC and Crown Castle GS III Corp. The '1'
recovery rating on the notes remains unchanged and indicates
prospects for very high (90%-100%) recovery in a payment default,"
S&P said.

"We affirmed our 'B-' rating on the unsecured debt at parent Crown
Castle International Corp. The '6' recovery rating remains
unchanged and indicates prospects for negligible (0-10%) recovery
in a payment default," S&P said.

"The outlook revision reflects our view that there is at least a
one-third probability of an upgrade of the company to 'BB-' from
'B+' over the next year," said Standard & Poor's credit analyst
Catherine Cosentino.

"The positive ratings outlook largely reflects the high degree of
revenue visibility inherent in the wireless tower business model.
An upgrade could occur if the company were able to demonstrate
that it can maintain leverage of no higher than 7x on an ongoing
basis, absent a materially sized, debt-funded acquisition. Even if
the company were to pursue an acquisition that temporarily
increased leverage to the mid-7x range, we could still raise the
ratings if we expected subsequent growth to lead to leverage
improvement below 7x," S&P said.

"A revision in the outlook back to stable is likely if leverage
rises above 8x, which could occur if the company were to buy a
large tower portfolio, such as the T-Mobile USA assets, which,
according to numerous press reports, are up for possible sale by
Deutsche Telekom AG. Alternatively, if the company's financial
policy were to become even more aggressive, including the adoption
of a substantially larger share repurchase program or paying a
special dividend of about $2.75 billion, either of which is debt-
funded, such actions would likewise prompt a revision in the
outlook back to stable," S&P said.


DAFFY'S INC: To Shut Stores, Files Full-Payment Plan
----------------------------------------------------
Daffy's Inc., the 19-store chain selling discount designer brands
in the U.S. Northeast, will shut the business and has a bankruptcy
plan that would pay off creditors in full.

Daffy's, which has 1,162 employees, filed simultaneously with its
Aug. 1 bankruptcy petition a Chapter 11 plan that would pay all
holders of allowed claims in full, with interest.  The Debtor has
not filed a disclosure statement as it is no longer soliciting
votes on the Plan.  All classes of creditors and equity holders
are unimpaired and are thus deemed to accept the Plan, a copy of
which is available at:

     http://bankrupt.com/misc/Daffys_Chapter_11_Plan.pdf

The Debtor has filed a motion to assume an agency agreement,
pursuant to which Gordon Brothers Retail Partners, LLC and Hilco
Merchant Resources LLC will liquidate the Debtor's inventory.

The Debtor has also filed a motion to assume an Asset Purchase,
Assignment and Support Agreement, dated as July 18, 2012, among
the Debtor, Marcia Wilson, The Wilson 2003 Family Trust, and
Jericho Acquisitions I LLC, pursuant to which the Debtor's
leasehold interests will be sold to Jericho Acquisitions I LLC
through the Plan.

The Debtor estimates that the proceeds received from the
liquidation of its inventory and the sale of its leasehold
interests will exceed at least $60 million to satisfy
approximately $37 million in claims.  Cost of administering the
chapter 11 case will not exceed approximately $5 million (after
certain expenses are reimbursed pursuant to the Purchase
Agreement).  Accordingly, the Debtor believes that the disposition
of the Debtor's principal assets will generate more than
sufficient cash to pay all holders of Allowed Claims (as such term
is defined in the Plan) in full, with interest, thus rendering all
classes under the Plan unimpaired.

The Debtor has asked the Court to immediately schedule a
confirmation hearing on the Plan.

                          Store Closings

Richard F. Kramer, Daffy's VP of Finance, said in a court filing
that the Debtor's operations during the last fifty years have
generally been profitable.  In 2011, however, as a result of the
continued economic downturn and increased competition in the
discount fashion market -- including an increase in online
discount retailers -- the Debtor suffered a net operating loss of
approximately $11,368,000.  The Debtor attempted to restructure
the business but sales continued to decline.  In June lender Wells
Fargo served default notices.  In light of the Debtor's
circumstances, the board decided that the Debtor would best be
able to maximize its assets through a sale of the Debtor's
leasehold interests and a liquidation of the Debtor's inventory.

For the fiscal year ending Jan. 1, 2012, the Debtor had net sales
of $151,264,000 and net operating losses of $11,368,000

The Debtor has already selected a liquidator for the assets and is
seeking approval to assume a deal reached prepetition.

Prepetition the Debtor sent bid packages to five different
liquidating agents.  It selected Great American Group WF, LLC as
stalking horse for an auction July 30.  A bid from a joint venture
comprised of Gordon Brothers and Hilco emerged the highest and
best offer.

Gordon/Hilco has guaranteed that that the Debtor would receive
99.5% of the aggregate cost value of the merchandise, which
equates to a minimum recovery for the Debtor of $16.915 million
based on a threshold inventory level of $17 million.

Gordon/Hilco has agreed to commence store closing sale Aug. 11 and
complete the sales and vacate the Debtor's stores no later than
Oct. 14, 2012.

                            Assets Sale

The Debtor is asking the bankruptcy court to approve its
assumption of the asset purchase agreement, under which the Debtor
has agreed to sell its leasehold interests and certain other
assets for a $43 million purchase price to Jericho Acquisitions I
LLC.

Another affiliate of Jericho has offered, through a separate sale
transaction, to purchase certain properties indirectly owned by
the Debtor's majority shareholder and Chief Executive Officer,
Marcia Wilson through wholly owned Vim-3, L.L.C., Vimwilco, L.P.
and Vim Associates, and leased by these entities to the Debtor.
The cash consideration is $40 million.  The sale provides a
benefit to the Debtor because it eliminates over $9 million in
guarantees made by the Debtor.

The Debtor, by the Purchase Agreement Assumption Motion, also
requests an extension of the time within which to assume or reject
unexpired leases of nonresidential real property through Feb. 27,
2013, the date that is 210 days from the Petition Date.

                   Schedules of Assets and Debts

The Debtor has filed its schedules of assets and liabilities,
disclosing:


     Name of Schedule              Assets         Liabilities
     ----------------            -----------      -----------
  A. Real Property                       $0
  B. Personal Property           $51,106,469
  C. Property Claimed as
     Exempt  N/A
  D. Creditors Holding
     Secured Claims                               $26,465,131
  E. Creditors Holding
     Unsecured Priority
     Claims                                           Unknown
  F. Creditors Holding
     Unsecured Non-priority
     Claims                                       $10,181,726
                                 -----------      -----------
        TOTAL                    $51,106,469      $36,646,856

Wells Fargo is owed more than $26 million for standby letters of
credit, revolving loans, terms loans, provided prepetition.

Wells Fargo is providing the Debtor $10 million in postpetition
financing, including $2.5 million in new financing on a revolving
basis and the roll up of certain obligations.

                           Employees

Daffy's has 1,162 employees in 19 stores in New York, New Jersey
and Philadelphia.

On July 12, employees were served with termination notices in
accordance with the requirements of the Worker Adjustment and
Retraining Notification Act of 1988.

                      Lawyers and Advisors

Donlin, Recano & Company, Inc., is the claims and notice agent.

The Debtor is represented by:

         Andrea Bernstein, Esq.
         Debra A. Dandeneau, Esq.
         WEIL, GOTSHAL & MANGES LLP
         767 Fifth Avenue
         New York, NY 10153
         Tel: (212) 310-8007
              (212) 310-8000
         E-mail: andrea.bernstein@weil.com
                 debra.dandeneau@weil.com

Gordon Brothers and Hilco Merchant Resources are represented by:

         Curtis, Mallet-Prevost, Colt & Mosle LLP
         101 Park Avenue
         New York, NY 10178
         Attention: Steven Reisman
         Tel: 212-696-6065
         E-mail: sreisman@curtis.com

Jericho Acquisition is represented by:

         Brad Eric Scheler, Esq.
         FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP
         One New York Plaza
         New York, NY 10004
         Fax: (212) 859-4000
         E-mail: Brad.Eric.Scheler@friedfrank.com

Marcia Wilson is represented by:

         Dana B. Cobb, Esq
         BEATTIE PADOVANO, LLC
         50 Chestnut Ridge Road, Suite 208
         Montvale, NJ 07645-0244
         Fax: (201) 573-9736
         E-mail: dcobb@beattielaw.com


DAVITA INC: Fitch Decides to Discontinue Ratings
------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn the
following ratings of DaVita Inc. (NYSE: DVA):

  -- Issuer Default Rating at 'BB-';
  -- Senior secured bank credit facility at 'BB';
  -- Senior unsecured notes at 'BB-'.

The Rating Outlook is Stable.

Fitch has decided to discontinue the rating, which is
uncompensated.


DEEP PHOTONICS: Sec. 341 Creditors' Meeting Set for Aug. 28
-----------------------------------------------------------
The U.S. Trustee in Oregon will convene a meeting of creditors
under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Deep
Photonics Corporation on Aug. 28, 2012, at 2:00 p.m. at UST1, US
Trustee's Office, Portland, Rm 223.

Proofs of claim are due in the case by Nov. 26, 2012.

Deep Photonics Corporation filed a Chapter 11 petition (Bankr. D.
Ore. Case No. 12-35626) on July 20, 2012.  Deep Photonics designs
and manufactures innovative solid-state fiber lasers.  The Debtor
estimated assets of $50 million to $100 million and debts of up to
$10 million.

Bankruptcy Judge Trish M. Brown presides over the case.  Timothy
J. Conway, Esq., at Tonkon Torp LLP, serves as the Debtor's
counsel.  The petition was signed by Theodore Alekel, president.


DEEP PHOTONICS: Hiring Tonkon Torp as Bankruptcy Counsel
--------------------------------------------------------
Deep Photonics Corporation is seeking Bankruptcy Court authority
to employ lawyers at Tonkon Torp LLP as Chapter 11 counsel.  The
Debtor has asked Tonkon Torp to advise it on its debt
restructuring and render general legal services as needed
throughout the course of the Chapter 11 case.

The firm's Timothy J. Conway, Esq., will lead the engagement.

The Tonkon Torp professionals who will be primarily responsible
for providing these services, their status and their current
billing rates are:

     Attorney Name             Status          Hourly Rate
     -------------             ------          -----------
     Timothy J. Conway, Esq.   Partner             $425
        E-Mail: tim.conway@tonkon.com

     Ava Schoen                Associate           $275
        E-Mail: ava.schoen@tonkon.com

     Spencer Fisher            Paralegal           $150

Tonkon Torp received $20,000 as retainer.

Within the 60 days preceding the Petition Date, Tonkon Torp has
provided legal services to Debtor related to pre-bankruptcy
planning.  The total cost of pre-bankruptcy legal services and
related disbursements through July 19, 2012 was $12,555 in legal
fees, plus $1,046 Bankruptcy Court filing fee, all of which was
paid in full from the retainer prior to the petition filing.  The
remaining balance of the retainer as of the Petition Date is
$6,399.

                       About Deep Photonics

Deep Photonics Corporation filed a Chapter 11 petition (Bankr. D.
Ore. Case No. 12-35626) on July 20, 2012.  Deep Photonics designs
and manufactures innovative solid-state fiber lasers.  The Debtor
estimated assets of $50 million to $100 million and debts of up to
$10 million.

Bankruptcy Judge Trish M. Brown presides over the case.  Timothy
J. Conway, Esq., at Tonkon Torp LLP, serves as the Debtor's
counsel.  The petition was signed by Theodore Alekel, president.


DENNY'S CORP: Reports $4.6 Million Net Income in Second Quarter
---------------------------------------------------------------
Denny's Corporation reported net income of $4.60 million on
$124.73 million of total operating revenue for the quarter ended
June 27, 2012, compared with net income of $8.13 million on
$135.85 million of total operating revenue for the quarter ended
June 29, 2011.

The Company reported net income of $10.46 million on $251.46
million of total operating revenue for the two quarters ended
June 27, 2012, compared with net income of $12.25 million on
$271.65 million of total operating revenue for the two quarters
ended June 29, 2011.

The Company's balance sheet at June 27, 2012, showed $328.88
million in total assets, $331.65 million in total liabilities and
a $2.77 million total shareholders' deficit.

John Miller, President and Chief Executive Officer, stated,
"During the second quarter, we achieved our fifth consecutive
quarter of positive system-wide same-store sales along with the
highest quarterly two-year same-store sales we have generated in
almost five years.  Despite the persistently challenging economic
environment, we continue to deliver solid financial results and
make progress in our efforts to differentiate Denny's in the
market place.  By executing on our strategies to further reinforce
our position as America's Diner and globally as your local diner,
we will build on our efforts to increase shareholder value.  As
Denny's approaches its 60th anniversary and 1,700th location, we
believe that Denny's will become one of the largest American full
service brands in the world.  Our recent partnership to open units
in southern China is the first significant step toward that goal."

A copy of the press release is available for free at:

                        http://is.gd/k2eLQM

                      About Denny's Corporation

Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ:
DENN) -- http://www.dennys.com/-- Denny's is one of America's
largest full-service family restaurant chains, consisting of 1,348
franchised and licensed units and 232 company-owned units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.

The Company said in its annual report for the year ended Dec. 28,
2011, that as the Company is heavily franchised, its financial
results are contingent upon the operational and financial success
of its franchisees.  The Company receives royalties, contributions
to advertising and, in some cases, lease payments from its
franchisees.  The Company has established operational standards,
guidelines and strategic plans for its franchisees; however, the
Company has limited control over how its franchisees' businesses
are run.  While the Company is responsible for ensuring the
success of its entire chain of restaurants and for taking a longer
term view with respect to system improvements, the Company's
franchisees have individual business strategies and objectives,
which might conflict with the Company's interests.  The Company's
franchisees may not be able to secure adequate financing to open
or continue operating their Denny's restaurants.  If they incur
too much debt or if economic or sales trends deteriorate such that
they are unable to repay existing debt, it could result in
financial distress or even bankruptcy.  If a significant number of
franchisees become financially distressed, it could harm the
Company's operating results through reduced royalties and lease
income.

                          *     *     *

Denny's carries 'B2' corporate family and probability of default
ratings from Moody's Investors Service and a 'B+' corporate credit
rating from Standard & Poor's.

As reported by the TCR on April 20, 2012, Standard & Poor's
Ratings Services withdrew all of its ratings, including the 'B+'
corporate credit rating on Spartanburg, S.C.-based Denny's Corp.
at the company's request.  There is no rated debt outstanding.


DEWEY & LEBOEUF: UK Firm May Liquidate; German Unit in Insolvency
-----------------------------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that the Dewey & LeBoeuf LLP's U.K.
administrators proposed liquidating the defunct law firm's British
assets last week, a day after the German operations were put in
insolvency proceedings by a Frankfurt court.

The U.K. partnership, which includes the London and Paris offices,
should be moved into liquidation, administrators at BDO LLP said
in a July 27 regulatory filing.  White & Case LLP attorney Andreas
Kleinschmidt, Esq., was appointed preliminary administrator on
July 26 in Germany, according to the country's online insolvency
registry.

Mr. Kleinschmidt said he couldn't comment on the German case as he
had only recently been appointed to the role.  He may be reached
at:

          Andreas Kleinschmidt
          WHITE & CASE LLP
          Bockenheimer Landstrasse 20
          60323 Frankfurt am Main
          Germany
          Tel: + 49 69 29994 0
          Fax: + 49 69 29994 1444

Kate Moffat, a spokeswoman for BDO, declined to comment.

                     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: Wins Two Add'l Weeks of Bankruptcy Funding
-----------------------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that Dewey & LeBoeuf LLP won court approval
to use cash pledged as collateral for lenders, giving it an
additional two weeks of funding to keep its bankruptcy case going.
U.S. Bankruptcy Judge Martin Glenn on July 31 approved Dewey's
request to extend its funding deadline, which would have July 31,
to Aug. 15.

                     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's German assets were put under preliminary administration by
a Frankfurt court in a ruling dated July 26.  White & Case
attorney Andreas Kleinschmidt was appointed as preliminary
administrator, according to a filing published by the German
central insolvency registry.  The German case is AG Frankfurt, 810
EI 2/12 D.

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.


DOT VN: Delays Form 10-K for Fiscal 2012
----------------------------------------
Dot VN, Inc., informed the U.S. Securities and Exchange Commission
that it will be late in filing its annual report on Form 10-K for
the period ending April 30, 2012.  The Company said the final
compilation, dissemination and review of the information required
to be presented in the Form 10-K could not be completed and filed
by July 30, 2012, without unreasonable effort and expense to the
Company.

                           About Dot VN

Dot VN, Inc. (OTC BB: DTVI) -- http://www.DotVN.com/-- provides
Internet and telecommunication services for Vietnam and operates
and manages Vietnam's innovative online media web property,
http://www.INFO.VN

The Company is the "exclusive online global domain name registrar
for .VN (Vietnam)."  Dot VN is the sole distributor of Micro-
Modular Data Centers(TM) solutions and E-Link 1000EXR Wireless
Gigabit Radios to Vietnam and Southeast Asia region.  Dot VN is
headquartered in San Diego, California with offices in Hanoi,
Danang and Ho Chi Minh City, Vietnam.

Dot VN was incorporated in the State of Delaware on May 27, 1998,
under the name Trincomali Ltd.

The Company's balance sheet at Jan. 31, 2012, showed $2.49 million
in total assets, $9.20 million in total liabilities and a $6.70
million total shareholders' deficit.

Following the 2011 results, PLS CPA, in San Diego, Calif., noted
that the Company's losses from operations raised substantial doubt
about its ability to continue as a going concern.


ELEPHANT TALK: Martin Zuurbier Resigns as Director
--------------------------------------------------
Martin Zuurbier resigned from the Board of Directors of Elephant
Talk Communications Corp.  Mr. Zuubier will continue to serve as
the Chief Technical Officer of the Company and an observer to the
Board.

Mr. Zuurbier's resignation is to ensure the Company's compliance
with the corporate governance requirement of NYSE MKT that at
least a majority of directors are independent directors.  Mr.
Zuurbier did not resign from the Board as a result of any
disagreement with the Company on any matter relating to the
Company's operations, policies or practices.

                        About Elephant Talk

Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK)
-- http://www.elephanttalk.com/-- is an international provider of
business software and services to the telecommunications and
financial services industry.

The Company reported a net loss of $6 million on $8.58 million of
revenue for the three months ended March 31, 2012.  The Company
reported a net loss of $25.31 million in 2011, a net loss of
$92.48 million in 2010, and a net loss of $17.29 million
in 2009.

The Company's balance sheet at March 31, 2012, showed $54.23
million in total assets, $21.95 million in total liabilities and
$32.28 million in total stockholders' equity.


ENTERTAINMENT PROPERTIES: S&P Rates $250MM Sr. Unsec. Notes 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue rating
and '2' recovery rating to Entertainment Properties Trust's
(EPR's) $250 million senior unsecured notes due 2022. "We expect
the company to use proceeds from the offering to repay $168
million in mortgage debt and draws on its unsecured revolving
credit facility," S&P said.

"Our ratings on Kansas City, Mo.-based EPR reflect the company's
'significant' financial risk profile and 'fair' business risk
profile. In our view, EPR's tenant base is concentrated and
exhibits weak credit quality. There may also be limited potential
for profitable reuse of some properties upon vacancy. However, we
believe strong occupancy, supported by mostly triple-net-leases,
and manageable near-term lease rollover will support EPR's
portfolio cash flow stability over the next few years," S&P said.

