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/raid1/www/Hosts/bankrupt/TCR_Public/120809.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, August 9, 2012, Vol. 16, No. 220 Headlines 804 CONGRESS: Subject Matter Jurisdiction Ends Upon Foreclosure A123 SYSTEMS: Has $450MM Deal With Chinese Auto-Parts Firm ACUNETX INC: Files for Chapter 7 Liquidation ADELPHIA COMMS: NextEra Energy Awaits Outcome of Trial AEROCAST INTERNATIONAL: Case Summary & Creditors List AFCO TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors AHERN RENTAL: Court Extends Plan Exclusivity, Names Mediator ALLY FINANCIAL: Files Form 10-Q, Incurs $898 Million Loss in Q2 AMARANTH INC: Voluntary Chapter 11 Case Summary AMERICAN AIRLINES: Has Settlement With Bond Trustees AMERICAN AIRLINES: Westinghouse Opposes N632AA Settlement AMERICAN AIRLINES: Wants More Time to Decide on 15 Leases AMERICAN AIRLINES: Settles With Miami-Dade County AMERICAN AIRLINES: Seeks Court OK to Buy 11 Boeing 737 Aircraft AMERICAN CRANE: Case Summary & 20 Largest Unsecured Creditors AMERICAN NATURAL: Sells 7 Million Common Shares for US$420,000 ARCTIC GLACIER: S&P Assigns 'B-' Corp. Credit Rating APPLETON PAPERS: Widens Net Loss to $48.8-Mil. in Second Quarter BEEBE MEDICAL: Moody's Reviews 'Ba3' Rating; Direction Uncertain BENADA ALUMINUM: Has Green Light to Pay Employees, Taxes BERNARD L. MADOFF: Daughter In-Laws Fight 'Insider' Label BG GROUP: Asks Justices to Review $185-Mil. Award Reversal BICENT HOLDINGS: Wins Prepack Plan Confirmation in Three Months BRUCE BURROW: Files for Chapter 11 Bankruptcy Protection CAESARS ENTERTAINMENT: Widens Net Loss to $241.8MM in 2nd Quarter CANO PETROLEUM: Plan Effective; Emerges from Bankruptcy CASTLEGATE GARAGE: Case Summary & 20 Largest Unsecured Creditors CATALYST PAPER: Incurs C$11.7 Million Net Loss in Second Quarter CHINA DELIGHT: Voluntary Chapter 11 Case Summary COLONIAL BANCGROUP: Seeks OK for $15MM Loan to Fight FDIC Claims COMMERCIAL CABINETRY: Case Summary & 20 Largest Unsec Creditors COMMUNITY FIRST: FRB Atlanta OKs Jon Thompson as VP and CFO COMMUNITY HEALTH: S&P Rates New $1.25-Bil. Sr. Secured Notes 'BB' CONNOLLY LLC: S&P Gives 'B' Corp. Credit Rating; Outlook Stable CONVERTED ORGANICS: Has 258.8 Million Outstanding Common Shares CORNERSTONE HEALTHCARE: S&P Assigns 'B' Corp. Credit Rating CROSS ISLAND PLAZA: Chapter 11 Plan Filed DAYTOP VILLAGE: Gets Short Exclusivity Extension Thru Nov. 1 DAYTOP VILLAGE: Hires Broker to Sell 4 Outpatient Facilities DAYTOP VILLAGE: Taps Former FBI's Firm as Security Consultant DEWEY & LEBOEUF: Sec. 341 Creditors' Meeting Next Wednesday DEWEY & LEBOEUF: Court OKs Togut Firm as Bankruptcy Counsel DEWEY & LEBOEUF: Dev't. Specialists OK'd as Wind Down Consultant DEWEY & LEBOEUF: Epiq Bankruptcy OK'd as Administrative Advisor DEWEY & LEBOEUF: Goldin Associates OK'd as Special Consultant DEWEY & LEBOEUF: Extends Deadline for Clawback Deal to Aug. 13 DIS PARTNERS: Case Summary & 20 Largest Unsecured Creditors DRC BUSINESS: Voluntary Chapter 11 Case Summary DUMEK HOLDINGS: Case Summary & Largest Unsecured Creditor DYNEGY INC: Files Form 10-Q, Incurs $1 Billion Net Loss in Q2 E-DEBIT GLOBAL: Incurs $28,900 Net Loss in Second Quarter EASTMAN KODAK: Judge Approves Incentive Plan to 12 Top Execs ELEGANT SURFACES: Voluntary Chapter 11 Case Summary ENDO HEALTH: Moody's Says Share Repurchase Program Credit Neg. ENERGY CONVERSION: Confirms 50% Liquidating Plan EVERGREEN SOLAR: Plan Confirmed and Implemented FAIR FINANCE: Textron Bid to Dismiss Trustee Suit Remains Pending FANNIE MAE: In Talks With BofA Over Bad Mortgages FRANKLIN CREDIT: Aug. 2 Established as Distribution Record Date FREEDOM MARINE: Voluntary Chapter 11 Case Summary FRIENDFINDER NETWORKS: Sells Shares of Holdings to Acquisition GERALD CHAMPION: Chapter 11 Plan Wins Judge Approval GIBSON GUITAR: Wood Importing Issue No Impact on Moody's B2 CFR GLOBAL FOOD: Incurs $797,000 Net Loss in Second Quarter GOLDWOOD INVESTMENT: Case Summary & Largest Unsecured Creditor GRAHAM SLAM: Lender Takes 3 Lots; Unsecureds to Be Paid in 3 Years GRATON ECONOMIC: S&P Rates $350MM Loan & $450MM Secured Notes 'B' GRAYSON EXCHANGE: Case Summary & 6 Largest Unsecured Creditors GREEK PEAK: $1.6MM FDIC Loan Allows Operations Through This Winter GRUBB & ELLIS: Avison Young Poached Employees, BGC Says HAMPTON ROADS: Commences $45 Million Rights Offering HASSEN REAL ESTATE: Plan Exclusivity Extended Until Nov. 15 HEALTHCARE OF FLORENCE: E&M Consented to Cash Use HERCULES OFFSHORE: Has $36MM Share Purchase Pact with Integradora HOMELAND POWERSOURCE: Case Summary & 8 Largest Unsecured Creditors HOSTESS BRANDS: Court OKs Delayed Payment of Pension Claims IDEARC INC: Verizon Bid to Shake Fraudulent Transfer Claims Denied INGRAM MICRO: Moody's Rates Preferred Stock Shelf '(P)Ba2' INNOVATION VENTURES: S&P Assigns 'B-' Corp. Credit Rating IRON MOUNTAIN: Moody's Rates $950MM Sr. Subordinated Notes 'B1' IRON MOUNTAIN: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Neg JANLAW PROPERTIES: Voluntary Chapter 11 Case Summary K-V PHARMACEUTICAL: Class A&B Common Stock Begin Trading KNIGHT CAPITAL: Turned Down Rival Citadel's $500-Mil. Loan Offer LEAGUE NOW: M. Barton Quits from Board; J. Charles Fills Vacancy LEVEL 3: Files Form 10-Q; Incurs $62 Million Net Loss in Q2 LEVEL 3: Completes Offering of $300 Million Senior Notes LON MORRIS: $750,000 Amegy Bank DIP Loan Approved LORING ESTATES: Four More Kontogiannis Entities File Chapter 11 LORING ESTATES: Case Summary & Unsecured Creditors LOWER BUCKS: BNY Appeals Court Decision Over $8 Million Claim LUCID INC: Marcum LLP Succeeds Deloitte & Touche as Accountants MACROSOLVE INC: Sells Illume Mobile to DecisionPoint Systems MBS MGT: Forward Contract Given Broad Meaning for Safe Harbor MCCLATCHY CO: Files Form 10-Q, Reports $26.9MM Net Income in Q2 MEDICAL CONNECTIONS: Signs Purchase Agreement with Trustaff METROPLEX LUCKY: Voluntary Chapter 11 Case Summary MF GLOBAL: ConocoPhillips Fights $205MM Clawback Bid MF GLOBAL: Judicial Watch Sues SEC, CFTC Over MF Collapse MMRGLOBAL INC: Reports Unregistered Sales of Equity Securities MOMENTIVE PERFORMANCE: Amends $525.6-Mil. Common Shares Offering MORGAN'S FOODS: James Pappas Hikes Stake to 15.8% MRW ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors MSR RESORT: Winthrop Realty Won't Back Paulson Chapter 11 Plan MUSCLEPHARM CORP: Amends 84.4 Million Common Shares Offering NAB HOLDINGS: S&P Assigns 'BB-' Corporate Credit Rating NASSAU BROADCASTING: Seeks Extension to File Payment Plan NAVISTAR INT'L: S&P Rates New $1-Bil. Secured Loan 'B+' NEXTWAVE WIRELESS: Has Forbearance with Notes Holders Until 2014 NGPL PIPECO: S&P Rates $700MM Senior Secured Term Loan 'B+' NORTEL NETWORKS: Aims to Expunge Affiliate Claims in March NORTHERN STAR: Enters Deal With Ely Gold on Notes Acquisition NUANCE COMMUNICATIONS: S&P Affirms 'BB-' Corporate Credit Rating OMEGA NAVIGATION: Files 'New Value' Chapter 11 Plan ONE CALL: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ORAGENICS INC: Randal Kirk Discloses 19.5% Equity Stake OTOLOGICS LLC: Auction Set for Sept. 4; Sale Hearing Next Day PEAK RESORTS: Case Summary & 20 Largest Unsecured Creditors PEMCO WORLD: Hearing Today on Sale to Sun Capital PEMCO WORLD: Former Employees Lodge WARN Suit Over Mass Layoffs PEREGRINE FINANCIAL: Trustee Can Subpoena Firm's Banks PINNACLE AIRLINES: Says Shareholders of Jeopardizing Restructuring PINNACLE HOLDCO: S&P Gives 'B' Corp. Credit Rating; Outlook Stable PLYMOUTH OIL: Secured Creditors Fail to Block Cash Use PLYMOUTH OIL: Hiring BrownWinick as Bankruptcy Counsel PLYMOUTH OIL: Sec. 341 Creditors' Meeting Set for Aug. 29 PROVIDENT COMMUNITY: Posts $143,000 Net Income in Second Quarter PORTER BANCORP: Signs Employment Agreement with John Taylor RAINBOW LAND: Has Court's Nod to Hire Alan R. Smith as Counsel REOSTAR ENERGY: Judge Denies Former Execs' Bid to Shake Suit RESIDENTIAL CAPITAL: Automatic Stay Is 'Shield,' Not 'Sword' RESIDENTIAL CAPITAL: Judge Gonzalez's Probe to Cost Up to $36MM RIDGE MOUNTAIN: Has OK to Hire Harris Beach as Bankruptcy Counsel RIDGE MOUNTAIN: US Bank Wants Daniel Ford to Continue as Receiver ROCK LAW: Case Summary & 5 Unsecured Creditors RON M. LAWRENCE: Voluntary Chapter 11 Case Summary ROSETTA GENOMICS: Offering 5.5 Million of Ordinary Shares SABANA DEL PALMAR: Case Summary & 20 Largest Unsecured Creditors SANTA YSABEL RESORT: Lender Seeks Chapter 11 Case Dismissal SDA INC: Files Schedules of Assets and Debts SHEA LTD: Voluntary Chapter 11 Case Summary SIGNATURE GROUP: Company-Nominees Officially Elected to Board SIRIUS INT'L: Fitch Affirms 'BB+' Rating on $250MM Pref. Shares SL GREEN: S&P Gives 'B+' Rating on $100MM Series I Preferred Stock SNK ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors SOLYNDRA LLC: Plan Justifies Exclusivity Through August ST. JOHN'S RIVERSIDE: S&P Raises Rating on Revenue Debt to 'B+' STEREOTAXIS INC: Posts $2.8 Million Net Income in Second Quarter STOCKTON, CA: Judge Powerless to Reinstate Health Benefits STONEY'S NORTH: Bankruptcy Filing Blocks Eviction Proceeding SUNFLOWER HOSPITALITY: Voluntary Chapter 11 Case Summary T3 MOTION: Due Date of JMJ Financial Note Extended to August 3 TANNIN INC: Brantley & Associates OK'd for Real Estate Appraisal TFG PROPERTIES: Case Summary & 2 Largest Unsecured Creditors TEXAS LAND: Case Summary & 3 Largest Unsecured Creditors THELEN LLP: Judge OKs Case Trustee's Clawback Deal With Ex-Partner THERATECHNOLOGIES INC: Gets Minimum Bid Price Notice TRAVELPORT HOLDINGS: Antonios Basoukeas Named Group Vice Pres. TRI-VALLEY: In Chapter 11; DIP Lenders Require Quick Sale TRIUS THERAPEUTICS: Incurs $14.4-Mil. Net Loss in Second Quarter TRONOX INC: Shareholders Suit Settled Against Kerr-McGee VERENIUM CORP: Incurs $2.5 Million Net Loss in Second Quarter VIRANI & MANAV: Case Summary & 12 Largest Unsecured Creditors WATSON VENTURES: Case Summary & 4 Unsecured Creditors WHOLE FOODS: S&P Raises Corporate Credit Rating From 'BB+' WILTON HOLDINGS: S&P Assigns 'B' Corp. Credit Rating WINDMILL INVESTMENT: Case Summary & 4 Largest Unsecured Creditors WOOTON GROUP: Hires M. Jonathan Hayes as Bankruptcy Counsel WOOTON GROUP: Files Schedules of Assets and Liabilities ZIMCAL CORPORATION: Voluntary Chapter 11 Case Summary * Eviction Warrant Alone Doesn't Terminate Lease * Circuit Court Clarifies Procedures for Recoupment * Student Loan Debt Must Be Paid Like Other Claims * Moody's Sees High Refinancing Risk for Low-Rated Debt Issuers * Moody's Sees High Re-Default Risk After Distressed Exchanges * Bankruptcy Filings Fall 12 Percent in July 2012 * Recent Small-Dollar & Individual Chapter 11 Filings ********* 804 CONGRESS: Subject Matter Jurisdiction Ends Upon Foreclosure --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that a U.S. District Court in Austin, Texas, ruled that once a bankruptcy judge modifies the automatic stay to allow foreclosure, the bankruptcy court lacks subject matter jurisdiction after the foreclosure sale to decide how proceeds should be distributed. According to the report, the case involved a company in Chapter 11 where the bankruptcy court modified the so-called automatic stay permitting the lender to sell the property through non judicial foreclosure for more than $4 million. After the sale was completed, the trustee under the deed of trust claimed a 5% fee, and the lender contended it was entitled to recover $83,000 in attorneys' fees expended in foreclosure. Both were based on provisions in the deed of trust. The report notes the bankruptcy judge reduced the deed of trust trustee's fee and the attorneys' fee reimbursement, thus increasing the surplus paid to the company still in Chapter 11. The trustee under the deed of trust and the bank both appealed and won. U.S. District Judge Lee Yeakel in Austin ruled in his March 28 opinion that the bankruptcy court lost subject matter jurisdiction over foreclosure sale proceeds once the sale was completed, because the "proceeds were governed by state law." Mr. Rochelle notes that the opinion doesn't explain why subject matter jurisdiction ended when the property was sold nor does it address the question of whether the bankruptcy court retained "related-to" jurisdiction. The opinion nonetheless may have reached the correct result for the wrong reason. The case is Wells Fargo Bank NA v. 804 Congress LLC (In re 804 Congress LLC), 11-360, U.S. District Court, Western District Texas (Austin). 804 Congress, LLC, formerly doing business as 804 Congress, LP, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 10-12184) on Aug. 3, 2010 in Austin. The Debtor is represented by Stephen W. Sather, Esq., at Barron & Newburger, P.C. The Debtor scheduled $7,002,265 in assets and $4,140,910 in liabilities. A123 SYSTEMS: Has $450MM Deal With Chinese Auto-Parts Firm ---------------------------------------------------------- The Wall Street Journal's Mike Ramsey reports that Wanxiang Group Corp., one of China's biggest parts makers, on Wednesday offered a $450 million lifeline to A123 Systems Inc., a maker of advanced batteries for electric vehicles that received U.S.-government backing, saving the Company from collapse. The deal would put A123's lithium-ion technology and its U.S.-funded manufacturing plant into the hands of a Company that has slowly acquired a passel of auto assets across the Midwest. WSJ notes Waltham, Massachusetts-based A123's recent losses and a high-profile battery recall were a sharp reversal for a start-up that attracted big-name investors and a $2.6 billion market value just a few years ago. A123 was awarded $249 million in Department of Energy grants and has used about half so far to pay for some of the costs of building a factory in Livonia, Michigan. It was among the earliest entrants in the field, opening its Michigan battery plant in 2010, and outlining plans for a second U.S. facility. A123 recently announced an advance in battery chemistry that would make its cells work in extreme hot or cold without the costly heating and cooling gear that now adds to the price of electric vehicles. WSJ recounts A123 got its start with battery technology licensed from the Massachusetts Institute of Technology and was a green- technology favorite. Its shares nearly doubled to above $25 within a week of its September 2009 initial public offering. WSJ notes A123 recently warned it could run out of money due to slower-than-expected sales of electric vehicles and manufacturing problems, triggering a hunt for cash and new investors. Shares on Wednesday were trading at 50 cents apiece. WSJ relates General Electric Co., which was an early investor and still owns about a 5% stake in A123, declined to comment. WSJ says Wanxiang's Elgin, Illinois, U.S. operations, managed by a son-in-law of the company's founder, has been a buyer of distressed auto-parts makers for nearly a decade. It formed a joint venture that bought and turned around Driveline Systems LLC, a Loves Park, Illinois, axle maker, and has acquired parts operations from Dana Corp. and Ford Motor Co. According to WSJ, Cliff Stearns (R., Fla.), who chairs the House Energy and Commerce Committee's panel on oversight and investigations, said on Wednesday he worried about the deal's transfer of intellectual property. WSJ says a White House spokeswoman declined to comment on the Chinese firm's investment, but noted that "the company can only use [U.S.] funding to support U.S. manufacturing facilities." The report notes the A123's Mr. Vieau said the deal should close in the "near term," beginning with receipt of a $25 million bridge loan. According to the report, if the U.S. and Chinese governments approve the deal, A123 would get another $50 million. With additional commitments to purchase convertible debt and exercise warrants, the deal could lead to a $450 million investment for an 80% ownership stake. WSJ also notes globally, Chinese firms have disclosed more than 1,400 acquisitions since January of 2008, says researcher Dealogic. ACUNETX INC: Files for Chapter 7 Liquidation -------------------------------------------- BankruptcyData.com reports that AcuNetx, doing business as Intellinetx, Eyedynamics, Visiontex and Orthonetx) filed for Chapter 7 protection (Bankr. N.D. Calif. Case No. 12-46436) in Oakland. The Company filed the case pro se. According to documents filed with the SEC, "In March 2011, the company computer was stolen from the company office located at 2301 W 205th St Suite 102, Torrance, California 90501. The computer was not reported to the Torrance Police until October of 2011 upon the insistence of Chapin Hunt Jr. Prior management had not backed-up the company's financial statements or bookkeeping and all records were lost and had not reported the stolen property. From 2009 to September 2011, former management had not filed tax returns, paid the EDD or filed 10Q's and 10K's. Corrections were made subsequent. Since 2009 AcuNetx management had an on going concern regarding the viability of the company as reflected in the SEC filings." SEC filings further assert, "Management will give the Trustee the written documentation of the mediation and the offers to merge or purchase a portion of the company. There may be an opportunity to convert the Chapter 7 to a Chapter 11." Headquartered in Torrance, California, AcuNetx, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of diagnostic, analytical, and therapeutic devices to the health providers, law enforcement officers, and employers in high-risk industries. ADELPHIA COMMS: NextEra Energy Awaits Outcome of Trial ------------------------------------------------------ In 1995 and 1996, NextEra Energy, Inc. (NEE), through an indirect subsidiary, purchased from Adelphia Communications Corporation (Adelphia) 1,091,524 shares of Adelphia common stock and 20,000 shares of Adelphia preferred stock (convertible into 2,358,490 shares of Adelphia common stock) for an aggregate price of approximately $35,900,000. On Jan. 29, 1999, Adelphia repurchased all of these shares for $149,213,130 in cash. In June 2004, Adelphia, Adelphia Cablevision, L.L.C. and the Official Committee of Unsecured Creditors of Adelphia filed a complaint against NEE and its indirect subsidiary in the U.S. Bankruptcy Court, Southern District of New York. The complaint alleges that the repurchase of these shares by Adelphia was a fraudulent transfer, in that at the time of the transaction Adelphia (i) was insolvent or was rendered insolvent, (ii) did not receive reasonably equivalent value in exchange for the cash it paid, and (iii) was engaged or about to engage in a business or transaction for which any property remaining with Adelphia had unreasonably small capital. The complaint seeks the recovery for the benefit of Adelphia's bankruptcy estate of the cash paid for the repurchased shares, plus interest from Jan. 29, 1999. NEE has filed an answer to the complaint. NEE believes that the complaint is without merit because, among other reasons, Adelphia will be unable to demonstrate that (i) Adelphia's repurchase of shares from NEE, which repurchase was at the market value for those shares, was not for reasonably equivalent value, (ii) Adelphia was insolvent at the time of the repurchase, or (iii) the repurchase left Adelphia with unreasonably small capital. The trial was completed in May 2012 and closing arguments were heard in July 2012. NextEra Energy, Inc., through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. The company is involved in the generation of renewable energy from wind and solar projects. It also generates electricity through natural gas, nuclear, oil and coal, and hydro power plants. The company serves roughly 8.9 million people through roughly 4.6 million customer accounts in the east and lower west coasts of Florida. In addition, it leases wholesale fiber-optic network capacity and dark fiber to telephone, wireless, Internet, and other telecommunications companies. About Adelphia Communications Based in Coudersport, Pennsylvania, Adelphia Communications Corporation was once the fifth-biggest cable company. Adelphia served customers in 30 states and Puerto Rico, and offered analog and digital video services, Internet access and other advanced services over its broadband networks. Adelphia collapsed in 2002 after disclosing that founder John Rigas and his family owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company. Mr. Rigas is serving 12 years in prison, and his son Timothy is serving 15 years. Adelphia Communications and its more than 200 affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 02-41729) on June 25, 2002. Willkie Farr & Gallagher represented the Debtors in their restructuring effort. PricewaterhouseCoopers served as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman LLP and Klee, Tuchin, Bogdanoff & Stern LLP represented the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas-Managed Entities, were entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642) on March 31, 2006. Their cases were jointly administered under Adelphia Communications and its debtor-affiliates' Chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. The Adelphia Recovery Trust, a Delaware Statutory Trust, was formed pursuant to the Plan. The Trust holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of Trust interests. Lawyers at Kasowitz, Benson, Torres & Friedman, LLP (NYC), represent the Adelphia Recovery Trust. AEROCAST INTERNATIONAL: Case Summary & Creditors List ----------------------------------------------------- Debtor: Aerocast International, Inc. 1736 South Nevada Way Mesa, AZ 85204 Bankruptcy Case No.: 12-17310 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case, II Debtor's Counsel: J. Kent Mackinlay, Esq. WARNOCK, MACKINLAY & CARMAN, PLLC 1019 S. Stapley Drive Mesa, AZ 85204 Tel: (480) 898-9239 Fax: (480) 833-2175 E-mail: kent@mackinlaylawoffice.com Estimated Assets: $100,001 to $1,000,000 Estimated Debts: $1,000,001 to $100,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb12-17310.pdf The petition was signed by Robert Jamieson, Sr. AFCO TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: AFCO Technologies, Inc. 1535 Brady Blvd. San Antonio, TX 78237-4355 Bankruptcy Case No.: 12-52431 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: Dean William Greer, Esq. 2929 Mossrock, Suite 117 San Antonio, TX 78230 Tel: (210) 342-7100 Fax: (210) 342-3633 E-mail: dwgreer@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txwb12-52431.pdf The petition was signed by Ronnie Green, president. AHERN RENTAL: Court Extends Plan Exclusivity, Names Mediator ------------------------------------------------------------ Vertikal.net reports that U.S. Bankruptcy Court Judge Bruce Beesley extended Ahern Rental's exclusivity period to propose a plan until Oct. 9, 2012. At the same time he agreed to bring in another bankruptcy judge as a mediator between the company and the holders of $618 million in debt. The report notes Judge Beesley extended the Company's exclusivity period in spite of the fact that several creditors have expressed dissatisfaction with the progress. Ahern had requested a three- month extension to its exclusivity, suggesting that with time it would be able to repay everyone in full, on the basis that the company is performing better than expected. The report notes Sphere Capital, an affiliate of Platinum Equity, argued against giving Ahern more time saying that it was part of a strategy to keep chief executive Don Ahern's majority ownership intact. About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. ALLY FINANCIAL: Files Form 10-Q, Incurs $898 Million Loss in Q2 --------------------------------------------------------------- Ally Financial Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $898 million on $1.71 billion of total net revenue for the three months ended June 30, 2012, compared with net income of $113 million on $1.77 billion of total net revenue for the same period during the prior year. The Company reported a net loss of $588 million on $3.56 billion of total net revenue for the six months ended June 30, 2012, compared with net income of $259 million on $3.32 billion of total net revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $178.56 billion in total assets, $160.19 billion in total liabilities and $18.36 billion in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/BxXvnq About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. As reported by the TCR on May 22, 2012, Standard & Poor's Ratings Services revised its outlook on Ally Financial Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' long-term counterparty credit and 'C' short-term ratings, on Ally. "The outlook revision reflects our view of potentially favorable implications for Ally's credit profile arising from measures the company announced May 14, 2012, designed to resolve issues relating to Residential Capital LLC, Ally's troubled mortgage subsidiary," said Standard & Poor's credit analyst Tom Connell. In the May 28, 2012, edition of the TCR, DBRS, Inc., has placed the ratings of Ally Financial Inc. and certain related subsidiaries, including its Issuer and Long-Term Debt rating of BB (low), Under Review Developing. This rating action follows the decision by Ally's wholly owned mortgage subsidiary, Residential Capital, LLC (ResCap) to file a pre- packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. AMARANTH INC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Amaranth, Inc. 1329 Breamar Drive Carrollton, TX 75007 Bankruptcy Case No.: 12-42143 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Bruce E. Turner, Esq. BENNETT, WESTON, LAJONE & TURNER, PC 1603 LBJ Freeway Suite 280 Dallas, TX 75234 Tel: (972) 862-2332 Fax: (214) 373-2570 E-mail: bturner@bennettweston.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Carmelita D. Dolores, president. AMERICAN AIRLINES: Has Settlement With Bond Trustees ---------------------------------------------------- AMR Corp. and its debtor affiliates asked Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement with Bank of New York Mellon and other bond trustees. The deal calls for the assumption of a sublease dated June 24, 1958 between the Tulsa Municipal Airport Trust and American Airlines Inc., an AMR subsidiary. It also requires AMR to pay the defaults under the sublease. American Airlines entered into the 1958 contract to lease a parcel of ground at the Tulsa International Airport for its aircraft maintenance base. Payments under the sublease are applied to ground rentals for use of the maintenance base and to debt service on the bonds issued by the trust under an indenture it executed with BNY Mellon. The bonds are guaranteed by AMR. The proposed settlement is formalized in a 14-page stipulation, a copy of which is available without charge at: http://bankrupt.com/misc/AMR_AgreementBNYSublease.pdf A court hearing on the proposed settlement is set for Aug. 22. Objections are due Aug. 15. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Westinghouse Opposes N632AA Settlement --------------------------------------------------------- Westinghouse Aircraft Leasing Inc. objects to American Airlines' settlement agreement with U.S. Bank N.A. with respect to Aircraft No. N632AA because a language in the settlement would seem to purport that the term is binding on any third party despite not being a party to the settlement. Westinghouse is the owner-participant with respect to Aircraft No. N632AA. The lease on the Aircraft was rejected effective Feb. 2012 and Westinghouse has filed rejection claims and other claims related to the aircraft. As reported in the July 30 edition of the TCR, the Debtors are seeking approval of a settlement of claims related to six aircraft leased by the company. The settlement was entered into by AMR's subsidiary American Airlines Inc., U.S. Bank N.A., and certificate holders of loan under certain financing transactions. The deal, if approved, will resolve the claims of the certificate holders and U.S. Bank, which serves as trustee under the indentures related to the six aircraft identified by U.S. Federal Aviation Administration Nos. N59523, N614AA, N626AA, N629AA, N632AA and N648AA. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wants More Time to Decide on 15 Leases --------------------------------------------------------- AMR Corp. and its affiliates ask the Court to extend the deadline within which they may decide whether to assume or reject 15 unexpired leases of non-residential real property. The Debtors explain that they need the additional time to adequately address the potential value of each lease in the context of their restructuring efforts. Majority of the leases are related to the Debtors' airport and flight service operations. A schedule of the leases is available for free at http://bankrupt.com/misc/amr_july31leases.pdf About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Settles With Miami-Dade County ------------------------------------------------- AMR Corp. and its affiliates entered into a court-approved stipulation with Miami-Dade County, through its Aviation Department, as owner and operator of Miami International Airport, which stipulation provides that the Debtors will pay $26,018,100 to the County in full and final satisfaction of any existing prepetition defaults under a prepetition agreement between the Debtors and the County. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Seeks Court OK to Buy 11 Boeing 737 Aircraft --------------------------------------------------------------- AMR Corp. and its affiliates seek the Bankruptcy Court's permission to purchase 11 Boeing 737-823 aircraft currently scheduled to be delivered between September 2012 and March 2013. The Debtors also seek authority to implement a sale and simultaneous leaseback of the Aircraft with Next Generation Aircraft Purchase Limited and AerCap Ireland Limited. The Debtors also seek the Court's permission to file the motion under seal to protect confidential information. Purchase of One Plane Approved The Debtors meanwhile sought and obtained approval to purchase from The Boeing Company of a Boeing 737-823 aircraft bearing U.S. Registration No. N898NN and manufacturer's serial number 33225 on or about August 7, 2012. The Debtors were also authorized to enter into certain agreements with International Lease Finance Corporation in relation to the sale of the Aircraft and the leaseback of the Aircraft. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN CRANE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: American Crane, Rigging and Sling Consultants, Inc. dba American Crane & Rigging aka American Crane, Rigging and Subsidiary Companies 7495 Garth Rd. Beaumont, TX 77705 Bankruptcy Case No.: 12-10497 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Beaumont) Debtor's Counsel: Jason R. Searcy, Esq. SEARCY & SEARCY, P.C. P.O. Box 3929 Longview, TX 75606 Tel: (903) 757-3399 E-mail: jrspc@jrsearcylaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txeb12-10497.pdf The petition was signed by Walter S. Lewicki, Jr., CEO. AMERICAN NATURAL: Sells 7 Million Common Shares for US$420,000 -------------------------------------------------------------- American Natural Energy Corporation sold an aggregate of 7,000,000 shares of its common stock to four accredited investors at a price of US$0.06 per share for total proceeds of US$420,000. There were no discounts or commissions paid. The shares of common stock are not registered under the Securities Act of 1933, as amended, or the securities laws of any state and were issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act, Rule 506 of Regulation D promulgated under the Securities Act and corresponding provisions of state securities laws which exempt transactions by an issuer not involving any public offering. About American Natural American Natural Energy Corporation (TSX Venture: ANR.U) is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. The Company reported a net loss of $905,792 in 2011, compared with a net loss of $2.06 million in 2010. The Company's balance sheet at March 31, 2012, showed $17.15 million in total assets, $10.47 million in total liabilities and $6.67 million total stockholders' equity. In its audit report accompanying the 2011 financial statements, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss in 2011 and has a working capital deficiency and an accumulated deficit at Dec. 31, 2011. ARCTIC GLACIER: S&P Assigns 'B-' Corp. Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' long-term corporate credit rating to newly formed Delaware-based Arctic Glacier Holdings, Inc. (Arctic Glacier), an affiliate of Miami- based H.I.G. Capital. The outlook is stable. "Standard & Poor's also assigned its 'B' issue-level rating (one notch above the corporate credit rating on the company), and '2' recovery rating, to Arctic Glacier's US$25 million senior secured revolving credit facility due 2017 and US$200 million senior secured term loan due 2018. The recovery rating of '2' indicates our expectation of substantial (70%-90%) recovery for creditors in the event of default," S&P said. "On July 27, 2012, Arctic Glacier closed on its acquisition of substantially all of the assets of Winnipeg, Man.