"The stable outlook on the company anticipates steady portfolio
cash flow supported by longer-term, triple-net-leases and modest
improvements in credit metrics from external growth. It also
reflects our expectation that fixed charges will decline after the
company refinances its secured debt," S&P said.

RATINGS LIST

Entertainment Properties Trust        Rating
Corporate credit rating               BB/Stable

New Rating
Entertainment Properties Trust        Rating
  $250 mil. sr. notes due 2022        BB+
   Recovery rating                    2


EXTERRAN HOLDINGS: S&P Cuts Rating on 4.75% Secured Notes to 'B+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue-level rating
on Exterran Energy Corp.'s 4.75% convertible senior unsecured
notes due 2014, which is being assigned to Exterran Holdings Inc.
to reflect recent changes to the company's capital structure. "We
lowered the issue-level rating to 'B+' (the same as the corporate
credit rating) from 'BB' and revised the recovery rating to '4'
from '1', reflecting our expectations of average recovery (30% to
50%) in the event of a payment default. This is because the 4.75%
convertible senior notes and the company's 4.25% convertible
senior notes due 2014 are now pari passu and share in the same
collateral after the company's secured revolving facility and its
7.25% senior notes," S&P said.

"The ratings on Exterran Holdings Inc. the company's participation
in the highly competitive, capital-intensive natural gas
compression services industry; its leveraged financial profile;
weak operating and credit metrics; its exposure to weak natural
gas prices; and the master limited partnership structure of
Exterran's growing subsidiary, Exterran Partners L.P.," said
Standard & Poor's credit analyst Susan Ding. "The ratings also
incorporate the company's respectable share of the domestic
contract compression market and its business and geographic
diversity. As of March 31, 2012, Exterran Holdings had
approximately $1.70 billion in debt outstanding."

RATINGS LIST
Exterran Holdings Inc.
Corporate credit rating              B+/Stable/--

Rating Lowered; Recovery Rating Revised
                                      To            From
4.75% convertible sr nts due 2014    B+            BB
  Recovery Rating                     4             1


HORSEHEAD HOLDING: S&P Assigns 'B-' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to U.S.-based zinc producer Horsehead Holding Corp.
The outlook is stable. "At the same time, we assigned our 'B-'
issue-level rating and a '4' recovery rating to the company's $175
million senior secured notes due 2017. The '4' recovery rating
indicates our expectation for average (30% to 50%) recovery in the
event of a payment default. Horsehead plans to use proceeds from
the notes to fund the capital required for construction of a new
zinc plant," S&P said.

"Our corporate credit rating on Horsehead reflects our view of the
company's business risk as 'vulnerable' and its financial risk as
'highly leveraged,'" said credit analyst Maurice S Austin.
"Weaknesses include high levels of debt and risks relating to the
construction of a large new zinc and diversified metals plant.
Other risks include the company's reliance on a single operating
plant, exposure to volatile metals prices, and cyclical end
markets."

"Our stable outlook reflects our view that note proceeds and
projected operating cash flow will provide 'adequate' liquidity to
the company to complete its plant construction, despite our
expectations for $0.80 to $0.85 zinc prices over the next 15
months."


HRK HOLDINGS: Aug. 8 Hearing on Cash Use, DIP Loan and Asset Sale
-----------------------------------------------------------------
HRK Holdings LLC and HRK Industries LLC are scheduled to appear
before the Bankruptcy Court in Tampa, Florida, on Aug. 8 at 3:00
p.m. for the continued hearing on the Debtors' various requests,
including for further use of cash collateral and to obtain
postpetition financing, and to sell assets.

At the hearing on July 12, the Debtors won interim authority to
use cash collateral and borrow funds on a superpriority basis.

The Court also has approved the Debtors' request to employ James
W. Martin, P.A., and William D. Preston, P.A. as special counsel.

The Court, however, declined the Debtors' request for expedited
consideration of their bid to sell assets.

The Debtors have arranged a $125,000 postpetition loan on a
secured basis from Arsenal Group LLC, owner of all of the
membership interests in HRK Industries and HRK Holdings.  Arsenal
Group is also an unsecured creditor of HRK Holdings.

The Debtors anticipate that revenues during certain weeks will be
insufficient to pay debts during such weeks.  The Debtors have
filed a motion seeking to approve the sale of certain real
property but need to borrow funds to supplement cash flow until
the sale closes.

The DIP Lender has agreed to make funds available to the Debtors
to supplement cash flow and pay the following obligations set
forth on a budget.

The DIP Loan will be in the maximum amount of $125,000 with
interest accruing at the rate of 9%.  Default interest will be 18%
per annum.  The Debtors will pay an unused line fee of 3%.

The Debtors may repay the DIP Loan in whole or in part from excess
cash.

In a five-week cash budget through July 27, the Debtors projected
to have $95,067 ending cash balance on revenues of $108,317 and
expenses of $13,250, by the end of the period.

According to papers filed in Court, the Debtors owe $17.5 million
to Regions Bank under prepetition loans.  Regions may assert that
it has lien on the Debtors' accounts proceeds and inventory.

The Debtors entered into an agreement, which granted the Florida
Department of Environmental Protection a lien on their property.
As of the petition date, the Debtors owe DEP $1.2 million.

Certain of the Debtors' assets may also be subject to mechanic's
lien claims, aggregating $2.15 million, filed by Ardman &
Associates Inc., Golson Legal Hayward Baker Inc., Neff Rental
Inc., Spectrum Underground Inc., and Sea Biscuit Trucking Inc.

HRK Holdings owns roughly 675 contiguous acres of real property in
Manatee County, Florida.  Roughly 350 acres of the property
accommodates a phosphogypsum stack system, called Gypstaks, a
portion of which was used as an alternate disposal area for the
management of dredge materials pursuant to a contract with Port
Manatee and as authorized under an administrative agreement with
the Florida DEP.  The remaining acres of usable land are either
leased to various tenants or available for sale.  HRK Industries
holds various contracts and leases associated with the Debtors'
property.

According to the Debtors, the bankruptcy filing was necessitated
by the immediate need to sell a portion of the remaining property
to create liquidity for (a) funding the urgent management of the
site-related environmental concerns; the benefit of creditors;
funding a litigation filed by the Debtors; and funding of expenses
related to additional sales of the remaining property.

The Debtors said the use of Cash Collateral will allow them to
"stabilize their business operations and maintain going-concern
value."

Pursuant to the Interim Cash Collateral Order, Regions, DEP, and
the Mechanic Lien Claimants are granted as adequate protection in
conjunction with Debtors' use of Cash Collateral postpetition
replacement liens against the Debtors' Cash Collateral to the same
extent, validity, and priority as existed as of the Petition Date.
The postpetition replacement lien to Regions Bank will not be
construed as determinative of whether or not Regions Bank
otherwise has an existing independent and enforceable postpetition
security interest in rents pursuant to Section 552(b)(2) of the
Bankruptcy Code.

                        About HRK Holdings

Based in Palmetto, Florida, HRK Holdings LLC owns real property in
Manatee County that accommodates a phosphogypsum stack system, a
portion of which is used as an alternate disposal area for the
management of dredge materials pursuant to a contract with Port
Manatee and as authorized under an administrative agreement with
the Florida Department of Environmental Protection.

HRK Holdings and its affiliate, HRK Industries, LLC, filed for
Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and
12-09869) on June 27, 2012.  Judge K. Rodney May oversees the
case.  Barbara A. Hart, Esq., at Stichter, Riedel, Blain &
Prosser, P.A., represents the Debtors.  HRK Holdings scheduled
$33,366,529 in assets and $26,069,208 in liabilities.  The
petitions were signed by William F. Harley, III, managing member.


HOTEL AIRPORT: Taps Capital Consulting as Insolvency Advisors
-------------------------------------------------------------
Hotel Airport, Inc., asks the U.S. Bankruptcy Court for the
District of Puerto Rico for permission to employ Javier Hernandez
Scimeca, CPA, CIRA, and the accounting firm of Capital Consulting
& Associates, PSC., as its insolvency and restructuring advisors.
The Debtor tells the Court that Capital Consulting and its
Consulting Director, Javier Hernandez Scimeca, will assist the
Debtor in the areas of Plan Development, Liquidation Analysis,
Claims Administration, Feasibility, Negotiations, Investment,
Financing in connection with its Chapter 11 proceedings.

The Debtor believes that Capital Consulting & Associates, PSC, and
Mr. Scimeca do not hold or represent any interest adverse to its
estate and are a disinterested party as required by 11 U.S.C.
327(a).

The rates that will be used by Debtor to compensate Capital
Consulting will be those approved by Debtor and the Court of
interim and/or final applications for services under 11 U.S.C.,
Sections 330 and 331, and applicable Local Bankruptcy Rules 2016.
A deposit of $2,000 has been agreed as a retainer.

                       About Hotel Airport

Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11
bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011.
Judge Enrique S. Lamoutte Inclan oversees the case.  Edgardo
Munoz, PSC, in San Juan, P.R., serves as bankruptcy counsel.
Francisco J. Garrido Molina serves as its accountant, and RS&
Associates as external auditors to perform auditing services.  The
Debtor disclosed US$8,547,993 in assets and US$171,169,392 in
liabilities as of the Chapter 11 filing.  The petition was signed
by David Tirri, its president.

The Debtor's plan provides that holders of administrative expense
claims and priority claims will be paid in full on the Plan's
effective date.

The Plan will be substantially funded by the Debtor's assets and
income from the operation of business.  The Plan proposes a merger
between the Debtor/HAI and and its parent, CAF, whereby a single
entity -- CAF -- will emerge.


HUGHES TELEMATICS: Suspending Filing of Reports with SEC
--------------------------------------------------------
HUGHES Telematics, Inc., filed with the U.S. Securities and
Exchange Commission a Form 15 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 $0.0001 per share.  There was only one holder of
the common shares as of July 31, 2012.

                       About HUGHES Telematics

Atlanta, Ga.-based HUGHES Telematics, Inc. is a telematics
services company that provides a suite of real-time voice and data
communications services and applications for use in vehicles and
is developing additional applications for use within and outside
of the automotive industry.

HUGHES reported a net loss of $85.35 million in 2011, a net loss
of $89.56 million in 2010, and a net loss of $163.66 million in
2009.

The Company's balance sheet at March 31, 2012, showed
$110.18 million in total assets, $211.81 million in total
liabilities, and a $101.62 million total stockholders' deficit.

In its report on the Company's 2011 financial results,
PricewaterhouseCoopers LLP, in Atlanta, Georgia, expressed
substantial doubt about the Company's ability to continue as a
going concern.  The independent auditors noted that the Company
has incurred recurring losses from operations and has a net
capital deficiency.


IMPERIAL INDUSTRIES: Signs Merger Agreement with Q.E.P.
-------------------------------------------------------
Imperial Industries, Inc., entered into an Agreement and Plan of
Merger with Q.E.P. Co., Inc., a worldwide manufacturer, marketer
and distributor of hardwood flooring, flooring installation tools,
adhesives and flooring related products, providing for the merger
of a subsidiary of QEP with and into the Company, with the Company
surviving the Merger as a wholly-owned subsidiary of QEP.
Pursuant to the terms and conditions of the Merger Agreement, each
share of the common stock of the Company issued and outstanding
immediately prior to the effective time of the Merger will be
converted into the right to receive $.30 in cash.

The Company's Board of Directors approved the Merger Agreement and
resolved to recommend that the Company's stockholders vote to
adopt the Merger Agreement.  The proposed Merger is subject to a
number of customary closing conditions, including obtaining
approval from the holders of a majority of the Company's
outstanding shares of common stock at a Company stockholder
meeting to be held.  The Company will call a special meeting of
its stockholders from the purpose of voting on the Merger as soon
as practical, which is expected to be held in October 2012.  There
can be no assurance that the Company will obtain a majority
shareholder vote to consummate the Merger, or that the Merger
Agreement will be terminated due to certain termination rights of
the parties.

A copy of the Agreement and Plan of Merger is available at:

                        http://is.gd/XAm0O5

A full-text copy of the Form 8-K filing is available at:

                        http://is.gd/GgQFMA

                     About Imperial Industries

Pompano Beach, Fla.-based Imperial Industries, Inc. (OTC BB: IPII)
-- http://www.imperialindustries.com/-- manufactures and
distributes stucco, plaster and roofing products to building
materials dealers, contractors and others through its subsidiary,
Premix-Marbletite Manufacturing Co.  The Company sells its
products primarily in the State of Florida and to a certain extent
the rest of the Southeastern United States.

In its report on the 2011 financial statements, Grant Thornton
LLP, in Fort Lauderdale, Florida, noted that the industry in which
the Company is operating has been impacted by a number of factors
and accordingly, the Company has experienced a significant
reduction in its sales volume.  In addition, for the year ended
Dec. 31, 2011, the Company has a loss from continuing operations
of approximately $1,310,000.  These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.

The Company's balance sheet at March 31, 2012, showed $4.18
million in total assets, $2.86 million in total liabilities and
$1.32 million in total stockholders' equity.


INTERLEUKIN GENETICS: Pyxis Innovations Owns 55.7% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Pyxis Innovations Inc. and its affiliates
disclosed that, as of April 13, 2012, they beneficially own
37,585,785 shares of common stock of Interleukin Genetics, Inc.,
representing 55.7% of the shares outstanding.  A copy of the
filing is available for free at http://is.gd/cfqny1

                         About Interleukin

Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized
health company that develops unique genetic tests to provide
information to better manage health and specific health risks.

Following the Company's financial results for the year ended
Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts,
expressed substantial doubt about Interleukin Genetics' ability to
continue as a going concern.  The independent auditors noted that
the Company incurred a net loss of $5.02 million during the year
ended Dec. 31, 2011, and, as of that date, the Company's current
liabilities exceeded its current assets by $12.27 million and its
total liabilities exceeded total assets by $11.4 million.

The Company reported a net loss of $5.0 million for 2011, compared
with a net loss of $6.0 million for 2010.

The Company's balance sheet at March 31, 2012, showed
$1.93 million in total assets, $14.72 million in total
liabilities, and a $12.79 million total stockholders' deficit.


KEOWEE FALLS: Proposes August 27 Auction Date for Sale of Assets
----------------------------------------------------------------
Keowee Falls Investment Group, LLC, asks the U.S. Bankruptcy Court
for the District of South Carolina for the entry of an order
approving bidding procedures for the sale of substantially all of
its assets to the highest and best bidder at an auction.

The terms and procedures proposed for the sale are:

Minimum Bid              : $17,175,000.

Bid Deadline             : 5:00 p.m. prevailing Eastern Time on
                           Aug. 24, 2012.

Auction Date             : Aug. 27, 2012 at 10 a.m. (prevailing
                           Eastern Time)

Credit Bid               : Worthington-Hyde Partners-II, L.P., the
                           Stalking Horse, will be deemed to be a
                           Potential Purchaser and its Initial Bid
                           of $17,125,000 as provided in the Asset
                           Purchase Agreement will be deemed to be
                           a Qualified Bid.  Worthington-Hyde wlll
                           be entitled: (i) to participate in the
                           Auction without submitting any
                           additional bid, deposit, notice or
                           other document; and (ii) to exercise
                           its credit bid rights under Section
                           363(k) of the Bankruptcy Code at the
                           Auction.

Closing                  : The closing will take place at the
                           offices of Levy Law Firm, LLC, 2300
                           Wayne Street, Columbia, South Carolina,
                           29201, within 24 hours after the entry
                           of the Sale Order, or such other date
                           as the parties may agree, but not later
                           than Aug. 31, 2012.

Sale Hearing             : Aug. 28, 2012.

Reimbursement of Expenses: If a competing bidder other than
                           Stalking Horse will be named the
                           Successful Bidder and acquire the Sale
                           Assets, the Stalking Horse will be
                           entitled to reimbursement of expenses
                           in the amount of $50,000.00 which will
                           be paid to the Stalking Horse
                           concurrent with the Closing of the Sale
                           to the Successful Bidder.

A copy of the Bid Procedures Motion is available for free at:

http://bankrupt.com/misc/keoweefalls.doc77.pdf

               About Keowee Falls Investment Group

Travelers Rest, South Carolina-based Keowee Falls Investment
Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case
No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012.
Bankruptcy Judge John E. Waites presides over the case.
R. Geoffrey Levy, Esq., at Levy Law Firm, LLC assists the Debtor
in its restructuring effort.  Keowee Falls estimated assets at
$100 million to $500 million and debts at $10 million to
$50 million.

The Cliffs Communities, Inc., owns 100% of the shares.

Units of The Cliffs Communities, led by The Cliffs Club &
Hospitality Group, Inc., doing business as The Cliffs Golf &
Country Club, along with 10 affiliates, sought Chapter 11
protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28,
2012.

The Cliffs has eight premier, private master-planned residential
communities, each to have its own world-class golf course.
Approximately 3,734 lots have been sold.  There are currently
1,385 finished homes, with 63 under construction.  The properties
for sale are owned by non-debtor DevCo entities.

The Feb. 28 Debtors operate the exclusive membership clubs for
golf, tennis, wellness and social activities at The Cliffs'
communities in North and South Carolina.  The clubs have 2,280
members, and there are 766 resigned members with refundable
deposits totaling $37 million.  The Debtors do not own the golf
courses -- they only own or lease all the "core amenities" for the
operation of the golf courses.



KV PHARMACEUTICAL: Files Form S-1; Registers 11MM Class A Shares
----------------------------------------------------------------
K-V Pharmaceutical Company filed with the U.S. Securities and
Exchange Commission a Form S-1 registration statement relating to
the disposition from time to time of up to 11,976,599 shares of
the Company's Class A Common Stock, which are held or may be held
by Commerce Court Small Cap Value Fund, Ltd. The Company is not
selling any Class A Common Stock under this prospectus and will
not receive any of the proceeds from the sale of shares by the
selling stockholder.

The Company's Class A Common Stock is traded on the New York Stock
Exchange under the symbol "KV.A".  On July 30, 2012, the closing
price of the Company's Class A Common Stock on the NYSE was $0.38
per share.

A copy of the prospectus is available for free at:

                        http://is.gd/x5YbAp

                  About KV Pharmaceutical Company

KV Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products.  The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.

The Company reported a net loss of $102.30 million for
the year ended March 31, 2012, a net loss of $271.70 million for
the year ended March 31, 2011, and a net loss of $283.60 million
for the year ended March 31, 2010.

The Company's balance sheet at March 31, 2012, showed
$253.40 million in total assets, $734.10 million in total
liabilities and a $480.70 million total shareholders' deficit.

BDO USA, LLP, in Chicago, Illinois, issued a "going concern"
qualification on the consolidated financial statements for the
fiscal year ended March 31, 2012.  The independent auditors noted
that the Company among other things has experienced recurring
losses from operations, has a significant shareholders' deficit,
and negative working capital.  These factors raise substantial
doubt about the Company's ability to continue as a going concern.


LEGENDS GAMING: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Lead
Debtor: Louisiana Riverboat Gaming Partnership
        P.O. Box 5637
        Bossier City, LA 71111-5637

Bankruptcy Case No.: 12-12013

Affiliates that simultaneously filed for Chapter 11:

        Debtor                              Case No.
        ------                              --------
Legends Gaming of Louisiana-1, LLC          12-12014
Legends Gaming of Louisiana-2, LLC          12-12015
Legends Gaming of Mississippi, LLC          12-12019
Legends Gaming of Mississippi RV Park, LLC  12-12020

Chapter 11 Petition Date: July 31, 2012

Court: U.S. Bankruptcy Court
       Western District of Louisiana (Shreveport)

Judge: Stephen V. Callaway

About the Debtors: The Debtors own gaming facilities located in
                   Bossier City, Louisiana, and Vicksburg,
                   Mississippi, operating under the DiamondJack's
                   trade name.  The Debtors are selling the assets
                   for $125 million to Global Gaming Solutions
                   LLC, absent higher and better offers.

                   As of July 31, 2012, first lien lenders are
                   owed $181.2 million and second lien lenders are
                   owed $114.7 million.


Debtors' Counsel: Tristan E. Manthey, Esq.
                  HELLER, DRAPER, HAYDEN PATRICK & HORN, LLC
                  650 Poydras Street, Suite 2500
                  New Orleans, LA 70130-6103
                  Tel: (504) 568-1888
                  Fax: (504) 522-0949
                  E-mail: tmanthey@hellerdraper.com

                         - and -

                  William H. Patrick, III, Esq.
                  HELLER, DRAPER, HAYDEN PATRICK & HORN, LLC
                  650 Poydras Street, Suite 2500
                  New Orleans, LA 70130
                  Tel: (504) 568-1888
                  Fax: (504) 522-0949
                  E-mail: wpatrick@hellerdraper.com

Debtors'
Financial
Advisor:          SEA PORT GROUP SECURITIES, LLC

Debtors'
Special
Counsel:          JENNER & BLOCK LLP

Debtors'
Claims and
Noticing Agent:   KURTZMAN CARSON CONSULTANTS LLC

Lead Debtor's
Estimated Assets: $50,000,001 to $100,000,000

Lead Debtor's
Estimated Debts: $100,000,001 to $500,000,000

The Debtors did not file lists of largest unsecured creditors
together with the petitions.

The petitions were signed by Raymond C. Cook, president and
secretary.


LEHMAN BROTHERS: To Pay Holders of $1.8BB in Japanese Bonds
-----------------------------------------------------------
Lehman Brothers Holdings Inc., as Plan Administrator, asks Judge
James Peck of the U.S. Bankruptcy Court for the Southern District
of New York for permission to implement a process that would
allow payment to holders of five securities that the company
issued in Japan.

The holders of the securities worth about $1.8 billion were
supposed to be paid during the initial distribution under the
company's $65 billion payout plan on April 17.

Lehman could not identify, however, those entitled to receive the
payments and no one, including Japan Securities Depository Center
Inc. that cleared the securities, assisted the company in the
distributions, according to court papers.

In Japanese insolvency cases, JASDEC is not required to facilitate
the payments to holders of securities.  Moreover, its records only
identify the banks and brokers that hold the five securities for
their customers.  If Lehman pays the customers without additional
procedures, those banks or brokers have no obligation under
Japanese law to deliver the payments to customers.

Under the proposed process, Lehman will serve notices to JASDEC
providing information about the process for distributions on
account of the five securities as well as information required to
receive a payment.  The notices will be distributed by the agency
to all account management institutions and holders of the
securities.

Each holder of securities is required to get from its bank or
broker a certificate of book entry account record, and return
such certificate to Lehman's Japanese counsel.  Only those that
can provide the company with a valid certificate and other
documents required by the notices will be paid.

The proposed process also allows Lehman to engage paying agents
in Japan to assist in the distributions.

The company will start making semi-annual distributions to
holders of the five securities on September 30, according to
court papers.

Judge James Peck will hold a hearing on August 15 to consider
approval of the proposed procedures.  Objections are due by
August 8.

                       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: Creditors Ask Fee Committee to Rule on Expenses
----------------------------------------------------------------
The committee of Lehman Brothers Holdings Inc.'s unsecured
creditors told Judge James Peck to enlist the so-called fee
committee to resolve the issue of whether or not certain
creditors are entitled to receive payments of fees from the
company.

The move comes after the U.S. Trustee, a Justice Department
agency that oversees bankruptcy cases, opposed the applications
by certain Lehman creditors for payment of more than $33 million
in fees and expenses.

"The fee committee has institutional knowledge of these cases and
the resources necessary to review and analyze the applicants'
requests," said Dennis Dunne, Esq., at Milbank Tweed Hadley &
McCloy LLP, in New York.

"The fee committee will play the role of a disinterested neutral
party and help the applicants and the U.S. Trustee reach a
resolution of the issues," Mr. Dunne said in a court filing.

The U.S. Trustee questioned the claim of creditors that they are
entitled to receive payments for their "substantial contribution"
in Lehman's bankruptcy case.  The agency also opposed the
proposed payment for "non-attorney and accountant professional
services."

The creditors include Goldman Sachs Bank, holders of notes issued
by Lehman Brothers Treasury Co., a group of banks and hedge funds
led by Bank of America N.A., and another group which calls itself
the ad hoc group of Lehman Brothers creditors.

The BofA-led group seeks payment of more than $13.7 million, of
which more than 2.1 million will be paid to the group while the
rest will be paid to its financial adviser, Blackstone Advisory
Partners L.P.

Blackstone and the BofA-led group were involved in the formulation
of the so-called global settlement, which resolved issues held by
nearly every creditor and cleared the way for the confirmation of
Lehman's $65 billion payout plan.

Goldman Sachs seeks payment of more than $3.29 million for the
legal services provided by Cleary Gottlieb Steen & Hamilton LLP.
The debt holders, meanwhile, seek more than $3.74 million for
Brown Rudnick LLP's legal services.

A court hearing to consider approval of the applications is
scheduled for August 15.

                       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: FirstBank Seeks Reconsideration on Claim Status
----------------------------------------------------------------
FirstBank Puerto Rico asked the U.S. Bankruptcy Court in
Manhattan to reconsider the decision by Lehman Brothers Inc.'s
trustee denying customer status to the bank's claim.

Earlier, James Giddens, the trustee appointed to liquidate the
brokerage, denied FirstBank's claim, arguing it was a duplicate
or an amendment of another claim filed by Lehman Brothers
Holdings Inc. and its affiliated debtors.

FirstBank asserts a claim against the Lehman brokerage for
approximately $61.5 million.  The claim is based on government
securities, which the bank entrusted to the brokerage for
safekeeping and for use as collateral for swap deals with the
Lehman Brothers Special Financing Inc.

FirstBank's lawyer said the bank has a "valid customer" claim
against the brokerage because it entrusted the securities to the
brokerage for safekeeping and for use as collateral.

"LBI clearly agreed to this tri-party custodial relationship, by
accepting the transfer of FirstBank's securities and by serving
as the custodian, bank account holder and back office for all of
LBSF's swap transactions," said Richard Miller, Esq., at K&L
Gates LLP, in New York.

Mr. Miller said custodial relationships with broker-dealers have
been recognized as subject to the customer protection rules and
customer status.

"The tri-party custodial relationship at issue here is entitled
to the same protection," Mr. Miller said in court papers.  "A
secured swap that involves the entrustment of government
securities to a registered broker-dealer, as the client's own
property, clearly is a fiduciary customer relationship under
federal and state securities laws."

A court hearing is scheduled for August 15.  Objections are due
by August 8.

                       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: Makes Progress in Settlement With Swiss Unit
-------------------------------------------------------------
Lehman Brothers Holdings Inc. is making headway on a settlement
with former subsidiary, Swiss-based Lehman Brothers Finance AG,
in their dispute over intercompany loans and guarantees, Dow
Jones reported.

In a status report filed in U.S. Bankruptcy Court, lawyers for LB
Finance said recent discussions with Lehman regarding a "global
resolution" of their claims against each other "have been
fruitful," according to the report.

LB Finance claims Lehman owes it $15.4 billion.  Lehman, on the
other hand, asserts that the Swiss company owes it $14.2 billion
and that the two claims should be "set off."

The Swiss company also said it "reached an agreement in principle"
with the U.K.-based Lehman Brothers International (Europe) Ltd. to
settle their claims.  Lehman and its affiliates filed $68 billion
in claims against LB Finance, with about half of that amount
sought by Lehman Europe, Dow Jones reported.

While there's no guarantee that either settlement will be
finalized, if the settlement with Lehman Europe is implemented,
the Swiss unit expects to receive "substantial value" from the
deal, according to the report.

A settlement would also signal a break in LB Finance's litigation
tactics, which had threatened to delay recoveries for creditors
who have been waiting nearly four years to be paid following
Lehman's bankruptcy filing.

                       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: Moody's Rates New Term Loan 'Ba3'; Outlook Stable
----------------------------------------------------------
Moody's Investors Service rated Level 3 Communications, Inc.'s new
$1.415 billion, 2-tranche, senior secured term loan, Ba3 while
also rating the company's new $775 million 8-year senior unsecured
notes B3. Level 3's corporate family and probability of default
ratings remain unchanged at B3 and were affirmed as was its SGL-1
speculative grade liquidity rating (very good liquidity). Since
the new credit facility replaces a like-sized commitment that
matures in 2014 and the new notes replace an existing like-sized
notes issue, the company's overall credit profile is not affected
and all of the company's rated debt instruments were affirmed at
their existing levels (see listing below). In addition, the
ratings outlook remains stable.

The following summarizes the rating action as well as Level 3's
ratings:

Assignments:

Issuer: Level 3 Financing, Inc.

    Senior Secured Bank Credit Facility, Ba3 (LGD2, 10%)

    Senior Unsecured Bond/Debenture, B3 (LGD4, 58%)

Affirmations:

Issuer: Level 3 Communications, Inc.

    Corporate Family Rating, B3

    Probability of Default Rating, B3

    Speculative Grade Liquidity Rating, SGL-1

    Outlook, Stable

    Senior Unsecured Bond/Debenture, Caa2 (LGD6, 92%)

Issuer: Level 3 Financing, Inc.

    Senior Secured Bank Credit Facility, unchanged at Ba3, LGD
    Assessment changed to (LGD2, 10%) from (LGD2, 11%)

    Senior Unsecured Regular Bond/Debenture (including debts
    issued by Level 3 Escrow, Inc. that have been assumed by
    Level 3 Financing, Inc.), B3 (LGD4, 58%)

Ratings Rationale

Level 3 has a reasonable business proposition as a facilities-
based provider of optical, Internet protocol telecommunications
infrastructure and services, however, owing to excess transport
capacity, margins are relatively weak and, with the combination of
the interest carry on the company's sizeable debt burden plus
ongoing capital expenditures, there has been little or no capacity
to amortize debt. The company's B3 ratings are based on
expectations that net synergies from the recently closed
acquisition of Global Crossing Ltd. will reduce expenses
sufficiently such that Level 3 will be modestly cash flow positive
(on a sustained basis) by late 2013. The rating is also based on
the expectation that there is sufficient liquidity to continue to
fund investments in synergy-related initiative, and that the
company's improving credit profile facilitates repayment and/or
roll-over of 2015 and 2016 debt maturities.

Rating Outlook

The stable ratings outlook is premised on net synergies from the
recently closed acquisition of Global Crossing Ltd. will reduce
expenses sufficiently such that Level 3 will be modestly cash flow
positive (on a sustained basis) by late 2013.

What Could Change the Rating - Up

As the existing B3 ratings anticipate the benefit of future
performance, it is unlikely that the rating would be upgraded over
the near term. Once execution risks are substantially addressed
and presuming solid industry conditions and solid liquidity
arrangements, in the event that Debt/EBITDA declines towards 5.0x
and (RCF-CapEx)/Debt advances beyond 5% (in both cases, inclusive
of Moody's adjustments and on a sustainable basis), positive
ratings actions may be warranted.

What Could Change the Rating - Down

Whether the result of execution mis-steps or adverse industry
conditions, should it appear that the company is not cash flow
self-sufficient or in the event of significant debt-financed
acquisition activity, negative ratings activity may be considered.

Level 3 maintains three pools of debt, senior secured, senior
unsecured, and subordinated (i.e. senior unsecured at the publicly
traded holding company). Since the senior secured pool is
approximately 28% of Level 3's consolidated waterfall of
liabilities while the (effectively) subordinated pool is only
approximately 17%, the asymmetry of the two debts book-ending the
core senior unsecured stresses senior unsecured instrument ratings
so that Moody's loss given default model provides a Caa1 outcome
(this situation has prevailed since November, 2011 when Level 3
Financing closed a $550 million senior secured term loan and used
the proceeds to repay junior-ranking debt. Since Moody's expects
the company to normalize the proportions of senior and
subordinated debt within a reasonable time period, Moody's has
over-ridden the model-driven outcome and continue to rate debts in
the senior unsecured pool at B3. If the debt structure is not
reconfigured in a reasonable time frame or if either or both of a
proportionate increase in the senior secured pool and a decreased
in subordinated pool occurs, Moody's may downgrade the senior
unsecured pool.

The principal methodology used in rating Level 3 was the Global
Communications Infrastructure Rating Methodology published in June
2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc. is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.


LEVEL 3: S&P Rates $400MM Senior Notes Due 2020 'CCC'
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' issue-level
rating and '6' recovery rating to Broomfield, Colo.-based Level 3
Communications Inc.'s subsidiary Level 3 Financing Inc.'s $400
million senior notes due 2020. "The '6' recovery rating on these
unsecured notes reflects our expectation of negligible (0 to 10%)
recovery of principal in the event of a default. The notes will be
sold under Rule 144A with registration rights, and the company
said it expects proceeds to be used to redeem a portion of its
8.75% senior notes due 2017, which have $700 million outstanding,"
S&P said.

"Other ratings on Level 3 Communications and subsidiaries,
including the 'B-' corporate credit rating and the positive
outlook, are not affected by the new notes. We do not expect the
debt offering and redemption of 8.75% notes to change our
assessment of the company's financial risk profile as 'highly
leveraged.' Apart from this refinancing, we expect debt leverage,
including our adjustments, mostly for operating leases, to improve
to an area above 6x, from recent levels of over 8x. The positive
outlook cites the potential for a one-notch upgrade if Level 3
Communications 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 Unsecured
  $400 mil notes due 2020      CCC
   Recovery Rating             6


MF GLOBAL: Clients Could Get All Money Back
-------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that the trustees overseeing the
liquidation of MF Global said brokerage customers, facing a
$1.6 billion gap in funds, will eventually recoup between 90% and
all of their money.

Louis Freeh, the trustee for the brokerage's parent, MF Global
Holdings Ltd., said at a U.S. Senate Agriculture Committee hearing
Aug. 1 in Washington that customers may eventually recoup all of
their money.

"All of the customers of MF Global Inc. eventually will be made
whole" by the brokerage trustee, Mr. Freeh said in testimony
submitted for the hearing, which he didn't attend.

Bloomberg notes Mr. Freeh's testimony was at odds with that of a
trustee for the brokerage, James W. Giddens, who predicted
customers will eventually get a recovery of about 90%.

"I think we're comfortable saying that additional distributions
should certainly be in the 90 percent range," Mr. Giddens said at
the hearing. "It's going to be an uphill fight to get, as I
indicated, to 100 percent."

Customers are rushing to sell their claims at higher prices after
the predictions, claims buyers said.  With a clearer range of what
recoveries could be, customers are saying, "Let's take the money
now and put it back to work and eliminate the bankruptcy
exposure," said Barrett Mikelberg, a director at New York-based
Triax Capital Advisors.

Joe Sarachek, managing director of special situations at CRT
Capital Group LLC, said Mr. Freeh "is jumping the gun on a 100
percent payback" of customer funds. "We're not saying it won't
happen, we just don't see the evidence yet to back it up," he said
in an e-mail to Bloomberg.

                          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.


MORGANS HOTEL: Incurs $13.5 Million Net Loss in Second Quarter
--------------------------------------------------------------
Morgans Hotel Group Co. reported a net loss of $13.51 million on
$47.79 million of total revenues for the three months ended
June 30, 2012, compared with a net loss of $11.80 million on
$54.21 million of total revenues for the same period during the
prior year.

The Company reported a net loss of $28.01 million on $91.08
million of total revenues for the six months ended June 30, 2012,
compared with a net loss of $44.67 million on $108.61 million of
total revenues for the same period a year ago.

The Company's balance sheet at June 30, 2012, showed $545.86
million in total assets, $655.93 million in total liabilities,
$6.12 million in redeemable noncontrolling interest and a $116.19
million total stockholders' deficit.

Michael Gross, CEO of the Company, said: "During the second
quarter, we made significant progress executing our growth
strategy and we are excited about the momentum in our management
business.  We recently signed three new management contracts that,
together with our previously announced expansion hotels, will
increase the size of our portfolio by almost fifty percent when
they open.  We have significant operating leverage that we expect
will allow us to generate high EBITDA margins from the growth of
our management business, and we are optimistic about the pace of
new deals going forward.  In addition, we are nearly complete with
renovations to our existing properties with the Hudson set to re-
launch in the third-quarter.  Overall, we are encouraged by our
progress in the quarter and remain focused on executing our
strategy and building long-term shareholder value."

A copy of the press release is available for free at:

                        http://is.gd/b9s8uW

                     About Morgans Hotel Group

Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector.  Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London.  Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico.  Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.

The Company reported a net loss of $87.95 million in 2011, a net
loss of $83.64 million in 2010, and a net loss of $101.60 million
in 2009.


MUSCLEPHARM CORP: Cancels TCA Equity & Registration Right Pacts
---------------------------------------------------------------
MusclePharm Corporation provided a notice of termination to TCA
Global Credit Master Fund, LP, pursuant to which the Company
advised TCA of the termination of the Committed Equity Facility
Agreement, dated as of July 13, 2012, among the Company and TCA,
which that termination should proceed pursuant to the terms and
conditions therein contained.  In conjunction with the termination
of the Equity Facility, the Company will terminate the
Registration Rights Agreement, by and among the Company and TCA,
dated as of July 13, 2012.  Upon termination of the Registration
Rights Agreement the Company will no longer be under any
obligation to register any of its securities for TCA.

Pursuant to the terms of the Equity Agreement, for a period of 24
months commencing on the effective date of the Registration
Statement, TCA will commit to purchase up to $3,000,000 of the
Company's common stock, par value $0.001 per share, pursuant to
Advances, covering the Registrable Securities.  The purchase price
of the Shares under the Equity Agreement is equal to 95% of the
lowest daily volume weighted average price of the Company's common
stock during the five consecutive trading days after the Company
delivers to TCA an Advance notice in writing requiring TCA to
advance funds to the Company, subject to the terms of the Equity
Agreement.

                         About MusclePharm

Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances.  MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe.  MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.

In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern.  The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at Dec.
31, 2011.

The Company's balance sheet at March 31, 2012, showed
$7.55 million in total assets, $24.76 million in total
liabilities, and a $17.21 million total stockholders' deficit.

The Company's restated statement of operations reflects a net loss
of $23.28 million in 2011, compared with a net loss of
$19.56 million in 2010.


NAVISTAR INT'L: GAMCO Hikes Equity Stake to 5.5%
------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, GAMCO Asset Management, Inc., and its
affiliates disclosed that, as of July 30, 2012, they beneficially
own 3,762,381 shares of common stock of Navistar International
Corporation representing 5.49% of the shares outstanding.

GAMCO Asset previously reported beneficial ownership of
3,154,935 common shares or a 4.60% equity stake as of June 7,
2012.