-based packaged ice manufacturer Arctic Glacier Income Fund and its subsidiaries," said Standard & Poor's credit analyst Lori Harris. "Arctic Glacier is a newly formed company created to acquire the above-noted assets with the proceeds from bank and mezzanine debt issuance, as well as an equity injection,' Ms. Harris added. Arctic Glacier Income Fund filed for creditor protection in Canada and the U.S. in February 2012." "The ratings on Arctic Glacier reflect Standard & Poor's view of the company's 'vulnerable' business risk profile and 'highly leveraged' financial risk profile. We base our business risk assessment on the company's narrow product portfolio, seasonality of demand, and participation in the challenging packaged ice industry, which is highly competitive, commoditized, fragmented, and susceptible to unfavorable weather and economic conditions. Partially offsetting these factors is Arctic Glacier's solid market position in North America as the second-largest player in the fragmented industry. We base our financial risk assessment on the company's aggressive financial policy, including a highly leveraged capital structure," S&P said. "The stable outlook reflects Standard & Poor's belief that Arctic Glacier's performance will meet our expectations in the next year, including maintaining its solid market position and generating positive free cash flow. We could raise the ratings if Arctic Glacier demonstrates improvement in its operating performance while strengthening its credit metrics, resulting in leverage remaining below 4.5x on a sustainable basis and good covenant cushion. We could lower the ratings if there is deterioration in the company's operations or negative free cash flow or less than a 15% EBITDA cushion within the financial covenants," S&P said. APPLETON PAPERS: Widens Net Loss to $48.8-Mil. in Second Quarter ---------------------------------------------------------------- Appleton Papers Inc. reported a net loss of $48.87 million on $213.90 million of net sales for the three months ended July 1, 2012, compared with a net loss of $3.28 million on $216.58 million of net sales for the three months ended July 3, 2011. For the six months ended July 1, 2012, the Company reported a net loss of $113.56 million on $433.53 million of net sales, as compared to a net loss of $8.47 million on $434.60 million of net sales for the six months ended July 3, 2011. The Company's balance sheet at July 1, 2012, showed $565.45 million in total assets, $875.19 million in total liabilities and a $309.73 million total deficit. Mark Richards, Appleton's chairman, president and chief executive officer, commended the company's second quarter and first half performances. He said strong, consistent growth of the Company's thermal papers segment drove those achievements. Sales of thermal papers grew 8.6% for second quarter 2012 and 9.8% for first half 2012, respectively. Shipments increased 3% for the second quarter and 5% for first half 2012. "Growth of our thermal tag, label and entertainment (TLE) business continues to deliver strong sales and profits and led improvements to company earnings during the first half of the year," said Richards. A copy of the press release is available for free at: http://is.gd/QsUYaE About Appleton Papers Appleton, Wisconsin-based Appleton Papers Inc. -- http://www.appletonideas.com/-- produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. Appleton Papers is a 100%-owned subsidiary of Paperweight Development Corp. The Company reported a net loss of $2.11 million for the year ended Dec. 31, 2011, compared with a net loss of $31.66 million for the year ended Jan. 1, 2011. * * * Appleton Papers carries a 'B' corporate credit rating, with stable outlook, from Standard & Poor's. IT has a 'B2/LD' probability of default rating from Moody's. BEEBE MEDICAL: Moody's Reviews 'Ba3' Rating; Direction Uncertain ---------------------------------------------------------------- Moody's Investors Service has placed Beebe Medical Center's Ba3 bond rating on review with direction uncertain. The outstanding bonds have exposure to a pending large class action lawsuit against the hospital for negligence to report a former pediatrician convicted of sexually abusing patients and ongoing settlement negotiations with several insurance carriers over whether insurance policies cover litigants claims. The rating under review direction uncertain is based upon the possibility the bond rating could be upgraded or downgraded depending on the final executed settlement terms and total financial exposure to Beebe. Summary Ratings Rationale The review action is prompted by recent discussion with management on the progress of the pending class action lawsuit in connection with a former pediatrician with admitting privileges at the hospital who was convicted on multiple counts of sexually abusing patients in his practice office. Beebe has set aside approximately $13.7 million in a contingency reserve fund that would be applied towards a final settlement agreement. Beebe's liability could be higher or lower depending on the final terms of the settlement. Insurance companies are expected to pay the majority of a final payout to victims and their families. Despite the ongoing legal proceedings, Beebe continues to maintain stable operations with 0.8% operating margin and 7.5% operating cash flow margin based on unaudited FY 2012 results. Unrestricted cash balance was $61.6 million as of June 30, 2012, equating to 85 days cash on hand and 162% cash-to- debt. If a settlement agreement is reached within the next 90 days, Moody's will take appropriate rating action which could include the withdrawal, raising or lowering of the rating. Beebe could receive a multi-notch upgrade if potential liability is capped at or near current reserve levels. Principal Methodology Used The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. BENADA ALUMINUM: Has Green Light to Pay Employees, Taxes -------------------------------------------------------- Penny Stacey at the USGlass News Network reports that the U.S. Bankruptcy Court for the Middle District of Florida has issued an order authorizing Benada Aluminum to continue operating its business and managing its property. The report relates, as part of the order, the company is permitted to continue paying all of its employees and providing them with benefits "in the ordinary course of business." According to the report, in addition, the order allows the Sanford, Fla.-based company to pay all of its necessary and current expenses for operating its business, including taxes, "to the extent that such payments are necessary to preserve the assets or operate the business." The report notes, as part of the agreement with the court, the company will be required to file monthly reports with the court and provide any information needed for the administration of the estate. The report says Benada's reorganization plan is due 150 days from the date of its original Chapter 11 filing. The company also has requested the court's permission to name Brad Aldrich of Transaction Data Processing Corp., as chief restructuring officer. The report notes, additionally, the court has authorized the company to obtain post-petition financing from Wells Fargo Bank in the principal amount of $5 million to be borrowed on an interim basis and $1.25 million from FTL Capital LLC. Under the order, Benada currently owes Wells Fargo roughly $5.7 million in debt developed prior to the Chapter 11 filing and $2 million to FTL Capital. 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. The Company filed for Chapter 11 protection on Aug. 1, 2012 (Bankr. M.D. Fla. Case No. 12-10518). Judge Karen S. Jennemann presides over the case. R. Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, represents the Debtor. The Debtor estimated between assets and debts of between $10 million and $50 million. BERNARD L. MADOFF: Daughter In-Laws Fight 'Insider' Label --------------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that the spouses of Bernard L. Madoff's sons asked a New York federal judge Friday to nix a $57.5 million clawback suit by the trustee recovering money for Ponzi scheme victims, saying their marital status did not make them "insiders" of the notorious firm. Bankruptcy Law360 relates that Stephanie Mack, the widow of Mark Madoff -- who committed suicide in 2010 -- and Deborah Madoff, the ex-wife of Andrew Madoff, filed a brief disputing claims by Bernard L. Madoff Investment Securities LLC trustee Irving Picard. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BG GROUP: Asks Justices to Review $185-Mil. Award Reversal ---------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that BG Group PLC has told the U.S. Supreme Court that the D.C. Circuit erred in reversing an arbitration award of more than $185 million stemming from the British oil company's dispute with Argentina, rendering an opinion that contravened both court precedent and national policy. BG Group filed a petition for writ of certiorari on July 27 in response to the D.C. Circuit's decision that an arbitration panel had overstepped its authority by taking on the dispute in violation of the preconditions of a bilateral treaty, according to Bankruptcy Law360. BICENT HOLDINGS: Wins Prepack Plan Confirmation in Three Months --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Bicent Holdings LLC persuaded the bankruptcy judge in Delaware to sign a confirmation order on July 31 approving the plan that transfers ownership of the two power plants in California to secured lenders. According to the report, the plan was supported by holders of more than two-thirds of the first- and second-lien debt, according to the disclosure statement approved by the bankruptcy court. The report relates first-lien lenders owed $178.9 million are to receive 95% of the new stock, for a recovery estimated between 38.3% and 60.4%. Barclays Bank Plc is agent for the lenders. Second-lien lenders, with U.S. Bank NA as agent for $128.5 million in debt, are to have warrants for 12.5% of the new stock plus $1.5 million cash, for an estimated recovery of 4.4%. Holders of mezzanine debt owed $65.2 million are to receive nothing. Likewise, general unsecured creditors with $25.4 million in claims are to have no recovery. About Bicent Power Bicent Holdings LLC and 12 of its affiliates sought bankruptcy protection under Chapter 11 (Bankr. D. Del. Lead Case No. 12-11304) on April 23, 2012. Bicent, based in Lafayette, Colorado, owns and operates two generating facilities: Hardin, a 120-megawatt coal-fired plant about 40 miles southeast of Billings, Montana, and San Joaquin, a 48-megawatt natural gas- fired facility about 70 miles east of San Francisco in Lathrop, California. Bicent Holdings is owned by non-debtor Bicent Prime Holdings, which is 87.1%-owned by Natural Gas Partners VIII LP, Natural Gas Partners IX LP and NGP IX Offshore Holdings LP and 12.9%-owned by Beowulf (Bicent) LLC. Bicent Power LLC disclosed $7.022 million in assets and $308 million in liabilities in its schedules. The schedule was filed before the June 22 deadline. Judge Kevin Gross oversees the case. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; Moelis & Company LLC, as financial advisor, and Paul, Weiss, Rikfind, Wharton & Garrison LLP as corporate counsel. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. BRUCE BURROW: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- The Associated Press reports that Jonesboro, Arkansas developer Bruce Burrow filed for Chapter 11 bankruptcy on July 30, 2012, listing $10 million to $50 million in assets and, and $50 million and $100 million in debts. Incomplete documents are due Aug. 14. The report relates Mr. Burrow, who developed the Mall at Turtle Creek in Jonesboro, lists 20 unsecured creditors and all of them are banks. The banks have filed claims totaling $53 million against Burrow. The report notes Mr. Burrow told Arkansas Business that when the economy went down he was left with too much vacant space. Several lenders filed foreclosure papers prior to the bankruptcy filing. CAESARS ENTERTAINMENT: Widens Net Loss to $241.8MM in 2nd Quarter ----------------------------------------------------------------- Caesars Entertainment Corporation reported a net loss of $241.8 million on $2.16 billion of net revenues for the quarter ended June 30, 2012, compared with a net loss of $153.1 million on $2.16 billion of net revenues for the same quarter a year ago. The Company reported a net loss of $522.9 million on $4.37 billion of net revenues for the six months ended June 30, 2012, compared with a net loss of $297.9 million on $4.27 billion of net revenues for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $28.03 billion in total assets, $27.43 billion in total liabilities and $607.2 million in total equity. "After a strong first quarter, difficult economic conditions led to lower visitation in several regions, impacting our core operating results in the second quarter," said Gary Loveman, Caesars Entertainment Corporation's chairman, chief executive officer and president. "While the economy may continue to pose challenges, we remain focused on controlling costs, investing in growth opportunities and our core brands and strengthening our capital structure. "We made significant progress during the quarter in expanding our domestic distribution," Loveman said. "Our alliance with Rock Gaming LLC opened Ohio's first casino, Horseshoe Cleveland, and is ahead of schedule on construction of Horseshoe Cincinnati, which is expected to open early next year. Horseshoe Cleveland has drawn larger than expected crowds and enrolled more than 50,000 new members in our Total Rewards loyalty-program during the quarter." A copy of the press release is available for free at: http://is.gd/ddVdD0 About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. CANO PETROLEUM: Plan Effective; Emerges from Bankruptcy ------------------------------------------------------- BankruptcyData.com reports that Cano Petroleum's Second Amended Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on July 16, 2012, concurrently approving the Company's stock purchase agreement with NBI Services. As reported in the Troubled Company Reporter on Aug. 1, 2012, the Bankruptcy Court entered an order approving and confirming the Second Amended Joint Plan of Reorganization of Cano Petroleum, Inc., and its subsidiaries and approving the Stock Purchase Agreement, dated as of March 7, 2012, by and among NBI Services, Inc., and the Debtors, and authorizing the consummation of the transaction contemplated thereby. A copy of the Plan as confirmed is available for free at http://is.gd/h2kwJf About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas- based energy producer with properties in the mid-continent region of the United States, filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates also sought bankruptcy protection: Cano Petro of New Mexico, Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O. Production Company, Ltd., and WO Energy, Inc. The cases are jointly administered. The Debtors filed for bankruptcy to pursue a sale under a joint plan of reorganization filed on the petition date. Cano Petroleum have entered into a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under the Plan for $47.5 million. The deal is subject to higher and better offers and a possible auction. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by lawyers at Thompson & Knight LLP, in Dallas Texas. Cano Petroleum's consolidated balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. In schedules filed with the Court, Cano Petroleum disclosed $1.16 million in assets and $82.5 million in liabilities. Union Bank of California, the administrative agent and issuing lender under the Debtors' prepetition senior credit facility; and UnionBanCal Equities, Inc., the administrative agent and issuing lender, under the junior credit facility, are represented by: William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP. CASTLEGATE GARAGE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Castlegate Garage Door Service, Inc. 4611 E. 46th Avenue Denver, CO 80216-3233 Bankruptcy Case No.: 12-26389 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Jeffrey Weinman, Esq. WEINMAN & ASSOCIATES, P.C. 730 17th St., Ste. 240 Denver, CO 80202 Tel: (303) 572-1010 Fax: (303) 572-1011 E-mail: jweinman@epitrustee.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob12-26389.pdf The petition was signed by Mark Burns, president. CATALYST PAPER: Incurs C$11.7 Million Net Loss in Second Quarter ---------------------------------------------------------------- Catalyst Paper Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of C$11.7 million on C$312.8 million of sales for the three months ended June 30, 2012, compared with a net loss attributable to the Company of C$47.7 million on C$297.8 million of sales for the same period a year ago. The Company reported net loss attributable to the Company of C$37.3 million on C$628.6 million of sales for the six months ended June 30, 2012, compared with a net loss attributable to the Company of $60.3 million on C$601.4 million of sales for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed C$730.7 million in total assets, C$1.38 billion in total liabilities and a C$653.9 million shareholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/NUFh5z Headquartered in Richmond, British Columbia, Catalyst Paper Corporation is largest producer of mechanical printing papers in western North America. It also produces NBSK pulp which is marketed primarily in Asia. Its business is comprised of three business segments: specialty printing papers; newsprint; and pulp. The Company operates four paper mills, three of which are located in British Columbia (B.C.) in Crofton, Port Alberni, and Powell River, and one in Snowflake, Arizona, which produces 100% recycled-content paper. On Jan. 31, 2012, Catalyst Paper Corporation and certain of its subsidiaries obtained an Initial Order from the Supreme Court of British Columbia (the Court) under the Companies' Creditors Arrangement Act (CCAA). The Company applied for recognition of the Initial Order under Chapter 15 of title 11 of the U.S. Bankruptcy Code. The Company entered into a Debtor-In-Possession (DIP) Credit Agreement, pursuant to which a DIP Credit Facility of approximately $175 million was confirmed by the Court. On June 14, 2012, the company announced a second amended plan of arrangement after receiving consent from a requisite number of holders of 2016 Notes to move forward to a vote. The second amended plan of arrangement included proposed changes regarding the compromise of certain extended health benefits, modifications to the salaried pension plan and application for additional solvency deficit funding relief. On June 25, 2012, the Company announced that it had received the necessary creditor approval for the second amended plan of arrangement. Approval of more than 99% of secured and unsecured creditors was received. The Company also received confirmation of regulatory approval by provincial order in council of the proposed modifications to the salaried pension plan and the application for additional funding relief. The Court sanctioned the second amended plan of arrangement on June 28, 2012, and the U.S. Bankruptcy Court in Delaware confirmed the plan under the Chapter 15 process in a confirmation hearing on July 27, 2012. The British Columbia Supreme Court has approved an extension of the Company's CCAA protection to Sept. 30, 2012. Implementation of the second amended plan of arrangement is conditional on the Company securing a new asset-based loan facility (ABL Facility) and/or other exit loan facility. This condition must be met before the Company can exit the CCAA process. CHINA DELIGHT: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: China Delight, Inc. dba Lao Ching Hing Shanghai Resturant 668 North 44th Street, Suite 112 Phoenix, AZ 85008 Bankruptcy Case No.: 12-17292 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtor's Counsel: J. Kent Mackinlay, Esq. WARNOCK, MACKINLAY & CARMAN, PLLC 1019 S. Stapley Drive Mesa, AZ 85204 Tel: (480) 898-9239 Fax: (480) 833-2175 E-mail: kent@mackinlaylawoffice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Margarita Truong, president. COLONIAL BANCGROUP: Seeks OK for $15MM Loan to Fight FDIC Claims ---------------------------------------------------------------- Daniel Wilson at Bankruptcy Law360 reports that Colonial BancGroup Inc. asked an Alabama bankruptcy court Wednesday to approve a $15 million financing agreement with three hedge funds, which the defunct bank holding company will partly use to fund a $610 million dispute with the Federal Deposit Insurance Corp. over tax refund and securities claims. Colonial needs the funding after an Alabama federal court in January vacated a bankruptcy court order allowing the bank access to disputed accounts, according to its motion to approve the term loans. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the Debtor. The Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. In September 2009, an Official Committee of Unsecured Creditors was formed consisting of three members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S. Bank National Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve as co-counsel for the Committee. Colonial Brokerage, a wholly owned subsidiary of Colonial BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy Court in the Middle District of Alabama in June 2010. Susan S. DePaola serves as Chapter 7 trustee. In June 2011, the Bankruptcy Court confirmed Colonial BancGroup's revised Chapter 11 liquidation plan over the FDIC's objection. Kevin O'Halloran was appointed as Plan trustee. He has tapped Quinn Emanuel Urquhart & Sullivan LLP to serve special litigation and conflicts counsel. COMMERCIAL CABINETRY: Case Summary & 20 Largest Unsec Creditors --------------------------------------------------------------- Debtor: Commercial Cabinetry of Georgia, LLC 800 Progress Center Avenue Lawrenceville, GA 30043 Bankruptcy Case No.: 12-69782 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Jerry A. Daniels, Esq. JERRY A. DANIELS, LLC Suite 300 390 W. Crogan Street Lawrenceville, GA 30046 Tel: (770) 962-4070 Fax: (770) 513-8462 E-mail: jerry@danielstaylor.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-69782.pdf The petition was signed by Matthew Beaudry, co-owner. COMMUNITY FIRST: FRB Atlanta OKs Jon Thompson as VP and CFO ----------------------------------------------------------- Community First, Inc., sought and obtained required regulatory approval from the Federal Reserve Bank of Atlanta regarding the appointment of Jon Thompson as Vice President and Chief Financial Officer of the Company. Following confirmation from the FRB Atlanta that it would not object to that appointment, the board of directors of the Company appointed Mr. Thompson to the position of Vice President and Chief Financial Officer of the Company effective as of Aug. 1, 2012. About Community First Columbia, Tennessee-based Community First, Inc., is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and became so upon the acquisition of all the voting shares of Community First Bank & Trust on Aug. 30, 2002. An application for the bank holding company was approved by the Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The Company was incorporated under the laws of the State of Tennessee as a Tennessee corporation on April 9, 2002. After auditing the Company's 2011 results, Crowe Horwath LLP, in Brentwood, Tennessee, expressed substantial doubt about Community First's ability to continue as a going concern. The independent auditors noted that the Company's bank subsidiary, Community First Bank & Trust, is not in compliance with a regulatory enforcement action issued by its primary federal regulator requiring, among other things, a minimum Tier 1 Leverage capital ratio at the Bank of not less than 8.5%, a minimum Tier 1 capital to risk-weighted assets ratio of not less than 10.0% and a minimum Total capital to risk-weighted assets ratio of not less than 12.0%. "The Bank's Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to risk-weighted assets ratio was 7.22% and its Total-capital to risk weighted assets ratio was 8.51% at Dec. 31, 2011. Continued failure to comply with the regulatory enforcement action may result in additional adverse regulatory action." The Company reported a net loss of $15.0 million on $19.6 million of net interest income (before provision for loan losses) in 2011, compared with a net loss of $18.2 million on $21.0 million of net interest income (before provision for loan losses) in 2010. Total non-interest income was $3.4 million for 2011, compared with $4.7 million for 2010. The Company's balance sheet at March 31, 2012, showed $583.77 million in total assets, $572.78 million in total liabilities, and $10.99 million in total shareholders' equity. COMMUNITY HEALTH: S&P Rates New $1.25-Bil. Sr. Secured Notes 'BB' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to the proposed $1.25 billion senior secured notes due 2018 to be borrowed by CHS/Community Health Systems Inc., a wholly owned subsidiary of Franklin, Tennessee-based Community Health Systems Inc. "We rated the notes 'BB' (two notches higher than the 'B+' corporate credit rating on the company) with a recovery rating of '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. The company will use the proceeds of this new issue to repay a portion of the term loan B that matures in 2014," S&P said. "The corporate credit rating on Community Health is 'B+' and remains unchanged, as does the stable rating outlook. The rating reflects our assessment of the company's business risk profile as 'fair' (according to our criteria), because of its large, relatively diversified portfolio of hospitals that helps the company manage uncertain reimbursement and spread local market risk over many markets. The rating is also based on our view of the company's financial risk profile as 'highly leveraged,' reflected in our expectation that the current debt to EBITDA level of about 5.3x, will remain largely unchanged. This viewpoint includes our belief that Community Health will use its cash flow to fund acquisitions and not repay debt. We believe acquisitions will remain a key strategy to increase earnings, particularly as a difficult reimbursement environment and relatively flat patient volume trends (adjusted for outpatient visits) continue to pressure profitability," S&P said. RATINGS LIST Community Health Systems Inc. Corporate credit rating B+/Stable/-- New Rating CHS/Community Health Systems Inc. Senior Secured $1.25B notes due 2018 BB Recovery rating 1 CONNOLLY LLC: S&P Gives 'B' Corp. Credit Rating; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Atlanta-based Connolly LLC. The outlook is stable. "At the same time, we assigned our 'B' issue-level rating to Connolly's proposed $30 million senior secured revolving credit facility and $240 million senior secured first-lien loan. The recovery rating is '3', reflecting our expectations of meaningful (50%-70%) recovery for lenders in case of a payment default," S&P said. "We also assigned our 'CCC+' issue-level rating to the company's $130 million senior secured second-lien term loan. The recovery rating is '6', reflecting our expectations of negligible (0%-10%) recovery for lenders in case of a payment default," S&P said. "The ratings on Connolly reflect our view that the company has a 'highly leveraged' financial profile," S&P said. "Our financial risk assessment incorporates our view that, following the leveraged buyout, the debt burden will remain high and the sponsor will likely influence financial governance," said Standard & Poor's credit analyst Nalini Saxena. "We view the company's financial policy as aggressive and acquisitions as likely in the future. Further, the company has weak asset protection," S&P said. "Because of recent growth trends, we expect Connolly's credit measures will improve moderately over the next 12 months, but remain weak and in line with our indicative ratios for a 'highly leveraged' financial risk descriptor (adjusted leverage above 5x and a funds from operations to total debt ratio below 12%). Connolly LLC is a private company and does not publicly disclose its financials," S&P said. "After the transaction, the sponsor will hold significant majority ownership of the company and control the board; the Connolly family will retain a partial ownership interest," S&P said. CONVERTED ORGANICS: Has 258.8 Million Outstanding Common Shares --------------------------------------------------------------- As previously disclosed on Jan. 3, 2012, Converted Organics entered into an agreement with an institutional investor whereby the Company agreed to sell to the investor 12 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 Jan. 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 27, 2012, the total principal outstanding on these notes was $1,805,160. As of Aug. 3, 2012, the principal amount of the Notes has declined to $1,760,160. From July 30, 2012, until Aug. 3, 2012, a total of $45,000 in principal had been converted into 22,595,500 shares of common stock. Since the issuance of the Original Note and the addtional closing, a total of $242,500 in principal has been converted into 78,349,676 shares of common stock. 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 Aug. 3, 2012, the Company had 258,880,148 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. CORNERSTONE HEALTHCARE: S&P Assigns 'B' Corp. Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Dallas, Texas-based Cornerstone Healthcare Group Holding Inc. Our rating outlook on the company is stable. "We also assigned the company's $150 million term loan credit facility due 2015 our issue-level rating of 'B' (the same our 'B' corporate credit rating) with a recovery rating of '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," said Standard & Poor's credit analyst David Peknay. "The ratings reflect our assessment of Cornerstone's business risk profile as 'vulnerable' and the financial risk profile as 'aggressive,' according to our criteria. We expect Cornerstone to remain subject to significant reimbursement risk, particularly from the government, because Medicare provides about three- quarters of the company's total revenues. While Medicare spending for long-term acute care hospitals (LTACs) will rise by 1.9% in 2012, we expect rates to be reduced by a three-year phase-in of a 3.75% budget neutrality adjustment. We expect Cornerstone to counteract this rate cut by trying to increase its commercial insurance patient base and pursue higher commercial insurance contract rates. We expect Cornerstone's total revenue to increase by about 10% in 2012. We expect small, single-digit increases in both patient days and rates to drive an estimated 4% organic growth rate supplemented by about 5% additional beds because of acquisitions. Possible acquisition activity could drive a revenue increase of over 30% in 2013. We expect Cornerstone's EBITDA margin at the end of 2012 to be about 20%," S&P said. CROSS ISLAND PLAZA: Chapter 11 Plan Filed ----------------------------------------- Cross Island Plaza, Inc. and Block 12892 Realty Corp. have a proposed Chapter 11 plan that promises to provide U.S. Bank National Association, as trustee on a secured promissory note, full payment for its $26 million secured claim from the proceeds of the sale of the Debtors' property or rental fees. DLJ Mortgage Capital Inc. will have an allowed claim of $48.3 million and will have valid liens but payment for the claim will be contingent on assets held by the distribution agent after the distribution pursuant to the carve-out and holders of priority claims and U.S. Bank. Holders of general unsecured claims will split with what's left with the disbursing agent after administrative expenses and secured creditors are paid. Holders of equity interests won't receive anything. Equity holders are deemed to reject the Plan. A redlined-copy of the Disclosure Statement, as amended June 21, 2012, is available for free at: http://bankrupt.com/misc/Cross_Island_DS_062112.pdf About Cross Island Plaza Rosedale, New York-based Cross Island Plaza, Inc., and affiliate Block 1892 Realty Corp. filed Chapter 11 petitions (Bankr. E.D.N.Y. Case Nos. 12-42491 and 12-42493) on April 4, 2012. Cross Island claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B), estimating assets and debts of $10 million to $50 million. CIP owns and operates an office building and parking lot known as "One Cross Island Plaza" in Rosedale. The property consists of three floors and a lower level which is occupied by roughly 100 tenants. Block owns an additional parking lot in close proximity to the One Cross Island Plaza, and has entered into a ground lease with CIP to provide additional parking space for two tenants of Cross Island. Judge Nancy Hershey Lord presides over the cases. Adam L. Rosen, Esq., at Silverman Acampora LLP, serves as the Debtors' counsel. The petition was signed by Chloe Henning, authorized representative. DAYTOP VILLAGE: Gets Short Exclusivity Extension Thru Nov. 1 ------------------------------------------------------------ The U.S. Bankruptcy Court granted Daytop Village Foundation Incorporated and Daytop Village Inc. an extension of their exclusive period to file a chapter 11 plan through and including Nov. 1, 2012, and their exclusive period to solicit acceptances on that plan through Dec. 31, 2012. The extensions are without prejudice to the Debtors' right to seek further extensions "for cause" should the circumstances so warrant. Absent the extension, the Debtors' exclusive plan filing period was to expire Aug. 3 and the solicitation period Oct. 2. The Debtors requested for a 120-day extension of those dates. The Official Committee of Unsecured Creditors appointed in the case objected to a longer exclusivity extension, saying the Debtors are losing money at a rate of $1 million per month and have not yet presented a strategy for stemming these losses. The Committee noted that on the Petition Date, the possibility for a 100% distribution to unsecured creditors was a very real prospect. Since the Petition Date, the Debtors are continuing to sustain losses and are eroding expectations regarding creditor recoveries. The Debtors have advised the Committee that they will submit a Business Plan to the Committee in the month of August 2012. The Committee believes that the Court should extend the Deadlines for no more than 60 days each. This extension will provide the Debtors with sufficient time to submit the Business Plan and for the Committee and all interest parties to review it. The Committee suggested that the Court extend the Plan Exclusivity Deadline through Oct. 2 and the Solicitation Exclusivity Deadline through Dec. 3. The Debtors argued there is no basis for the Committee's unrealistic "expectations regarding creditor recoveries," nor should continued losses by the Debtors in the short term come as a surprise to anyone, particularly the Committee, whose financial advisor has had access to all relevant financial information about the Debtors in this regard. In any event, the Debtors continued, the Committee has inaccurately portrayed the extent of such losses. The Debtors pointed out that since the Petition Date they have made progress in reducing expenses, including cutting payroll and related costs. Moreover, as a result of the Debtors' extensive efforts to re-market and sell their former headquarters building and negotiate with their pre-petition contract vendee, the Debtors increased the value of their combined assets by roughly $6 million, which would not have been possible had the Debtors not commenced their chapter 11 cases and instead sold that building pursuant to a pre-petition sales contract. The Debtors said that, through the efforts of management and their restructuring professionals, they are actively crafting a business plan that will form the basis for their exit from bankruptcy with a sustainable revenue stream and a rationalized cost structure. They anticipate completing the business plan within roughly 45 to 60 days. Only thereafter will they be in a position to formulate a plan of reorganization, the Debtors said. Committee Professionals The five-member Creditors Committee was appointed on April 17 and comprises: 1. Morgan Fuel & Heating Co., Inc. d/b/a "Bottini Fuel" 2785 West Main Street Wappingers Falls, NY 12590 Attn: Mark J. Bottini, Secretary Tel: (845) 297-5580 Fax: (845) 297-5465 2. Millin Associates LLC 521 Chestnut Street Cedarhurst, NY 11516 Attn: Shlomo Weiss, Chief Executive Officer Tel: (516) 374-4530 Fax: (516) 374-8613 3. Chem Rx Pharmacy Services, LLC 750 Park Place Long Beach, NY 11561 Tel: (516) 889-8770 ext. 110 Fax: (516) 889-8732 Attn: Michael S. Schildt, Credit Manager 4. Bendiner & Schlesinger Inc. 140 58th Street Brooklyn, NY 11220 Tel: (212) 254-2300 Attn: Peter Stein, Executive Vice President 5. K.J.L. Realty Company 147-17 Jamaica Avenue Jamaica, NY 11435 Attn: Peter Kulka, Vice President Tel: (718) 297-1049 Fax: (718) 297-2403 Bendinger & Schlesinger, Inc., is the chair of the Committee. The Committee has won Court authority to retain Robinson Brog Leinwand Greene Genovese & Gluck P.C. as bankruptcy counsel; and Alvarez & Marsal Healthcare Industry Group LLC as financial advisor. Robinson Brog's hourly rates are: Professional Rates ------------ ----- Partners $400 - $600 Contract Partners/of Counsel $400 - $550 Associates $275 - $400 Paralegals/legal assistants $150 - $275 A&M's billing rates are: Professional Rates ------------ ----- Managing Directors $625 - $850 Directors $450 - $625 Analysts/Associates $225 - $450 The hourly billing rates will be discounted by 25% provided however, A&M will be entitled to recover the portion of the discount on the basis of a favorable distribution payable by the reorganized Debtors to general unsecured creditors: GUC Recovery ------------------------------- A&M Discount Greater Than Up to Recapture ---------------- ------------- ------------ 0 Less than 85% None 85% Less than 90% 50% 90% Less than 95% 75% 95% Less than 100% 90% 100% Not Applicable 112.5% A&M will also be reimbursed for out-of-pocket expenses. About Daytop Village Daytop Village Foundation Incorporated, along with affiliate Daytop Village Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11436) on April 5, 2012, in Manhattan. In 1963, Father William O'Brien and Dr. Alexander Bassin founded the Daytop Lodge, a substance abuse treatment facility, in Staten Island. Today, Daytop is the third largest substance abuse agency operating in the State of New York and the only substance abuse agency operating world-wide under a contract with the Unites States State Department. It provides family-oriented substance abuse treatment for adults and adolescents. Through six residential facilities and eight outreach clinics in New York, Daytop offers individual treatment plans by providing professional counseling, medical, social and spiritual attention. Judge Shelley C. Chapman presides over the Chapter 11 cases. Lowenstein Sandler PC is the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtors' Restructuring and Management Officer is Marotta Gund Budd Dezera LLC. The petition was signed by Michael Dailey, chief executive officer. Daytop Village Inc., as of Jan. 31, 2012 has $8.68 million in assets and $45.03 million of liabilities. DVF has $42.20 million in assets and $32.00 million in liabilities as of Jan. 31, 2012. Island Funding II, the DIP lender, is represented by Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP. Counsel to the prepetition lender Signature Bank is Stephen D. Brodie, Esq., at Herrick Feinstein LLP; and Joshua I. Divack, Esq., at Hahn & Hessen LLP. Counsel to the prepetition lender Hudson Valley Bank is James P. Blose, Esq., at Griffin Coogan Blose & Sulzer P.C. Eric M. Huebscher was appointed Patient Care Ombudsman in the case. DAYTOP VILLAGE: Hires Broker to Sell 4 Outpatient Facilities ------------------------------------------------------------ Daytop Village Foundation Incorporated and Daytop Village, Inc., seek Court permission to hire Massey Knakal Realty of Manhattan LLC as real estate broker to DVF effective as of July 30, 2012. The Debtors currently operate various residential treatment centers and outpatient facilities. The Debtors, together with their CRO and professional advisors, are currently in the process of developing a business plan for operating on a going forward basis. The Debtors have preliminarily identified four properties owned by DVF and currently leased by DVF to Daytop Village for use as outpatient facilities which may be candidates to be sold: (i) 401 State Street (Brooklyn, NY); (ii) 2614-2616 Halperin Avenue (Bronx, NY); (iii) 316 Beach 65th Street (Queens, NY); and (iv) 1915 Forest Avenue (Staten Island, NY). MKR will assist the Debtors regarding the marketing and sale process with respect to the Properties. The Debtors also have won Court permission to employ GA Keen Realty Advisors, LLC as special real estate advisor. To the extent that DVF makes a final determination to enter into a sales contract with respect to any of the Properties, there is a statutory process wherein the Debtors may request that the facility licenses granted by OASAS with respect to each of the Properties be transferred to a neighboring leased facility. MKR will be paid by commission in connection with a sale of each Property, computed as: Portion of Purchase Price Commission With for Sale of Each of Respect to Such Portion the Properties of Purchase Price ------------------------- ----------------------- Up to $2 million 5% Greater than $2 million and up to $3.5 million 4% Greater than $3.5 million 1.5% Any Commission will be due and payable (i) to MKR whether the sale is effectuated by MKR, DVF or another broker, and (ii) only as, if, and when title passes. Furthermore, to the extent MKR is successful in procuring the sale of three or more of the Properties, the Commission schedule will be: Portion of Purchase Price Commission With for Sale of Each of Respect to Such Portion the Properties of Purchase Price ------------------------- ----------------------- Up to $2 million 4.5% Greater than $2 million and up to $3.5 million 3.5% Greater than $3.5 million 1% The Commission will be earned and payable only upon and at the transfer of title for any of the Properties, and will be payable solely from the proceeds of the sale. No Commission or other compensation will be deemed earned or payable to MKR unless and until a sale contract satisfactory to DVF is executed, approved by the Court, the sale closes, and the purchaser pays the full purchase price for any of the Properties. MKR is a diversified real estate company, representing owners in the sale, retail lease and/or financing of their properties. With over 100 employees, four offices and thorough coverage of the five boroughs of New York City, Westchester County, Long Island and New Jersey, MKR dominates the New York metropolitan area's property transaction marketplace. For over two decades, MKR has focused exclusively on the New York metropolitan area, building strong relationships within the neighborhoods it represents and developing an extensive database of customers that includes all of the major investors, institutions, agencies and individuals that are active in real estate in the area. Since 1998, MKR's real estate agents have closed over 4,200 transactions having an aggregate market value in excess of $15 billion. The Court approved the GA Keen hiring in May 2012. GA Keen provides appraisal services to the Debtors, including: (a) reviewing 10 appraisals of the Debtors prepared with respect to real property identified by the Debtors; (b) preparing and being available to provide oral testimony regarding the appraisals; (c) appraising additional Debtor-owned real properties; (d) preparing oral and (at the Debtors' request) written appraisal report containing the conclusions of the additional appraisals; and (e) providing additional services that the Debtors will request, including litigation support, preparation, deposition, court time and travel time. GA Keen's compensation will include (a) a $17,000 flat fee for the 10 appraisal review services; (b) a fee of between $4,000 and $8,000 for each of the additional appraisals and (c) $400 per hour for the additional services, plus reasonable and customary expenses. GA Keen's Mark P. Naughton attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Other Hirings The Debtors also have obtained Court authority to employ Lowenstein Sandler PC as counsel. Lowenstein was first retained to represent the Debtors in early March 2012. On March 13, 2012, the Debtors paid Lowenstein $25,000 for services rendered and to be rendered in the future. On March 16, 2012, the Debtors paid Lowenstein $125,000 as an additional retainer for future services. Further, on March 21, 2012, the Debtors paid Lowenstein $125,000 as an additional retainer for future services, and on April 5, 2012, the Debtors paid an additional $32,000 retainer to Lowenstein, for a total of $307,000. Lowenstein's current hourly rates are: Members of the Firm $435 - $895 Senior Counsel (generally 10 or more years experience) $390 - $660 Counsel $350 - $630 Associates (generally less than 6 years experience) $250 - $470 Paralegals and Legal Assistants $145 - $245 The Debtors also were given permission to employ Marotta Gund Budd & Dzerra LLC as crisis managers and designate the firm's Stephen Marotta as Chief Restructuring Officer and Neil Peritz as Assistant Chief Restructuring Officer. Marotta Gund provides various services to the Debtors, including: (a) supervising management in organizing the Debtors' resources and activates so as to effectively plan, coordinate and manage the chapter 11 process and communicate with customers, lenders, suppliers, employees, shareholders and other parties in interest. (b) supervising management in designing and implementing programs to manage or divest assets, improve operations, reduce costs and restructure as necessary with the objective of rehabilitating the business; and (c) interfacing with official committees, other constituencies and their professionals, including the preparation of financial and operating information required b such parties and/or the Bankruptcy Court. Marotta Gund's fee structure consists of a fixed monthly fee of $125,000. Since the firm is not being employed as professional under Section 327 of the Bankruptcy Code, it will not submit fee applications. The firm's fees and expenses will be treated as administrative expenses of the Debtors' estates. Marotta Gund attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Daytop Village Daytop Village Foundation Incorporated, along with affiliate Daytop Village Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11436) on April 5, 2012, in Manhattan. In 1963, Father William O'Brien and Dr. Alexander Bassin founded the Daytop Lodge, a substance abuse treatment facility, in Staten Island. Today, Daytop is the third largest substance abuse agency operating in the State of New York and the only substance abuse agency operating world-wide under a contract with the Unites States State Department. It provides family-oriented substance abuse treatment for adults and adolescents. Through six residential facilities and eight outreach clinics in New York, Daytop offers individual treatment plans by providing professional counseling, medical, social and spiritual attention. Judge Shelley C. Chapman presides over the Chapter 11 cases. Lowenstein Sandler PC is the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtors' Restructuring and Management Officer is Marotta Gund Budd Dezera LLC. The petition was signed by Michael Dailey, chief executive officer. Daytop Village Inc., as of Jan. 31, 2012 has $8.68 million in assets and $45.03 million of liabilities. DVF has $42.20 million in assets and $32.00 million in liabilities as of Jan. 31, 2012. Island Funding II, the DIP lender, is represented by Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP. Counsel to the prepetition lender Signature Bank is Stephen D. Brodie, Esq., at Herrick Feinstein LLP; and Joshua I. Divack, Esq., at Hahn & Hessen LLP. Counsel to the prepetition lender Hudson Valley Bank is James P. Blose, Esq., at Griffin Coogan Blose & Sulzer P.C. The Official Committee of Unsecured Creditors was formed April 17, 2012. Bendinger & Schlesinger, Inc., is the chair of the Committee. Alvarez & Marsal Healthcare Industry Group LLC is the Committee's financial advisor. Robinson Brog Leinwand Greene Genovese & Gluck P.C. is the Committee's counsel. Eric M. Huebscher was appointed Patient Care Ombudsman in the case. DAYTOP VILLAGE: Taps Former FBI's Firm as Security Consultant ------------------------------------------------------------- Daytop Village Foundation Incorporated and Daytop Village, Inc., ask the Court for authority to enter into a security consulting agreement with Global Risk & Investigative Diligence, LLC, effective as of July 27, 2012. In light of the (i) nature of the Daytop's business involving residential client treatment facilities; and (ii) Daytop's acute interest in providing for the continued safety of its patients, employees and others in contact with the Debtors' Facilities, Daytop seeks to enter the Agreement with GRID and to have GRID provide consulting services to Daytop as a security and incident reporting/management advisor. GRID has begun the process of evaluating and seeking to enhance where necessary the security and incident management capabilities of the Debtors' Facilities, and will make recommendations to Daytop once their evaluation is complete. GRID is a full-service security, crisis management and investigative consulting firm led by Pasquale J. D'Amuro, the former third-highest ranking member of the FBI, who served as Executive Assistant Director for Counter Terrorism and Counter Intelligence and as Assistant Director in Charge of New York. The Debtors noted that GRID's employees possess decades of experience in security assessment and planning, emergency preparedness and crisis management, intelligence gathering and investigations. Pursuant to the Agreement, GRID will, inter alia, provide two phases of advice: (i) an assessment of Daytop's security and incident reporting/management system and presentation of findings, observations and recommendations to Daytop to enhance, where necessary, overall physical security and incident reporting management -- Phase I; and (ii) assisting Daytop in the development and implementation of the Approved Recommendations -- Phase II. GRID will be compensated hourly for its services provided in Phase I, at this pricing schedule: (i) Principal Manager -- $450 per hour; (ii) Senior Consultant -- $350 per hour; and (iii) Consultant -- $250 per hour. GRID will also be reimbursed for all business and travel related expenses reasonably and necessarily incurred in the performance of the engagement and approved in advance by the Debtors. GRID estimates that its fees for Phase I will be roughly $45,000 (plus expenses). The scope and cost of Phase II will be determined based on the results of Phase I and the Approved Recommendations. GRID will submit an estimated fee schedule upon completion of Phase I and will only commence work with respect to Phase II with the advance written approval of Daytop. About Daytop Village Daytop Village Foundation Incorporated, along with affiliate Daytop Village Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11436) on April 5, 2012, in Manhattan. In 1963, Father William O'Brien and Dr. Alexander Bassin founded the Daytop Lodge, a substance abuse treatment facility, in Staten Island. Today, Daytop is the third largest substance abuse agency operating in the State of New York and the only substance abuse agency operating world-wide under a contract with the Unites States State Department. It provides family-oriented substance abuse treatment for adults and adolescents. Through six residential facilities and eight outreach clinics in New York, Daytop offers individual treatment plans by providing professional counseling, medical, social and spiritual attention. Judge Shelley C. Chapman presides over the Chapter 11 cases. Lowenstein Sandler PC is the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtors' Restructuring and Management Officer is Marotta Gund Budd Dezera LLC. The petition was signed by Michael Dailey, chief executive officer. Daytop Village Inc., as of Jan. 31, 2012 has $8.68 million in assets and $45.03 million of liabilities. DVF has $42.20 million in assets and $32.00 million in liabilities as of Jan. 31, 2012. Island Funding II, the DIP lender, is represented by Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP. Counsel to the prepetition lender Signature Bank is Stephen D. Brodie, Esq., at Herrick Feinstein LLP; and Joshua I. Divack, Esq., at Hahn & Hessen LLP. Counsel to the prepetition lender Hudson Valley Bank is James P. Blose, Esq., at Griffin Coogan Blose & Sulzer P.C. The Official Committee of Unsecured Creditors was formed April 17, 2012. Bendinger & Schlesinger, Inc., is the chair of the Committee. Alvarez & Marsal Healthcare Industry Group LLC is the Committee's financial advisor. Robinson Brog Leinwand Greene Genovese & Gluck P.C. is the Committee's counsel. Eric M. Huebscher was appointed Patient Care Ombudsman in the case. DEWEY & LEBOEUF: Sec. 341 Creditors' Meeting Next Wednesday ----------------------------------------------------------- The U.S. Trustee for Region 2 will hold a meeting of creditors pursuant to Section 341 of the Bankruptcy Code in the Chapter 11 case of Dewey & LeBoeuf on Aug. 15, 2012, at 1:00 p.m. (ET) at 80 Broad Street, 4th Floor, New York. There are also Hearings scheduled in the case for Aug. 23, 2012 at 10:00 a.m. (ET) and Sept. 20, 2012 at 10:00 a.m. (ET). 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 US$245 million and assets of US$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 US$6 million. The Pension benefit Guaranty Corp. took US$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. 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. DEWEY & LEBOEUF: Court OKs Togut Firm as Bankruptcy Counsel ----------------------------------------------------------- The Hon. Martin Glenn U.S. Bankruptcy Court for the Southern District of New York authorized Dewey & Leboeuf LLP to employ Togut, Segal & Segal LLP as counsel. Albert Togut, a member of the Togut Firm, assures the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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 US$245 million and assets of US$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 US$6 million. The Pension benefit Guaranty Corp. took US$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. 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. DEWEY & LEBOEUF: Dev't. Specialists OK'd as Wind Down Consultant ---------------------------------------------------------------- The Hon. Martin Glenn U.S. Bankruptcy Court for the Southern District of New York, in an amended order, authorized Dewey & Leboeuf LLP to employ Development Specialists Inc., as wind down consultant. DSI is expected to: a) familiarize itself with the Debtor's operations, assets and liabilities and the proceedings in the Debtor's chapter 11 case relating to DSI's functions as wind down consultant; b) assist in implementing strategic and tactical courses of action during the Debtor's wind down relating to vacating office spaces, negotiating with lessors, and resolving issues relating to client files and records and leased property; c) coordinate with the chief restructuring officer, the Debtor's proposed bankruptcy counsel and Wind-Down Committee with respect to the foregoing; and d) assist, if necessary, in negotiations with parties-in- interest and their representatives with respect to the foregoing. To the best of the Debtor's knowledge, DSI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 US$245 million and assets of US$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 US$6 million. The Pension benefit Guaranty Corp. took US$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. 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. DEWEY & LEBOEUF: Epiq Bankruptcy OK'd as Administrative Advisor --------------------------------------------------------------- The Hon. Martin Glenn U.S. Bankruptcy Court for the Southern District of New York, in an amended order, authorized Dewey & Leboeuf LLP to employ Epiq Bankruptcy Solutions, LLC as administrative advisor. Epiq related that it will use its best efforts to avoid any duplication of services provided by any of the Debtor's other retained professionals in the Chapter 11 case. James Katchadurian, executive vice president at Epiq, assures the Court that Epiq is a "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 US$245 million and assets of US$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 US$6 million. The Pension benefit Guaranty Corp. took US$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. 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. DEWEY & LEBOEUF: Goldin Associates OK'd as Special Consultant ------------------------------------------------------------- The Hon. Martin Glenn U.S. Bankruptcy Court for the Southern District of New York authorized Dewey & Leboeuf LLP to employ Goldin Associates, LLC as special consultant. David Pauker, executive managing director of the Goldin Firm, assures the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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 US$245 million and assets of US$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 US$6 million. The Pension benefit Guaranty Corp. took US$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. 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. DEWEY & LEBOEUF: Extends Deadline for Clawback Deal to Aug. 13 -------------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that the Dewey & LeBoeuf LLP trustee on Monday extended the deadline for partners to agree to a proposed $90.4 million settlement that would resolve potential clawback litigation, as the details of the deal continue to be debated. Bankruptcy Law360 relates that the Dewey estate pushed the deadline ? which had already been extended from July 24 to Aug. 7 ? to Aug. 13, according to sources familiar with the matter. 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 US$245 million and assets of US$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 US$6 million. The Pension benefit Guaranty Corp. took US$2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey & LeBoeuf has won Court authority to use lenders' cash collateral through July 31, 2012. DIS PARTNERS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: DIS Partners, LLC, a Nevada limited liability company 6020 Cornerstone Court West, Suite 200 San Diego, CA 92121 Bankruptcy Case No.: 12-10821 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Peter W. Bowie Debtor's Counsel: L. Scott Keehn, Esq. KEEHN LAW GROUP, APC 401 B Street, Suite 1470 San Diego, CA 92101 Tel: (619) 400-2200 E-mail: scottk@keehnlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/casb12-10821.pdf The petition was signed by Jacob Carroll, designated member. DRC BUSINESS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: DRC Business, Inc. 10907 White Oak Ridge Houston, TX 77095 Bankruptcy Case No.: 12-35818 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Barbara Mincey Rogers, Esq. ROGERS & ANDERSON, PLLC 1415 North Loop West Ste 1020 Houston, TX 77008 Tel: (713) 868-4411 Fax: (713) 868-4413 E-mail: brogers@ralaw.net Scheduled Assets: $430,000 Scheduled Liabilities: $1,141,251 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Randeep Singh, president. DUMEK HOLDINGS: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Dumek Holdings Inc. 5042 Wilshire Blvd #237 Los Angeles, CA 90036 Bankruptcy Case No.: 12-36894 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: Chukwudum N. Emenike, Esq. 5042 Wilshire Blvd Ste 237 Los Angeles, CA 90036 Tel: (213) 487-0190 Fax: (213) 487-7415 Scheduled Assets: $1,200,000 Scheduled Liabilities: $1,795,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ronald Gillaspie Contract $235,000 14701 Bruce St. Bellflower, CA 90706 The petition was signed by Chukwudum N. Emenike, president. DYNEGY INC: Files Form 10-Q, Incurs $1 Billion Net Loss in Q2 -------------------------------------------------------------- Dynegy Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.06 billion on $53 million of revenue for the three months ended June 30, 2012, compared with a net loss of $116 million on $326 million of revenue for the same period during the prior year. The Company reported a net loss of $1.12 billion on $230 million of revenue for the six months ended June 30, 2012, compared with a net loss of $193 million on $831 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $119 million in total assets, $121 million in total liabilities and a $2 million total stockholders' deficit. "While the restructuring and corporate reorganization activities have added significant complexity to the Company's financial results, the bottom line for the quarter is our Gas segment continues to achieve record run times helping to offset the impact that lower natural gas prices are continuing to have on our Coal segment results," said Robert C. Flexon, Dynegy President and Chief Executive Officer. "Furthermore, our commercial operations team remained focused on managing the portfolio's exposure to commodity price fluctuations, the legacy derivative liability positions, and also successfully achieving new long-term agreements for coal transportation to our facilities." A copy of the Form 10-Q is available for free at: http://is.gd/02MkBr About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. E-DEBIT GLOBAL: Incurs $28,900 Net Loss in Second Quarter --------------------------------------------------------- E-Debit Global Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $28,947 on $609,025 of total revenue for the three months ended June 30, 2012, compared with a net loss of $284,376 on $869,400 of total revenues for the same period a year ago. The Company reported a net loss of $337,023 on $1.21 million of total revenue for the six months ended June 30, 2012, compared with a net loss of $513,427 on $1.67 million of total revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.46 million in total assets, $3.13 million in total liabilities and a $1.66 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/ept2MD About E-Debit Global Corporation E-Debit Global Corporation (WSHE) is a financial holding company in Canada at the forefront of debit, credit and online computer banking. Currently, the Company has established a strong presence in the privately owned Canadian banking sector including Automated Banking Machines (ABM), Point of Sale Machines (POS), Online Computer Banking (OCB) and E-Commerce Transaction security and payment. E-Debit maintains and services a national ABM network across Canada and is a full participating member of the Canadian INTERAC Banking System. Following the 2011 results, Schumacher & Associates, Inc., in Littleton, Colorado, noted that the Company has incurred net losses for the years ended Dec. 31, 2011, and 2010, and had a working capital deficit and a stockholders' deficit at Dec. 31, 2011, and 2010, which raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $1.09 million in 2011, compared with a net loss of $1.15 million in 2010. EASTMAN KODAK: Judge Approves Incentive Plan to 12 Top Execs ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Allan L. Gropper approved Eastman Kodak Co.'s requests Monday to extend a 10-year-old incentive plan to 12 top executives who were cut out following its bankruptcy filing, and to pay one insider a bonus of up to $1.5 million. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. ELEGANT SURFACES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Elegant Surfaces a California corporation 551 Carnegie Street Manteca, CA 95337 Bankruptcy Case No.: 12-34409 Chapter 11 Petition Date: August 8, 2012 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: David C. Johnston, Esq. JOHNSTON & JOHNSTON LAW CORP. 627 13th Street, Suite E Modesto, CA 95354 Tel: (209) 579-1150 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John Polimeno, president. ENDO HEALTH: Moody's Says Share Repurchase Program Credit Neg. -------------------------------------------------------------- Moody's Investors Service commented that the new share repurchase authorization of Endo Health Solutions Inc. is credit negative. However, there is currently no effect on Endo's ratings. Endo is rated Ba2 (Corporate Family Rating) with a negative rating outlook. "The extent to which Endo's share repurchase program is credit negative will depend on whether or not the company continues to buy back stock at the higher pace seen during 1Q2012 and 2Q2012," stated Michael Levesque, Moody's Senior Vice President. The principal methodology used in rating Endo Health Solutions Inc. was the Global Pharmaceuticals Industry Methodology published in October 2009. ENERGY CONVERSION: Confirms 50% Liquidating Plan ------------------------------------------------ Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that although Energy Conversion Devices Inc. and operating subsidiary United Solar Ovonic LLC were unable to sell the business as a going concern, the Chapter 11 case wasn't a wipeout for unsecured creditors because the company came to bankruptcy court in February with $145 million of unrestricted cash and short-term investments. According to the report, last week, the U.S. Bankruptcy Court in Detroit signed a confirmation order approving a reorganization plan where unsecured creditors with up to $337 million in claims were told they could expect a recovery between 50.1% and 59.3%. The plan creates a trust to sell remaining assets and distribute proceeds in the order of priority laid out in bankruptcy law. A liquidation analysis attached to the disclosure statement showed cash of $139.5 million. When other assets are liquidated, the company projected total proceeds would be $182 million to $196 million. After expenses and claims of higher priority are paid, the disclosure statement predicted that $168.7 million to $182.2 million would remain for unsecured creditors. About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. Foley and Lardner, LLP represents the Committee. Scouler & Company, LLC, serves as financial advisor. A group of shareholders had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. The Debtors canceled an auction to sell USO as a going concern and discontinued the court-approved sale process after failing to receive an acceptable qualified bid by the bid deadline. Quarton Partners served as the companies' investment banker. The Debtors also hired auction services provider Hilco Industrial to prepare for an orderly sale of the companies' assets. EVERGREEN SOLAR: Plan Confirmed and Implemented ----------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that creditors of Evergreen Solar Inc. are receiving distributions under the Chapter 11 plan resulting from a settlement between secured noteholders and the unsecured creditors' committee. The settlement was approved by the bankruptcy court in March. The report relates the settlement gave Evergreen $1.3 million and some of the stock in the Chinese manufacturing subsidiary. Unsecured creditors are receiving some of the subsidiary's stock plus $50,000 cash and the ability to bring specified lawsuits. The settlement gave the secured noteholders a deficiency claim of $108.3 million plus an agreement that noteholders won't participate in the recovery by unsecured creditors until they take home 1%. The report relates the disclosure statement told unsecured creditors with an estimated $233 million in claims how they can expect to recover less than 1%. The disclosure statement revealed that about $2.8 million would be used to pay professionals for their work in the Chapter 11 case. The Bloomberg report disclosed the bankruptcy court signed a confirmation order on July 13 approving the plan. The plan was implemented on July 16. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. FAIR FINANCE: Textron Bid to Dismiss Trustee Suit Remains Pending ----------------------------------------------------------------- A motion to dismiss filed by Textron Inc.'s subsidiary Textron Financial Corporation against a complaint filed by the Chapter 7 Trustee for Fair Finance Company, according to Textron's Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarterly period ended June 30, 2012. On Feb. 7, 2012, a lawsuit was filed in the United States Bankruptcy Court, Northern District of Ohio, Eastern Division (Akron) by Brian A. Bash, Chapter 7 Trustee for Fair Finance Company against TFC, Fortress Credit Corp. and Fair Facility I LLC. TFC provided a revolving line of credit of up to $17.5 million to Fair Finance Company from 2002 through 2007. The complaint alleges numerous counts against TFC, as Fair Finance Company's working capital lender, including receipt of fraudulent transfers and assisting in fraud perpetrated on Fair Finance investors. The Trustee seeks avoidance and recovery of alleged fraudulent transfers in the amount of $316 million as well as damages of $223 million on the other claims. The Trustee also seeks trebled damages on all claims under Ohio law. Textron said, "We intend to vigorously defend this lawsuit, and on April 20, 2012, TFC moved to dismiss all claims in the complaint. That motion is still pending. An estimate of a range of possible loss cannot be made at this time due to the early stage of the litigation." Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. About Fair Finance Akron, Ohio-based investment company Fair Finance Co. was closed following a November 2009 raid by the U.S. Federal Bureau of Investigation. Fair Finance's owner, Indiana businessman Timothy S. Durham, a Republican political contributor whose holdings include National Lampoon Inc., has been targeted in lawsuits and investigations over claims he funded a luxurious lifestyle with the proceeds of a Ponzi scheme. Three creditors -- Nick Spada, Jacques Dunaway, and Robert Ripley -- filed on Feb. 8, 2010, a petition to send Fair Finance to Chapter 7 liquidation (Bankr. N.D. Oh. Case No. 10-50494). David Mucklow, Esq., serves as counsel to the petitioners. Brian Bash was appointed bankruptcy trustee. A motion to appoint a trustee filed by the petitioning creditors said that Mr. Durham and co-owner James Cochran took $176 million in loans transferred from the investment fund into Fair Holdings LLC and DC Investments LLC. They used the money to fund $220 million in other loans, according to the filing. FANNIE MAE: In Talks With BofA Over Bad Mortgages ------------------------------------------------- American Bankruptcy Institute, citing Reuters, reports that Bank of America Corp. is in talks with Fannie Mae to resolve a dispute over bad mortgages that the government-controlled entity wants the No. 2 U.S. bank to buy back. About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. Fannie Mae reporte a net loss of $16.85 billion in 2011, a net loss of $14.01 billion in 2010, and a net loss of $72.02 billion in 2009. FRANKLIN CREDIT: Aug. 2 Established as Distribution Record Date --------------------------------------------------------------- The First Amended Prepackaged Plan of Reorganization of Franklin Credit Holding Corporation, dated July 3, 2012, was amended and confirmed by the Confirmation Order entered on July 18, 2012, in Case No. 12-24411 (DHS), which is the voluntary case commenced by the Company, under Chapter 11 of the Bankruptcy Code, in the United States Bankruptcy Court for the District of New Jersey. Upon the expiration of the time to file an appeal of the Confirmation Order under the Federal Rules of Bankruptcy Procedure, the Confirmation Order became a final order of the Bankruptcy Court on Aug. 2, 2012, and, pursuant to the Prepackaged Plan, Aug. 2, 2012, was established as the record date. Pursuant to the Prepackaged Plan, shareholders of the common stock of the Company as of the Record Date are entitled to receive their respective pro rata shares of the Company's 80% interest in Franklin Credit Management Corporation, a national mortgage servicer. The Effective Date of the Prepackaged Plan is anticipated to be on or about Aug. 9, 2012. On the Effective Date, the Company's common shares of FCMC are expected to be distributed to the record holders of the common stock of the Company as of the Record Date, and all conditions precedent to the effectiveness of the Prepackaged Plan are expected to have been satisfied or waived. The FCMC common stock so distributed will be in the form of legended securities that may not be offered or sold in the public marketplace until the effectiveness of a Form 10 Registration Statement to be filed by FCMC, which FCMC anticipates filing in the next several days, with the Commission pursuant to the Securities Exchange Act of 1934, as amended, or under an applicable exemption from registration requirements. The Company anticipates the Form 10 Registration Statement to be filed by FCMC will be effective, subject to the approval, review and comments of the Commission, within sixty to ninety days of filing. On Aug. 2, 2012, to further implement the Prepackaged Plan: * FCMC executed a promissory note in the amount of $1,109,000 payable over a period of five years at an interest rate of 3.25% per annum. The proceeds received by the Company from the cash payment and Note will be used to pay the expenses of the liquidation manager, allowed administrative claims to the extent not otherwise paid, the distributions to holders of allowed claims and the additional costs of winding down the Debtor and the estate under the Prepackaged Plan. * Thomas J. Axon, the Chairman, President and a shareholder of the Company and FCMC, entered into a continuing and unconditional guaranty of payment agreement in favor of the Company to guarantee (i) the payment of all sums due under the Note; and (ii) the performance of all terms, conditions and covenants set forth in the Note. The guaranty of payment includes interest on all obligations of FCMC under the Note without regard to whether FCMC is relieved of the obligation to pay that interest under the Bankruptcy Code or other similar statute. * Following notice to parties-in-interest and approval by the Bankruptcy Court, the Company entered into an agreement with Kevin P. Gildea, EVP, chief legal officer and Secretary of the Company and FCMC, who, without compensation and without any personal liability for any of the obligations of the Company, will succeed to the rights and obligations of the Company and will, pursuant to the Prepackaged Plan, serve as Liquidation Manager until the liquidation and distribution of the assets of the Company's bankruptcy estate and books, records and files required to be retained under applicable law are stored. The Company, under the control of the Liquidation Manager, will not engage in, at any time, the conduct of any trade or business other than the distribution and liquidation of the assets of the Company's bankruptcy estate. About Franklin Credit Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. The Court has established July 18, 2012, as the hearing on the adequacy of the Disclosure Statement. The Debtor filed a First Amended Prepackaged Plan of Reorganization that proposes to change, among other things, the proposed record date to identify stockholders for a proposed distribution of a pro rata share of the Company's 80% interest in its mortgage servicing subsidiary, Franklin Credit Management Corporation. The Debtor now proposes the record date to be a date after a confirmation order has been entered by the Bankruptcy Court. The Debtor also proposes to exclude liability to the Securities and Exchange Commission from the releases proposed to be granted in favor of non-debtors. The Debtor asks the Court to approve those modifications as non-material without the need for further solicitation of votes to accept or reject the Prepackaged Plan. FREEDOM MARINE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Freedom Marine Finance, LLC 7169 NW 71 Ter Parkland, FL 33067 Bankruptcy Case No.: 12-28653 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Sherri B. Simpson, Esq. LAW OFFICES OF SHERRI B. SIMPSON, P.A. 644 SE 5 Avenue Ft. Lauderdale, FL 33301 Tel: (954) 524-4141 Fax: (954) 763-5117 E-mail: sbsecf@gmail.com Scheduled Assets: $3,500,000 Scheduled Liabilities: $209,485 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Todd Littlejohn, manager. FRIENDFINDER NETWORKS: Sells Shares of Holdings to Acquisition -------------------------------------------------------------- FriendFinder Networks Inc. sold all of the shares, par value $0.01 per share, of JGC Holdings Limited, a direct and wholly-owned subsidiary of the Company, to JGC Acquisition LLC. JGC Holdings owns the operations of JigoCity. JCG Acquisition is an entity controlled by Anthony R. Bobulinski, the former owner of JigoCity. The Company sold the Shares for cash consideration in the amount of $1.00 and cancellation of warrants exercisable into 4,111,400 shares of common stock of the Company with exercise prices ranging from $7.00-$18.00 per share out of the warrants exercisable into 6,436,851 shares originally issued when the Company acquired the operations of JigoCity. Additionally, the Company will reimburse Purchaser up to an aggregate amount of $2.16 million for legitimate business expenses of the Purchaser or JGC for the time period from July 2012 through June 2013. The Purchaser has agreed to indemnify and hold harmless the Company and its affiliates in certain circumstances. As part of the sale transaction, 500,000 shares of common stock of the Company previously issued in connection with the Company's acquisition of JigoCity will remain in escrow until no later than Dec. 31, 2012, to secure a guaranty by Global Investment Ventures, LLC, an entity wholly-owned by Mr. Bobulinski, of Purchaser's indemnification obligations. In connection with the sale of the Shares, the parties terminated, effective Aug. 1, 2012, the Equity Put Agreement, entered into by and among the Company, the shareholders named therein and Mr. Bobulinski as the representative previously entered into in connection with the Company's acquisition of JigoCity. The Equity Put Agreement gave the shareholders a put right with respect to the shares of common stock and warrants of the Company issued to them in connection with the acquisition of JigoCity under certain circumstances. The Company did not incur any penalty as a result of the early termination of the Equity Put Agreement. About FriendFinder Networks Inc. FriendFinder Networks (formerly Penthouse Media Group) owns and operates a variety of social networking Web sites, including FriendFinder.com, AdultFriendFinder.com, Amigos.com, and AsiaFriendFinder.com. All total, its Web sites are offered in 12 languages to users in some 170 countries. The company also publishes the venerable adult magazine PENTHOUSE, and produces adult video content and related images. The Company is based in Boca Raton, Florida. Friendfinder's balance sheet at March 31, 2012, showed $475.34 million in total assets, $624.96 million in total liabilities and a $149.62 million total stockholders' deficiency. * * * As reported by the TCR on April 9, 2012, Standard & Poor's Ratings Services lowered its rating on Boca Raton, Fla.-based FriendFinder Networks Inc. to 'CCC+' from 'B-'. "The rating actions reflect the company's declining paid subscriptions and the likelihood that operating results will remain weak over the near term," said Standard & Poor's credit analyst Daniel Haines. "In addition, we believe that the company will face difficulty refinancing significant debt maturities due in 2013. We expect that continued economic headwinds and negative business momentum will remain a drag on results." GERALD CHAMPION: Chapter 11 Plan Wins Judge Approval ---------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that Gerald Champion Regional Medical Center won approval of its Chapter 11 reorganization Tuesday as a New Mexico judge signed off on a plan that removes the danger of lingering malpractice suits and enables the Alamogordo, N.M., hospital to leave the court's protection in good financial health. Otero County Hospital Association, Inc., dba Gerald Champion Regional Medical Center -- http:/www.gcrmc.com/ -- is a not-for- profit 99-bed acute care facility located in Alamogordo, N.M. It filed for Chapter 11 bankruptcy (Bankr. N.M. Case No. 11-11-13686) on Aug. 16, 2011. Craig H. Averch, Esq., and Ronald Kevin Gorsich, Esq., at White & Case, LLP, as well as John D. Wheeler & Associates, PC, represent the Debtor. GIBSON GUITAR: Wood Importing Issue No Impact on Moody's B2 CFR --------------------------------------------------------------- The settlement of the illegal wood importing issue is a credit positive, but not enough to move the rating or outlook according to Moody's. On August 5, 2012, the U.S. Department of Justice reported that Gibson Guitar Corporation agreed to pay a fine for sourcing exotic wood from Madagascar that may have violated certain laws of that country. Gibson will pay a civil fine of $300,000 penalty to settle and end the investigation that it violated the Lacey Act, which prohibits the acquisition of plant products that are protected in other countries. In 2011, Gibson was accused of illegally importing ebony from Madagascar and India, as well as rosewood from India. In addition to the $300,000 penalty, Gibson will also have to make a "community service payment" of $50,000 to the U.S. National Fish and Wildlife Foundation to promote conservation and development of tree species used in making musical instruments. Ratings Rationale Gibson's B2 Corporate Family Rating reflects its relatively small scale with proforma revenue under $550 million, the volatility in earnings and cash flow and corporate governance concerns. Gibson's significant customer concentration with Guitar Center also constrains the rating. Gibson's prominent market share in guitars, good and improving credit metrics, strong brand recognition and diversification within guitars and related music areas supports the rating. Moody's believes stronger credit metrics are necessary to balance Gibson's small scale and Moody's corporate governance concerns. Being geographically diversified helps the rating, but having material exposure to Europe is a risk. The company's good liquidity profile benefits the rating as does the potential for additional strategic acquisitions. The positive outlook reflects Moody's view that Gibson's recent operating performance and credit metric improvements will continue absent a macroeconomic shock and that its corporate governance structure will further stabilize. The outlook also incorporates Moody's expectation that the company will integrate both its recent acquisitions (Stanton Group and Onkyo Corporation) without any significant difficulties and that it will maintain a good liquidity profile. Moody's expectation of debt reduction with free cash flow is reflected in the outlook. The principal methodologies used in this rating were Global Consumer Durables published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Nashville, Tennessee, Gibson Guitar Corp. primarily manufactures and markets acoustic and electric guitars under the Gibson and Epiphone brand names and pianos under the Baldwin brand name. The company also sells other stringed instruments and instruments related accessories such as amplifiers, speakers, and picks/straps. Reported revenue for the twelve months ended March 27, 2012 approximated $360 million, but proforma revenue was around $525 million. GLOBAL FOOD: Incurs $797,000 Net Loss in Second Quarter ------------------------------------------------------- Global Food Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $796,659 on $36,540 of revenue for the three months ended June 30, 2012, compared with a net loss of $899,162 on $11,872 of revenue for the same period during the prior year. The Company reported a net loss of $1.45 million on $66,276 of revenue for the six months ended June 30, 2012, compared with a net loss of $1.89 million on $101,438 of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.07 million in total assets, $4.31 million in total liabilities, all current, and a $3.23 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/D0fzov About Global Food Headquartered in Hanford, California, Global Food Technologies, Inc., is a life sciences company focused on food safety processes for the food processing industry by using its proprietary scientific processes to substantially increase the shelf life of commercially packaged seafood and to make those products safer for human consumption. The Company has developed a process using its technology called the "iPuraT Food Processing System". The System is installed in processor factories in foreign countries with the product currently sold in the United States. Global Food reported a net loss of $3.68 million in 2011, compared with a net loss of $3.74 million in 2010. Following the 2011 results, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted the Company has an accumulated deficit of approximately $68,000,000 at Dec. 31, 2011, has negative cash flow from operations of approximately $2,800,000 for the year ended Dec. 31, 2011, and has negative working capital at Dec. 31, 2011. The Company's ability to continue operations is predicated on its ability to raise additional capital and, ultimately, to achieve profitability. GOLDWOOD INVESTMENT: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Goldwood Investment, LLC c/o Peter K. Ng 1118 Harry Hines Blvd., Ste. 140 Dallas, TX 75229 Bankruptcy Case No.: 12-35136 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Pro Se Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peter Ng Loan $400,000 11181 Harry Hines Blvd Suite 140 Dallas, TX 75229 The petition was signed by Peter Kimseng Ng, manager. GRAHAM SLAM: Lender Takes 3 Lots; Unsecureds to Be Paid in 3 Years ------------------------------------------------------------------ Graham Slam, LLC, has a confirmed Chapter 11 Plan that was unanimously accepted by creditors and interest holders. The Plan contemplates that: * Secured creditor Garrison Commercial Funding VII, LLC, will (i) receive titles to Lots 2, 3 and 14 in the Graham Shopping Center, (ii) retain its lien on Lot 1, and upon the sale of Lot 1, will receive 50% of the net proceeds, in full satisfaction of its secured claims. * Pierce County will retain the liens securing its real property tax claims and will receive deferred cash payments in the form of equal monthly payments that would fully amortize the real property tax claims over a period of 10 years, plus a balloon payment paid in cash on or before the fifth anniversary of the confirmation date in the amount of the total unpaid balance. Pierce County will be entitled to statutory interest on its claim pursuant to RCW 84.56.020 and 11 U.S.C. Sec. 511(a). * Unsecured creditors will receive on the sixth month anniversary of the Effective Date, the first of 6 equal semi-annual payments in an amount equal to 16.667% of their allowed claims, with a final payment to be made on the third anniversary of the Effective Date. They will not receive interest on their allowed claims. * Interest holders are impaired but they will retain their interests in the Reorganized Debtor. The Reorganized Debtor will not make and distributions to any members during any period when the Reorganized Debtor is in default under the terms on the plan in making monthly distributions to the holders of allowed claims. Judge Brian D. Lynch confirmed the Plan on July 12 after Garrison changed its rejecting ballots to accepting ballots following changes to the treatment of its claims. The confirmation order says that as a result, the Plan has been unanimously accepted by holders of all claims and interests. A copy of the Second Amended Plan is available at: http://bankrupt.com/misc/Graham_Slam_2nd_DS.pdf About Graham Slam Graham Slam, LLC, owns 12 commercial lots located in the Graham Shopping Center on Meridian Avenue East in Pierce County, Washington, valued together by the Debtor at $13.4 million; three of the lots have buildings and improvements and the rest are undeveloped and vacant. Graham Slam filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-49300) on Oct. 20, 2011. Judge Brian D. Lynch oversees the case. The Debtor disclosed assets of $13,483,263 and liabilities of $12,890,039. The Debtor tapped Richard G. Birinyi, Esq., at Schwabe Williamson & Wyatt P.C., in Seattle, as its bankruptcy counsel. The petition was signed by Brent C. Nicholson, managing member. GRATON ECONOMIC: S&P Rates $350MM Loan & $450MM Secured Notes 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned Rohnert Park, Calif.- based Graton Economic Development Authority its 'B' preliminary issuer rating. The preliminary rating outlook is stable. The Authority is a wholly owned unincorporated instrumentality of the Federated Indians of Graton Rancheria (the Tribe). "At the same time, we assigned the Authority's proposed $350 million senior secured term loan due 2018 and $450 million in senior secured notes due 2019 our 'B' preliminary issue-level rating (the same as our preliminary issuer credit rating). The proposed senior secured term loan and senior secured notes are pari passu. The Authority also intends to raise a $25 million priority revolving credit facility, which we will not rate. Additionally, pro forma for the transaction, the Authority will have $75 million outstanding in a management loan (manager loan), which is held by a subsidiary of Station Casinos LLC and will be subordinated to the senior secured notes and senior secured term loan," S&P said. "We do not assign recovery ratings to Native American debt issues, because there are sufficient uncertainties surrounding the exercise of creditor rights against a sovereign nation, including whether the Bankruptcy Code would apply, whether a U.S. court would ultimately be the appropriate venue to settle such a matter, and to what extent a creditor would be able to enforce any judgment against the sovereign nation," S&P said. "Our preliminary ratings are subject to our review of final documentation," S&P said. "Our preliminary 'B' issuer credit rating on the Authority reflects our assessment of its business risk profile as 'weak' and our assessment of its financial risk profile as 'highly leveraged,' according to our criteria," S&P said. "Our business risk profile assessment of weak reflects the vulnerability of new gaming projects to uncertain demand and difficulties managing initial costs, which can lead to poor profitability during the first several months of operations," said Standard & Poor's credit analyst Michael Halchak, "as well as the Authority's reliance on a single asset to meet debt service needs. These risks are somewhat mitigated by our expectation for the property to be the highest asset quality in proximity to the San Francisco market, a somewhat protected market position, and an experienced property manager in Station. However, although there are approximately 2.1 million adults within a 60-minute drive of the property, we see some risk in the fact that the adult population within 30 minutes of the property is approximately 354,000 people." GRAYSON EXCHANGE: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Grayson Exchange, LLC 942 Little Darby LN Suwanee, GA 30024 Bankruptcy Case No.: 12-69510 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Barbara Ellis-Monro Debtor's Counsel: Leslie M. Pineyro, Esq. JONES AND WALDEN, LLC 21 Eighth Street, NE Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 E-mail: lpineyro@joneswalden.com Scheduled Assets: $2,001,839 Scheduled Liabilities: $3,086,550 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-69510.pdf The petition was signed by Young Ju Oh Hall, manager. GREEK PEAK: $1.6MM FDIC Loan Allows Operations Through This Winter ------------------------------------------------------------------ Jeff Platsky at pressconnects.com reports U.S. Sen. Charles Schumer (D-N.Y.) said the $1.6 million in emergency loans provided by the Federal Deposit Insurance Corp. to ski resort operator Greek Peak will allow the Cortland County, N.Y., attraction to continue operating through this winter, averting an immediate crisis. However, Sen. Schumer said a more permanent solution is necessary. According to the report, Sen. Schumer has been lobbying the FDIC to assure at least the immediate future of the resort, which employs as many as 1,000 people during the winter season. The report notes federal regulators seized Greek Peak's primary lender, Tennessee Commerce Bank, in January. Resort managers have been unable to secure alternative financing for the $35 million in outstanding loans it had from the defunct bank. Without assurances of alternative financing, the long-term future of Greek Peak is uncertain. GRUBB & ELLIS: Avison Young Poached Employees, BGC Says ------------------------------------------------------- Scott Flaherty at Bankruptcy Law360 reports that BGC Partners Inc., which recently acquired Grubb & Ellis Co., sued Canadian rival Avison Young Inc. in New York state court Wednesday, alleging it engaged in an illegal scheme to poach Grubb employees and steal its business. Bankruptcy Law360 relates that BGC said that Avison Young and its CEO Mark Rose, who served as Grubb's CEO until late-2007, had carried out an aggressive U.S. recruiting plan that illicitly targeted Grubb's employees, inducing them to break contracts and conceal "business opportunities." About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. On March 27, 2012, the Court approved the sale to BCG. An auction was cancelled after no rival bids were submitted. Pursuant to the term sheet signed by the parties, BGC would acquire the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC would also pay $16 million in cash because the sale was approved by the March 27 deadline. Otherwise, the cash component would have been $14 million. Approval of the sale was simplified when BGC settled with unsecured creditors by increasing their recovery. Several parties in interest have taken an appeal from the sale order. HAMPTON ROADS: Commences $45 Million Rights Offering ---------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, announced the commencement of its previously disclosed $45 million rights offering. In the Rights Offering, shareholders who owned common shares of the Company as of 5:00 p.m., New York City time, on May 31, 2012, will receive at no charge a non-transferable right to purchase newly-issued common shares. The Company will issue up to 64,285,715 common shares in the Rights Offering at a price of $0.70 per share. For each share of the Company's common stock owned on the record date, an eligible shareholder will be entitled to exercise a basic subscription right to buy 1.8600 shares of the Company's common stock at the subscription price and, if all of the shareholder's basic subscription rights are exercised, an additional subscription right to buy 2.0667 shares of the Company's common stock at the subscription price. The Rights Offering will expire at 5:00 p.m. New York City time on Sept. 5, 2012. In connection with the Rights Offering, the Company has entered into a Standby Purchase Agreement with the following entities or their affiliates or managed funds: The Carlyle Group L.P., Anchorage Capital Group, L.L.C., and CapGen Capital Group VI LP. The Standby Purchase Agreement provides that the Investors will not exercise their basic subscription rights and instead will purchase from the Company, at the subscription price, a portion of the shares, if any, up to an aggregate of 53,518,176 shares, not subscribed for in the Rights Offering. The Company plans to use the proceeds of the Rights Offering for general corporate purposes, which will include, but not be limited to, making capital contributions to its subsidiary banks. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.13 billion in total assets, $2.02 billion in total liabilities and $105.29 million in total shareholders' equity. HASSEN REAL ESTATE: Plan Exclusivity Extended Until Nov. 15 ----------------------------------------------------------- The bankruptcy judge has approved a stipulation extending until Nov. 15, 2012, the exclusive period for Hassen Real Estate Partnership and affiliate Eastland Tower to solicit acceptances for their First Amended Joint Chapter 11 Plan of Reorganization dated Jan. 18, 2012. The stipulation also provides that the hearing on the disclosure statement is postponed until Sept. 13, 2012. The Debtors' access to cash collateral is also extended until Sept. 13, according to the stipulation, which was signed by the Debtors and lenders CSMC 2006-C5 Azusa Avenue Limited Partnership and CSMC 2006-C5 Barranca Street Limited Partnership. The parties have already entered nine stipulations continuing the hearing on certain issues and granting the Debtors access to cash collateral. The prior stipulation gave the Debtors exclusivity until Sept. 7 and access to cash until Aug. 7. About Hassen Real Estate and Eastland Tower Hassen Real Estate Partnership and affiliate Eastland Tower Partnership are each engaged in the business of commercial real estate development and operation in West Covina, California. HREP owns and operates a retail/office center known as the West Covina Village Shopping Center, while ETP owns and operates an office tower known as the Wells Fargo Bank Tower. HREP filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-25499) on April 10, 2011. Christine M. Pajak, Esq., and Marina Fineman, Esq., and Theodore B. Stolman, Esq., at Stutman, Treister & Glatt Professional Corporation, in Los Angeles, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. ETP (Bankr. C.D. Calif. Case No. 11-25500) simultaneously filed a separate Chapter 11 petition. HEALTHCARE OF FLORENCE: E&M Consented to Cash Use ------------------------------------------------- Healthcare of Florence, LLC, has been allowed to use cash collateral of E&M Hospital Investments, LLC, in order to maintain operations of its hospital. E&M, owed $2,602,577 (not including legal fees and costs) with prepetition collateral of a value of around $3,175,000, initially opposed access to its cash collateral. Following hearings on May 30, June 7 and June 12 the judge on June 13 entered a final order authorizing the use of cash collateral. According to the order, E&M is awarded adequate protection in the form of post-petition receivables for the Debtor's use without E&M's consent of $121,000 of prepetition receivables. For the use of cash collateral postpetition, E&M will have first priority lien and perfected replacement lien upon all assets of the Debtor postpetition. E&M permitted the use of cash collateral totaling $334,000 until June 13. About Healthcare of Florence Healthcare of Florence, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-08547) in Tucson, Arizona, on April 23, 2012. Healthcare of Florence, LLC -- http://www.florencecommunityhealthcare.com-- owns and operates a full-service community hospital in Florence, Arizona. The Debtor disclosed $42.2 million in assets and $39.0 million in liabilities as of the Chapter 11 filing. Judge James M. Marlar presides over the case. James F. Kahn P.C. serves as the Debtor's counsel. The petition was signed by Edward McEachern, CEO of Initiatives Healthcare, LLC, manager of debtor. HERCULES OFFSHORE: Has $36MM Share Purchase Pact with Integradora ----------------------------------------------------------------- Hercules Offshore, Inc.'s wholly owned subsidiaries, THE Offshore Drilling Company, THE Onshore Drilling Company, TODCO Mexico Inc. and Servicios TODCO S. de R.L. de C.V., entered into a share purchase agreement with Integradora de Servicios Petroleros Oro Negro, S.A.P.I. de C.V. Pursuant to the Purchase Agreement, Sellers will sell to Buyer all of the issued and outstanding capital stock of TMI and the equity interests in Servicios for aggregate consideration of approximately $36 million, consisting of a base purchase price of $28 million, as adjusted for net working capital as of the closing. TMI's current business is the operation of one rig, Platform Rig 3, that is providing drilling services to Petr�leos Mexicanos, or PEMEX, in the offshore Gulf of Mexico under a long-term contract. Servicios' current business is providing personnel to TMI in connection with the operation of Rig 3. As a result of this transaction, the Company will no longer own any platform rigs and will no longer have operations in Mexico. The net book value of Rig 3 is approximately $8.2 million. The transaction is expected to close in the third quarter of 2012, subject to customary closing conditions, including obtaining any necessary approvals required under the Mexican antitrust laws and Buyer securing funding necessary to complete the acquisition. The Purchase Agreement contains customary representations and warranties, covenants and indemnification provisions. About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. The Company's balance sheet at June 30, 2012, showed $2.04 billion in total assets, $1.13 billion in total liabilities and $913.21 million in stockholders' equity. * * * The Troubled Company Reporter said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc., Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. HOMELAND POWERSOURCE: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Homeland PowerSource Production Company, LLC 1320 S. University Dr., Suite 806 Fort Worth, TX 76107 Bankruptcy Case No.: 12-44496 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: Mark Joseph Petrocchi, Esq. GRIFFITH, JAY & MICHEL, LLP 2200 Forest Park Blvd. Ft. Worth, TX 76110 Tel: (817) 926-2500 Fax: (817) 926-2505 E-mail: mpetrocchi@lawgjm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A copy of the Company's list of its eight largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb12-44496.pdf The petition was signed by Valencia Wescott, sole member. HOSTESS BRANDS: Court OKs Delayed Payment of Pension Claims ----------------------------------------------------------- Rachel Feintzeig at Dow Jones' Daily Bankruptcy Review reports that a bankruptcy judge affirmed that Hostess Brands Inc. doesn't immediately have to dole out payments to pension funds that had previously won high-ranking claims in the bankruptcy case. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. IDEARC INC: Verizon Bid to Shake Fraudulent Transfer Claims Denied ------------------------------------------------------------------ Liz Hoffman at Bankruptcy Law360 reports that a Texas federal judge on Monday denied Verizon Communications Inc.'s bid to shake four fraudulent transfer claims brought by U.S. Bank NA related to the $9.9 billion spinoff in 2009 of Idearc Inc., which later filed for bankruptcy under the weight of Verizon's flagging Yellow Pages business. Bankruptcy Law360 relates that Verizon was seeking summary judgment on four of the 11 causes of action that remain in the case, brought by U.S. Bank, acting as trustee for the Idearc estate. About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. INGRAM MICRO: Moody's Rates Preferred Stock Shelf '(P)Ba2' ---------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to Ingram Micro, Inc.'s proposed $300 million senior unsecured notes and affirmed Ingram Micro's Baa3 rating. The rating outlook remains stable. The company intends to use the net proceeds for general corporate purposes, which may include funding a portion of its pending $840 million acquisition of Brightpoint, Inc. Ratings Rationale The Baa3 rating reflects Ingram Micro's position as the largest broad-based technology distributor, with the expectation of continued solid operating performance in its core North American markets (about 42% of revenue), as well as in the higher growth regions of Asia-Pacific and Latin America. The rating also recognizes Ingram Micro's improving product and services mix, expanding presence in higher margin adjacent segments (e.g., data capture/point of sale, fee-for-service logistics, mobility and enterprise technology) and efforts to streamline the cost structure. The acquisition, which is expected to close by the end of the year, furthers Ingram Micro's credit positive strategic initiatives to expand its presence in the higher-growth mobility and higher-margin logistics, repair and refurbishment businesses. Moody's expects the Brightpoint acquisition to bring new customer and supplier relationships to Ingram Micro, strengthen its presence with existing clients and vendors, and expand its portfolio of mobility products, particularly in media tablets and smartphones. Although pro forma leverage will increase from the current debt-to-EBITDA ratio of 1.6x (which reflects Moody's adjustments) to approximately 1.8x, it will remain well under Moody's upper threshold of 2.5x for its rating. However, Moodys' notes that Ingram Micro has significant international accounts payable balances at its foreign subsidiaries, which are deemed structurally senior to the general unsecured debt at the parent company. Should Ingram Micro's credit profile deteriorate or the proportion of unsupported/unguaranteed parent debt relative to the international trade payables changes, the rating of the unsecured notes may be notched down from the current Baa3 level. The stable outlook reflects Moody's expectations that Ingram Micro's vendor/customer relationships will remain relatively steady, adjusted operating margins will stay within a range of 1.3% to 1.6% (on average) and retained cash flow to debt (Moody's adjusted) will remain at or above 25%. Additionally, the stable outlook reflects Moody's expectation that Ingram Micro will maintain leverage at or below 2.5x (Moody's adjusted), fund share buybacks and acquisitions within the cash generating capabilities of the business and maintain cash balances in a range of at least $300 to $500 million. Rating assigned: $300 Million Senior Unsecured Notes -- Baa3 Ratings affirmed: Long-Term Senior Unsecured Rating -- Baa3 $300 Million Senior Global Notes due 2017 -- Baa3 Senior Notes/Preferred Stock Shelf Registration -- (P)Baa3/(P)Ba2 The assigned rating is subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Ingram Micro intends to use the debt offering proceeds for general corporate purposes, which may include funding a portion of the BrightPoint acquisition.. The last rating action was on August 16, 2010 when Moody's assigned a Baa3 rating to Ingram Micro's $300 Million new senior notes. The principal methodologies used in rating Ingram Micro was Global Distribution and Supply Chain Services published in November 2011. Ingram Micro, headquartered in Santa Ana, California, is the largest global information technology (IT) wholesale distributor providing sales, marketing, and supply chain solutions for the IT industry worldwide. The company offers various IT products, including peripherals, systems, networking, software, logistic services, consumer electronics, and more recently data capture, point-of-sale (POS), and high-end home technology products. INNOVATION VENTURES: S&P Assigns 'B-' Corp. Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Farmington Hills, Mich.-based Innovation Ventures LLC. The outlook is stable. "We also assigned a 'B-' issue-level rating to the company's $450 million senior secured notes due 2019. The notes will be issued under Rule 144a with registration rights. The recovery rating on this debt is '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of a payment default. The company has increased the amount of debt issuance -- it had previously proposed $400 million in new debt," S&P said. "The company will use one-half of the proceeds to build a manufacturing plant and support new product development, and the remaining half will fund international expansion and acquisitions, which are currently unspecified," S&P said. "The ratings on Innovation Ventures reflect our view that it has a 'highly leveraged' financial risk profile. The company's very aggressive financial policy and that Innovation Ventures' ownership is highly concentrated with the founder and CEO constrain our financial risk assessment. Directly and indirectly he controls a supermajority of the equity capital and has the primary discretion over financial policy decisions," S&P said. "The outlook is stable. We expect Innovation Ventures' operating performance and key credit measures to be relatively steady following the proposed notes issuance," said Standard & Poor's credit analyst Nalini Saxena. "We could consider a downgrade if the company were to engage in an even more aggressive financial policy, specifically debt-financed shareholder dividends to the detriment of reinvesting in the longer term growth of the business. Given the company's product concentration, in the event of negative publicity -- perhaps coupled with a product recall -- and a resulting compromise of operational performance (including an EBITDA decline of more than 30%), we could also consider a downgrade," S&P said. "Although less likely over the next 12 months, we could consider an upgrade if the company were to strengthen its financial profile, specifically its governance, through the institution of a board of directors such that policy decisions would no longer be limited to the sole discretion of one party," S&P said. IRON MOUNTAIN: Moody's Rates $950MM Sr. Subordinated Notes 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to $950 million of senior subordinated notes offered by Iron Mountain Incorporated. No other ratings were impacted, including Iron Mountain's Ba3 Corporate Family Rating ("CFR") and SGL-3 Speculative Grade Liquidity Rating. The ratings outlook remains negative. Proceeds from the new notes due 2024 will be used to: (i) repay the $318 million 6.625% notes due 2016, (ii) repay the $200 million 8.75% notes due 2018, (iii) pay fees and expenses, including premiums, (iv) pay down the $268 million outstanding balance on the revolver, and (v) add approximately $143 million of cash to the balance sheet to fund upcoming REIT conversion costs and for general corporate purposes. Rating assigned to Iron Mountain Incorporated (and Loss Given Default assessment): Proposed $950 million senior subordinated notes due 2024, B1 (LGD4, 63%) Existing ratings of Iron Mountain Incorporated (and LGD assessments): Corporate Family Rating, Ba3 Probability of Default Rating, Ba3 Speculative Grade Liquidity Rating, SGL-3 Senior subordinated shelf expiring 2013, (P)B1 GBP150 million 7.25% senior subordinated notes due 2014, B1 (LGD4, to 63% from 64%) $318 million 6.625% senior subordinated notes due 2016, B1 (LGD4, to 63% from 64%) -- rating to be withdrawn upon closing $200 million 8.75% senior subordinated notes due 2018, B1 (LGD4, to 63% from 64%) -- rating to be withdrawn upon closing EUR 225 million 6.75% senior subordinated notes due 2018, B1 (LGD4, to 63% from 64%) $400 million 7.75% senior subordinated notes due 2019, B1 (LGD4, to 63% from 64%) $300 million 8% senior subordinated notes due 2020, B1 (LGD4, to 63% from 64%) $548 million 8.375% senior subordinated notes due 2021, B1 (LGD4, to 63% from 64%) Existing rating of Iron Mountain Nova Scotia Funding Company (and LGD assessment): C$175 million 7.5% senior subordinated notes due 2017, B1 (LGD4, to 63% from 64%) Existing rating of Iron Mountain Information Management, Inc. (and LGD assessment): $725 million senior secured revolver due 2016, Baa3 (LGD1, to 7% from 8%) $500 million senior secured term loan A due 2016, Baa3 (LGD1, to 7% from 8%) Ratings Rationale The transaction adds approximately $430 million of funded debt to the balance sheet, which was anticipated as part of the REIT conversion process. While interest expense and cash flow will be impacted by the incremental interest burden, the refinancing will improve Iron Mountain's debt maturity schedule and liquidity profile upon closing. Nonetheless, Moody's expects that the excess cash balance will be depleted and a portion of the $725 million revolver will be tapped over the next twelve months to fund special dividends, tax recapture payments, and other one-time conversion costs related to the REIT process. Revolver availability may be further reduced by diminishing covenant cushion on the fixed charge coverage ratio. A proposed amendment to the credit facility will allow for certain REIT special charges to be excluded from the calculation of fixed charges. However, Moody's expects cushion under the 1.2 times fixed charge covenant to become modest in the second half of 2013 due primarily to rising interest expense. "Part of Iron Mountain's long-term plan as a REIT is to lower financial leverage, which could be credit positive if executed," stated Moody's analyst Suzanne Wingo. The Ba3 CFR reflects Iron Mountain's large and recurring revenue base, which is diversified geographically and by customer. Its well-established brand and considerable market share in North America has enabled pricing power and a consolidated EBITDA margin of about 30%. However, the document storage business faces secular pressures stemming from the gradual shift away from paper towards electronic media. In mature markets in particular, Moody's believes it may become increasingly difficult for Iron Mountain to offset volume weakness with price increases. The negative outlook reflects near-term liquidity constraints resulting from the high cash costs necessary to convert to a REIT. Additionally, the outlook considers the uncertainties in financial policies and capital structure going forward should the REIT conversion not be approved. The outlook could be raised to stable if the REIT conversion becomes more certain and if Iron Mountain improves its liquidity profile. The issuance of equity to reduce financial leverage could also have a positive impact on the ratings. The ratings could eventually be upgraded if the company achieves its operational goals in the international business while maintaining at least modestly positive consolidated revenue growth, such that financial leverage can be sustained below 4 times on a Moody's adjusted basis. Conversely, the ratings could be lowered if the REIT conversion is unsuccessful and changes in financial policy are expected to cause financial leverage to reach 5 times on a sustained basis. The principal methodology used in rating Iron Mountain Incorporated was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Boston, Massachusetts, Iron Mountain is an international provider of information storage and related services. Annual revenues are approximately $3 billion. IRON MOUNTAIN: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed all of its ratings on Boston-based information storage company Iron Mountain Inc., including the 'BB-' corporate credit rating. "At the same time, we removed all ratings from CreditWatch, where they were placed with negative implications on June 7, 2012. The rating outlook is negative," S&P said. "In addition, we assigned a 'B+' rating to the company's proposed $950 million senior subordinated notes with a recovery rating of '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default. The company is expected to use the proceeds of the notes to redeem its 8.75% notes due 2018, to call its 6.625% notes due 2016, to repay borrowings under its revolving credit facility, and for general corporate purposes, including covering costs related to its planned conversion to a Real Estate Investment Trust(REIT)," S&P said. "We removed the ratings from CreditWatch with negative implications because the proposed amendment will improve the company's margin of compliance with its fixed-charge covenant," explained Standard & Poor's credit analyst Tulip Lim. "The rating on Iron Mountain reflects Standard & Poor's view that the company's financial risk profile is 'aggressive' (based on our criteria), a function of its still-high leverage, relative capital intensity, and its increased shareholder return orientation. Our business profile assessment on the company is 'fair,' reflecting our view that Iron Mountain's business benefits from its market leadership and a strong base of recurring revenue," S&P said. "However," added Ms. Lim, "we believe that the company's revenue will decline somewhat because of unfavorable foreign exchange rates and paper prices as well as both pressure on the core storage business from migration to digital storage and the sluggish economy." "The negative outlook reflects our expectation that leverage will increase as a result of costs related to the REIT conversion. We could lower the ratings if leverage rises materially or if we conclude that business and financial flexibility will decrease if the company converts to a REIT," S&P said. "We could revise our outlook to stable if the company decides not to pursue the REIT conversion and financial policy does not become more aggressive, or if we conclude that business and financial flexibility will not be materially reduced if the company converts to a REIT." JANLAW PROPERTIES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Janlaw Properties, Inc. 5353 Alpha Road, Suite 200 Dallas, TX 75240 Bankruptcy Case No.: 12-42102 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Harold Baeck, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Zimcal Corp. 12-42104 08/06/12 K-V PHARMACEUTICAL: Class A&B Common Stock Begin Trading -------------------------------------------------------- K-V Pharmaceutical Company disclosed that its Class A and Class B common shares have begun trading on the OTCQB Marketplace. The Company's Class A and Class B common shares are trading on the OTCQB Marketplace under the symbols "KVPHA" and "KVPHB," respectively. The transition to the OTCQB Marketplace comes after the Company's Class A and Class B common shares were suspended, pending delisting, from the NYSE as a result of the Company's voluntary filing for protection under Chapter 11 of the U.S. bankruptcy Code on Aug. 4, 2012. About K-V 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. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. K-V Pharmaceutical said it continues to operate during the reorganization. KNIGHT CAPITAL: Turned Down Rival Citadel's $500-Mil. Loan Offer ---------------------------------------------------------------- The Wall Street Journal's Telis Demos and Jenny Strasburg report that people familiar with the discussions said Citadel LLC made a $500 million loan offer to competitor Knight Capital Group Inc. on Sunday, hours before Knight finalized a $400 million recapitalization by a group of investors. The sources told WSJ that the Citadel offer, which was considered and discussed by Knight's board, was for a $500 million loan to Knight in exchange for a controlling stake in Knight's currencies trading platform Hotspot FX, plus a minority stake in the company of less than 20%. It followed an earlier offer on Friday, which Knight also reviewed, they said. The sources told WSJ the Citadel offer represented the potential for lesser dilution to existing Knight shareholders, by giving Citadel the right to as much as a 20% stake in the company, far less than the 73% stake anticipated in the investor group's deal. According to WSJ, the people familiar with Knight's thinking said Knight and its advisers believed there wasn't enough time to complete Citadel's deal. Further, the sources said, the Knight board and advisers viewed the Citadel terms as onerous for shareholders and the company, which not only would have had to repay the loan, but also surrender control of Hotspot, a "crown jewel" asset. The board also disagreed with Citadel's valuation of Hotspot, the people said. According to the report, some people familiar with Knight's thinking said that by Sunday, the board was in the late stages of considering a deal to sell $400 million in convertible securities to a group of investors, including customer TD Ameritrade Holding Corp., private-equity firm Blackstone Group LP, and trading firm Getco LLC. The board ultimately decided to back that deal. WSJ reports a spokeswoman for Knight said: "Knight explored a wide range of alternatives. After a thorough review, Knight determined that the $400 million equity investment was the best and only alternative for the company and its shareholders." Jacob Bunge, Anupreeta Das and Telis Demos reported earlier that Knight reached an agreement with investors for a $400 million lifeline after a glitch cost the trading firm $440 million last week. Knight agreed to a $400 million rescue plan that would help fill a $440 million hole left by a trading glitch last week. The Securities and Exchange Commission said it is investigating the incident. WSJ relates the group of six investors include investment bank Jefferies Group Inc., Blackstone, TD Ameritrade, and Knight rival Getco, took effective control, getting securities representing potential ownership of about 73% of the company. Jefferies will become Knight's largest shareholder, having put up about $100 million of the rescue package. WSJ also reports J.P. Morgan Chase on Monday allowed Knight to draw $200 million on a credit line. About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital m installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. LEAGUE NOW: M. Barton Quits from Board; J. Charles Fills Vacancy ---------------------------------------------------------------- Mario Barton resigned from the board of directors of League Now Holdings Corporation on Aug. 3, 2012. In his letter of resignation, Mr. Barton did not indicate that there were any disagreements between himself and the Company's board of directors regarding the Company's operations, policies or practices. Also on Aug. 3, 2012, Mr. Joe Charles, the Company's President was elected to the Company's board of directors to fill the vacancy created by the resignation of Mr. Barton. Joe Charles was appointed President of the Company's wholly-owned subsidiary, Infiniti Systems Group in July 2012. Prior joining the Company, Mr. Charles was President of JLC Services, Inc., in Akron, Ohio. He was responsible for all of that Company's sales and operations, including software design, service and support. From 2000-2002, Mr. Charles was the Vice President of ISG's Infrastructure Division, responsible for all sales, marketing and delivery to clients. Prior to that Mr. Charles was President of Sigma Design, Inc., an International Architecture Computer Aided Design Software firm in Boston Massachusetts. Mr. Charles started his career founding Northeast CAD Systems a national Computer Aided Design and Drafting software reseller and services firm in Cleveland, Ohio. Mr. Charles has a bachelor's degree in computer sciences and business management from Kent State University. Mr. Charles does not have a family relationship with any director or executive officer of the Company, nor with any of its affiliates, nor are there any arrangements or understandings between him and any other person with respect to his election to the board of directors. About League Now Brecksville, Ohio-based League Now Holdings Corporation, through its subsidiary, Infiniti Systems Group, Inc., provides technology integration services to businesses in the midwestern United States. The Company's balance sheet at March 31, 2012, showed $1.25 million in total assets, $1.40 million in total liabilities, and a stockholders' deficit of $151,668. As reported in the TCR on April 23, 2012, Harris F. Rattray CPA, in Pembroke Pines, Florida, expressed substantial doubt about League Now's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditor noted that the Company has incurred accumulated net losses of $207,200 and needs to raise additional funds to meet its obligations and sustain its operations. LEVEL 3: Files Form 10-Q; Incurs $62 Million Net Loss in Q2 ----------------------------------------------------------- Level 3 Communications, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $62 million on $1.58 billion of revenue for the three months ended June 30, 2012, compared with a net loss of $181 million on $913 million of revenue for the same period a year ago. The Company reported a net loss of $200 million on $3.17 billion of revenue for the six months ended June 30, 2012, compared with a net loss of $386 million on $1.82 billion of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $12.94 billion in total assets, $11.73 billion in total liabilities and $1.21 billion in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/0Q2m9q About Level 3 Communications 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. The Company reported a net loss of $756 million in 2011, a net loss of $622 million in 2010, and a net loss of $618 million in 2009. * * * As reported by the TCR on April 2, 2012, Fitch Ratings upgraded Level-3 Communications' Issuer Default Rating to 'B' from 'B-' on Oct. 4, 2011, and assigned a Positive Outlook. The rating action followed LVLT's announcement that the company closed on its previously announced agreement to acquire Global Crossing Limited (GLBC) in a tax-free, stock-for-stock transaction. In the July 20, 2012, edition of the TCR, Moody's Investors Service affirmed Level 3 Communications, Inc.'s corporate family and probability of default ratings at B3. 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. Level 3 carries a 'B-' corporate credit rating from Standard & Poor's Ratings Services. LEVEL 3: Completes Offering of $300 Million Senior Notes -------------------------------------------------------- Level 3 Communications, Inc., has completed its previously announced offering of $300 million aggregate principal amount of its 8.875% Senior Notes due 2019 in a private offering to "qualified institutional buyers," as defined in Rule 144A under the Securities Act of 1933, as amended, and non-U.S. persons outside the United States under Regulation S under the Securities Act of 1933. On Aug. 1, 2012, Level 3 entered into an indenture with The Bank of New York Mellon Trust Company, N.A., as trustee, in connection with Level 3's issuance of $300,000,000 Senior Notes. A copy of the Indenture is available for free at http://is.gd/VhBLdE The notes will mature on June 1, 2019. The net proceeds from the offering of the notes will be used for general corporate purposes, including the potential repurchase, redemption, repayment or refinancing of Level 3 Communications, Inc.'s and its subsidiaries' existing indebtedness from time to time. The notes are not registered under the Securities Act of 1933 or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. About Level 3 Communications 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. The Company reported a net loss of $756 million in 2011, a net loss of $622 million in 2010, and a net loss of $618 million in 2009. The Company's balance sheet at June 30, 2012, showed $12.94 billion in total assets, $11.73 billion in total liabilities and $1.21 billion in total stockholders' equity. * * * As reported by the TCR on April 2, 2012, Fitch Ratings upgraded Level-3 Communications' Issuer Default Rating to 'B' from 'B-' on Oct. 4, 2011, and assigned a Positive Outlook. The rating action followed LVLT's announcement that the company closed on its previously announced agreement to acquire Global Crossing Limited (GLBC) in a tax-free, stock-for-stock transaction. In the July 20, 2012, edition of the TCR, Moody's Investors Service affirmed Level 3 Communications, Inc.'s corporate family and probability of default ratings at B3. 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. Level 3 carries a 'B-' corporate credit rating from Standard & Poor's Ratings Services. LON MORRIS: $750,000 Amegy Bank DIP Loan Approved ------------------------------------------------- Lon Morris College obtained an order allowing it to obtain up to $750,000 of DIP financing from Amegy Bank National Association. The $750,000 loan includes the $250,000 funded prepetition. Amegy is already owed the principal of $2.12 million for loans made to the Debtor prepetition secured by assets of the Debtor. The Final DIP order entered July 24 also authorized the Debtor to use cash that constitutes as Amegy's cash collateral. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at McKool Smith P.C., and Webb and Associates serve as counsel to the Debtor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. LORING ESTATES: Four More Kontogiannis Entities File Chapter 11 --------------------------------------------------------------- Long Island real estate developer Thomas Kontogiannis on Aug. 7 filed in bankruptcy court in Brooklyn (Bankr. E.D.N.Y.) Chapter 11 petitions for four entities: Debtor Case No. ------ -------- Loring Estates LLC 12-45757 Edgewater Development, Inc. 12-45759 Group Kappa Corp. 12-45761 Plaza Real Estate Holding Inc 12-45764 Each of the Debtors disclosed debt of $48.27 million to DLJ Mortgage Capital, Inc., on a bank loan. The Chapter 11 petitions say the entities are related to Halifax Group. Halifax Group LLC filed a bare-bones Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-45736) on Aug. 6, 2012. Gregory Holland, as president, signed Halifax's Chapter 11 petition. Halifax owns properties in Brooklyn. In October 2011, the U.S. District Court in Brooklyn sentenced Mr. Kontogiannis to 9 years imprisonment for leading a mortgage fraud conspiracy resulting in more than $98 million in losses. The U.S. attorney for New York's Eastern District said Mr. Kontogiannis defrauded Washington Mutual Bank and DLJ Mortgage Capital, a subsidiary of Credit Suisse, in connection with his development of two tracts of land in Brooklyn and Queens. He purchased and subdivided Loring Estates, located in East New York, Brooklyn, and Edgewater Development, located in College Point, Queens, and then staged sales of the properties financed by mortgage loans to straw buyers. Mr. Kontogiannis directed others to prepare false loan files to create the appearance that the straw buyers were creditworthy homeowners. The mortgages were supported by fraudulent appraisals depicting finished homes, when the buildings had yet to be built or had fictional addresses, and the mortgage files contained fraudulent title abstract reports and other documentation designed to indicate that the seller, a Kontogiannis-controlled entity, had clear title to convey and that the lender's interest was protected by title insurance. U.S. Attorney Loretta Lynch said the loans were financed by lenders controlled by Mr. Kontogiannis, including InterAmerican Mortgage Corp., later known as CIP Mortgage Corp. and Coastal Capital Corp. After the loans were closed, Mr. Kontogiannis ensured that the mortgages and deeds were not recorded, thereby permitting him to "sell" the same property repeatedly. Eventually, Mr. Kontogiannis sold the loans to WAMU or DLJ. In an effort to conceal the multiple sales of the same properties, Mr. Kontogiannis changed the addresses of properties located in East New York, Brooklyn, to addresses in neighboring Howard Beach, Queens. In addition, he directed others to make monthly payments on the mortgages, ensuring that none of the mortgages became delinquent. The payments ceased in 2007, with roughly $98 million in principal outstanding on the fraudulent mortgages, Ms. Lynch said. Mr. Kontogiannis was previously jailed for previously jailed for laundering bribes to a California congressman. LORING ESTATES: Case Summary & Unsecured Creditors -------------------------------------------------- Debtor: Loring Estates LLC One Cross Island Plaza Suite LL6 Rosedale, NY 11422 Bankruptcy Case No.: 12-45757 Chapter 11 Petition Date: August 7, 2012 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Nancy Hershey Lord Debtor's Counsel: Narissa A. Joseph, Esq. LAW OFFICE OF NARISSA JOSEPH 277 Broadway, Suite 501 New York, NY 10007 Tel: (212) 233-3060 Fax: (212) 608-0304 E-mail: njosephlaw@aol.com Scheduled Assets: $9,300,000 Scheduled Liabilities: $53,090,698 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Edgewater Development, Inc. 12-45759 Assets: $10,000,001 to $50,000,000 Debts: $50,000,001 to $100,000,000 Group Kappa Corp. 12-45761 Assets: $1,000,001 to $10,000,000 Debts: $0 to $50,000 Plaza Real Estate Holding Inc 12-45764 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 The petitions were signed by Thomas Kontogiannis, president. A. Loring Estates' List of 19 Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DLJ -- $48,267,204 Hahn & Hessen 488 Madison Avenue New York, NY 10022 CNS Construction Mgt,Inc. -- $2,566,940 CANUSA Construction Mgt,Inc 13333 Brooklville Plaza, NY 11422 Canusa Realty Corp -- $2,096,554 Toffales Insurance -- $40,400 Agency Tuffles Insurance Co. -- $22,775 Moseson Associates -- $21,000 Con Edison -- $15,075 Thermal Tech Doors Inc. -- $15,000 Leonard J. Strandberg & -- $14,327 Associates Master Plumbing -- $8,431 Con Edison 1 -- $6,836 Nyc Water Board -- $5,625 National Grid 1 -- $3,965 Nyc Department of -- $3,100 Buildings NYC Department of -- $2,034 Environmental Protection Bisset Nursery Corp. -- $985 Con Edison -- $261 Clearview Abstract -- $125 Coastal Capital -- $57 B. Edgewater Development's List of 14 Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DLJ Hahn & Hessen Bank loan $48,267,204 488 Madison Avenue NY, NY 10022 Stoute Street Funding Bank loan $257,000 1200 17th Street Denver, CO 80202 Florence Corp -- $70,568 1647 East Jericho Turnpike Huntington, NY 11743-5711 M G Systems Inc. -- $32,000 Tuffanies Insurance Bank loan $22,775 Company Feldman Lumber -- $18,937 All Standard Corp. -- $9,868 Marjam Supply Co. -- $4,199 Raw Equipment Corp. -- $4,018 Standard Funding Corp. Bank loan $3,831 Standard Funding Corp. Bank loan $3,831 Con Edison -- $3,135 Almar Supplies Inc. -- $2,008 Four Suns Fuel Oil -- $350 Co. Inc. C. Group Kappa's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ New York Dept of Finance $11,868 345 Adam Street, 3rd Floor Brooklyn, NY 11201 D. Plaza Real's List of Six Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DLJ Hahn & Hessen Bank loan $48,267,204 488 Madison Avenue NY, NY 10022 Master Plumbling and Bank loan $17,632 Heating 25-18 50th Street Woodside, NY 11377 Con Edison Bank loan $11,101 4 Irving Place Room 1875-S New York, NY 10003 Cooper, Paroff, Bank loan $10,425 Cooper & Cook National Grid Trade debt $8,134 My Carpet Bank loan $4,172 LOWER BUCKS: BNY Appeals Court Decision Over $8 Million Claim ------------------------------------------------------------- Matt Fair at Bankruptcy Law360 reports that BNY Mellon Trust Co., an indenture trustee representing bondholders owed money for a $36 million renovation project at a suburban Philadelphia hospital, asked a federal judge on Friday to overturn a bankruptcy court?s decision shooting down a disputed $8.1 million payment to the creditors. Lower Bucks Hospital is a non-profit hospital based in Bristol, Pennsylvania. The Hospital is licensed to operate 183 beds. Together with affiliates Advanced Primary Care Physicians and Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre campus with several medical facilities. The Hospital's emergency room serves 30,000 patients annually. For the fiscal year ending June 30, 2009, Lower Bucks had $114 million in consolidated revenues. The Hospital filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-10239) on Jan. 13, 2010. The Hospital's affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced Primary Care Physicians -- also filed Chapter 11 petitions. Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP, in Philadelphia, assist the Hospital in its restructuring effort. Donlin, Recano & Company, Inc., is the Hospital's claims and notice agent. The Debtors tapped Zelenkofske Axelrod LLC for tax preparation services. The Hospital estimated assets and liabilities at $50 million to $100 million. Regina Stango Kelbon, Esq., at Blank Rome LLP, in Philadelphia, represents the Official Committee of Unsecured Creditors as counsel. The Bankruptcy Court confirmed the hospital operator's Chapter 11 plan in December 2011. It emerged from bankruptcy in January 2012. The Plan is centered around a settlement of the litigation between LBH and The Bank of New York Mellon Trust Company, N.A, as bond trustee, regarding several issues, including whether the Bond Trustee, on behalf of the holders of bonds, holds a secured claim against LBH, as opposed to a claim that is secured. General unsecured creditors were to realize 18.5% recovery; bondholders were to get 35% recovery. LUCID INC: Marcum LLP Succeeds Deloitte & Touche as Accountants --------------------------------------------------------------- Lucid, Inc., as approved by the Audit Committee of its Board of Directors, dismissed Deloitte & Touche LLP as the Company's independent registered accounting firm. On Aug. 2, 2012, the Company engaged Marcum LLP as its new independent registered accounting firm. D&T has served as the Company's independent registered accounting firm since 2008. D&T's audit report on the consolidated financial statements of the Company for the years ended Dec. 31, 2011, and 2010 expressed an unqualified opinion and included an explanatory paragraph relating to substantial doubt regarding the Company's ability to continue as a going concern. During the years ended Dec. 31, 2011, and 2010, and the subsequent interim period through July 30, 2012, there were no disagreements with D&T on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedures, which disagreement, if not resolved to the satisfaction of D&T, would have caused D&T to make reference to the subject matter of disagreements in connection with its reports. During the years ended Dec. 31, 2011 and 2010, and the subsequent interim period through Aug. 2, 2012, neither the Company, nor anyone on its behalf, consulted Marcum regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and no written report or oral advice was provided to the Company that Marcum concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing, or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event. About Lucid Inc. Rochester, N.Y.-based Lucid, Inc., is a medical device company that designs, manufactures and sells non-invasive cellular imaging devices that assist physicians in the early detection of disease. The Company's VivaScope(R) platform produces rapid noninvasive, high-resolution cellular images for subsequent diagnostic review by physicians, pathologists and other diagnostic readers. The Company's balance sheet at March 31, 2012, showed $2.82 million in total assets, $5.91 million in total liabilities, and a stockholders' deficit of $3.09 million. As reported in the TCR on April 9, 2012, Deloitte & Touche LLP, in Rochester, New York, expressed substantial doubt about Lucid'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 of the Company's recurring losses from operations, deficit in equity, and projected need to raise additional capital to fund operations. MACROSOLVE INC: Sells Illume Mobile to DecisionPoint Systems ------------------------------------------------------------ MacroSolve, Inc., has sold the assets of its Illume Mobile business unit, which develops and delivers mobile applications, to DecisionPoint Systems, Inc., a leading provider of enterprise mobility and RFID solutions, effective July 31, 2012. MacroSolve sold the Illume Mobile assets to DecisionPoint for $250,000 in cash and approximately $750,000 of DecisionPoint stock, and an agreement by DecisionPoint to pay ongoing patent royalties on current and future sales of apps based upon MacroSolve's patent No. 7,822,816. In addition, MacroSolve may earn up to an additional $500,000 in cash upon certain net revenue milestones being reached by DecisionPoint relating to the Illume Mobile assets. As a result of this sale, MacroSolve will own approximately 8% of DecisionPoint common stock on the date of closing. DecisionPoint has expressed that it will continue to operate the Illume Mobile assets and retain the majority of its employees in Tulsa, Oklahoma where MacroSolve is headquartered. The combination of the Illume Moble app development and sales skill sets with the large existing base of DecisionPoint customers and DecisionPoint's ability to reach into the Fortune 1000 enterprise customer base creates a strong synergistic opportunity for future value for both companies. "The sale of Illume Mobile enabled MacroSolve to spin off cash flow dilutive operations while maintaining the Company's focus on patent enforcement and licensing, both of which have proven to generate high margin revenues for MacroSolve," stated MacroSolve CFO, Kendall Carpenter. "We believe owning a nearly 8 percent stake in DecisionPoint is an asset that has growth potential. Through this sale, we are bringing to Tulsa a world-class employer in DecisionPoint, which will use Tulsa as one of its main operating centers." Jim McGill, executive vice chairman of MacroSolve commented, "MacroSolve's shareholders will benefit from increasing value of DecisionPoint stock as well as ongoing monetization of MacroSolve's intellectual property. DecisionPoint has the resources to execute larger enterprise level contracts for mobile apps based upon our technology. This positions us to continue to benefit from this transaction long term. We will also look for additional partners with which to further monetize our intellectual property. By focusing on intellectual property and patent enforcement, we enhance MacroSolve's capacity for building shareholder value with a business model that offers low operational expenses with strong cash flows and higher operating margins. Our patent is truly foundational to the mobile apps marketplace and we believe we will continue to unlock its value." As of March 31, 2012, MacroSolve had nineteen legal proceedings open against 34 alleged infringers of its patent No. 7,822,816. The Company has already settled with prejudice pursuant to a settlement agreement with 21 companies it had previously filed against. A copy of the Asset Purchase Agreement is available at: http://is.gd/UIJrpl Top Executives Resign On Aug. 1, 2012, Steve Signoff resigned for personal reasons, effective immediately, as President and Chief Executive Officer of the Company. In submitting his resignation, Mr. Signoff did not express any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Mr. Signoff remains as a director of the Company. On Aug. 1, 2012, Randy Ritter resigned for personal reasons, effective immediately, as Chief Operating Officer of the Company. In submitting his resignation, Mr. Ritter did not express any disagreement with the Company on any matter relating to the Company's operations, policies or practices. About MacroSolve, Inc. Tulsa, Okla.-based MacroSolve, Inc. (OTC BB: MCVE) -- http://www.macrosolve.com/-- is a technology and services company that develops mobile solutions for businesses and government. A mobile solution is typically the combination of mobile handheld devices, wireless connectivity, and software that streamlines business operations resulting in improved efficiencies and cost savings. The Company reported a net loss of $2.53 million in 2011, compared with a net loss of $1.92 million during the prior year. The Company's balance sheet at March 31, 2012, showed $2.58 million in total assets, $3.18 million in total liabilities and a $598,195 total stockholders' deficit. In its report on the Company's 2011 financial results, Hood Sutton Robinson & Freeman CPAs, P.C., in Tulsa, Oklahoma, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. MBS MGT: Forward Contract Given Broad Meaning for Safe Harbor ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Chief Judge Edith H. Jones ruled on Aug. 2 for the U.S. Court of Appeals in New Orleans that a contract for supplying electricity to several apartment projects for two years is a "forward contract," thus making late payments immune from attack as a preference under the so-called safe harbor contained in Section 546(e) of the Bankruptcy Code. The report relates Judge Jones upheld rulings from both the bankruptcy court and the district court. The bankruptcy trustee sued to recover $156,000 in late payments that otherwise qualified as a preference. On appeal, the trustee contended the contract wasn't a "forward contract" because it specified neither a particular amount of electricity nor a delivery date. Judge Jones rejected the argument, saying the safe harbor statute contains no such requirements for status as a forward contract. The case is Lightfoot v. MX Energy Electricity Inc. (In re MBS Management Services Inc.), 11-30553, U.S. 5th Circuit Court of Appeals. About MBS Management Metairie, Louisiana-based MBS Management Services Inc. and its affiliates broker and manage multifamily properties. MBS Management provides the real estate debtors with leasing, maintenance coordination, on-site and regional management. In most instances, MBS Management has engaged Gray Star or Lincoln Property Company to handle the property management for the Real Estate Debtors. MBS Management and its affiliates filed for chapter 11 bankruptcy on Nov. 5, 2007 (Bankr. E.D. La. Lead Case No. 07-12151). Tristan E. Manthey, Esq., Jan Marie Hayden, Esq., and Douglas S. Draper, Esq. at Heller, Draper, Hayden, Patrick & Horn and Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC, represent the Debtors in their restructuring efforts. The Debtors disclosed to the Court $12,299,366 in total assets and $9,461,174 in total debts. MBS-South Point Apartments, an affiliate of the Debtor that owns a 128-unit apartment in Desoto, Texas, filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. E.D. La. Case No. 07-12283). MBS-The Trails Ltd. and MBS-Fox Chase Ltd., affiliates of the Debtor, filed separate chapter 11 petition on Dec. 4, 2007 (Bankr. N.D. Tex. Case Nos. 07-45430 and 07-45431, respectively). These affiliates estimated assets and debts between $1 million and $10 million when they filed for bankruptcy. Following confirmation of the Chapter 11 Plan, MBS transferred all rights to avoid preferential or fraudulent conveyances to a litigation trust for prosecution. Claude Lightfoot was named Trustee of the MBS Unsecured Creditors' Trust. MCCLATCHY CO: Files Form 10-Q, Reports $26.9MM Net Income in Q2 --------------------------------------------------------------- The McClatchy Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $26.86 million on $299.29 million of net revenues for the three months ended June 24, 2012, compared with net income of $4.94 million on $314.25 million of net revenues for the three months ended June 26, 2011. The Company reported net income of $24.77 million on $587.59 million of net revenues for the six months ended June 24, 2012, compared with net income of $2.98 million on $617.98 million of net revenues for the six months ended June 26, 2011. The Company's balance sheet at June 24, 2012, showed $2.92 billion in total assets, $2.72 billion in total liabilities and $202.40 million in stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/72hHqD About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MEDICAL CONNECTIONS: Signs Purchase Agreement with Trustaff ----------------------------------------------------------- Medical Connections Holdings, Inc., and its wholly owned subsidiary, Medical Connections, Inc., executed an Asset Purchase and Sale Agreement with Trustaff Medical Connections, LLC, an Ohio limited liability company, whereby Trustaff agreed to purchase substantially all of the assets of MCI, the Company's sole operating subsidiary. The purchase price for the assets was $825,000 plus 90% of MCI's outstanding accounts receivable balance which at the date of closing totaled $854,928. The purchase price for the assets, which included an additional $7,525 in prepaids, totaled $1,687,453. At Closing, the Purchase Price was delivered to Cors & Basset, LLC. The Escrow Agent was obligated to deduct from the Purchase Price all outstanding Medical Connections liabilities and pay those liabilities on behalf of Medical Connections. These liabilities included: (a) Payment of approximately $449,027 to Paragon Financial Group, Inc., representing payment in full of MCI's outstanding line of credit with Paragon Financial Group. (b) Payment of approximately $242,406 related to accounts payable, professional fees and related expenses. Additionally, the Company had existing expenses related to accounts payable, notes payable, accrued and other related expenses totaling $644,250 that were paid in full with proceeds. As a result, the net proceeds received from the sale of the assets were approximately $351,770, of which $120,000 will be held in escrow pursuant to the terms of an Escrow Agreement dated as of July 31, 2012, by and between Trustaff, MCI, the Company and the Escrow Agent. The Escrow Agreement will terminate Jan. 31, 2013, if the amount of funds remaining in escrow is less than the remaining claims against the MCI and the Company. The Agreement and the transactions contemplated thereby were approved by the Company's Board of Directors and majority shareholders owning 73.83% of the Company's total voting power effective as of July 26, 2012. Also in connection with the sale of the Assets, Trustaff entered into an assignment of lease with its Landlord, BRE/BOCA Corporate Center LLC. It is anticipated that Trustaff and BRE will enter into a new leasehold agreement. However, until the parties enter into a new lease, if Trustaff defaults on the leasehold obligation, MCI will be liable for any default. In addition, the Company's current officers, Anthony Nicolosi, Brian Neill and Jeffrey Rosenfeld executed Non-Competition Agreements which prevents each of them from engaging directly or indirectly in any business competitive with the business being conducted by MCI anywhere in the United States, whether as an owner, director, officer, member, shareholder, employee, agent or consultant for a period of up to five years after the Closing Date. With the sale of the assets of MCI, the Company will have no operations. The Company's officers, Anthony Nicolosi and Brian Neill intend to use the net proceeds to explore other business opportunities. Their investigation will not be limited to any specific business or industry. The Company may also seek to acquire a foreign or domestic private company which seeks to take advantage of a reporting company with a class of securities registered under the Securities Exchange Act of 1934. With the execution of the Agreement, Jeffrey Rosenfeld tendered his resignation as the Company's chief executive officer and director and entered into a separation and release agreement with the Company. There was no disagreement with the Company's other officers or directors in connection with the Company?s operations or the execution of the Agreement. Concurrent with the delivery of his resignation, Mr. Rosenfeld agreed to tender all Series C preferred shares owned by Mr. Rosenfeld to the Company for cancellation as well as one million outstanding common stock options representing all common stock options owned by Rosenfeld. A copy of the Asset Purchase Agreement is available at: http://is.gd/Suj7a3 About Medical Connections Boca Raton, Fla.-based Medical Connections Holdings, Inc., is a healthcare staffing company which provides staffing services for allied professionals and nurses to the Company's clients on a national basis. In its audit report for the 2011 financial statements, De Meo, Young, McGrath, in Boca Raton, Florida, noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses from consolidated operations raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $3.71 million on $6.65 million of revenue in 2011, compared with a net loss of $7.78 million on $7.80 million of revenue in 2010. The Company's balance sheet at March 31, 2012, showed $1.81 million in total assets, $929,532 in total liabilities and $887,834 in total stockholders' equity. METROPLEX LUCKY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Metroplex Lucky Star, LLC 1301 Coit Road Plano, TX 75075 Bankruptcy Case No.: 12-42149 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Mulaw W. Alemayehu, manager. MF GLOBAL: ConocoPhillips Fights $205MM Clawback Bid ---------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that ConocoPhillips Co. on Friday argued that its dispute with MF Global Inc.?s bankruptcy trustee over his treatment of $205 million in letters of credit the company had secured for the now-collapsed brokerage should be moved to federal court because it involves an unusual interpretation of a federal agency rule. 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. MF GLOBAL: Judicial Watch Sues SEC, CFTC Over MF Collapse --------------------------------------------------------- Judicial Watch, the public interest group that investigates and fights government corruption, disclosed that on July 18, 2012, it filed a Freedom of Information Act (FOIA) lawsuit (vern mckinley v. commodity futures trading commission and securities and exchange commission (no. 1:12-cv-01176) against the Securities and Exchange Commission and the Commodity Futures Trading Commission seeking records related to internal discussions involving the bankrupt company MF Global Holdings Ltd. Judicial Watch's FOIA lawsuit, filed on behalf of Vern McKinley, focuses specifically on an Oct. 31, 2011, meeting of the Treasury Department's Financial Stability Oversight Council, during which MF Global was reportedly discussed. McKinley is a former employee of the Board of Governors of the Federal Reserve and the Federal Deposit Insurance Corporation and author of Financing Failure: A Century of Bailouts. Judicial Watch seeks the following records from both the SEC and the CFTC pursuant to the original April 24, 2012, FOIA requests copies of any and all records concerning this update of MF Global, the discussion of the implications for the broader financial system, and any follow up contact and discussions on public statements. Such records include, but are not limited to, detailed meeting minutes, meeting notes, supporting memoranda, communications, and electronic messages and attachments. The CFTC acknowledged receiving the FOIA request on April 25, 2012, and was required to issue a final response by May 23, 2012. To date, the CFTC has failed to respond to the request in accordance with FOIA law. The SEC acknowledged receiving the FOIA request on April 25, 2012, and was required to issue a final response by May 23, 2012. To date, the SEC has failed to respond to the request in accordance with FOIA law. (The SEC indicated in an interim response on May 18, 2012, that it had uncovered a two-page document responsive to Judicial Watch's request, but withheld the document in full.) The FSOC was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Council is charged with "identifying threats to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States financial system." Per Reuter's, on Oct. 31, 2011, the FSOC held a conference call to discuss MF Global Holdings Ltd. the same day the company filed for bankruptcy: "The Financial Stability Oversight Council, which is headed by the Treasury Department, received 'a series of oral reports' from the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Reserve, the official said. No other details of the call were provided." Judicial Watch and Mr. McKinley have been sharply critical of the FSOC for failing to anticipate the MF Global meltdown in accordance with its congressional mandate. MF Global was forced to file bankruptcy after what has been described as "one of the most egregious violations of trust on Wall Street." The company allegedly stole $1.6 billion from customer accounts in an attempt to cover the company's losses and lied to bondholders about the financial condition of the company. Former U.S. Senator and New Jersey Governor John Corzine was forced to resign as CEO for MF Global for his alleged role in the improprieties at the company. "The FSOC is yet another expensive bureaucratic boondoggle that has failed to provide the financial stability and oversight promised by its congressional mandate. The American people deserve to know the truth about what FSOC officials knew about the epic failure of MF Global and when they knew it. But once again, the Obama administration refuses to provide basic information related to its 'oversight' of the private sector," stated Judicial Watch President Tom Fitton. Judicial Watch has launched a comprehensive investigation to determine under what legal authorities and lawful rationales the federal government initiated the Wall Street bailouts and has filed a number of lawsuits on behalf of Mr. McKinley. More information is available in Judicial Watch President Tom Fitton's new national and New York Times bestselling book, "The Corruption Chronicles." 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. MMRGLOBAL INC: Reports Unregistered Sales of Equity Securities -------------------------------------------------------------- As part of an amendment and renewal of five different convertible notes with principal amounts of $150,000, $150,000, $150,000, $156,436, and $157,422, that were outstanding and had or were about to mature by the end of July, MMRGlobal, Inc., granted two different related parties five different warrants to purchase a total of 2,269,308 shares of the Company's common stock at a price of $0.02 per share and amended the terms of the convertible notes to extend the maturity date, recalculate the conversion prices based on the current market prices to a price of $0.0166 per share, and a set the trigger price for automatic conversion to $0.08. The warrants vest immediately and expire five years from the date of issuance. The amended convertible notes mature in six months. On July 30, 2012, as part of an amendment to the Line of Credit Agreement with The RHL Group to increase the credit line from $3,000,000 to $4,500,000 under the Seventh Amended and Restated Secured Promissory Note the Board of Directors approved granting The RHL Group the right to convert, at any time following the date of the Amended Note, up to an aggregate of $500,000 in outstanding principal of the Credit Facility into shares of the Company's Common Stock at a conversion price of $0.02 per share. On July 30, 2012, in consideration for guarantees the Company issued a warrant to the RHL Group to purchase 3,055,432 shares of the Company's common stock at an exercise price of $0.02 per share. The warrant was fully vested as of July 31, 2012, and expires on July 31, 2017. On July 30, 2012, the Company granted 2,180,000 shares of common stock at $0.02 per share to two different related-parties as an incentive and consideration for promissory notes totaling $250,771. On July 19, 2012, the Company granted a vendor 1,850,000 shares of the Company's common stock at a price of $0.02 per share for past and future services rendered. On July 1, 2012, the Company granted a vendor 187,500 shares of its common stock at a price of $0.08 per share for services rendered as a reduction to accounts payable. On June 27, 2012, and July 10, 2012, the Company entered into two different Convertible Promissory Notes with two different unrelated third-parties for principal amounts totaling $50,000. The Notes bear interest at a rate of 6% per annum payable in cash or shares of common stock or a combination of cash and shares of common stock. The decision whether to pay the interest in cash, shares of common stock or combination of both will be at the Company's sole discretion. At any time from and after the earliest to occur of (i) the approval of the stockholder's of the Company of the increase in the authorized shares of the Company's common stock from 650,000,000 to 950,000,000, which has already occured; or (ii) the availability of sufficient unreserved shares, the Company will be entitled to convert any portion of the outstanding and unpaid conversion amount into fully paid and non- assessable shares of common stock. If the Company were to elect to convert those Notes, it will issue a total of 2,500,000 shares. On June 27, 2012, the Company granted a vendor 1,002,997 shares of the Company's common stock at a price of $0.02 for commissions under an on-going commission relationship. The Company generally used the proceeds of the sales of securities for repayment of indebtedness, working capital and other general corporate purposes. About MMRGlobal Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF) -- http://www.mmrglobal.com/-- through its wholly-owned operating subsidiary, MyMedicalRecords, Inc., provides secure and easy-to- use online Personal Health Records (PHRs) and electronic safe deposit box storage solutions, serving consumers, healthcare professionals, employers, insurance companies, financial institutions, and professional organizations and affinity groups. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Rose, Snyder & Jacobs LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the years ended Dec. 31, 2011, and 2010. The Company reported a net loss of $8.88 million in 2011, compared with a net loss of $17.90 million in 2010. The Company reported a net loss of $10.3 million in 2009. The Company's balance sheet at March 31, 2012, showed $1.90 million in total assets, $7.96 million in total liabilities, and a $6.05 million stockholders' deficit. MOMENTIVE PERFORMANCE: Amends $525.6-Mil. Common Shares Offering ---------------------------------------------------------------- Momentive Performance Materials Inc. filed with the U.S. Securities and Exchange Commission amendment no. 3 to Form S-1 covering resales by holders of the 9.0% Second-Priority Springing Lien Notes due 2021 issued by Momentive Performance Materials Inc. on Nov. 5, 2010. The Notes mature on Jan. 15, 2021. Interest on the Notes is payable in cash at a rate of 9.0% per annum, from the issue date or from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on January 1 or July 1 immediately preceding the interest payment date on January 15 and July 15 of each year. At any time prior to Jan. 15, 2016, Momentive may redeem, in whole or in part, the Notes at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest and additional interest, if any, to the redemption date and a "make- whole" premium. Thereafter, Momentive may redeem the Notes, in whole or in part, at the redemption prices set forth in this prospectus. In addition, at any time and from time to time on or prior to Jan. 15, 2014, Momentive may redeem up to 35% of the aggregate principal amount of Notes with the net cash proceeds from certain equity offerings at the redemption price of 109% of the principal amount of the Notes redeemed plus accrued and unpaid interest and additional interest, if any, to the redemption date. The Company has not applied, and does not intend to apply, for listing of the Notes on any national securities exchange or automated quotation system. Momentive will not receive any proceeds from the resale of the Notes. A copy of the amended prospectus is available for free at: http://is.gd/BedsCG About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company had a net loss of $140 million in 2011, following a net loss of $63 million in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at March 31, 2012, showed $3.07 billion in total assets, $3.90 billion in total liabilities, and a $832 million total deficit. * * * As reported by the TCR on May 14, 2012, Moody's Investors Service lowered Momentive Performance Materials Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3. The action follows the company's weak first quarter results and expectations for a slower than expected recovery in volumes in 2012. In the May 25, 2012, edition of the TCR, Standard & Poor's Ratings Services raised its rating on Momentive Performance Materials and its subsidiaries' senior secured credit facilities to 'B+' from 'B'. "The ratings on MPM reflect the company's 'highly leveraged' financial profile and what we deem to be a 'fair' business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. MORGAN'S FOODS: James Pappas Hikes Stake to 15.8% ------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, James C. Pappas and his affiliates disclosed that, as of Aug. 2, 2012, they beneficially own 462,858 shares of common stock of Morgan's Foods, Inc., representing 15.8% of the shares outstanding. Mr. Pappas previously reported beneficial ownership of 368,825 common shares or a 12.6% equity stake as of Feb. 20, 2012. A copy of the amended filing is available for free at http://is.gd/FYAqs0 About Morgan's Foods Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in 1925, operates through wholly-owned subsidiaries KFC restaurants under franchises from KFC Corporation, Taco Bell restaurants under franchises from Taco Bell Corporation, Pizza Hut Express restaurants under licenses from Pizza Hut Corporation and an A&W restaurant under a license from A&W Restaurants, Inc. As of May 20, 2011, the Company operates 56 KFC restaurants, 5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises from KFC Corporation and franchises from Taco Bell Corporation, 3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco Bell Corporation and licenses from Pizza Hut Corporation, 1 KFC/Pizza Hut Express "2n1" under a franchise from KFC Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W "2n1" operated under a franchise from KFC Corporation and a license from A&W Restaurants, Inc. The Company reported a net loss of $1.68 million for the year ended Feb. 26, 2012, compared with a net loss of $988,000 for the year ended Feb. 27, 2011. The Company's balance sheet at May 20, 2012, showed $53.51 million in total assets, $54.51 million in total liabilities and a $1 million total shareholders' deficit. MRW ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: MRW Enterprises, LLC 2545 Ivy Street E Cumming, GA 30041 Bankruptcy Case No.: 12-22753 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Debtor's Counsel: J. Robert Williamson, Esq. SCROGGINS AND WILLIAMSON 1500 Candler Building 127 Peachtree Street, N.E. Atlanta, GA 30303 Tel: (404) 893-3880 E-mail: rwilliamson@swlawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-22753.pdf The petition was signed by Jeff A. Woodman, member. MSR RESORT: Winthrop Realty Won't Back Paulson Chapter 11 Plan -------------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that Michael Ashner's Winthrop Realty Trust, which teamed with John Paulson's hedge fund company, Paulson & Co., to take over a group of iconic resorts a year and half ago, isn't supporting a Paulson-backed plan to bring the luxury properties out of bankruptcy. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MUSCLEPHARM CORP: Amends 84.4 Million Common Shares Offering ------------------------------------------------------------ Musclepharm Corporation filed with the U.S. Securities and Exchange Commission a post-effective amendment no. 1 to the Form S-1 relating to the resale of 84,400,000 Shares of the Company's common stock, par value $0.001 per share, by Southridge Partners II, LP, Bleu Ridge Consultants, Inc., TSX Ventures, LLC, et al., including (i) 10,000,000 Put Shares that the Company will put to Southridge pursuant to the Equity Purchase Agreement, (ii) 42,000,000 Purchase Shares, and (iii) 32,400,000 Warrant Shares. The Equity Purchase Agreement provides that Southridge is committed, at the Company's sole option, to purchase up to $10,000,000 of the Company's common stock. The Company may draw on the facility from time to time, as and when the Company determines appropriate in accordance with the terms and conditions of the Equity Purchase Agreement. The Company will not receive any proceeds from the sale of the Shares. However, the Company will receive proceeds from the sale of its Put Shares under the Equity Purchase Agreement. The proceeds will be used for working capital or general corporate purposes. The Company will bear all costs associated with the registration of the Shares under the Securities Act. The Company's common stock is quoted on the OTCBB under the symbol "MSLP.OB." The Shares registered hereunder are being offered for sale by the Selling Security Holders at prices established on the OTCBB during the term of this offering. On Aug. 3, 2012, the closing bid price of the Company's common stock was $0.01 per share. A copy of the amended prospectus is available for free at: http://is.gd/etvWD2 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. NAB HOLDINGS: S&P Assigns 'BB-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Troy, Mich.-based NAB Holdings LLC, the indirect parent of the primary operating company North American Bancard LLC. The outlook is stable. "At the same time, we assigned our 'BB+' issue-level rating and '1' recovery rating to the company's proposed $160 million first- lien senior secured credit facility, consisting of a $10 million revolver and $150 million term loan. The '1' recovery rating indicates our expectation for very high (90%-100%) recovery in the event of a payment default," S&P said. "Our ratings on NAB reflect its 'weak' business risk profile due to modest scale and market position in a highly competitive industry, and its 'significant' financial risk profile," S&P said. "However," said Standard & Poor's credit analyst Alfred Bonfantini, "the company has a strong growth trajectory, supported by good secular growth trends, consistent profitability, and positive free cash flow." "Our outlook on NAB is stable, supported by the company's strong revenue growth trends, consistent profit margins, and positive free operating cash flow even through the recent recession, and leverage currently low for the rating. The company's modest position in the highly competitive payments processing industry and its lack of a track record of managing the business with material amounts of debt in the capital structure limit a possible upgrade over the near term," S&P said. "We could lower the rating to 'B+' if leverage is sustained at or above 4x as a result of additional debt-funded dividends or acquisitions, or increased competition leading to higher merchant attrition and pricing pressure and a drop in margins of over 500 basis points," S&P said. NASSAU BROADCASTING: Seeks Extension to File Payment Plan --------------------------------------------------------- Marie Beaudette at Dow Jones' DBR Small Cap reports that Nassau Broadcasting Corp. is seeking a 60-day extension to file a creditor-repayment plan as it awaits regulatory approval to sell its 49 radio stations. About Nassau Broadcasting Nassau Broadcasting Partners LP is a radio-station owner and operator. Three secured lenders -- affiliates of Goldman Sachs Group Inc., Fortress Investment Group LLC and P.E. Capital LLC -- filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del. Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting Partners LP, the owner of 45 radio stations in the northeastern U.S. The lender group said in court papers that they are owed $83.8 million secured by all of Nassau's property. Involuntary petitions were also filed against three affiliates of Nassau, which is based in Princeton, New Jersey. The lenders said the stations aren't worth enough to pay them in full. Nassau Broadcasting in October won a Delaware bankruptcy court's blessing to convert its involuntary Chapter 7 bankruptcy -- pressed by creditors including Goldman Sachs Lending Partners LLC -- to a proceeding on its own terms in Chapter 11. NAVISTAR INT'L: S&P Rates New $1-Bil. Secured Loan 'B+' ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue rating to Navistar Inc.'s proposed $1 billion secured loan, due 2017. The issue rating is one notch above the Navistar International Corp. (Navistar) corporate credit rating of 'B'. "The recovery rating on this issue is '2', indicating that we expect substantial (70%-90%) recovery in the event of default. Navistar Inc. is a core subsidiary of Navistar, comprising its domestic and Canadian operations. Furthermore, Navistar guarantees the new debt issue," S&P said. "At the same time, we lowered our ratings on Navistar's unsecured debt to 'CCC+' from 'B'. We revised the unsecured debt recovery rating to '6' from '4', reflecting the additional priority claims represented by the new secured issue and our expectation of negligible (0%-10%) recovery in the event of payment default," S&P said. "The corporate credit rating on the Illinois-based truck maker reflects, among other things, challenges in revamping its product line, following the environmental Protection Agency's rejection of its proprietary engine technology; slowing industry and military demand; and Navistar's substantial debt burden, including large underfunded postretirement obligations," S&P said. "On the other hand, Navistar's arrangement to provide Cummins Inc. (A/Stable/--) engines and emissions control components represents a significant first step toward continuance of operations. The new issue will provide more than $700 million net financing, which is meaningful to assure liquidity during the upcoming critical quarters," S&P said. RATINGS LIST Navistar International Corp. Corporate Credit Rating B/Negative/-- Downgraded To From Navistar International Corp. Unsecured CCC+ B Recovery Rating 6 4 New Rating Navistar Inc. $1 bil. secured loan due 2017 B+ Recovery Rating 2 NEXTWAVE WIRELESS: Has Forbearance with Notes Holders Until 2014 ---------------------------------------------------------------- Nextwave Wireless Inc. and its wholly owned subsidiary NextWave Wireless LLC, and certain subsidiary guarantors entered into a Forbearance Agreement with: (i) the holders of the Company's Senior Secured Notes due 2012; (ii) the holders of the Company's Senior-Subordinated Secured Second Lien Notes due 2013 issued under the Second Lien Subordinated Note Purchase Agreement, dated as of Oct. 19, 2008, as amended; and (iii) the Third Lien Holders issued under the Third Lien Subordinated Exchange Note Exchange Agreement, dated as of Oct. 19, 2008, as amended. Pursuant to the Forbearance Agreement, each Holder has agreed, and directed The Bank of New York Mellon, as collateral agent under each of the Note Agreements, to temporarily forbear from exercising their respective rights and remedies in connection with potential defaults and events of default that may occur prior to the Forbearance Termination Date. The occurrence of any "Event of Default" under the Note Agreements would, in the absence of the Forbearance Agreement, entitle the Holders to accrue additional default interest at a rate of 2% per annum, to accelerate the maturity of each respective series of Notes upon notice from the Holders of at least 51% of the outstanding principal amount of those series and to take action to foreclose on NextWave's wireless spectrum assets, or the stock of NextWave's subsidiaries which own such wireless spectrum. If the Forbearance Agreement is terminated without completion of the contemplated transactions, the Holders reserve the right to accrue default interest retroactively for the term of the Forbearance Agreement, and will have the right to pursue all remedies under the Note Purchase Agreements. The Forbearance Agreement will terminate on the earlier of (i) the Company's merger with AT&T Inc. (ii) 60 days after the termination of the Merger Agreement and (iii) Jan. 31, 2014. A copy of the Forbearance Agreement is available for free at: http://is.gd/kre2q4 About Nextwave Wireless NextWave Wireless Inc. (PINK: WAVE) is a holding company for holding company for a significant wireless spectrum portfolio. Its continuing operations are focused on the management of ikts wireless spectrum interests. Total domestic spectrum holdings consist of approximately 3.9 billion MHz POPs. Its international spectrum included in continuing operations include 2.3 GHz licenses in Canada with 15 million POPs covered by 30 MHz of spectrum. The Company disclosed total assets of $457.139 million, total current liabilities of $1,064.058 million, deferred income tax liabilities of $84.148 million and long-term obligations, net of current portion of $14.854 million, and total stockholders' deficit of $705.921 million. In its report on the Company's annual report for year ended Dec. 31, 2011, Ernst & Young, said, "The Company has incurred recurring operating losses and has a working capital deficiency, primarily comprised of the current portion of long term obligations of $142.0 million at December 31, 2011 that is associated with the maturity dates of its debt. The Company currently does not have the ability to repay this debt at maturity. These conditions raise substantial doubt about the Company's ability to continue as a going concern." NGPL PIPECO: S&P Rates $700MM Senior Secured Term Loan 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '3' recovery rating to U.S. natural gas pipeline company NGPL PipeCo LLC's $700 million senior secured term loan due 2017. The '3' recovery rating indicates that lenders can expect meaningful (50% to 70%) recovery if a payment default occurs. NGPL used net proceeds to partly fund a tender offer for $1.25 billion of debt maturing in December 2012. "Our corporate credit rating on NGPL is 'B+', and the outlook is stable," S&P said. RATING LIST NGPL PipeCo LLC Corporate Credit Rating B+/Stable/-- New Rating NGPL PipeCo LLC Senior Secured Term Loan Due 2017 B+ Recovery Rating 3 NORTEL NETWORKS: Aims to Expunge Affiliate Claims in March ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Nortel Networks Inc. is proposing a schedule where the bankruptcy judge in Delaware could hold a hearing in March and dismiss about $2.45 billion in claims filed by U.K. affiliates. According to the report, the proposal, for presentation to the bankruptcy court at an Aug. 22 hearing, is an upshot from a 62-page opinion in March by U.S. Bankruptcy Judge Kevin Gross who concluded that Nortel was entitled to dismissal of 30 claims for breach of fiduciary duty out of 85 claims filed by foreign affiliates. The report relates Nortel was unsuccessful at having the judge throw out every claim filed by the company's European affiliates. Ultimate resolution of the remaining claims will determine how $9 billion cash will be distributed. The report notes Nortel is proposing that Judge Gross allow fact investigations at this time only with regard to so-called fiduciary duty-dependent claims and tracing-dependent claims. Mr. Rochelle notes that if Judge Gross adopts Nortel's proposal, the judge could be holding a hearing in March 2013 on a so-called summary judgment motion where the company would argue that most of the remaining claims can be knocked out without a trial. According to the report, Nortel contends that the litigation schedule advocated by the foreign affiliates wouldn't have factual investigations ending until August 2013. The company wants discovery halted on other claims by the affiliates. The report relates that in addition to sorting out the intercompany claims, there also must be agreement or court decisions to devise a formula dividing sale proceeds among the Nortel companies in the U.S., Canada, and abroad. About Nortel Networks Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Office of the United States Trustee for the District of Delaware has appointed an Official Committee of Unsecured Creditors in respect of the Debtors, and an ad hoc group of bondholders has been organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. The Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel has collected almost $9 billion for distribution to creditors. Of the total, US$4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTHERN STAR: Enters Deal With Ely Gold on Notes Acquisition ------------------------------------------------------------- Ely Gold & Minerals Inc. had entered into two separate amending agreements providing for completion of its initial acquisition of outstanding Senior Secured Notes issued by Northern Star Mining Corp. to occur ten business days following the date on which title to the NSM assets is vested in the Note holders by Court Order. The purpose of the amendments was to ensure that Ely Gold would receive an interest in the NSM assets in the first instance rather than an interest in the Notes. The bankruptcy proceedings are taking much longer than anticipated, and market conditions have changed in the interim. Accordingly, Ely Gold has notified the Note holders that while it remains interested in acquiring an interest in the NSM assets, it will be necessary to discuss new terms at such time as the bankruptcy proceedings are concluded and the Note holders are in a position to deal with the NSM assets. Ely Gold cannot state with certainty when such proceedings will be concluded or whether the Note holders will agree to new terms which are more favorable to Ely Gold than the previously negotiated terms. As reported in the Troubled Company Reporter on Feb. 1, 2011, Deloitte & Touche Inc. was appointed trustee in the bankruptcy of Northern Star Mining Corp. NSM and its subsidiary, Jake Resources Ltd., did not seek a further extension of the period in which to file a proposal under the Bankruptcy and Insolvency Act (Canada), which expired on January 24. As a consequence, NSM and Jake Resources were deemed to have filed assignments in bankruptcy, and NSM's officers and directors have resigned. NUANCE COMMUNICATIONS: S&P Affirms 'BB-' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Burlington, Mass.-based Nuance Communications Inc. The outlook is stable. "At the same time, we assigned our issue-level rating of 'BB-' to the company's newly issued $600 million senior unsecured notes due 2020 with a recovery rating of '3', indicating expectations for meaningful (50%-70%) recovery in the event of a payment default," S&P said. "We also affirmed our 'BB+' rating on the company's first-lien credit facilities, keeping the '1' recovery rating unchanged, reflecting our expectation for very high (90%-100%) recovery in the event of a payment default," said Standard & Poor's credit analyst David Tsui. "We expect Nuance to keep increasing EBITDA through its successful integration of acquisitions; this growth strategy will not be a detriment to credit quality at current levels. Our ratings reflect Nuance's highly acquisitive growth strategy and its 'significant' financial risk profile. Partly offsetting is its leading presence in the voice and language solutions market, a significant level of recurring revenues, a diverse customer base, and its track record of organic growth, and successful integrations of acquisitions as ratings support. We view its business risk profile as 'fair,'" S&P said. OMEGA NAVIGATION: Files 'New Value' Chapter 11 Plan --------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Omega Navigation Petroleum tanker owner Omega Navigation Enterprises Inc. filed a proposed reorganization plan at the end of last week where the current owner will make a new investment and share ownership with junior secured lenders, if they too make new contributions. According to the report, there will be a hearing on Sept. 4 in U.S. Bankruptcy Court in Houston for approval of the disclosure statement explaining the Chapter 11 plan. Omega is tentatively scheduling an Oct. 15 confirmation hearing for approval of the plan. The report relates the plan will be funded in part with a new investment of about $2.5 million by an entity related to George Kassiotis, the company's chief executive. In return, his company will receive all the new stock. Junior secured lenders, owed some $36.2 million, may participate in a rights offering to buy one- third of the new stock at the same cost per share as Mr. Kassiotis. The $242.7 million owed to senior secured lenders will be rolled over into new secured debt maturing in October 2017. The lenders must also agree to provide $7.5 million in a new working capital facility. General unsecured creditors will receive 10% in three installments over one year. Unsecured creditors must vote in favor of the plan as a class and individually to receive the payment. Existing stock will be extinguished. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. ONE CALL: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------ Moody's Investors Service has assigned a Corporate Family Rating of B2 to One Call Medical Inc. in conjunction with its acquisition of MSC Care Management. Moody's assigned a Ba3 rating to the $465 million senior secured credit facility. The proposed credit facility, together with a new $210 million unsecured term loan (not rated) and cash equity from Odyssey Investment Partners, GSO Capital and management will be used to fund the acquisition and repay One Call's existing debt. The outlook is stable. Moody's assigned the following ratings: Corporate Family Rating, B2 Probability of Default Rating, B2 $50 million senior secured revolver expiring 2018, Ba3 (LGD2, 28%) $415 million senior secured term loan due 2018, Ba3 (LGD2, 28%) The outlook is stable. Ratings Rationale One Call's B2 Corporate Family Rating reflects the company's modest absolute size based on revenue, high financial leverage, and integration risks associated with the large acquisition of MSC and the potential for future acquisitions. The B2 also incorporates the company's concentration of revenues with its largest customers and the relatively low profit margins. The B2 is supported by the company's leading positions within niche sub segments of the worker's compensation market and modest regulatory or reimbursement risk. Despite its concentration by top customers, the company is well-diversified by state. Moody's views the combination of One Call and MSC as strategically sound and believe the combined company has strong organic growth prospects. Further, despite high leverage Moody's expects the company to generate positive free cash flow. If the two companies are integrated without disruption and EBITDA grows such that adjusted debt to EBITDA is sustained below 4.5 times and free cash flow to debt is sustained above 8%, Moody's could upgrade the ratings. An upgrade would also require the company to engage in a conservative acquisition strategy that does not lead to material integration risks or increases to leverage. Moody's could downgrade the ratings if leverage fails to decline below 6.0 times within the first 12-24 months following the transaction or if Moody's expects free cash flow to debt to be negligible in relation to the company's debt. Aggressive acquisition or shareholder dividends or merger disruption could also lead to a downgrade. The principal methodology used in rating One Call Medical, Inc was the Global Business & Consumer Service Industry Rating 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. Based in Parsippany, NJ, One Call Medical, Inc. provides cost containment services related to workers' compensation claims, acting as an intermediary between healthcare providers, payors and patients. One Call reduces medical costs of workers' compensation claims by negotiating lower rates with network-based providers, reducing unnecessary spend through utilization management and handling certain administrative aspects of workers' compensation medical claims. One Call is a leader in network services within the diagnostic imaging, transportation and translation (T&T) and dental segments. One Call is acquiring MSC Care Management ("MSC"), based in Jacksonville, FL, which provides similar services within the equipment & device management ("EDM"), home health ("HH"), surgical implants, and T&T segments. Customers include insurance companies, third-party administrators (TPAs) and self-insured employers. One Call Medical is owned by Odyssey Investment Partners, LLC. The combined company will have annual revenues of approximately $680 million. ORAGENICS INC: Randal Kirk Discloses 19.5% Equity Stake ------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Randal J. Kirk disclosed that, as of July 31, 2012, he beneficially owns 5,249,980 shares of common stock of Oragenics, Inc., representing 19.5% of the shares outstanding. Intrexon Corporation beneficially owns 4,392,425 common shares representing 16.3% equity stake. A copy of the filing is available for free at http://is.gd/dM1kB9 About Oragenics Inc. Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/-- is a biopharmaceutical company focused primarily on oral health products and novel antibiotics. Within oral health, Oragenics is developing its pharmaceutical product candidate, SMaRT Replacement Therapy, and also commercializing its oral probiotic product, ProBiora3. Within antibiotics, Oragenics is developing a pharmaceutical candidate, MU1140-S and intends to use its patented, novel organic chemistry platform to create additional antibiotics for therapeutic use. In its audit report for the 2011 financial statements, Mayer Hoffman McCann P.C., in Clearwater, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses, negative operating cash flows and has an accumulated deficit. The Company reported a net loss of $7.67 million in 2011, compared with a net loss of $7.80 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.94 million in total assets, $2.25 million in total liabilities, and a $314,253 total shareholders' deficit. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that its loan agreement with the Koski Family Limited Partnership matures in three years and select material assets of the Company relating to or connected with its ProBiora3, SMaRT Replacement Therapy, MU1140 and LPT3-04 technologies have been pledged as collateral to secure the Company's borrowings under the Loan Agreement. This secured indebtedness could impede the Company from raising the additional equity or debt capital the Company needs to continue its operations even though the amount borrowed under the Loan Agreement automatically converts into equity upon a qualified equity financing of at least $5 million. The Company's ability to repay the loan will depend largely upon the Company's future operating performance and the Company cannot assure that its business will generate sufficient cash flow or that the Company will be able to raise the additional capital necessary to repay the loan. If the Company is unable to generate sufficient cash flow or are otherwise unable to raise the funds necessary to repay the loan when it becomes due, the KFLP could institute foreclosure proceedings against the Company's material intellectual property assets and the Company could be forced into bankruptcy or liquidation. OTOLOGICS LLC: Auction Set for Sept. 4; Sale Hearing Next Day ------------------------------------------------------------- Otologics, L.L.C., can move forward with the planned sale of its assets after the Bankruptcy Court approved procedures that will govern the sale and bidding. The Debtor and Cochlear Limited have already executed an Asset Purchase Agreement where, subject to Court approval and potential higher and better bids, Cochlear will purchase the sale assets for roughly $14.0 million payable by a combination of credit bids and cash. Before the Petition Date, the Debtor borrowed funds on a secured basis from Cochlear and a group of 11 noteholders. The Debtor owes Cochlear $10.30 million plus fees and expenses. The Debtor owes a total of $1.91 million to the noteholders. Competing bids are due Aug. 30. The auction is set for Sept. 4 at 2:30 p.m. (Central time), at the offices of the Debtor's counsel, Thompson Coburn LLP, in St. Louis, Missouri. A hearing to consider a sale of the Purchased Assets and the assumption and assignment of designated contracts will be held Sept. 5 at 1:00 p.m. Objections to the sale are due Aug. 28. Any party in interest that wishes to object to the validity and priority of Cochlear's liens and security interests in the collateral securing Cochlear's pre-bankruptcy loan must file an objection by Aug. 27. The Court also approved -- on an interim basis -- the payment to Cochlear of an amount equal to $500,000 in cash as break-up fee in the event the Debtor closes a deal with another party, leaving open the opportunity for any party to object to the allowance of the Break-Up Fee. Objections to the Break-Up Fee are due Aug. 14 and will be tackled at a hearing the next day. No objection to approval of the Bidding Procedures was made prior to or at the Hearing by any party to the case. About Otologics Otologics, L.L.C., filed a Chapter 11 petition (Bankr. E.D. Mo. Case No. 12-47045) in St. Louis on July 23, 2012, intending to sell its assets to Cochlear Limited. Otologics was founded in 1996 to acquire ceratin implantable hearing device technology from Storz Instrument Co, and further develop and test such technology for future commercial marketability. The Debtor's first product, the semi-implantable MET (middle ear implant) has received the CE Mark and is currently being sold in Europe. In October 2006, the Debtor completed the European clinical trial for its second product, the fully implantable CARINA middle ear implant, and received the CE Mark, authorizing European sales. In the United States, the CARINA fully implantable device is currently in Phase II clinical trials. The Debtor's proprietary technology is protected with roughly 40 U.S. patents, 17 pending applications, and 46 proposed applications. The Debtor also has roughly 11 issued patents and 18 pending patent applications in various international jurisdictions. The patents cover hearing implant systems, actuators, electrical stimulation and implanted microphones. The Debtor owns or has exclusive, worldwide licenses to these patents and applications, many of which cover the design and manufacture of its products. Cochlear is a global participant in the hearing impaired device industry. It is publicly traded on the Australian Stock exchange and has over 2,500 employees. Bankruptcy Judge Charles E. Rendlen III oversees the case. Otologics is represented in the case by Thompson Coburn LLP as lead bankruptcy counsel, and Roberts & Olivia LLP as special counsel. Otologics estimated under $50 million in both assets and debts. The petition was signed by Jose H. Bedoya, chief executive officer. PEAK RESORTS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Peak Resorts, Inc. dba Greek PeakMountain Resort 2000 NYS Route 392 Cortland, NY 13045 Bankruptcy Case No.: 12-31471 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Hope Lake Investors LLC 12-31472 V.R.P.D. II, L.P. 12-31473 REDI, LLC 12-31475 ARK Enterprises, Inc. 12-31476 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court Northern District of New York (Syracuse) About the Debtors: Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. An affiliate, REDI LLC, owns 402.7 acres of adjacent property. Another affiliate, Hope Lake Investors, LLC, owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Debtors' Counsel: Lee E. Woodard, Esq. HARRIS BEACH PLLC 333 West Washington Street, Suite 200 Syracuse, NY 13202 Tel: (315) 423-7100 Fax: (315) 422-9331 E-mail: bkemail@harrisbeach.com - and ? Wendy A. Kinsella, Esq. HARRIS BEACH PLLC 333 West Washington Street, Suite 200 Syracuse, NY 13202 Tel: (315) 423-7100 Fax: (315) 422-9331 E-mail: bkemail@harrisbeach.com Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. A. Peak Resorts' List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ FDIC ? The Fes. Deposit Insurance -- $10,000,000 Corp. 1251 Avenue of the Americas New York, NY 10020-1104 FDIC ? The Fes. Deposit Insurance -- $3,318,248 Corp. 1251 Avenue of the Americas New York, NY 10020-1104 MFC Real Estate, LLC -- $1,800,000 7 World Trade Center 250 Greenwich Street New York, NY 10007 Abisch Family Ltd. Partnership -- $350,000 19 Lisa Lane Ithaca, NY 14850 Gray Ledge Enterprises, Inc. -- $343,601 3387 Southern Pine Way Syracuse, NY 13215 Gray Ledge Enterprises -- $343,331 109 Harbor Street Syracuse, NY 13204 The Rossignol Group -- $285,817 1413 Center Drive Park City, UT 84098 FDIC ? The Fed. Deposit Insurance -- $189,444 Corp. Rossignol Ski Company -- $152,729 American Express -- $116,854 J&H Equipment Corp. -- $110,500 National Grid -- $106,708 TAG Mechanical Systems, Inc. -- $100,574 LEC, Inc. -- $82,114 Edward Joy Electric, LLC -- $69,286 Carpets Wholesale Inc. -- $42,524 Mountain Uniforms -- $33,376 CDW Direct, LLC -- $32,432 Friedman Electric Supply -- $31,763 Arcadia Village Master HOA -- $28,199 B. Hope Lake Investors' List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peak Resorts Inc. -- $6,353,177 2000 NYS Route 392 Cortland, NY 13045 FDIC ? The Fed. Deposit Ins. Corp. -- $4,469,349 1251 Avenue of the Americas New York, NY 10020-1104 Manufacturers & Traders Trust -- $3,400,000 Company One M&T Plaza Buffalo, NY 14240 Metro Funding -- $1,800,000 1 Kalisa Way, Suite 310 Paramus, NJ 07652 VRPD II, LP -- $1,000,000 661 South Hurtsbourne Parkway Louisville, KY 40222 Emerald Hospitality -- $292,805 7261 Engle Road, Suite 306 Middleburg Heights, OH 44130 FDIC ? The Fed. Deposit Ins. Corp. -- $225,944 Corning Natural Gas Corp. -- $161,381 FDIC ? The Fed. Deposit Ins. Corp. -- $140,600 Ally (formerly GMAC) -- $136,028 Greek Peak Resort -- $135,063 American Locker -- $84,246 Empire Natural Gas Corp. -- $84,000 New Value, Inc. -- $75,000 National Grid ? 