A copy of the amended filing is available for free at:

                         http://is.gd/sCaUwf

                    About Navistar International

Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans.  It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets.  The company also provides truck and diesel
engine parts and service.  Another affiliate offers financing
services.

The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.

                           *     *     *

Navistar has 'B1' Corporate Family Rating and Probability of
Default Rating from Moody's Investors Service.

Moody's said in summary credit opinion at the end of April 2012
that the B1 Corporate Family Rating of Navistar International
reflects the company's highly competitive position in the North
American medium and heavy duty truck markets, and the continuing
recovery in demand.  It also reflects the progress Navistar
continues to make in implementing a strategy that should reduce
its vulnerability to cyclical downturns and strengthen returns.
The key elements of this strategy include: expanding its scale and
operating efficiencies by offering a full line of medium and
heavy-duty trucks equipped with Navistar engines; building its
position in international truck and engine markets through
alliance and joint ventures; and, strengthening its domestic
dealer network.

As reported by the TCR on June 13, 2012, Standard & Poor's Ratings
Services lowered its ratings on Navistar International Corp.,
including the corporate credit rating to 'B+', from 'BB-'.  "The
downgrade and CreditWatch placement reflect the company's
operational and financial setbacks in recent months," said
Standard & Poor's credit analyst Sol Samson.


NAVISTAR INT'L: Moody's Cuts CFR to 'B2'; Outlook Negative
----------------------------------------------------------
Moody's Investors Service lowered Navistar International
Corporation's Corporate Family Rating (CFR), Probability of
Default Rating (PDR), and senior note rating to B2 from B1. The
company's Speculative Grade Liquidity Rating was lowered to SGL-3
from SGL-2. The outlook is negative.

Ratings Rationale

The downgrade of Navistar's ratings reflects the significant
challenges the company will face during the next eighteen months
in re-establishing the profitability and competitiveness of its US
and Canadian truck operations in light of the failure to achieve
EPA certification of its EGR emissions technology, the significant
reductions in military revenues and substantially higher engine
warranty reserves. These challenges have resulted in sizable
losses and negative cash flow during the first half of fiscal 2012
that could continue if not addressed . It is critical that
Navistar remain firmly on track with its plan to transition to an
SGR emission control platform, and at the same time rebuild the
market share position and profit margins of its truck operations.
In the absence of consistent success in these areas during 2013,
the company could face a prolonged period of negative cash flow,
weak credit metrics and eroding liquidity.

Navistar will face a number of challenges as it begins to employ
SCR emission technology. These include ensuring adequate operating
performance of its engines, achieving sufficient pricing for its
product, and rebuilding market share that was lost as a result of
market uncertainty over its strategy. Moody's expects that this
transition period will last well into 2013 and that a significant
rebound in truck profitability will not occur until the latter
half of this transition.

An unexpected spike in engine warranty expenditures required
Navistar to increase warranty reserves with a $227 million true-up
during the first half of fiscal 2012, thereby contributing to a
sizable operating loss. The company appears to have identified the
sources of these problems. It is moving to address them and
Moody's expects that future expenditures will begin to decline.

A more sustained source of pressure on earnings will be the wind
down of profitable MRAP vehicle sales to the US military due to
the withdrawal of troops from Iraq. This will contribute to
weakness in Navistar's 2012 earnings.

The negative outlook recognizes the execution risks that Navistar
will face in transitioning from EGR to SCR emissions technology,
reducing engine warranty expenditures, and rebuilding share that
has been lost due to the uncertainty surrounding its emissions
strategy. If the company is not able to make clear progress in
these areas during 2013, the rating would be subject to further
downgrade.

Moody's expects that Navistar will have adequate liquidity during
the coming twelve months as it implements the transition to SCR
and attempts to reverse near term operating losses and negative
cash flow. The company's principal source of liquidity is $681
million in manufacturing company cash as of April 30, 2012 and
approximately $52 million in availability under an ABL facility
after a $138 million borrowing in June 2012. These sources should
provide adequate coverage of $130 million in maturing
manufacturing debt and negative operating cash flow that could
amount to several hundred million dollars during the transition
period. Navistar's captive finance operation, Navistar Financial
Corporation (NFC), continues to fund the company's dealer floor
plan requirements. The alliance with GE Capital continues to fund
a significant portion of Navistar's retail sales. NFC has
approximately $1.3 billion in debt and ABS obligations coming due
during the next twelve months. Moody's anticipates that these
liquidity requirements can be covered by drawings under a $500
million revolving credit facility, and continued access to the ABS
market, as evidenced by the company's July 2012 issuance of $500
million in term ABS securities.

Navistar's rating could come under pressure if the company is not
able to smoothly execute three key initiatives into 2013:
integrating SCR technology into its lineup of medium and heavy
duty engines; reducing engine warranty expenditures; and
rebuilding truck market share. To avoid rating pressure Navistar
would need to remain on track for generating EBITA margin
approaching 2.0% for fiscal 2013. This compares with a margin of
2.7% during 2011 and -1.6% during the last twelve months ending
April 30, 2012. In addition EBIT/interest would need to be above
1.25x for 2013 compared with 2.3x in 2011 and -1.6x for LTM
through April 2012. (all figures reflect Moody's standard
adjustments)

The rating outlook could be stabilized if Navistar can implement
these initiatives and maintain a trajectory toward the following
metrics for 2013: EBITA margin of 2.5%; EBIT/interest of 2.0x; and
manufacturing company free cash flow exceeding $200 million. This
compares with manufacturing company free cash flow of about $250
million for 2011 and negative $125 million for the LTM through
April 2012.

The principal methodology used in rating Navistar was the Global
Heavy Manufacturing Industry Methodology published in November
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.


NCR CORP: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BBB-' issue-level
rating with a recovery rating of '2' to Duluth, Ga.-based NCR
Corp.'s proposed incremental $125 million revolving credit
facility and $125 million incremental term loan A.

"We also affirmed our 'BB+' corporate credit rating on the
company. The rating outlook is stable," S&P said.

"In addition, we are assigning a 'BBB-' to the existing revolving
credit facility and term loan with a recovery rating of '2'. This
is a change from the preliminary rating of 'BBB' with a
preliminary recovery rating of '1' and reflects the increased use
of secured debt in the capital structure," S&P said.

"We expect to assign a 'BB' issue-level rating to NCR's proposed
$500 million senior notes issue (to be filed and sold in
September), with a recovery rating of '5', indicating expectations
for modest (10%-30%) recovery of principal in the event of a
payment default," S&P said.

"The rating reflects our view of NCR's financial risk profile as
significant, with adjusted debt leverage likely to decline after a
slight uptick as result of the contemplated transaction," said
Standard & Poor's credit analyst Jacob Schlanger. "We view NCR's
business risk profile as 'satisfactory.'"

"In addition to $740 million funded debt (which largely arose from
the 2011 Radiant acquisition), NCR has substantial pension and
postretirement health liabilities, which we view as debt-like
obligations, and include in our adjusted leverage calculation.
Unfunded gross pension and postretirement benefits of $1.39
billion and postemployment benefit obligations of $264 million
totaled $1.654 billion as of December 2011 ($1.075 billion on a
tax-adjusted basis). The present series of transactions--a planned
funding and an offer of lump-sum payments to deferred vested
participants--will substantially reduce the outstanding unfunded
pension liability and reduce future funding needs. As a result,
total unfunded obligations may drop by as much as $800 million.
These transactions are the latest step NCR has undertaken since
2010 to reduce earnings volatility and funding requirements
associated with its pensions. It earlier began to reallocate its
domestic pension portfolio, and expects it to be 100% fixed income
by year-end 2012," S&P said.


NESBITT PORTLAND: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Nesbitt Portland Property, LLC, a Delaware Limited
        Liability Company
        205 Lambert Road
        Carpinteria, CA 93013

Bankruptcy Case No.: 12-12883

Affiliates that simultaneously filed for Chapter 11:

        Debtor                          Case No.
        ------                          --------
Nesbitt Bellevue Property, LLC          12-12884
Nesbitt El Paso Property, L.P.          12-12888
Nesbitt Denver Property, LLC            12-12889
Nesbitt Lynnwood Property, LLC          12-12890
Nesbitt Colorado Springs Property, LLC  12-12891
Nesbitt Livonia Property, LLC           12-12894
Nesbitt Blue Ash Property, LLC          12-12895

Chapter 11 Petition Date: July 31, 2012

Court: U.S. Bankruptcy Court
       Central District of California (Santa Barbara)

Judge: Robin Riblet

About the Debtors: The Debtors are units of Windsor Capital Group
                   Inc. that own the Embassy Suites hotels sent to
                   receivership by lender U.S. Bank National
                   Association.  The Debtors sought bankruptcy
                   before the receiver, Alan Tantleff of FTI
                   Consulting, Inc., could take over the eight
                   hotels and assign management of the hotels to
                   Crescent Hotels and Resorts LLC.

Debtors'
Bankruptcy
Counsel:          Peter Susi, Esq.
                  SUSI & GURA, A PROFESSIONAL CORP
                  7 W. Figueroa, 2nd Floor
                  Santa Barbara, CA 93101-3191
                  Tel: (805) 965-1011
                  Fax: (805) 965-7351
                  E-mail: cheryl@susigura.com

Each Debtor's
Estimated Assets: $10,000,001 to $50,000,000

Each Debtor's
Estimated Debts: $100,000,001 to $500,000,000

The petition was signed by Patrick Nesbitt, manager.

Nesbitt Portland's List of Its 20 Largest Unsecured Creditors:

        Entity                     Nature of Claim    Claim Amount
        ------                     ---------------    ------------
Guets Supply                       Trade Payable           $23,247
P.O. Box 910
Monmouth Junction, NJ 08852

Food Service of America            Trade Payable           $21,536
P.O. Box 3929
Portland, OR 97208

Northwest Natural                  Trade Payable            $8,155
P.O. Box 6017
Portland, OR 97228

Hilton Hotels Corporation          Trade Payable            $5,056

New System Laundry                 Trade Payable            $4,334

Otis Elevator Company              Trade Payable            $4,191

Comcast Cable                      Trade Payable            $3,924

Micros Systems, Inc.               Trade Payable            $3,740

Duck Delivery Produce, Inc.        Trade Payable            $3,705

Alameda Carpet and Upholstery      Trade Payable            $2,500

Evolve Interiorscapes              Trade Payable            $2,177

Pepsi Cola Company                 Trade Payable            $1,641

Service Paper Company              Trade Payable            $1,455

Ocean Beauty                       Trade Payable            $1,299

Royal Cup, Inc.                    Trade Payable            $1,164

HD Supply Facilities Maint.        Trade Payable            $1,052

Marsee Foods, Inc.                 Trade Payable            $1,013

Shredit                            Trade Payable              $952

Accent Marketing Group, Inc.       Trade Payable              $824

Frontier                           Trade Payable              $794


NORTH BY NORTHWEST: Sec. 341 Creditors' Meeting Set for Aug. 8
--------------------------------------------------------------
The U.S. Trustee for the Northern District of Georgia, in Rome,
will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec.
341(a) in the Chapter 11 case of North By Northwest LLC on Aug. 8,
2012, at 12:00 p.m. at 341 Meeting Room, Rome.

North By Northwest LLC filed a bare-bones Chapter 11 petition
(Bankr. N.D. Ga. Case No. 12-42087) in Rome, Georgia, on July 12,
2012.  North By Northwest scheduled $14,667,210 in assets and
$4,202,709 in liabilities.  The Debtor holds surface and mineral
interests in the real property in Valley District, Fayette County,
West Virginia, worth $12.5 million, and which secures a $3.05
million debt to Macon Bank.  Bankruptcy Judge Paul W. Bonapfel
presides over the case.  Jim Knight, Esq., at Thomas F. Tierney,
P.C., in Peachtree City, Georgia, serves as counsel.


PENN TREATY: Has Settlement Agreement with Insurance Commissioner
-----------------------------------------------------------------
The Insurance Commissioner of the Commonwealth of Pennsylvania and
Penn Treaty American Corporation entered into a Settlement
Agreement and Release pursuant to which the Company would pay $1.2
million to Penn Treaty Network America Insurance Company.

On May 10, 2010, the Insurance Commissioner, in his official
capacity as Rehabilitator of Penn Treaty Network America Insurance
Company, filed in the Commonwealth Court of Pennsylvania a
Complaint against the Company, the parent of PTNA.  The Insurance
Commissioner alleged that PTNA is owed approximately $2.3 million
from the Company related to a federal tax refund and certain
accrued paid time off liabilities.

On July 24, 2012, a Praecipe to Discontinue was filed with the
Commonwealth Court of Pennsylvania settling, discontinuing and
ending the case between the Insurance Commissioner and the
Company.

Meanwhile, on July 6, 2012, by order of the Commonwealth Court of
Pennsylvania, the court granted the Intervenors' Petition to
recover professional fees, costs and other expenses awarded
whereby the Insurance Commissioner is ordered to reimburse the
Intervenors, Eugene J. Woznicki and the Company, for professional
fees, costs and other expenses of the defense of the
rehabilitation proceeding, in equal amounts from the estates of
PTNA and American Network Insurance Company within ten days of the
date of the Order.  The amounts due to the Company pursuant to the
fee petition were paid by the Insurance Commissioner on July 16,
2012.

A copy of the Settlement and Release is available at:

                        http://is.gd/g6UGj6

                     About Penn Treaty American

Penn Treaty American Corporation -- https://www.penntreaty.com/ --
through its wholly owned direct and indirect subsidiaries, Penn
Treaty Network America Insurance Company, American Network
Insurance Company, American Independent Network Insurance Company
of New York, Network Insurance Senior Health Division and Senior
Financial Consultants Company, is engaged in the underwriting,
marketing and sale of individual and group accident and health
insurance products, principally covering long term nursing home
and home health care.

On Oct. 2, 2009, the Insurance Commissioner of the Commonwealth of
Pennsylvania filed in the Commonwealth Court of Pennsylvania
Petitions for Liquidation for PTNA and American Network Insurance
Company.  PTNA is a direct insurance company subsidiary of Penn
Treaty American Corporation, and ANIC is a subsidiary of PTNA.


PEREGRINE FIN'L: Labor Department Initiates Probe
-------------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that the Chapter 7 trustee for Peregrine
Financial Group Inc., said the defunct commodities firm's handling
of its employees' 401(k) plan is being reviewed by the U.S. Labor
Department.  Trustee Ira Bodenstein disclosed the department's
action in written testimony for a hearing Aug. 1 by the Senate
Agriculture Committee.

In the statement, Mr. Bodenstein summarized his role and progress
in the bankruptcy since being appointed July 11 to liquidate the
firm and pay its creditors.

"I am also working diligently to address employee issues,
including those related to an investigation that has been
initiated by the Department of Labor into Peregrine's employee
401(k) plan," Mr. Bodenstein said without elaboration.

                     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: Seeks to Subpoena Banks on Transfers
-----------------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that the trustee liquidating Peregrine
Financial Group Inc. asked a judge for authority to subpoena the
defunct futures brokerage's banks including JPMorgan Chase & Co.
and Citigroup Inc. for information about transfers from segregated
accounts and proprietary accounts.  Citing a lawsuit by the U.S.
Commodity Futures Trading Commission against the company and
founder Russell Wasendorf Sr. over misappropriation of customer
funds, the trustee said he needs records from various financial
institutions to identify "abnormalities" in the company's records.
Ira Bodenstein, the trustee, wants 10 financial institutions to
provide records, including account applications, wire transfers,
and statements.  The other financial institutions that will be
asked for information are U.S. Bank, Bank of New York Mellon
Corp., First Premier Bank, Commerzbank AG, Royal Bank of Scotland
Plc, Jefferies Bache LLC, Morgan Stanley and Goldman Sachs Group
Inc., he said.

                     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.


POSTMEDIA NETWORK: Moody's Rates C$250MM Sr. Secured Notes 'Ba3'
----------------------------------------------------------------
Moody's Investors Service rated Postmedia Network Inc.'s new C$250
million senior secured notes Ba3. Since proceeds from the new
notes will be used to repay Postmedia's senior secured term loan,
they are rated at the same level as debt instrument that they
replace. In addition, since the transaction has no ratings'
implications, Postmedia's B3 corporate family and probability of
default ratings remain unchanged, as does the Caa1 rating of the
company's senior secured notes. The rating outlook remains stable
and Postmedia's SGL-3 speculative grade liquidity ratings also
remains unchanged. Lastly, ratings on the company's senior secured
term loan will be withdrawn once they are repaid from the proceeds
of the new notes issue (refer to Moody's policy re ratings
withdrawals).

The following summarizes the rating action along with Postmedia's
ratings:

  Issuer: Postmedia Network Inc.

Assignment:

    Senior Secured Regular Bond/Debenture, Assigned Ba3
    (LGD2, 22%)

Ratings and Outlook:

    Corporate Family Rating, unchanged at B3

    Probability of Default Rating, unchanged at B3

    Outlook, Unchanged at Stable

    Speculative Grade Liquidity Rating, unchanged at SGL-3

    Senior Secured Bank Credit Facility, unchanged at Ba3
    (LGD2, 22%); to be withdrawn in due course

    Senior Secured Regular Bond/Debenture, unchanged at Caa1
    (LGD5, 71%)

Ratings Rationale

Postmedia Network Inc.'s (Postmedia) B3 ratings are influenced
primarily by the significant use of debt financing by a company
that is transforming its operations and by the related material
execution risks and very poor forward-looking earnings visibility.
As the company transitions to a digital age news gathering and
distribution operation, the magnitude and sustainability of
related cash flow is entirely uncertain. Reciprocally, the
magnitude and sustainability of legacy print-based cash flow,
which is needed to both bridge-fund the transition and to service
debt, is also quite speculative. Until the business transformation
is completed, the requisite risks argue for minimal debt levels
and, while management has been disciplined in reducing the
company's debt burden, the serviceability of Postmedia's remaining
debts continues to be uncertain. While Moody's assesses near term
liquidity as being adequate, in the event of unforeseen
difficulties, Postmedia's $60 million revolving credit facility
($45 million available) may provide only moderate flexibility to
assist with bridging potential execution setbacks as it is
somewhat small at only 5.0% of revenues.

Rating Outlook

The rating outlook is stable as a consequence of management's
continued discipline in reducing debt levels and in light of
proactive steps taken to reconfigure the business model given the
ongoing evolution of the company's business environment.

What Could Change the Rating - Up

A near term ratings upgrade is not likely, however, should the
conversion to a digital business model be completed and with it,
should revenue and EBITDA stabilize, and should Moody's expects
Debt/EBITDA to be sustained below 3.5x while Free Cash Flow/Debt
exceeds 5%, and presuming maintenance of good liquidity
arrangements, an upgrade would be considered.

What Could Change the Rating - Down

Moody's would consider Postmedia's ratings for potential downgrade
if the company's safety cushion of unused liquidity was eroded
likely owing to a sustained period of nominal or negative free
cash flow.

The principal methodology used in rating Level 3 was the Global
Publishing Industry Methodology published in December 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Corporate Profile

Postmedia Network Inc. is a Toronto, Ontario headquartered
newspaper publisher that is in the early stages of repositioning
to a digital platform. The company is wholly-owned by Postmedia
Network Canada Corp., a publicly traded holding company that is
also headquartered in Toronto, Ontario.


POSTMEDIA NETWORK: S&P Cuts CCR to 'B-' on Weak Performance
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Toronto-based Postmedia Network Inc. to 'B-' from
'B'. The outlook is stable.

"At the same time, we lowered our issue-level rating on the
company's senior secured first-lien term loan to 'B+' from 'BB-'.
The '1' recovery rating on the debt is unchanged. In addition, we
lowered our issue-level rating on Postmedia's senior secured
second-lien notes to 'CCC+' from 'B-'. The recovery rating on the
debt is unchanged at '5'," S&P said.

"We base the downgrade on our view that Postmedia's operating
performance will remain weak in fiscal 2013, starting Sept. 1,
2012," said Standard & Poor's credit analyst Lori Harris. "The
company's most recent financial results included declines in
reported revenue and operating income (before depreciation,
amortization, and restructuring costs) of 7% and 17%, in the third
quarter ended May 31, 2012, compared with the same period in 2011.
Given the lackluster economy and declining newspaper print
advertising sales, we expect the company's performance to remain
stressed in fiscal 2013, including revenue declines in the mid-to-
high single digit percent, as well as continued margin pressure,"
Ms. Harris added.

"Finally, Standard & Poor's assigned its 'B+' issue-level rating
and '1' recovery rating to Postmedia's proposed C$250 million
senior secured first-lien notes due 2017. The company plans to
refinance the first-lien term debt with the new first-lien notes,
which will provide Postmedia with more flexibility in several
ways, including lowering mandatory principal payments, removing
maintenance financial covenants, providing the ability to prepay
both the first-lien and more expensive second-lien debt, and
extending the maturity date," S&P said.

"The ratings on Postmedia reflect Standard & Poor's assessment of
the company's 'vulnerable' business risk profile and 'highly
leveraged' financial risk profile. Our business risk assessment is
based on the company's weak operating performance, declining
revenue base and profitability, and participation in the
challenging newspaper publishing industry, which is characterized
by reduced advertising and circulation revenues, digital media
substitution, and pricing pressures. We believe the newspaper
industry is facing long-term secular pressures related to market
share erosion toward online and other forms of advertising.
Partially offsetting these business risk factors, in our opinion,
is the company's position as a leading Canadian newspaper
publisher. We base our financial risk assessment on Postmedia's
aggressive financial policy and weak credit protection measures,"
S&P said.

"The stable outlook reflects Standard & Poor's belief that
Postmedia will maintain its market position and that the company's
operating performance, albeit weakened, will still meet our
expectations in the near term, including generating positive free
cash flow. We could lower the ratings should there be further
significant deterioration in the company's operations or negative
free cash flow. While unlikely, we could raise the ratings if
Postmedia's revenue base and EBITDA margin stabilized, online
advertising growth was solid, and adjusted leverage was below 4x
on a sustainable basis," S&P said.


QUANTUM CORP: Incurs $17.5 Million Net Loss in Fiscal Q1
--------------------------------------------------------
Quantum Corp. reported a net loss of $17.49 million on $140.87
million of total revenue for the three months ended June 30, 2012,
compared with a net loss of $5.22 million on $153.53 million of
total revenue for the same period during the prior year.

The Company's balance sheet at June 30, 2012, showed $364.52
million in total assets, $425.08 million in total liabilities and
a $60.55 million stockholders' deficit.

"Our overall June quarter results were not what we planned for and
not what we expected when we started the fiscal year, and they
were clearly disappointing," said Jon Gacek, president and CEO of
Quantum.  "Although we can't do anything about the macroeconomic
conditions that impacted Quantum and many other companies, we know
we must adjust the business and improve our execution around what
we can control to drive better financial performance, including
revenue growth and profitability - and that is our focus.

"We are continuing to enhance and expand our already strong
product portfolio in both data protection and big data management.
In addition, we are driving increased brand awareness and end user
marketing and engaging more closely with key channel partners.  As
a result, we believe we are still well-positioned to capitalize on
market opportunities."

A copy of the press release is available for free at:

                        http://is.gd/I2ejH8

                        About Quantum Corp.

Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com/-- is a storage company specializing in
backup, recovery and archive.  Quantum provides a comprehensive,
integrated range of disk, tape, and software solutions supported
by a world-class sales and service organization.

The Company reported a net loss of $8.81 million for the fiscal
year ended March 31, 2012, compared with net income of $4.54
million during the prior year.


RANCHER ENERGY: Full-Payment Plan Ready for Confirmation Sept. 24
-----------------------------------------------------------------
Rancher Energy Corp. will ask Judge Michael E. Romero at a hearing
Sept. 24, 2012 at 9:30 a.m. to confirm its reorganization plan.

According to the order approving the disclosure statement, ballots
accepting or rejecting the Second Amended Plan of Reorganization
are due Aug. 21 at 5:00 p.m.  Objections to confirmation of the
Plan are also due Aug. 21.

As reported in the April 5, 2012 edition of the TCR, the Plan
contemplates that cash will be distributed to all creditor classes
in order of priority until they are paid in full or no more cash
remains above the amount needed to wind up Rancher's affairs.  If
Rancher is successful in paying all creditor classes in full,
Rancher's Board will wind up Rancher's affairs and distribute any
remaining cash to the shareholders, or, if the remaining cash and
other assets exceed $2.0 million, the Board may elect to continue
in the oil and gas business.

The Disclosure Statement says that secured creditor GasRock
Capital LLC, holders of priority wage claims, tax claims, and
unsecured claims are impaired and will be entitled to vote on the
Plan.

                        Liquidation Analysis

The Liquidation Analysis says that the net value of Rancher's
assets is $4.053 million.  Under the Plan, administrative expenses
and priority claims would total $635,000, thus $3.418 million
would be available for distribution to unsecured creditors.  In
contrast, in a Chapter 7 scenario, administrative and priority
expenses would total $515,389, leaving $3.538 million available
for distribution to creditors.  In either scenario, unsecured
creditors totaling $1.054 million would be paid in full.  Return
to equity under the Plan is $2.35 million while it would be $2.473
million in a liquidation scenario.

The difference in return to creditors and shareholders under the
Plan and in a hypothetical chapter 7 case is likely to be the
difference in the cost of a chapter 7 trustee's fee plus the cost
of the trustee's professionals compared to the cost of the Board
and the CEO plus the cost of Rancher's professionals.

                             Emergence

Under the Plan, certain insider claimants with convertible notes
are given the option of conversion, but conversion is unlikely.
Warrant holders will receive common stock at a ratio of 1 share
per 100 shares purchasable under the warrant.

The proceeds from the sale of the Debtor's assets, as well as
income or other proceeds from a contract with Merit Energy and
other revenue Rancher may generate will be used to fund an "Asset
Pool".

If after all Allowed Claims are satisfied in full and funds are
deposited in a claims reserve sufficient to pay all disputed
claims, if any, as provided in the Plan and Rancher has more than
$1,500,000 in cash or other assets (or such lesser amount as the
Board may determine with approval by Rancher's shareholders),
including any receivable due from the existing contract with Merit
Energy, then the Board may determine that it is in the best
interest of its shareholders to continue Rancher's operations as a
public company.  In such event, Rancher would continue to operate
in the oil and gas business.  The focus of Rancher's activities
would be the purchase of non-operating interests in producing oil
and gas properties in the Rocky Mountain area, with the decision
to purchase such interests depending on the economics of each
prospect.  In addition, Rancher may seek strategic transactions
with other existing public and private companies to raise
additional capital and invest in other oil and gas enterprises.

If the Board determines not to continue Rancher's operations, then
the Board may wind up Rancher's affairs in accordance with
applicable law.  Until such time as a shareholder election occurs,
Rancher will maintain its publicly traded status and do all that
is reasonably necessary to maintain the same.

A copy of the Disclosure Statement is free at:

   http://bankrupt.com/misc/RANCHER_ENERGY_ds_secondamended.pdf

                      About Rancher Energy

Denver, Colorado-based Rancher Energy Corp. (OTC BB: RNCHQ)
-- http://www.rancherenergy.com/-- is an independent energy
company that 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.

Effective March 1, 2011, the Company sold all of its oil and gas
properties, which has allowed it to eliminate the majority of its
debt and also provide financial resources during its continuing
reorganization.

The Company was formerly known as Metalex Resources, Inc., and
changed its name to Rancher Energy Corp. in 2006.  Rancher Energy
Corp. was incorporated in the State of Nevada on Feb. 4, 2004.

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 lawyers 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 cash of $20 million plus other potential future
consideration up to $825,000, and subject to other adjustments.
The deal was approved Feb. 24, 2011.

As reported in the Troubled Company Reporter on March 25, 2011,
the Company delivered to the Bankruptcy Court a first amended
Chapter 11 plan of reorganization, and first amended disclosure
statement explaining that plan.


REOSTAR ENERGY: Amends Plan Outline to Include Settlement
---------------------------------------------------------
ReoStar Energy Corporation on July 20 filed an amended disclosure
statement explaining the terms of its Chapter 11 plan to
incorporate a pending settlement with its secured lender.

Pursuant to the settlement, BT and MK Energy and Commodities, LLC,
will be paid $7.5 million on the effective date of the Plan, and
will have no deficiency claim.  The prior iteration of the Plan
contemplated that BT & MK will receive deferred cash payments of
35 equal monthly payments of $75,000 per month, with a $8.175
million balloon payment on the 37th month, and will have a
deficiency claim that would be treated as an unsecured claim.

As with the prior iteration of the Plan, holders of general
unsecured claims in each of the Debtors will have 100% of the net
proceeds from all estate actions, and 20% of their allowed claim
amounts over 36 equal monthly payments, without interest.
According to the July 20 Plan, BT & MK has an estimated unsecured
claim of $185,000 against each of the Debtors only for voting
purposes.  Unsecured creditors are impaired.

Holders of existing interests won't receive anything.  New
interests will be sold to Russco Energy LLC.

According to the liquidation analysis, if the Debtor instead
liquidates under Chapter 7, all holders of claims other than
holders of secured claims, administrative claims, and priority tax
claims could expect a dividend of zero dollars.  Furthermore, the
Debtor expects that the Chapter 7 Trustee's process of winding-
down the Debtor's affairs, objections to Claims, and making
dividends could take up to two years or longer, due to pending
litigation.  Thus, a dividend, if one is paid upon liquidation,
would not likely be made until 2014 or later.

There's a hearing Aug. 28, 2012, to consider confirmation of the
Plan.

A copy of the Disclosure Statement dated July 20, 2012, is
available at http://bankrupt.com/misc/Reostar_DS_072012.pdf

                       About ReoStar Energy

Fort Worth, Texas-based ReoStar Energy Corporation is engaged in
the exploration, development and acquisition of oil and gas
properties, primarily located in the state of Texas.  The Company
owns roughly 9,000 acres of leasehold, which include 5,000 acres
of exploratory and developmental prospects as well as 4,000 acres
of enhanced oil recovery prospects.  ReoStar filed for Chapter 11
bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on
Nov. 1, 2010.

Bankruptcy Judge D. Michael Lynn presides over the case.  Bruce W.
Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP,
in Dallas, represent the Debtors in their restructuring efforts.
Greenberg Taurig, LLP, serves as special corporate/securities
counsel.  Reostar Energy disclosed $15.3 million in assets and
$16.4 million in liabilities.

ReoStar Energy's bankruptcy case is jointly administered with
ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar
Operating, Inc.  ReoStar Energy is the lead case.

No trustee was appointed in the Debtors' cases.  On Jan. 10, 2011,
Michael McConnell was appointed as Chapter 11 examiner.

ReoStar filed for bankruptcy a few weeks after BT and MK Energy
and Commodities LLC, a Delaware Limited Liability Corporation
comprised of two members, BancTrust International, Inc., and MK
Oil Ventures LLC, accelerated a Union Bank note and issued a
foreclosure notice.  BTMK acquired full interest in ReoStar's $25
million line of credit from Union Bank.  Earlier in 2010, BT and
MK Capital expressed interested in investing in ReoStar and in
acquiring the line of credit for that purpose.  Roughly
$10.8 million of the Union Bank loan were then outstanding, and
Union Bank assigned the loan to BTMK for roughly $5.4 million.


RESIDENTIAL CAPITAL: Proposes KPMG as IT and Tax Advisor
--------------------------------------------------------
Residential Capital LLC has filed an application seeking Court
authority to employ KPMG LLP to provide tax compliance and
information technology advisory services.

The company selected KPMG because of the firm's "diverse
experience and extensive knowledge" in the fields of taxation and
operational controls for large sophisticated companies, according
to James Whitlinger, Residential Capital's chief financial
officer.

KPMG will be paid for its tax compliance services at these hourly
rates:

   Personnel                   Hourly Rates
   ---------                   ------------
   Partners/Managing Directors     $510
   Directors                       $435
   Managers                        $345
   Senior Associates               $240
   Associates                      $195

Meanwhile, the firm's hourly billing rates for IT advisory
services to be provided are:

   Personnel                   Hourly Rates
   ---------                   ------------
   Partners/Principals             $330
   Directors/Senior Managers       $260
   Managers                        $215
   Senior Associates               $195
   Associates                      $160

James McAveeney, a principal of KPMG, disclosed in court papers
that the firm does not hold nor represent interest adverse to
Residential Capital's estate, and that it is a "disinterested
person" under Section 101(14) of the Bankruptcy Code.

                     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: Wins OK for KCC as Administrative Agent
------------------------------------------------------------
Residential Capital LLC and its affiliates sought and obtained
authority from the Court to employ Kurtzman Carson Consultants LLC
as administrative agent, nunc pro tunc to the Petition Date.

As administrative agent, KKC will:

   (a) assist with the preparation of the Debtors' Schedules of
       Assets and Liabilities and Statement of Financial Affairs
       by inputting and formatting data provided by the Debtors
       and their professionals;

   (b) tabulate votes and perform subscription services in
       connection with any and all plans filed by the Debtors and
       provide ballot reports and related balloting and
       tabulating services;

   (c) generate an official ballot certification and testify, if
       necessary, in support of the ballot tabulation results;
       and

   (d) perform other ministerial and administrative services.

Albert Kass, vice president of Corporate Restructuring Services
of Kurtzman Carson Consultants LLC, assured the Court that his
firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code, as qualified by Section
1107(b), and does not have an interest adverse to the interests
of the Debtors and their estates.  Mr. Kass disclosed that the
Debtors provided KCC a $100,000 retainer 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).


RESIDENTIAL CAPITAL: Can Hire 3 Firms as Special Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved Residential Capital LLC and its affiliates' hiring of
these firms as special counsel, nunc pro tunc to May 14, 2012:

   * Carpenter Lipps & Leland LLP as special litigation counsel
     to continue the firm's representation of the Debtors in
     connection with, among other things, litigation related to
     the outstanding securitizations sponsored by the Debtors and
     advice concerning the Debtors' rights and responsibilities
     under the transaction documents for these securitizations;

   * Dorsey & Whitney LLP as their special securitization and
     investigatory counsel in connection with an ongoing matter
     involving private label securities suits and ongoing
     government investigations; and

   * Orrick Herrington & Sutcliffe LLP as special securitization,
     transactional and litigation counsel in connection with,
     among other things, the Debtors' rights and obligations
     relating to their securitization and servicing agreements,
     certain claims and litigation asserted by insurers, trustees
     and investors arising from or related to residential
     mortgage-backed securities, and the sale of the Debtors'
     assets.

The firms will be paid their customary hourly rates:

   Firm                 Professionals           Hourly Rates
   ----                 -------------           ------------
   Carpenter Lipps      Partners & Of counsel   $190 to $360
                        Associates              $150 to $220
                        Paralegals              $75

   Dorsey & Whitney     Partners                $400 to $780
                        Non-partner Attorneys   $235 to $495
                        Paralegals              $175 to $250

   Orrick, Herrington   Partners & Counsel      $695 to $895
                        Associates              $355 to $675
                        Paralegal               $170 to $270

The firms will also be reimbursed for any necessary out-of-pocket
expenses incurred.

Each of the firms assures the Court that it is a "disinterested
person" as the term is defined under Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy
Code, and does not represent any interest adverse to the Debtors
or their estates.

                     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: Wins OK for FTI as Financial Advisor
---------------------------------------------------------
Residential Capital LLC obtained approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
FTI Consulting Inc. as its financial adviser.

As financial advisor, FTI will assist with the preparation of
financial related disclosures required by the Court, and assist
the Debtors with certain aspects of claims management and
resolution, among other things.

FTI's proposed compensation will be a monthly fixed fee of
$1,750,000 per month until the later of March 31, 2013, or the
sale of substantially all of the Debtors' assets.  After that
time, FTI will be paid a monthly fixed fee of $1,250,000 until
the effective date of a Chapter 11 plan of reorganization or
liquidation, plus reimbursement of actual and necessary expenses.
FTI will also be paid a completion fee of $4,300,000.

During the 90-day period prior to the Debtors' Petition Date, FTI
received $7,241,578 from the Debtors for professional services
performed and expenses incurred.  Prior to the Petition Date, FTI
received retainers totaling $1,350,000.  FTI will apply the
remaining amount of its prepetition Retainer as a credit towards
postpetition fees and expenses, after the postpetition fees and
expenses are approved.

William J. Nolan, FTI's Senior Managing Director, assures the
Court that FTI is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.

                     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: Can Hire Centerview as Investment Banker
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Residential Capital LLC to employ Centerview Partners
LLC as its investment banker.

On October 18, 2011, prior to the Petition Date, the Debtors
engaged Centerview to provide general restructuring advice in
connection with the Debtors' attempts to complete a strategic
restructuring, reorganization, recapitalization and/or M&A
transaction and, if necessary, to prepare for the Debtors'
commencement of chapter 11 cases.

The Debtors want Centerview to continue to advise them in a
variety of matters, including, as reasonably requested:

   (a) reviewing and analyzing the Debtors' business, operations,
       and financial projections;

   (b) evaluating the Debtors' potential debt capacity in light
       of its projected cash flows;

   (c) assisting in the determination of a capital structure for
       the Debtors;

   (d) assisting in the determination of a range of estimated
       values for the Debtors on a going concern basis;

   (e) advising the Debtors on tactics and strategies for
       negotiating with the Stakeholders;

   (f) rendering financial advice to the Debtors and
       participating in meetings or negotiations with the
       Stakeholders and/or rating agencies or other appropriate
       parties in connection with any Restructuring;

   (g) advising the Debtors on the timing, nature, and terms of
       new securities, other consideration or other inducements
       to be offered pursuant to a Restructuring;

   (h) advising and assisting the Debtors in evaluating potential
       Financing transactions by the Debtors, and, subject to
       Centerview's agreement to so act and the execution of
       appropriate agreements, contacting potential sources of
       capital as the Debtors may designate and assisting the
       Debtors in implementing such a Financing;

   (i) assisting the Debtors in preparing documentation within
       Centerview's area of expertise that is required in
       connection with a Restructuring;

   (j) assisting the Debtors in identifying and evaluating
       candidates for a potential Sale Transaction6, advising the
       Debtors in connection with negotiations and aiding in the
       consummation of one or more Sale Transactions;

   (k) attending meetings of the Debtors' Board of Directors and
       its committees with respect to matters on which Centerview
       has been engaged to advise the Debtors;

   (l) providing testimony, as necessary, with respect to matters
       on which Centerview has been engaged to advise the Debtors
       in any proceeding before the Bankruptcy Court; and

   (m) providing (but only to the extent permitted by further
       orders of the Court) the Debtors with other financial
       restructuring advice as may be specifically agreed upon in
       writing by the Debtors and Centerview.

The Debtors propose to pay Centerview:

   (a) A monthly financial advisory fee of $300,000, payable on
       the first day of each month through the conclusion of the
       engagement; provided, that 50% of Monthly Advisory Fees
       paid subsequent to the Petition Date shall be credited
       against a Transaction Fee; provided further, that such
       credit will only apply proportionately to the extent that
       such fees are approved by the Bankruptcy Court.

   (b) A fee of $12,500,000, payable upon the consummation of a
       Restructuring or Sale Transaction that is consummated in
       Bankruptcy Court (the "Transaction Fee"); provided; that
       with respect to any Restructuring or Sale Transaction that
       is intended to be effected, in whole or in part, as a sale
       pursuant to Bankruptcy Code section 363 with a stalking
       horse bidder, or as a prepackaged, partial prepackaged, or
       prearranged plan of reorganization, which plan may include
       a Sale Transaction, the Transaction Fee shall be earned
       and payable (i) 50% upon, in the case of a sale pursuant
       to Bankruptcy Code section 363, execution of a stalking
       horse asset purchase agreement, or, in the case of a
       Prearranged Plan, upon obtaining indications of support
       from certain of the Company's key creditors that in the
       good faith judgment of the Board of Directors of the
       Company are sufficient to justify filing such Prearranged
       Plan, and (ii) 50% upon consummation of such Restructuring
       or Sale Transaction.

   (c) If the Debtors consummate any Financing, the Debtors will
       pay Centerview:

          (i) 1.0% of the aggregate amount of any indebtedness
              issued that is secured by a first lien;

         (ii) 3.0% of the aggregate amount of any indebtedness
              issued that (x) is secured by a second or junior
              lien, (y) is unsecured and/or (z) is subordinated;

        (iii) 5.0% of the aggregate amount of any equity or
              equity-linked securities or obligations issued; and

         (iv) 0.5% of the aggregate amount of any debtor-in-
              possession financing issued, plus 1.0% of the
              aggregate amount of any debtor-in-possession
              financing issued by new lenders, not to exceed
              $5,000,000 in the aggregate.

       Any fee(s) paid under subparagraphs (c)(i), (ii) or (iii)
       shall be 50% credited (but only once) against a
       Transaction Fee subsequently paid under paragraph (b).

       Any fee in excess of $500,000 paid out under subparagraph
       (c)(iv) shall be 50% credited against a Transaction Fee
       subsequently paid under paragraph (b).

   (d) If at any time during the term of Centerview's engagement
       or within the nine full months following the termination
       of the engagement the Debtors (i) receive a letter of
       intent to purchase all or substantially all of the
       Debtors' assets or (ii) receive a debtor-in-possession
       financing proposal, in either case, satisfactory to the
       Debtors, Centerview shall be due and paid a transaction
       fee equal to $1,200,000 (the "Interim Transaction Fee").

   (e) In addition to any fees that may be payable to Centerview
       and, regardless of whether any transaction occurs, the
       Debtors shall promptly reimburse Centerview for all: (A)
       reasonable documented production charges and out-of-pocket
       expenses (including travel and lodging, data processing
       and communications charges, courier services and other
       appropriate expenditures) and (B) other reasonably
       incurred fees and expenses, including expenses of counsel
       if engaged with the prior approval of the Debtors, which
       approval shall not be unreasonably withheld.

   (f) As part of the compensation payable to Centerview, the
       Debtors agree to the indemnification, contribution and
       other provisions in the Engagement Letter.

   (g) For the avoidance of doubt, if both a Restructuring and a
       Sale Transaction occur (in separate transactions or
       through a single transaction that meets both the
       definitions), the Company will be obligated to pay only
       one Transaction Fee. One or more fees pursuant to
       paragraph (c) may be payable in addition to a
       Restructuring Fee (subject to crediting).

Marc D. Puntus, a Partner and co-head of the Restructuring Group
of Centerview Partners LLC, assures the Court that based on the
firm's current knowledge of the professionals listed as Potential
Parties-in-Interest in the Debtors' Chapter 11 Cases, and to the
best of his knowledge, none of these business relations
constitute interests adverse to the Debtors.

Mr. Puntus disclosed that prior to the Petition Date, the Debtors
paid Centerview an aggregate of $2,900,000 in full payment of the
Monthly Advisory Fees for the months of October 2011 through May
2012 and $54,155 as reimbursement for Centerview's expenses
billed through May 13, 2012. In addition, the Debtors paid
Centerview $5,000,000 for the Financing Fee associated with the
$1.45 billion and $150 million debtor-in-possession financings
obtained by the Debtors, an Interim Transaction Fee of $1,200,000
and 50% of the Restructuring Fee ($6,250,000), all pursuant to
the terms of the Engagement Letter. Centerview also received an
expense retainer of $50,000.

Upon the completion of the proposed sales of the Debtors' legacy
loan portfolio and mortgage loan origination and servicing
businesses and assets, and/or other Restructuring, Centerview
will be entitled to receive the remaining 50% of the Transaction
Fee ($6,250,000), which amount is subject to crediting of certain
amounts pursuant to the terms of the Engagement Letter.

                     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: Delays Auction of Sparrows Point and Warren Assets
------------------------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that RG Steel LLC delayed the auctions of
its steelmaking facilities in Sparrows Point, Maryland, and
Warren, Ohio.  Under sale procedures approved June 21, RG Steel
set up a dual auction process depending on whether it selected a
so-called stalking horse, or lead bidder, to set a floor for
others to beat. Under those rules, the company was supposed to
select a stalking horse by July 30.  If it didn't, it was to have
held an auction July 31.

According to the report, auctions of the Sparrows Point and Warren
assets will now be held on Aug. 7 and a hearing to request court
approval to sell the assets to the winning bidders is set for
Aug. 15, according to court filings.

The report adds that the Debtor went ahead with the auctions of
its Wheeling Corrugating and other Wheeling assets July 31.  It
will seek court permission to sell the assets to the auction
winners at an Aug. 8 hearing.

                          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.


RR DONNELLEY: S&P Cuts Corp. Credit Rating to 'BB' on Weak Economy
------------------------------------------------------------------
Standard & Poor's Rating Services lowered its ratings on R.R.
Donnelley & Sons Co. (RRD), including the corporate credit rating,
to 'BB' from 'BB+'. The rating outlook is stable.

"The downgrade reflects our expectation that the global economy
will remain weak over the near term, depressing RRD's revenue,
EBITDA, and cash flow, hampering the ability to reduce leverage,"
said Standard & Poor's credit analyst Tulip Lim. "We also expect
low discount rates to keep contributing to elevated leverage. We
previously expected interest rates to rise, which, coupled with
the company freezing its pension plan would have allowed leverage
to drop to the mid-3x area."

"Our financial risk score of 'significant' on R.R. Donnelley &
Sons (RRD) reflects the company's cash flow generation and our
revised expectation that leverage will decline, but to the high 3x
area over the near-term, if economic and pricing pressures do not
worsen. RRD's business risk profile as 'fair' (based on our
criteria), reflecting its market position and efficiencies
associated with its critical mass. The company faces secular
declines in several of its products and pricing pressure because
of industry overcapacity. We believe that these trends could cause
RRD's organic revenue to decline over the near term," S&P said.

"The printing industry has steadily lost ground to electronic
distribution of content and online advertising. As a result, it
has been afflicted by overcapacity, chronic pricing pressure, and
the need to continuously take out costs. RRD is the largest
participant in the industry, with broad-based services addressing
a variety of end markets. RRD's size confers important
efficiencies, the capacity to provide one-stop service to clients,
the ability to invest in leading technology, and the ability to
cope with pricing pressure more successfully than many of its
competitors. Nevertheless, several of its important end markets
are subject to long-term adverse fundamentals, notably the
magazine, retail inserts, directory, and book businesses. Industry
volume shrinkage is likely to continue to necessitate capacity
downsizing and restructuring charges," S&P said.


SABINE PASS: Moody's Rates First Lien Bank Term Loan 'Ba3'
----------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to Sabine Pass
Liquefaction, LLC (SPL or Project) $3.6 billion 7-year, first lien
bank term loan. Moody's also withdrew the Ba3 rating on SPL's 1st
lien term loan and the B1 rating on Cheniere Energy Partners'
(CQP) 1st lien term loan. The rating outlook for SPL is stable.

Sabine Pass LNG's (SPLNG) B1 rating on its senior secured debt and
positive outlook is unchanged.

Ratings Rationale

On June 6, 2012, Moody's assigned a Ba3 rating to the then
proposed $1.25 billion senior secured term loan B at SPL while
SPL's $2.5 billion bank loan was not rated. SPL subsequently
upsized its bank loan to $3.6 billion and canceled its $1.25
billion term loan.

Moody's Ba3 rating on the upsized $3.6 billion, first lien bank
loan remains supported by the lump sum EPC contract with Bechtel,
Bechtel's global experience in building similar large LNG
liquefaction facilities, $300 million of budgeted construction
contingency, extensive existing infrastructure, long term offtake
agreements with investment grade parties that support strong 'Baa'
financial metrics during operations, sizeable third party equity
investment in CQP, project finance protections and expected strong
cash flow during operations. The Ba3 rating also considers the
large, four year construction period that exposes SPL to potential
construction cost overruns and delays especially given the $739
million of provisional sums that are not currently fixed in the
EPC contract, sizeable owner costs, the project's location in a
region susceptible to hurricanes and reliance on $180 MM of Train
1 revenues to complete construction that reduces the benefit of
the $300 million in budgeted contingency. The other challenges
facing SPL include uncertainties on gas feedstock supply and
transportation arrangements, major debt maturities at the SPL and
its affiliates around the 2013 to 2019 timeframe, and
uncertainties regarding future financing at CQP and uncertainties
regarding the financing and construction of SPL's Trains 3 & 4.
CQP's lack of ownership of the Creole Trail Pipeline (CTPL) is
also viewed as credit negative.

Moody's recognizes that SPL's revised financing benefits from
certain recent improvements including upfront equity funding prior
to most draws on the bank loan ($100 MM is drawn at initial
funding); no debt at CQP; roughly $100 million of less debt due
primarily due to less interest during construction; additional
equity funding at Cheniere Energy; and reduced reliance on Train 1
revenues to fund construction. These improvements strongly
position SPL at the Ba3 rating category; however, uncertainties on
the future financings at CQP, uncertainties on the financing and
construction of SPL's Trains 3 & 4, and CQP's lack of ownership of
the Creole Trail Pipeline (CTPL) serve as key rating restraints.

SPL's stable rating outlooks reflect the expectation that
construction will be completed on time and on budget and that SPL
and SPLNG will meet their performance obligations under their
respective offtake contracts once construction is completed.

SPL's rating could be positively affected depending on SPL's
ultimate financing and construction plans for its Trains 3 & 4,
the extent of any financing at CQP, whether ownership of CTPL is
shifted to CQP and construction progress at SPL. Over the longer
term, positive trends that could lead to an upgrade include SPL's
successful construction completion, demonstrated good operational
performance at SPL and SPLNG and the two borrowers' ability to
address their upcoming debt maturities from 2013 to 2019.

SPLNG's positive outlook reflects the possibility that SPLNG's
near-term refinancing risk could be addressed in advance of the
November 2013 debt maturity, including from funds provided by CQP.
To the extent that such refinancing occurs, additional positive
rating pressure would surface.

SPLNG and SPL ratings could be downgraded if SPL incurs
significant construction cost overruns or delays, if SPLNG incurs
operating problems, if SPLNG is unable to address its Nov 2013
debt maturity or if Trains 3 & 4 add further material financial
and construction risk. SPLNG and SPL's ratings could face negative
rating action if SPL's fuel sourcing strategy introduces
significant imperfections, if equity contributions are not made as
expected or if any of SPL's governmental authorizations are
revoked or limited.

Sabine Pass Liquefaction LLC (SPL) is expected to build and
operate a nameplate 9 million ton per annum (mtpa) liquefied
natural gas (LNG) project located in Cameron Parish, Louisiana
next to the existing Sabine Pass LNG L.P.'s regasification plant
(SPLNG). SPL's output is contracted with BG Group and Gas Natural
SA under 20 year offtake contracts. SPLNG owns and operates a
liquefied natural gas receiving terminal with an aggregate
regasification capacity of four Bcf/d and five LNG storage tanks.
SPLNG has third party 20-year contracts for half of the capacity.
SPL expects to utilize SPLNG's existing infrastructure including
storage tanks and marine terminal under an affiliate contract.
Cheniere Energy Partners (CQP) owns SPL and SPLNG. Post financial
close, CQP is expected to be owned by private equity funds managed
by Blackstone, Cheniere Energy, and public investors.

The principal methodology used in this rating was Generic Project
Finance methodology published in December 2010.


SAN BERNARDINO, CA: Files for Chapter 9 Bankruptcy
--------------------------------------------------
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012.

San Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.

Mayor Patrick J. Morris said in a phone interview with Bloomberg
that City officials sped up the timing of its filing because they
were concerned that some creditors may take legal action against
the city.

"All of our vital service bills will continue to be paid," Mayor
Morris said.  "We are going to keep our city services running."
San Bernardino, a city of 209,000 about 60 miles (97

The Debtor is represented that Paul R. Glassman, Esq., at
Stradling Yocca Carlson & Rauth.

The city council of San Bernardino voted on July 10 to file for
bankruptcy.  The move lets San Bernardino bypass state-required
mediation with creditors and proceed directly to U.S. Bankruptcy
Court.

San Bernardino said it will be insolvent in the current fiscal
year absent a restructuring.  A report by city staff projected
city spending of $166.2 million would exceed revenue by $46
million in the current fiscal year.

On July 18, 2012, the mayor and the common council declared a
fiscal emergency and determined that the Debtor would be unable to
pay obligations within the next 60 days, and found that the
financial state for the City jeopardizes the health, safety, or
well-being of the residents absent a bankruptcy filing.

San Bernardino joins two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.


SAN BERNARDINO, CA: Voluntary Chapter 9 Case Summary
----------------------------------------------------
Debtor: City of San Bernardino, California
        City Hall
        300 North "D" Street
        San Bernardino, CA 92418

Bankruptcy Case No.: 12-28006

Chapter 9 Petition Date: Aug. 1, 2012

Court: U.S. Bankruptcy Court
       Central District of California

Debtor's
Counsel   : Paul R. Glassman, Esq.
            STRADLING YOCCA CARLSON & RAUTH
            100 Wilshire Blvd Ste 440
            Santa Monica, CA 90401
            Tel: (424) 214-7000
            Fax: (424) 214-7010
            E-mail: pglassman@sycr.com

Estimated Assets: More than $1 billion

Estimated Debts:  More than $1 billion

The Debtor did not file a list of its largest unsecured creditors
together with its petition.

The petition was signed by Andrea M. Travis-Miller, Interim City
Manager.


SELECT MEDICAL: S&P Affirms 'B+' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on specialty hospital operator and outpatient
rehabilitation therapy provider Select Medical Corp. "At the
same time, we placed our 'BB' credit rating on Select's senior
secured debt on CreditWatch with negative implications, because a
potential increase in the size of this debt class may reduce
recovery prospects in the event of payment default according to
our criteria. We affirmed our 'B' credit rating on Select's senior
unsecured debt. Our recovery rating on the senior secured debt
is '1', indicating our expectation for very high (90% to 100%)
recovery of principal, and our recovery rating on the senior
unsecured debt is '6', indicating our expectation for negligible
(0 to 10%) recovery of principal, both in the event of payment
default," S&P said.

"The affirmation of the corporate credit rating reflects the
neutral impact on Select's overall financial risk profile of the
pending transaction, because we do not expect the total amount of
debt outstanding to change," S&P said.

"We expect to resolve the CreditWatch listing of the senior
secured debt rating when Select's financing plans are final," S&P
said.

"The ratings reflect our assessment of Select's business risk
profile as 'weak' and the financial risk profile as 'highly
leveraged,' according to our criteria. We expect Select to remain
subject to significant reimbursement risk, particularly from the
government as Medicare generates about half of the company's total
revenues. However, the April 24, 2012, proposal by the Centers
for Medicare & Medicaid Services (CMS) stating it projects long-
term, acute-care (LTAC) payments increasing by about 1.9% in
fiscal 2013 somewhat eases near-term reimbursement risk. We expect
Select's total revenue to increase by about 5.5% in 2012, a much
smaller increase than the 17% growth in 2011 as the Regency
acquisition is now fully incorporated into the revenue base. We
expect low single-digit increases in both admissions and rates to
drive 6% growth in specialty hospital division revenue, and growth
in its contract service business to contribute to an estimated 4%
growth in outpatient rehabilitation revenue. We expect Select's
lease-adjusted EBITDA margin to decrease about 50 basis points to
14.8% in 2012 to reflect increased infrastructure investments and
the difficulty of managing operating costs to meet relatively low
rate increases," S&P said.


SEVEN SEAS: Moody's Affirms B2 CFR/PDR, Rates $40MM Revolver Ba2
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Seven Seas
Cruises S. DE R.L.'s proposed $40 million revolver expiring in
2017 and $300 million first lien term loan due 2019. Seven Seas'
B2 Corporate Family and Probability of Default ratings, and B2
rating on the company's $225 million senior secured notes due 2019
were affirmed. The outlook remains stable.

Proceeds from the proposed $300 million term loan will be used to
refinance the company's existing $293 million first lien term loan
due 2014. The Ba2 rating on the proposed term loan and revolver --
three notches above the CFR -- reflects the considerable amount of
junior debt that ranks below the first lien debt in the capital
structure.

Ratings assigned:

$300 million first lien term loan due 2019 at Ba2 (LGD2, 13%)

$40 million first lien revolver expiring 2017 at Ba2 (LGD2, 13%)

Ratings affirmed (and LGD assessments revised):

Corporate Family Rating at B2

Probability of Default Rating at B2

$225 million 9.125% second lien notes due 2019 at B2 (LGD 3,
46% from LGD 3, 45%)

Ratings Rationale

Seven Seas' B2 Corporate Family Rating reflects its small scale in
terms of capacity and narrow business focus -- the company owns
only three luxury cruise ships -- and high leverage (about 11.0
times including 50% of payment-in-kind ("PIK") subordinated debt
issued by Seven Seas' ultimate parent, or 6.3 times excluding the
PIK debt). Also considered is the increase to Seven Seas' cost of
debt that is expected to occur as a result of the proposed
transaction. Pro forma reported EBITDA/cash interest is 2.7 times,
about a full turn lower than the 3.6 times for the latest 12-month
period ended March 31, 2012.

Positive rating consideration is given Seven Seas' low
intermediate-term capital expenditure requirements, and Moody's
expectation that the company will continue to grow earnings and
generate positive free cash flow. Also considered are the benefits
of the proposed transaction, including the extended debt maturity
profile and the substantially lower principal amortization
requirement of the proposed credit facility relative to the credit
facility that it will replace. The ratings also consider that
despite demand weakness in the European market, revenue and EBITDA
are expected to increase modestly over the next 12 -- 18 months
based upon booking trends reported by Seven Seas. The company's
reported bookings for 2013 demonstrate stable occupancy at higher
prices relative to the same time last year for 2012.

The stable rating outlook reflects Moody's view that a further
improvement in earnings, limited capital expenditure requirements
and continued positive free cash flow generation will enable the
company to reduce debt/EBITDA by year-end 2013 to 10.3 times
including the PIK debt, or 5.2 times excluding the PIK debt as
well as improve its EBITDA minus capital expenditures/interest
coverage, currently at about 1.2 times, to about 1.6 times over
that same period.

A higher rating is not likely in the foreseeable future and would
require a material amount of debt reduction along with further
improvement in EBITDA minus capital expenditures/interest to at
least 2.0 times. A higher rating would also require that Seven
Seas maintain its very good liquidity profile. Ratings could be
lowered if it appears Seven Seas will not be able to achieve and
sustain debt/EBITDA including the PIK sub debt at 9.0 times, or
5.0 times excluding PIK sub debt by the end of fiscal 2014.
Ratings could also be lowered if EBITDA minus capital expenditures
to interest does not improve and/or the company's liquidity
deteriorates for any reason.

Independent from any change to Seven Seas' Corporate Family
Rating, the instrument rating on the second lien notes could be
downgraded if the company was to incur additional first lien debt
to purchase a new vessel. According to its credit agreement, Seven
Seas is allowed to incur additional secured debt to finance 80% of
the cost of a new vessel.

The principal methodology used in rating Seven Seas Cruises S. DE
R.L. was the Global Lodging & Cruise Industry Rating 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.

Seven Seas Cruises S. DE R.L. is a cruise ship operator that
targets the luxury segment of the cruise industry with
destination-oriented cruises. Seven Seas was acquired by Prestige
Cruise Holdings, Inc. in January 2008. Seven Seas owns three
luxury cruise ships with aggregate berth capacity of 1,890. Seven
Seas generates about $480 million of gross annual revenue.
Affiliates of Apollo Management L.P. own a large ownership
interest in Seven Seas' ultimate parent, Prestige Cruise Holdings,
Inc. through Prestige Cruise International, Inc. PCH also owns
Oceania Cruises (which in turn owns Insignia Vessel Acquisition,
LLC (B3, negative).


STOCKTON, CA: Assured Guaranty Faces $100-Mil. Loss Under Plan
--------------------------------------------------------------
Michael Bathon, substituting for Bloomberg bankruptcy columnist
Bill Rochelle, reports that bond insurer Assured Guaranty Corp.
said it is being forced by Stockton, California, to accept $100
million in losses instead of seeking more concessions from labor
unions.

In a statement Aug. 1, Assured said its claims should be treated
the same as those of other creditors, including any filed by
employees.

"Chapter 9 was not intended to be used as a sword to prefer one
class of similarly situated creditor over another," according to
the statement.

Before Stockton's filing, Assured suggested areas the city should
consider cutting to avoid bankruptcy, Assured Chief Executive
Officer Dominic J. Frederico said in a telephone interview with
Bloomberg's Steven Church.

Stockton's financial problems won't be fixed by trying to persuade
U.S. Bankruptcy Judge Christopher Klein to throw out much of the
city's long-term debt, Mr. Frederico said.  Even if all long-term
debt was eliminated, the city would still be left with
unsustainable costs for employee wages, pensions and health
benefits, he said. Those costs are higher for Stockton than for
many of its peers in California, he said.

"You've got to look at all the costs," Mr. Frederico said,
according to the Bloomberg report.

                      About Stockton, Calif.

The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Calif. Case No. 12-32118) in Sacramento on June 28,
2012, becoming the largest city to seek creditor protection in
U.S. history.  The city was forced to file for bankruptcy after
talks with bondholders and labor unions failed.  Stockton
estimated more than $1 billion in assets and in excess of $500
million in liabilities.

The city, with a population of about 300,000, identified the
California Public Employees Retirement System as the largest
unsecured creditor with a claim of $147.5 million for unfunded
pension costs.  In second place is Wells Fargo Bank NA as trustee
for $124.3 million in pension obligation bonds.  The list of
largest creditors includes $119.2 million owing on four other
series of bonds.

The city is being represented by Marc A. Levinson, Esq., at
Orrick, Herrington & Sutcliffe LLP.  The petition was signed by
Robert Deis, city manager.

Mr. Levinson also represented the city of Vallejo, Calif. in its
2008 bankruptcy.  Vallejo filed for protection under Chapter 9
(Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, estimating
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition.  In August 2011, Vallejo was
given green light to exit the municipal reorganization.   The
Vallejo Chapter 9 plan restructures $50 million of publicly held
debt secured by leases on public buildings.  Although the Plan
doesn't affect pensions, it adjusts the claims and benefits of
current and former city employees.  Bankruptcy Judge Michael
McManus released Vallejo from bankruptcy on Nov. 1, 2011.


SUN PRODUCTS: Moody's Affirms 'B2' CFR/PDR; Outlook Negative
------------------------------------------------------------
Moody's Investors Services affirmed the Corporate Family and
Probability of Default ratings of Sun Products Corporation at B2.
Moody's also assigned a Ba3 rating to the senior secured revolving
credit facility with the new maturity date of April 26, 2014. The
rating outlook is negative.

The affirmation of the company's B2 CFR reflects its progress in
improving profitability and operational controls following last
year's disruptive facilities and information systems realignment.
The negative outlook reflects the substantial risk that Sun
Products will not be able to restore its credit metrics to levels
appropriate for its B2 rating given the challenging competitive
and promotional environment for laundry and dish care.

"Sun Product's ability to sustain its much improved profitability,
generate free cash flow and reduce its leverage is made more
challenging given the sluggish U.S. economic recovery, highly
price sensitive U.S. consumer and potential for volatile raw
material costs," says Moody's Senior Vice President, Janice
Hofferber.

The following ratings of Sun Product's were affirmed:

- Corporate Family Rating at B2

- Probability of Default rating at B2

- $792 million first lien term loan due April 2014 at Ba3
   (LGD2, 24%)

- $225 million second lien term loan due October 2014 at B3
   (LGD4, 60%)

The following rating of Sun Products were assigned:

- $125 million senior secured revolving credit facility due
   April 2014 at Ba3 (LGD2, 24%)

Ratings Rationale

Sun Product's B2 Corporate Family Rating reflects its very high
leverage (debt-to-EBITDA of over 12 times), heightened competitive
activity from better capitalized operators, and significant
retailer concentration for its core private label and branded
laundry care products. Moreover, the company's mid-tier branded
strategy remains challenged by the significant additional
investments required to compete effectively, especially given the
recent category declines and intense price competition.The rating
benefits from a good liquidity profile, highlighted by
availability under its committed revolving credit facility and
lack of near-term debt maturities.

The negative outlook reflects Moody's view that operating
conditions will remain difficult in the near-term as the company
slowly recovers from certain operational challenges and responds
to a competitive market environment. As a result, restoring credit
metrics to ranges acceptable for a B2 rating may be difficult to
achieve.

Sun Product's ratings could be downgraded if category growth
continues to decline and profitability remains weak. Specifically,
Moody's could downgrade the company's ratings it it believes that
the company will not be able to achieve a meaningful improvement
in credit metrics such that debt-to-EBITDA is around 7.5 times by
December 31, 2012 or if free cash flow is negative.

Given the company's weak credit metrics, Sun Product's ratings are
not likely to be upgraded in the near term. However, the company's
ratings could be upgraded if operating performance and organic
growth was restored such that debt-to-EBITDA is sustained below
5.0 times and free cash flow-to-debt climbs above 5%.

The principal methodology used in rating Sun Products Corporation
was the Global Packaged Goods Industry Methodology published in
July 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.

The Sun Products Corporation, based in Wilton, Connecticut, is a
leading provider of moderately priced and private label laundry
detergents, fabric softeners and other related household and
personal care products in the North America market. Significant
brands include all, Snuggle, Sun Wisk, Sunlight (Canada), and
Surf. The company is also the largest private label manufacturer
of laundry care products in North America. Sun Products' parent
company, Spotless Group Holding, LLC is controlled by affiliates
of Vestar Capital Partners. Sun Products' sales for the twelve
months ending March 31, 2012 were approximately $1.9 billion.


SYNCORA GUARANTEE: Moody's Corrects Ratings on Certain Securities
-----------------------------------------------------------------
Moody's Investors Service is correcting the ratings of eight
classes of US structured finance securities wrapped by Syncora
Guarantee Inc. to Ca (sf) on review for upgrade from Ca (sf). Due
to an internal administrative error, the ratings of these classes
were not placed on review for upgrade on July 30, 2012 as part of
the watch action taken on securities backed by first or second
lien-US residential mortgages that are wrapped by Syncora
Guarantee Inc. That action was driven by Moody's announcement also
on July 30, 2012 that it had placed on review for possible upgrade
the Ca insurer financial strength rating of Syncora Guarantee Inc.

The list of the transactions and classes being corrected as
follows:

Transaction Name: Option One Mortgage Loan Trust 2007-HL1

Class Name and Current Rating:

Cl. II-A-3, Ca (sf) on review for upgrade
Cl. II-A-4, Ca (sf) on review for upgrade
Cl. I-A-1, Ca (sf) on review for upgrade

Transaction Name: C-BASS Mortgage Loan Asset-Backed Certificates,
                  Series 2007-SL1

Class Name and Current Rating:

Cl. A-1, Ca (sf) on review for upgrade
Cl. A-2, Ca (sf) on review for upgrade

Transaction Name: SunTrust Acquisition Closed-End Seconds Trust,
                  Series 2007-1

Class Name and Current Rating:

Cl. A, Ca (sf) on review for upgrade

Transaction Name: FFMLT 2007-FFB-SS, Mortgage Pass-Through
                  Certificates, Series 2007-FFB-SS

Class Name and Current Rating:

Cl. A, Ca (sf) on review for upgrade

Transaction Name: Nomura Asset Acceptance Corporation,
                  Alternative Loan Trust, Series 2007-S2

Class Name and Current Rating:

Cl. A, Ca (sf) on review for upgrade

The complete updated List of Affected Credit Ratings is available
at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF293257

At the same time, for the July 30, 2012 press release, Moody's
corrected the headline to "Moody's places on review for upgrade
ratings of 42 US structured finance securities guaranteed by
Syncora Guarantee Inc."; corrected the sub-headline to:
"Approximately $2.0 billion of US structured finance securities
affected", in the first paragraph, first sentence, corrected '34
classes' to '42 classes'.


TANNIN INC: Plan Confirmed After SEPH Objection Resolved
--------------------------------------------------------
Judge William S. Hulman late last month entered an order
confirming the reorganization plan for Tannin, Inc.

The order also approves the sale of the Debtor's West 21 Acres
property to Cottages of Romar, LLC.

The judge approved the plan following a hearing on July 24.

SE Property Holdings, LLC, as successor by merger to Vision Bank,
a secured creditor in the Debtor's case, objected to the Plan.

The Debtor the day prior to the hearing filed a Second Amended
Plan of Reorganization to revise the treatment of SEPH's claim.
This prompted SEPH to withdraw the objection and change its vote
from "reject" to "accept"

Under the Plan, SEPH, holder of $1.34 million claim secured by a
first-priority mortgage lien on the Debtor's property, will
receive net proceeds of the sale totaling $1.7 million in full
satisfaction of its claims against Tannin and its sole
shareholder, George Gounares.

As with the prior iteration of the Plan, unsecured creditors are
impaired and will receive tenth day of the month following the
date which is 60 days from the Effective Date and on the same day
of each third month thereafter for 12 payments, a payment equal
1/12 of that creditor's allowed claim, without interest.

The sole shareholder of the Debtor will retain his stock.

A copy of the Plan dated July 23, 2012 is available for free at:

    http://bankrupt.com/misc/Tannin_Inc_Plan_072312.pdf

                        About Tannin Inc.

Orange Beach, Alabama-based Tannin, Inc. owned West 21 Acres, an
approximately 21-acre parcel of undeveloped real property located
on the west side of the Village of Tannin, which is subject to the
first priority mortgage lien of Vision Bank.

Tannin Inc. filed for Chapter 11 protection (Bankr. S.D. Ala. Case
No. 12-00593) on Feb. 20, 2012.  Alexandra K. Garrett, Esq., and
Lawrence B. Voit, Esq., at Silver, Voit & Thompson represents the
Debtor in its restructuring effort.  The Debtor has scheduled
assets of $54,396,740 and scheduled liabilities at $2,379,421.


TRANSALTA CORP: S&P Cuts Global Rating on Preferred Stock to 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on Calgary, Alta.-based
power generation company TransAlta Corp. to 'BBB-' from 'BBB'. At
the same time, Standard & Poor's lowered its global scale
preferred stock rating on the company to 'BB' from 'BB+', and its
Canada scale rating to 'P-3' from 'P-3(High)'. The outlook is
stable.

"The downgrade reflects our belief that TransAlta will not improve
and maintain its adjusted funds from operations-to-debt to levels
consistent with the previous ratings or improve its business risk
profile in the near term," said Standard & Poor's credit analyst
Gavin MacFarlane.

"The cash flows associated with the long-term contract that
TransAlta has signed at its Centralia facility reduce volume and
price risk on the units. However, the contract falls largely
outside our rating horizon, so it has a negligible immediate
credit impact. The contract does not start to generate cash flows
until December 2014 and is contracted for 180 megawatts (MW) of
capacity ramping up in the following two years to reach 380 MW out
of a total capacity of 1,340 MW (28% of the total) in December
2016. The contract is with Puget Sound Energy Inc. (BBB/Stable/A-
2), a combined electric and gas utility business focused in the
Puget Sound region of Washington State, which is subject to
regulatory review by the Washington Utilities and Transportation
Commission," S&P said.

"The ratings on TransAlta reflect Standard & Poor's opinion of the
company's strong business risk profile and significant financial
risk profile. In our view, the business risk profile reflects a
predominance of long-term power purchase arrangements (PPAs) and a
relatively diversified electricity generation portfolio. We
believe that offsetting these credit strengths are high leverage;
the potential for year-to-year volatility in cash flow due to
revenue exposure to volume and price risk; asset concentration at
Centralia, TransAlta's largest merchant asset; and the company's
involvement in high-risk energy trading activities. An underlying
level of profitability and cash flow stability comes from long-
term power contracts (with a minimum of five years to maturity),"
S&P said.

"TransAlta owns and often operates both large and small generation
facilities in North America and Australia. For the 2012-2015
forecast period, more than two-thirds of its capacity is
contracted primarily through legislated Alberta PPAs or other
long-term contracts, with the balance coming from merchant
capacity that the company hedges over a rolling four-year period.
At June 30 2012, TransAlta had about C$5.2 billion in adjusted
debt," S&P said.

"The stable outlook reflects our expectation of AFFO-to-debt
remaining in the 15%-20% range and a relatively stable business
risk profile. We could raise the ratings if TransAlta improves its
business risk profile or if we expect the company to achieve and
maintain AFFO-to-debt of more than 20%. Conversely, while we don't
expect it, a material debt-financed acquisition or capital
building program, costly regulatory or environmental initiatives,
or a sustained deterioration in plant operating performance
leading to AFFO-to-debt falling below 15% could result in a
downgrade," S&P said.


UNI-PIXEL INC: Has Public Offering of 3 Million Common Shares
-------------------------------------------------------------
UniPixel, Inc., announced a public offering of 3,000,000 shares of
common stock by the Company and two of its stockholders, The Altar
Rock Fund Liquidating Trust and The Raptor Global Portfolio
Liquidating Trust.  Of the shares being offered, the Company is
offering 1,962,920 shares and the selling stockholders are
offering an aggregate 1,037,080 shares.  In addition, the Company
intends to grant the underwriter a 30-day option to purchase up to
an additional 450,000 shares of common stock from the Company to
cover over-allotments, if any.  The Company intends to use the net
proceeds from the offering for working capital and general
corporate purposes.  The Company will not receive any of the
proceeds from the sale of shares by the selling stockholders.

Craig-Hallum Capital Group LLC is the sole book-running manager
for the offering.

This offering is being conducted pursuant to a shelf registration
statement that was declared effective by the U.S. Securities and
Exchange Commission on June 8, 2012.  The offering is being made
only by means of a prospectus supplement and accompanying
prospectus, forming an effective part of the registration
statement.

                       About Uni-Pixel Inc.

The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.

The Company reported a net loss of $8.57 million in 2011 compared
to a net loss of $3.82 million in 2010.

The Company's balance sheet at June 30, 2012, showed $5.60 million
in total assets, $154,626 in total liabilities and $5.45 million
in total shareholders' equity.


UNITED RETAIL: To Seek Plan Confirmation on Sept. 13
----------------------------------------------------
United Retail Group Inc. will ask Judge Stuart M. Bernstein in
Manhattan to confirm its reorganization plan at hearing commencing
Sept. 13, 2012, at 10:00 a.m.

The judge scheduled the hearing after approving the disclosure
statement explaining the Plan.  Objections to confirmation and
ballots accepting or rejecting the Plan are due Sept. 4, 2012.

As reported in the June 25, 2012 edition of the TCR, the Debtors
have a plan that provides for the distribution to creditors from
the consideration provided by Redcats USA, Inc., pursuant to an
asset purchase agreement.

Holders of allowed secured claims will be paid in full in cash or
receive the collateral securing the claim.  Holders of general
unsecured creditors totaling $25 million to $30 million will
recover 9.2% to 11% of their claims which payments will be funded
from the $2.75 million in unsecured claims funds plus any
additional cash.  Equity holders won't receive anything and are
deemed to reject the Plan.

On April 13, 2012, the Debtors closed the sale of substantially
all of their assets to Avenue Stores, LLC an affiliate of Versa
Capital Management, LLC.  Pursuant to the APA, the Buyer is the
primary source of the Cash consideration for distributions under
the Plan.  The Buyer has agreed to pay in Cash:

   -- up to $27 million in the aggregate for (1) amounts
      outstanding under the DIP Facility as of the Closing and (2)
      Administrative Claims (not including 503(b)(9) Claims, which
      are accounted for separately under the APA) and Priority
      Claims as of the Closing that ultimately are Allowed;

   -- up to $4.7 million for Allowed 503(b)(9) Claims;

   -- $1.5 million for the benefit of holders of Allowed General
      Unsecured Claims on account of the Claims; and

   -- up to $2 million for costs associated with winding down the
      Debtors' estates.

A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/UNITED_RETAIL_ds.pdf

                     About United Retail Group

United Retail Group Inc., owner of the Avenue brand of women's
fashion apparel and a subsidiary of Redcats USA, sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1,
2012, as it seeks to sell the business to Versa Capital Management
for $83.5 million, subject to higher and better offers.

The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners
LLP serves as restructuring advisor and Peter J. Solomon Company
serves as financial advisor and investment banker; and Donlin
Recano & Company Inc. is the notice, claims and administrative
agent.  Versa Capital's legal advisor is Sullivan & Cromwell LLP.

Avenue has 433 stores and an e-commerce site --
http://www.avenue.com/. Avenue employs roughly 4,422 employees,
roughly 294 of which are located at Avenue's corporate
headquarters in Rochelle Park, New Jersey or at the Troy
Distribution Facility.  The Company disclosed $117.2 million in
assets and $67.3 million in liabilities as of the Chapter 11
filing.

Cooley LLP serves as counsel for the Official Committee of
Unsecured Creditors.


USEC INC: Incurs $92 Million Net Loss in Second Quarter
-------------------------------------------------------
USEC Inc. reported a net loss of $92 million on $364.8 million of
total revenue for the three months ended June 30, 2012, compared
with a net loss of $21.2 million on $454.4 million of total
revenue for the same period during the prior year.

The Company reported a net loss of $120.8 million on $926.3
million of total revenue for the six months ended June 30, 2012,
compared with a net loss of $37.8 million on $834.9 million of
total revenue for the same period a year ago.

The Company's balance sheet at June 30, 2012, showed $3.78 billion
in total assets, $3.13 billion in total liabilities and $642.6
million in stockholders' equity.

"We made significant progress in the second quarter by securing
near-term funding for the RD&D program and putting in place a
contract to support one year of continued enrichment operations at
the Paducah Gaseous Diffusion Plant," said John K. Welch, USEC
president and chief executive officer.  "While the benefits of
these achievements on our financial performance for the second
quarter were limited, these are significant accomplishments that
are important to our longer term success and will positively
impact our financial performance over the balance of the year."

A copy of the press release is available for free at:

                       http://is.gd/uHQjjN

                          About USEC Inc.

Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) --
http://www.usec.com/-- supplies enriched uranium fuel for
commercial nuclear power plants.

The Company reported a net loss of $540.70 million in 2011,
compared with net income of $7.50 million in 2010.

                            *     *     *

USEC Inc. carries 'Caa1' corporate and probability of default
ratings, with "developing" outlook, from Moody's, and 'CCC+' long
term foreign issuer credit rating and 'CCC-' long term local
issuer credit rating, with outlook "developing", from Standard &
Poor's.

In May 2010, S&P said that its rating and outlook on USEC Inc. are
not affected by the announcement that Toshiba Corp. and Babcock &
Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co.,
have signed a definitive investment agreement for $200 million
with USEC.


USEC INC: S&P Keeps 'CCC+' Issuer Credit Rating on Watch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services has assigned its 'AA-' rating
to Energy Northwest (ENW), Wash.'s proposed $34.6 million Columbia
Generating Station (CGS) electric revenue bonds, series 2012-D;
and $740.9 million series 2012-E (taxable). Bonneville Power
Administration (BPA), Ore., will pay the bonds' debt service as an
operating expenses of its electric system. At the same time,
Standard & Poor's affirmed its 'AA-' rating on parity subordinate
ENW obligations and the several nonfederal obligations that BPA
pays as operating expenses of its electric system. Standard &
Poor's also affirmed its 'aa-' stand-alone credit profile on BPA.
The outlook is stable.

"Series 2012-D bond proceeds will finance CGS capital projects.
Their amortization through 2044 approximates the nuclear plant's
extended operating license. The 2012-E bonds will be amortized
through 2027 and bond proceeds will principally fund ENW's
purchases of nuclear fuel from USEC Inc. (CCC+/Watch Neg/--).
Proceeds of the 2012-E bonds will also fund issuance costs,
capitalized interest, and some CGS capital projects," S&P said.

"ENW's contract with USEC provides for its purchase of 4.4 million
separative work units (SWU) contained in 482 metric tons of
enriched uranium hexafluoride. Enriched product, consisting of SWU
and natural uranium, is a component of nuclear reactor fuel. BPA,
through ENW, will pay USEC's fuel enrichment costs. BPA and ENW
project savings from the multiparty transaction because the U.S.
Department of Energy will furnish the raw material, depleted
uranium hexafluoride, to USEC at no cost to the parties beyond
nominal delivery costs," S&P said.

"ENW will retain and use only a modest portion of the USEC fuel it
purchases. The fuel it keeps will produce electricity at its CGS.
Notably, it has entered into an agreement to sell most of the
processed fuel to Tennessee Valley Authority (TVA), which will
purchase 90% of the enriched product totaling 435.5 metric tons
containing 72.5% of the SWU, equaling 2.9 million SWU. TVA is also
supplying a quantity of natural uranium to USEC. ENW will apply
TVA's $731 million of nuclear fuel payments to debt service on the
2012-E bonds. It projects that TVA's payments will cover about 84%
of the debt service on the bonds. BPA's operating cash flow will
cover the balance of the debt service," S&P said.

"Although our 'CCC+' rating and CreditWatch negative listing on
USEC underscore elements of the counterparty risk that it
contributes to the transaction, mitigating factors temper some of
ENW and BPA's exposure," said Standard & Poor's credit analyst
David Bodek. "They include the narrow window that extends only to
May 31, 2013, during which time USEC must fulfill its production
and supply obligations. Also, take-and-pay contract provisions tie
ENW's payment obligations to USEC's delivery of fuel."

"The 'AA-' ratings on BPA's nonfederal debt reflect the
application of our government-related entities criteria. We
believe that there is a 'moderately high' likelihood that the U.S.
government would provide extraordinary support to it in financial
distress. We base the latter view on our opinion of the 'strong'
link between the BPA and the federal government, as well as the
'important' federal role the agency plays in the Pacific
Northwest," S&P said.

"The stable outlook reflects our view that Bonneville's stand-
alone credit profile can withstand a further downgrade on the U.S.
Also, the nearly 8% rate increases established in BPA's rate
proceeding covering the two fiscal years that began in October
2011 will help address recent years' erosion of debt service
coverage and liquidity due to weak hydrology conditions and soft
wholesale power markets. If during our two-year outlook horizon,
BPA continues producing cash-basis coverage of federal and
nonfederal obligations below 1x, as it did in 2009 and 2010, and
its robust liquidity cushion continues eroding, we could lower
Bonneville's stand-alone credit profile. Also, if BPA adds
significant off-balance-sheet leverage obligations because of its
statutory debt ceiling, it could lead to negative implications for
the stand-alone credit profile and the 'AA-' rating," S&P said.


VALENCE TECH: Sec. 341 Creditors' Meeting Set for Aug. 7
--------------------------------------------------------
The U.S. Trustee for the Western District of Texas in Austin will
convene a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the
Chapter 11 case of Valence Technology, Inc., on Aug. 7, 2012, at
2:00 p.m. at Austin Room 118.

Proofs of claim are due in the case by Nov. 5, 2012.

                     About Valence Technology

Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin.  Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries.  Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.

The Debtor disclosed debt of $82.6 million and assets of $31.5
million as of March 31, 2012.  It owes $35 million in loans to
affiliates of Chairman Carl E. Berg, about $34 million in interest
on those loans, and $3 million on a third-party loan.  The company
also owes about $9 million on two series of convertible preferred
stock held by Berg affiliates and has $11 million in trade debt
and accrued expenses.  Mr. Berg and related entities own 44.4% of
the shares.  ClearBridge Advisors, LLC owns 5.5%.

Valence expects to complete its restructuring during 2012.

Judge Craig A. Gargotta presides over the case.  The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters.  The petition was signed by Robert Kanode,
CEO.


VALENCE TECH: Hearing on Use of Cash Collateral Reset to Aug. 31
----------------------------------------------------------------
The Bankruptcy Court in Austin, Texas, reset to Aug. 31, 2012, at
9:00 a.m., the final hearing on an Agreed Motion allowing Valence
Technology, Inc., to use cash collateral.  According to the case
docket, the hearing was initially slated for July 13.

As reported by the Troubled Company Reporter on July 16, Valence
said it needs additional financing to maintain operations.
Valence wants to use cash collateral while a loan is being
negotiated.

Robert Kanode, president and CEO, said in a court filing, "To meet
its current liquidity requirements, Valence needed additional
financing, either in the firm of debt or equity, to fund its
operating and capital needs.  Due to its historical operating
results and its high level of existing debt, as well as other
factors, Valence has so far been unable to secure the financing it
needs."

From $16 million in 2010, revenue climbed to $46 million in fiscal
2011.  Revenue in fiscal 2012 was slightly down to $44 million.
Although it has expanded its customer base and increased its
revenue, it has experienced operating losses in the current and
prior fiscal years.  There's also a third party loan in the amount
of $3 million in principal and interest maturing on July 31, 2012.

Valence said its cash and cash equivalents were insufficient to
fund its operating and capital needs, and thus was forced to seek
bankruptcy protection.  The Debtor owes $35 million in loans to
affiliates of Chairman Carl Berg, about $34 million in interest on
those loans, and $3 million on a third-party loan. The company
also owes about $9 million on two series of convertible preferred
stock held by Berg affiliates and has $11 million in trade debt
and accrued expenses.

                     About Valence Technology

Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin.  Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries.  Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.

The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012.  Chairman Carl E. Berg and
related entities own 44.4% of the shares.  ClearBridge Advisors,
LLC owns 5.5%.

Valence expects to complete its restructuring during 2012.

Judge Craig A. Gargotta presides over the case.  The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters.  The petition was signed by Robert Kanode,
CEO.


WEST CORP: Moody's Rates New $720MM Loan Ba3, New $250MM Bond B3
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to a new $720
million term loan tranche and a B3 rating to a proposed $250
million bond add-on offered by West Corporation. Concurrently,
Moody's raised the Speculative Grade Liquidity Rating to SGL-1
from SGL-2. All of West's other ratings, including the B2
Corporate Family Rating ("CFR"), were affirmed. The ratings
outlook remains stable.

The new financing will be used to repay a $448 million term loan
maturing in 2013, fund a $500 million distribution to
shareholders, and pay fees and expenses.

Ratings assigned:

- Proposed $720 million first lien term loan B-6 due 2018, Ba3
   (LGD2, 25%)

- Proposed $250 million 7.875% senior unsecured notes due 2019,
   B3 (LGD5, 76%)

Rating raised:

- Speculative Grade Liquidity Rating, to SGL-1 from SGL-2

Rating affirmed (and Loss Given Default assessments):

- Corporate Family Rating, B2

- Probability of Default Rating, B2

- $49 million first lien revolver due 2012, Ba3 (LGD2, 25%)

- $201 million first lien revolver due 2016, Ba3 (LGD2, 25%)

- $450 million first lien term loan due 2013, Ba3 (LGD2, 25%) --
   rating to be withdrawn upon closing of refinancing

- $1.46 billion first lien term loans B-4 and B-5 due 2016, Ba3
   (LGD2, 25%)

- $500 million 8.625% senior unsecured notes due 2018, B3 (LGD5,
   76%)

- $650 million 7.875% senior unsecured notes due 2019, B3 (LGD5,
   76%)

- $450 million 11% senior subordinated notes due 2016, Caa1
   (LGD6, 94%)

The ratings are subject to Moody's review of final documentation.

Ratings Rationale

The B2 CFR reflects Moody's expectation that West will continue to
operate with significant leverage. Pro forma for the incremental
$524 million of debt, financial leverage (debt / EBITDA) is
estimated at 6.3 times at June 30, 2012 (using Moody's standard
adjustments). We anticipate modest improvement in credit metrics
through EBITDA growth, driven primarily by higher volumes in
automated service lines. The ratings are supported by West's track
record of steady revenue and earnings growth, a very good
liquidity profile, large revenue size and leading market
positions. The ratings remain constrained by pricing pressures,
technology risks, and aggressive financial policies including
debt-financed acquisitions and dividends.

The change in the liquidity rating to SGL-1 from SGL-2 reflects
Moody's expectation for very good liquidity post-closing of the
refinancing. The refinancing will improve the near term maturity
profile and will loosen leverage covenant requirements in the
credit agreement. Although the incremental interest burden of
approximately $60 million annually will negatively impact cash
flow, Moody's expects West to generate at least $175 million of
free cash flow and have ample cushion under amended covenant
levels over the next four quarters. Liquidity is supplemented by
almost $350 million of revolver availability and approximately $85
million of cash at June 30, 2012. A failure to complete the
proposed refinancing would likely result in a downgrade of the SGL
rating.

The stable outlook reflects Moody's expectation that consolidated
revenue will grow in the low-to-mid single digit range over the
next 12-18 months. Modest margin contraction is expected,
primarily from rate declines for conferencing services, offset by
solid volume growth. The ratings could be downgraded if pricing
trends worsen or volumes weaken, or West makes a large debt-
financed acquisition or dividend, resulting in debt / EBITDA or
free cash flow to debt sustained above 6.5 times or below 2%,
respectively. Given the company's current private equity
sponsorship, an upgrade in the ratings is unlikely unless Moody's
can become comfortable that West has shifted its financial
policies to a more conservative profile. However, an IPO that
results in substantial debt reduction could lead to an upgrade if
Moody's anticipates that debt to EBITDA and free cash flow to debt
will be sustained below 5 times and above 7%, respectively.

The principal methodology used in rating West Corporation was the
Global Business & Consumer Service Industry Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.

West Corporation is a leading provider of technology-driven
communication services and agent-based services. The company
offers conferencing, unified communications, alerts and
notifications, 911 emergency communications, and business process
outsourcing services. Major shareholders are Thomas H. Lee Funds,
Quadrangle Group Funds, Gary L. West, Mary E. West, and members of
management. West reported revenues of approximately $2.6 billion
in the twelve months ended June 30, 2012.


* S&P: Default Rate Climbs to 2.8% on U.S. High-Yield Debt
----------------------------------------------------------
The trailing 12-month U.S. high-yield corporate default rate
increased to an estimated 2.8% in July from 2.7% in the prior
month, according to Standard & Poor's.  Three companies defaulted
last month, bringing the total this year to 26, S&P analysts led
by Diane Vazza in New York wrote in a report Aug. 1.  The trailing
default rate for U.S. speculative-grade debt has risen from 2% at
the end of 2011.  The extra yield investors demand to hold
speculative-grade bonds rather than government debt declined to
616 basis points, or 6.16 percentage points, as of July 31 from
this year's high of 723 on June 5, according to the Bank of
America Merrill Lynch U.S. High Yield Master II index.  High-
yield, high-risk, or junk debt is rated below Baa3 by Moody's
Investors Service and lower than BBB- at S&P.


* RI Bankruptcy Judge Votolato Retires; Finkle Takes Over
---------------------------------------------------------
Arthur Votolato is a record-setter.

He was the first bankruptcy judge to sit in Rhode Island, and for
44 years, he was the only U.S. bankruptcy judge to serve the
state.  He also enjoyed the distinction of being the longest
continuously serving active bankruptcy judge in U.S. history.
This week Judge Votolato, 81, retired.

"I was fortunate to work in both a changing and rewarding
profession," said Judge Votolato. "It was a great honor to serve
the people of Rhode Island for more than four decades and I will
enjoy slowing down and spending time with my family and caring for
myself."

On July 31, people filled the U.S. Bankruptcy Court for the
District of Rhode Island in Providence to celebrate Judge
Votolato's career and dedicate the courtroom in his name.
Included in the group was veteran Rhode Island bankruptcy lawyer
Diane Finkle, who has been selected to fill Judge Votolato's seat,
and will become the second bankruptcy judge in the history of the
state.

The courtroom Judge Votolato has presided in since 1982 was
dedicated in his honor with a plaque.

Judge Votolato was appointed the U.S. District Court's Bankruptcy
referee in 1968 and when a separate U.S. Bankruptcy Court was
created in Rhode Island in 1978, he was named its first and only
judge.

Ms. Finkle is a named partner of Winograd Shine Land & Finkle,
P.C., in Providence.  She has practiced bankruptcy and
receivership law since 1983, having begun her career as a law
clerk to Rhode Island Supreme Court Justice Thomas F. Kelleher.
Ms. Finkle has represented debtors, secured creditors, creditors'
committees in Chapter 11 bankruptcy cases and served as counsel to
Bankruptcy Trustees.

The firm may be reached at:

          WINOGRAD SHINE LAND & FINKLE, P.C.
          123 Dyer Street
          Providence, RI 02903-3980
          Tel: (401) 273-8300
          Fax: (401) 272-5728
          E-mail: firm@wslf-law.com
                  dfinkle@wslf-law.com

Bankruptcy judges are appointed to 14-year terms by the 12
regional courts of appeals.


* BOOK REVIEW: Corporate Debt Capacity
--------------------------------------
Author: Gordon Donaldson
Publisher: Beard Books, Washington, D.C. 2000 (reprint of 1961
book published by the President and Fellows of Harvard College).
List Price: 294 pages. $34.95 trade paper, ISBN 1-58798-034-7.

"The research project who results are reported in this volume was
primarily concerned with the risk element involved in the
utilization of debt as a source of permanent capital for
business," Bertrand Fox, Director of Research, succinctly writes
in the "Foreword".  The research project was funded by and
conducted by an organization connected with Harvard College, the
original publishers of this book in the early 1960s.

The research was not a body of data for analysis as research
typically is in business studies or sociological studies.  In the
end, Donaldson recommends perspectives and practices going beyond
the research.  This doesn't necessarily go against the findings of
the research, but rather shows the limitations of the thinking of
most businesspersons at the time or their blind spots regarding
the role of debt, especially with respect to potentials for
growth, longevity, and other interests of business management.

The businesses are not identified.  Given Donaldson's credibility
and reputation and the Harvard name behind the research project
however, the research data is taken as factual and reliable.  The
research was garnered from participating corporations and
financial institutions.

Though there are a few tables, the research is not limited to
financial information strictly as figures and other balance sheet
data.  Donaldson was interested as much in corporate leaders'
psychology and presumptions about debt more than current debt
situations and corporate policies regarding debt.  Financial
institutions were included as part of the study as well because
their views toward corporate debt and the way they worked with the
financial parts of corporations had an effect on corporate debt of
the time.

As Donaldson found from the research, both corporations and
financial institutions understood debt in conventional,
traditional, ways.  For the corporations, these ways could be
hampering operations and strategy.  The ways corporations were
being hampered were unseen however unless they started looking at
their books differently and became open to taking on debt
differently.  Donaldson's singular achievement was to see in the
research ways in which corporations were being hampered and in
thus propose a new way of regarding debt.  This was a
revolutionary step for the large majority of businesses.  And for
even the small number of businesses which were pursuing
unconventional debt practices, Donaldson's studies and new
perspective put these on solid ground giving better guidance.

Donaldson's readings of the research reflect corporate managers'
own statements (also part of the research) regarding their views
on their company's financial analysis and debt.  Managers are
quoted, "Our management is essentially conservative."; "The word
which describes our corporate image is 'dignified'."; "I supposed
in a way we're lazy."  The author treats these as "attitudes"--as
in a chapter "Management Attitudes to Non-Debt Sources"--realizing
that it is such "attitudes" more than what financial figures
disclose or debt itself which colors practices about the
fundamental business matter of debt.

Donaldson brings into the open managers false sense of debt.  This
false sense is bound in with conventional, inherited concepts and
images of a corporation having no relation to facts. Such
conventional views are perpetuated by an aversion to risk. The
less debt, the less risk, according to the prevailing precept.
But Donaldson points out that managers who observe this actually
often pursue greater risks in product development, entering new
markets, mergers, and other activities.

Corporate "attitudes" to debt since the book's 1961 publication
attest to the deep influence of Donaldson's groundbreaking
perspective.  Consumer debt, the growth of credit cards, and other
financial phenomena also evidence changed regard of debt found in
Donaldson's work.  The tipping of the balance to too much debt for
many corporations and beyond cannot be attributed to the book
however.  For in urging new concepts and uses of debt for the
better management of corporations, Donaldson also goes into
determination and control of risks entailed in new types of debt.

Gordon Donaldson retired in 1993 after close to 20 years at the
Harvard Business School.



                            *********

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 ***