8009 Acct -- $70,951 Gerharz Equipment Inc. -- $64,033 National Grid 49007 -- $63,138 Town of Virgil/Lodge -- $59,706 Verizon Credit Inc. -- $48,485 Shamrock Construction -- $47,500 C. REDI, LLC's List of Its 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Metro Funding Corp. -- $686,684 One Kalisa Way Paramus, NJ 07652 FDIC ? The Fed. Deposit Ins. Corp. -- $686,684 1251 Avenue of the Americas New York, NY 10020-1104 Dr. Dominic Colarusso, Jr. -- $45,500 138 North Third Street Olean, NY 14760 G. Terry Thomas -- $45,500 28 Mayflower Drive Rochester, NY 14618 Town of Virgil Tax Collector -- $24,007 School Tax Collector -- $23,785 Greek Peak Resort -- $7,503 J & H Equipment Corp. -- $6,249 Defresne-Henry, Inc. -- $2,738 Tom Hatfield, CPA -- $1,750 Stockwin Surveying -- $1,025 Hope Lake Investors -- $1 PEMCO WORLD: Hearing Today on Sale to Sun Capital ------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that secured lender Sun Capital Partners Inc. likely will end up buying Pemco World Air Services Inc. because the court-approved sale to an affiliate of VT Systems Inc. fell through. There will be a hearing Aug. 9 in U.S. Bankruptcy Court in Delaware for approval of the sale to Sun Capital in exchange for pre-bankruptcy secured debt and debt financing the Chapter 11 effort. The report relates Boca Raton, Florida-based Sun Capital will leave behind enough cash to wind down the bankruptcy case, with any excess being refunded to the buyer. The bankruptcy court approved a sale June for $41.9 million cash, after VT Systems came out ahead of Sun Capital at auction. The report notes that, when the original buyer couldn't complete the acquisition by the appointed date, the contract was cancelled, Pemco said in a statement. Sun Capital's offer to swap debt for ownership had been selected as the backup bid after the conclusion of the auction. According to the report, the Court-authorized procedures allowed approval of a sale on the backup bid to proceed quickly. Prior to the auction, the official creditors' committee negotiated the settlement with Sun Capital. The lender guaranteed that no less than $1 million would be available for unsecured creditors after claims with higher priority and expenses of the Chapter 11 case were paid. According to the report, a Sun Capital affiliate acquired the $31.8 million senior secured debt from Merrill Lynch Credit Products LLC and is also the holder of a $5.6 million subordinated secured loan. In addition, Sun Capital is providing $6 million in financing for the Chapter 11 effort. The Bloomberg report disclosed Sun Capital agreed as part of the settlement that it won't receive a distribution on account of the subordinated secured loan. About Pemco World Air Services Headquartered in Tampa, Florida Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, AL (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) on March 5, 2012. Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. On March 14, 2012, the U.S. Trustee appointed an official committee of unsecured creditors. On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS Aviation Services Holding Corp., which in turn owns 100% of the stock of debtor WAS Aviation Services Inc., which itself owns 100% of the stock of Pemco World Air Services Inc. Pemco also owes Sun Aviation $5.6 million. As a result, Sun Aviation is seeking separate counsel. However, Sun Aviation obtained an order jointly administering its case with those of the Pemco debtors. On June 15 the bankruptcy court approved sale of Pemco's business for $41.9 million cash to an affiliate of VT Systems Inc. from Alexandria, Virginia. Boca Raton, Florida-based Sun Capital was under contract to make the first bid at auction for the provider of heavy maintenance and repair services for commercial jet aircraft. PEMCO WORLD: Former Employees Lodge WARN Suit Over Mass Layoffs --------------------------------------------------------------- Megan Leonhardt at Bankruptcy Law360 reports that former employees sued Pemco World Air Services Inc. in Delaware on Friday, claiming the commercial aircraft maintenance firm unlawfully failed to give almost 500 employees enough notice of planned mass layoffs at its Florida facility. Lodged as an adversary case in Pemco?s bankruptcy pending in Delaware, Ethan Willock claimed that the company violated the federal Worker Adjustment and Retraining Notification Act, which required businesses to notify workers at least 60 days in advance of potential employee layoffs, according to Bankruptcy Law360. About Pemco World Air Services Headquartered in Tampa, Florida Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, AL (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) on March 5, 2012. Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. On March 14, 2012, the U.S. Trustee appointed an official committee of unsecured creditors. On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS Aviation Services Holding Corp., which in turn owns 100% of the stock of debtor WAS Aviation Services Inc., which itself owns 100% of the stock of Pemco World Air Services Inc. Pemco also owes Sun Aviation $5.6 million. As a result, Sun Aviation is seeking separate counsel. However, Sun Aviation obtained an order jointly administering its case with those of the Pemco debtors. On June 15, 2012, the bankruptcy court approved sale of Pemco's business for $41.9 million cash to an affiliate of VT Systems Inc. from Alexandria, Virginia. Boca Raton, Florida-based Sun Capital was under contract to make the first bid at auction for the provider of heavy maintenance and repair services for commercial jet aircraft. PEREGRINE FINANCIAL: Trustee Can Subpoena Firm's Banks ------------------------------------------------------ Jacob Bunge at Dow Jones' Daily Bankruptcy Review reports that a federal judge on Aug. 7, 2012 cleared the way for a trustee to seek financial records from banks used by Peregrine Financial Group Inc., as investigators sift the collapsed brokerage's finances. Carolina Bolado at Bankruptcy Law360 reports that JPMorgan Chase Bank NA objected to the Peregrine Financial Group Inc. liquidating trustee's proposed subpoenas in his search for potentially fraudulent transfers among the bank records of the embattled brokerage. Peregrine trustee Ira Bodenstein asked U.S. Bankruptcy Judge Carol A. Doyle on July 31 for permission to subpoena Peregrine financial records from at least 10 banks, including JPMorgan, Bank of New York Mellon Corp., Morgan Stanley & Co. Inc. and Goldman Sachs & Co. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, 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. PINNACLE AIRLINES: Says Shareholders of Jeopardizing Restructuring ------------------------------------------------------------------ Jacqueline Palank at Dow Jones' Daily Bankruptcy Review reports that Pinnacle accuses shareholders of jeopardizing restructuring. Pinnacle Airlines Corp. is accusing hedge fund and shareholder Meson Capital Partners LP of putting its reorganization at risk in order to squeeze value out of shares that are expected to be worthless. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PINNACLE HOLDCO: S&P Gives 'B' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Luxembourg-based Pinnacle Holdco S.a.r.l. The outlook is stable. "We also assigned a 'B+' issue-level rating with a recovery rating of '2' to the company's $40 million senior secured revolving credit facility and $305 million first-lien term loan. In addition, we assigned a 'CCC+' issue-level rating with a recovery rating of '6' to Pinnacle's $135 million second-lien term loan. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery of principal in the event of a payment default by the borrower and the '6' recovery rating indicates expectations for negligible (0% to 10%) recovery," S&P said. "Standard & Poor's ratings on Pinnacle, parent company of the group of companies that composed Paradigm Ltd. prior to its acquisition by Apax Partners and JMI Equity in June 2012, reflect the company's 'weak' business profile, characterized by its position in a fairly narrow segment of the exploration and production (E&P) market and its 'highly leveraged' financial profile. Offsetting some of these issues is the critical role the company's products play in the E&P process, a strong and rising position in its segment, and a highly recurring revenue base," S&P said. "Pinnacle is a provider of software solutions for the worldwide oil and gas E&P industry. The industry uses Pinnacle's products to accurately and cost-effectively locate and optimally produce oil and gas, with over 700 customers worldwide including majors, independents, national oil companies, universities, and research institutes. Core services include interpretation and modeling products, seismic processing and imaging, and reservoir characterization. The company has over 3,000 active contracts and 15,000 seats. Revenues are geographically diversified, in line with the E&P industry. Its products target and are used by geophysicists and others in the evaluation of E&P potential. The company offers an integrated suite of products -- on Linux- and most recently Windows-based platforms, representing the culmination of 10 years and a significant amount of research and development (R&D) spending. In addition, the company has made acquisitions to further complement its own offerings," S&P said. "We view the company's business profile as weak, reflecting its significant market position in a relatively small market, competing with several major and long-established players with greater financial and product resources," said Standard & Poor's credit analyst Jacob Schlanger. "However, this is partly offset by its suite of integrated software products that spans the full E&P cycle, an emphasis on establishing relationships with new geoscientists and engineers, and a significant patent portfolio. The company's relationship strategy creates a growing base of future users and enables them to increase penetration of existing customers." "Our stable rating outlook reflects Ceridian's modest near-term debt maturities, the eased leverage covenant put in , which provides sufficient headroom over the near term, and the company's significant base of recurring revenues. We expect revenue to slowly grow in conjunction with the economic recovery, introduction of new offerings, and expansion into new markets. Liquidity is ample enough to handle near-term maturities. However, the highly leveraged capital structure limits a possible upgrade," S&P said. "Although the company has addressed the 2014 maturity wall, we could lower our ratings as the company approaches the 2015 maturity wall and there are no plans in place to restructure or repay the debt, or if covenant headroom drops to less than 10%," S&P said. PLYMOUTH OIL: Secured Creditors Fail to Block Cash Use ------------------------------------------------------ Plymouth Oil Company, L.L.C., won bankruptcy court permission, on an emergency basis, to use the cash collateral of its secured creditors through a final hearing on Sept. 11. Plymouth Oil will use the cash collateral that secures its prepetition obligations to Ryan Lake, Steve Vande Brake, Arlon Sandbulte, Dirk Dorn, Iowa Corn Opportunities, LLC, Iowa Prairie Bank, Iowa Corn Processors, L.C., and FWS Industrial Projects, USA Inc. to fund, among other things: (a) the maintenance and preservation of its assets; (b) the continued operation of its business, including employee expenses, current tax obligations and insurance expenses; and (c) professional fees and the United States Trustee fees. The Debtors propose to grant the Secured Creditors adequate protection for the use of Cash Collateral in the form of (i) replacement liens and (ii) adequate protection claims. The Replacement Liens and the Adequate Protection Claims, however, will: (i) be subject and subordinate to valid, properly-perfected liens on the Debtor's assets as of the Petition Date and the carve-out for fees payable to the U.S. Trustee and bankruptcy court clerk; and fees and expenses of attorneys (not to exceed $25,000), employed in the Debtor's case from July 23, 2012 to Sept. 11, 2012, to the extent allowed by the Bankruptcy Court; and (ii) not extend to avoidance actions under Chapter 5 of the Bankruptcy Code, or related proceeds as well as any products provided by C&N Ethanol Marketing, LLC, to the Debtor pursuant to the Feedstock Supply, Off-Take, and Merchandising Agreement between C&N and the Debtor. The Court heard the Debtor's request to use Cash Collateral at hearings on July 31 and Aug. 1. The Secured Creditors tried to block the Debtor's request, saying the Debtor has shown no ability to restructure its obligations in a way that it can meet debt service. The Creditors categorically object to a "carve out" of their collateral for attorney fees or trustee fees. The Creditors said they most likely have little or no equity cushion and the proposed carve-out, absent strong evidence of an equity cushion, further diminishes their position. The Secured Creditors said their interest in the Cash Collateral arise from five separate blanket security agreements signed by the Debtor -- one in favor of each of the Creditors -- and appropriate UCC financing statements filed with the appropriate offices. The Secured Creditors said the Debtor owes them $9.25 million in the aggregate, including interest and other charges, instead of the $8.3 million alleged by the Debtor in its court filings. They said the Debtor has paid very little to the Creditors so far this year, and interest continues to accrue on the debt. The Loans matured in 2010. For the last 2 years, Debtor has been attempting to find replacement loans or capital with which to refinance or pay the Creditors, but it has been unable to do so, in part at least because the Debtor has never been able to earn a profit. Certain of the Creditors were former board members of the Debtor. They resigned once it became clear that they would need to litigate against Plymouth to collect their loans. According to the Secured Creditors, "the Debtor lost $2.5 million in 2011 and another $1 million in the first half of this year. The Debtor has never been unable to meet its debt service, or anything reasonably close. Plain and simple, the Debtor is close to failing." The Debtor warned in court papers the "estate will be immediately and irreparably harmed if this Emergency Order is not entered." The Secured Creditors also said Plymouth Oil's current assets -- from which it gets its cash collateral -- are dropping in value. Its current assets (inventory, accounts receivable and cash) started their long downward slide in 2011. From a high of $1.1 million in mid-2011, they dropped more than $200,000 that year. Starting in January, they dropped another $120,000 during the first six months of this year. The Secured Creditors said the value of the Debtor's assets is unknown. The Debtor lists its property, plant and equipment at about $16 million, but that is simply historical cost basis, less depreciation. Because the plant is somewhat unique and has never been profitable, its value will be difficult to determine, they said. Neither side has a recent appraisal. It should not be assumed that the plant is worth more than the debt against it. There is no meaningful evidence of an "equity cushion". The secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven Vande Brake, and Iowa Corn Opportunities, LLC, are represented by: T. Randall Wright, Esq. Brandon R. Tomjack, Esq. Eric J. Adams, Esq. BAIRD HOLM LLP 1500 Woodmen Tower 1700 Farnam Street Omaha, NE 68102-2068 Tel: 402-344-0500 Fax: 402-344-0588 E-mail: rwright@bairdholm.com btomjack@bairdholm.com eadams@bairdholm.com About Plymouth Oil Plymouth Oil Company, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Iowa Case No. 12-01403) in Sioux City on July 23, 2012. The Debtor estimated assets and debts of $10 million to $50 million. Plymouth Oil -- http://www.plymouthoil.com-- has a $30 million extraction plant located at 22058 K-42 Merrill, Iowa, directly across from the new Plymouth Energy Ethanol Plant. Founded by local investors, Plymouth Oil started operations in February 2010 purchasing raw corn germ and refining this material into de-oiled germ meal and kosher food-grade cooking oil. The plant has the capability of pumping out 90 tons of corn oil each day and about 300 tons of DCGM (defatted corn germ meal) daily, which is used for hog, poultry and dairy feed. Bankruptcy Judge Thad J. Collins presides over the case. Bradley R. Kruse, Esq., at Brown Winick Graves Gross Baskerville & Schoenebaum, P.L.C., serves as the Debtor's counsel. The petition was signed by David P. Hoffman, president. PLYMOUTH OIL: Hiring BrownWinick as Bankruptcy Counsel ------------------------------------------------------ Plymouth Oil Company, L.L.C., seeks Bankruptcy Court permission to employ Bradley R. Kruse of the law firm of Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C. as its general reorganization counsel. Mr. Kruse will act as lead counsel; he will utilize other BrownWinick attorneys and paralegals when appropriate. Mr. Kruse attests that BrownWinick, including the attorneys employed by it, is a disinterested person, represents or holds no interest adverse to the interest of the estate with respect to the matters on which it is to be employed, represents no other entity in connection with this case, has represented no other entity in connection with this case and has no connection with the debtor (except that it represented the Debtor in various legal matters pre-petition), any creditor (except that it previously represented creditor Port Neal Welding Co. Inc. on matters wholly unrelated to this bankruptcy case), or any other party in interest (except that it previously represented Randall Kroese and Jon Bjornstad, who both own a minority membership interest in Plymouth Oil Company, LLC, and currently represents Kroese & Kroese, an accounting firm owned in part by Randall Kroese, on matters wholly unrelated to this bankruptcy case), or their attorneys or accountants, or the United States trustee, or any person employed in the office of the United States trustee. The Debtor paid the Firm $20,000 on July 23, 2012, as a retainer to guaranty payment of services. The Debtor and the Firm agreed that the Firm should be paid $12,949.75 from this retainer for previously unbilled pre-petition legal services and reimbursement of pre-petition expenses and costs advanced, related to Debtor's financial difficulties, the possibilities of reorganizing and bankruptcy options. The balance of the prepetition retainer in the amount of $7,050.25 has been placed in the Firm's Client Trust Account, and will be applied to postpetition attorney fees and costs incurred, after application to and upon approval by the Bankruptcy Court. Plymouth Oil Company, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Iowa Case No. 12-01403) in Sioux City on July 23, 2012. The Debtor estimated assets and debts of $10 million to $50 million. Plymouth Oil -- http://www.plymouthoil.com-- has a $30 million extraction plant located at 22058 K-42 Merrill, Iowa, directly across from the new Plymouth Energy Ethanol Plant. Founded by local investors, Plymouth Oil started operations in February 2010 purchasing raw corn germ and refining this material into de-oiled germ meal and kosher food-grade cooking oil. The plant has the capability of pumping out 90 tons of corn oil each day and about 300 tons of DCGM (defatted corn germ meal) daily, which is used for hog, poultry and dairy feed. Bankruptcy Judge Thad J. Collins presides over the case. Bradley R. Kruse, Esq., at Brown Winick Graves Gross Baskerville & Schoenebaum, P.L.C., serves as the Debtor's counsel. The petition was signed by David P. Hoffman, president. Secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven Vande Brake, and Iowa Corn Opportunities, LLC, are represented by lawyers at Baird Holm LLP in Omaha, Nebraska. PLYMOUTH OIL: Sec. 341 Creditors' Meeting Set for Aug. 29 --------------------------------------------------------- The U.S. Trustee for the Northern District of Iowa will convene a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Plymouth Oil Company, LLC, on Aug. 29, 2012, at 10:00 a.m. at Sioux City 341 Meeting Room. Plymouth Oil Company, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Iowa Case No. 12-01403) in Sioux City on July 23, 2012. The Debtor estimated assets and debts of $10 million to $50 million. Plymouth Oil -- http://www.plymouthoil.com-- has a $30 million extraction plant located at 22058 K-42 Merrill, Iowa, directly across from the new Plymouth Energy Ethanol Plant. Founded by local investors, Plymouth Oil started operations in February 2010 purchasing raw corn germ and refining this material into de-oiled germ meal and kosher food-grade cooking oil. The plant has the capability of pumping out 90 tons of corn oil each day and about 300 tons of DCGM (defatted corn germ meal) daily, which is used for hog, poultry and dairy feed. Bankruptcy Judge Thad J. Collins presides over the case. Bradley R. Kruse, Esq., at Brown Winick Graves Gross Baskerville & Schoenebaum, P.L.C., serves as the Debtor's counsel. The petition was signed by David P. Hoffman, president. Secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven Vande Brake, and Iowa Corn Opportunities, LLC, are represented by lawyers at Baird Holm LLP in Omaha, Nebraska. PROVIDENT COMMUNITY: Posts $143,000 Net Income in Second Quarter ---------------------------------------------------------------- Provident Community Bancshares, Inc., reported net income of $143,000 on $1.81 million of net interest income for the three months ended June 30, 2012, compared with net income of $8,000 on $2.30 million of net interest income for the same period during the prior year. The Company reported net income of $59,000 on $3.76 million of net interest income for the six months ended June 30, 2012, compared with net income of $119,000 on $4.28 million of net interest income for the same period a year ago. Dwight V. Neese, President and CEO, said "During the second quarter, our financial performance improved, but was still affected by the continued decline in real estate values in the markets we serve. The increase in our loan loss provision in the second quarter was necessary to cover valuation issues on commercial real estate loans. Our results reflect the positive outcome of proactive measures that were taken earlier to address uncertain market conditions. As a result, our capital ratios increased and higher underwriting standards and a profitable core banking operation contributed to an improved quarter. We continue to take a very conservative approach on all aspects of managing our loan portfolio, especially collateral valuations. While we realize the financial sector has more challenges ahead, we believe the actions we have taken over the past several years in dealing with risk management systems, loan review systems and technology improvements have prepared us to deal with whatever issues are yet to come. We also believe that we have aggressively identified and dealt with our problem loans and believe that the steps that we have taken will enable us to better manage our loan portfolio." A copy of the press release is available for free at: http://is.gd/vZO3gd About Provident Community Rock Hill, South Carolina-based Provident Community Bancshares, Inc., is the bank holding company for Provident Community Bank, N.A. (the "Bank"). Provident Community Bancshares has no material assets or liabilities other than its investment in the Bank. Provident Community Bancshares' business activity primarily consists of directing the activities of the Bank. The Bank's operations are conducted through its main office in Rock Hill, South Carolina and seven full-service banking centers, all of which are located in the upstate area of South Carolina. The Bank is regulated by the Office of the Comptroller of the Currency (the "OCC"), is a member of the Federal Home Loan Bank of Atlanta (the "FHLB") and its deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (the "FDIC"). Provident Community Bancshares is subject to regulation by the Federal Reserve Board (the "FRB"). The Company reported a net loss of $190,000 on net interest income of $8.5 million for 2011, compared with a net loss of $13.8 million on net interest income of $8.4 million for 2010. Total non-interest income was $3.3 million for 2011, as compared to $3.5 million for 2010. The Company's balance sheet at March 31, 2012, showed $375.39 million in total assets, $363.61 million in total liabilities and $11.78 million in total shareholders' equity. Consent Order On Dec. 21, 2010, Provident Community Bank, N.A. entered into a stipulation and consent to the issuance of a consent order with the Office of the Comptroller of the Currency. At Dec. 31, 2011, the Bank met each of the capital requirements required by regulations, but was not in compliance with the capital requirements imposed by the OCC in its Consent order. The Bank is required by the consent order to maintain Tier 1 capital at least equal to 8% of adjusted total assets and total capital of at least 12% of risk-weighted assets. However, so long as the Bank is subject to the enforcement action executed with the OCC on Dec. 21, 2010, it will not be deemed to be well-capitalized even if it maintains the minimum capital ratios to be well- capitalized. At Dec. 31, 2011, the Bank did not meet the higher capital requirements required by the consent order and is evaluating alternatives to increase capital. PORTER BANCORP: Signs Employment Agreement with John Taylor ----------------------------------------------------------- John T. Taylor entered into an employment agreement with Porter Bancorp, Inc., and PBI Bank, effective Aug. 2, 2012, to serve as President and CEO of PBI Bank and President of Porter Bancorp. Mr. Taylor will also be appointed to the board of directors of Porter Bancorp and PBI Bank, pending regulatory approval. Mr. Taylor's Employment Agreement has a term of 3 years. Mr. Taylor's initial base salary is $375,000 per year and may be increased from time to time in those amounts as the boards of directors of the Company and the Bank may determine, but may not be decreased without his express written consent. No increase in the base salary is expected to occur during the first two years of the agreement. On the effective date, the Company granted a restricted stock award to Mr. Taylor which has a grant date value equal to one- third of his projected total compensation for 2012. A copy of the Employment Agreement is available for free at: http://is.gd/CAFpN2 About Porter Bancorp Porter Bancorp, Inc., is a bank holding company headquartered in Louisville, Kentucky. Through its wholly-owned subsidiary PBI Bank, the Company operates 18 full-service banking offices in twelve counties in Kentucky. Crowe Horwath, LLP, in Louisville, Kentucky, audited Porter Bancorp's financial statements for 2011. The independent auditors said that the Company has incurred substantial losses in 2011, largely as a result of asset impairments. "In addition, the Company's bank subsidiary is not in compliance with a regulatory enforcement order issued by its primary federal regulator requiring, among other things, increased minimum regulatory capital ratios. Additional significant asset impairments or continued failure to comply with the regulatory enforcement order may result in additional adverse regulatory action." The Company reported a net loss of $107.31 million in 2011, compared with a net loss of $4.38 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.33 billion in total assets, $1.25 billion in total liabilities and $81.50 million in stockholders' equity. RAINBOW LAND: Has Court's Nod to Hire Alan R. Smith as Counsel -------------------------------------------------------------- Rainbow Land & Cattle Company, LLC, sought and obtained authorization from the Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada to employ the Law Offices of Alan R. Smith as bankruptcy counsel. The firm will, among other things, negotiate, prepare and file a plan or plans of reorganization and disclosure statements in connection with the plans, and otherwise promote the financial rehabilitation of the Debtor at these hourly rates: Alan R. Smith $500 John J. Gezelin, Contract Attorney $350 Holly E. Estes, Associate Attorney $300 Peggy L. Turk, Paraprofessional $205 Debra L. Goss, Paraprofessional $150 Other Paraprofessional Services $105 The principal of the Debtor, John Houston, paid into the Debtor the sum of $25,000 for the payment of attorneys' fees to the firm. The funds were deposited in the business account of the Debtor, and the Debtor subsequently wrote a check to the firm for $25,000, which was paid pre-petition. Alan R. Smith, Esq., a member at the Firm, attested that the Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Rainbow Land Rainbow Land & Cattle Company, LLC, owns 466 undeveloped acres of real property located in Caliente, Nevada, along with 133 acre fee of water rights. Rainbow Land filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-14009) on April 4, 2012. It scheduled $15.43 million in assets and $2.50 million in liabilities. The Debtor owns land and water rights in Caliente with a combined value of $15.4 million. The properties secure $2.4 million of debt. Judge Bruce A. Markell presides over the case. The petition was signed by John H. Huston, managing member. REOSTAR ENERGY: Judge Denies Former Execs' Bid to Shake Suit ------------------------------------------------------------ Max Stendahl at Bankruptcy Law360 reports that U.S. District Judge John McBryde on Friday refused to dismiss ReoStar Energy Corp.'s suit alleging its former CEO and finance chief breached a contract by selling an $11.2 million debt at a steep discount to a creditor who then pushed the firm into bankruptcy. Bankruptcy Law360 says Judge McBryde denied a May 29 motion by Mark Zouvas and Scott Allen to dismiss claims for breach of contract, breach of fiduciary duty and negligence. 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: Automatic Stay Is 'Shield,' Not 'Sword' ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Aurora Bank FSB won't be permitted to go ahead with several lawsuits in California state courts seeking $1.4 million in damages from Residential Capital LLC. According to the report, U.S. Bankruptcy Judge Martin Glenn wrote a 13-page opinion Aug. 7 telling Rescap that he won't allow the so-called automatic bankruptcy stay "to be used both as a sword and a shield." The disputes between Aurora and Rescap date to 2009 when Rescap filed foreclosure suits and Aurora counterclaimed, contending Rescap improperly transferred mortgages Aurora was servicing. While Judge Glenn won't permit Aurora to proceed with the suits to obtain money judgments, he won't allow Rescap to move ahead with its part of the suits seeking so-called declaratory judgments. Judge Glenn said that Aurora's claims, even if upheld, would only give rise to general unsecured claims not covered by insurance. Distracting Rescap's management with the lawsuits would interfere with progress of the Chapter 11 effort, Judge Glenn said. The report notes Judge Glenn previously allowed about two-thirds of lawsuits against Rescap to go ahead despite the bankruptcy stay that automatically halts lawsuits against a company when it files a Chapter 11 petition. The suits that may proceed include those to resolve title disputes and defenses to foreclosures. 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. 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. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. According to Bloomberg News, following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. 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: Judge Gonzalez's Probe to Cost Up to $36MM --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Arthur J. Gonzalez, who was appointed on July 3 as examiner for Residential Capital LLC, said in a court filing that his investigation will cost $29 million to $36 million. According to the report, Mr. Gonzalez said it's "realistic" to expect that his report will be filed in early February. Mr. Gonzalez retired as a bankruptcy judge in New York on March 1. His investigation will cover ResCap and its parent, nonbankrupt Ally Financial Inc. As examiner, Mr. Gonzalez will utilize the law firm Chadbourne & Park LLP along with Mesirow Financial Consulting LLC as financial advisers. The report relates U.S. Bankruptcy Judge Martin Glenn formally called for an examiner in June and later directed Gonzalez to investigate Ally and Cerberus Capital Management LP, ResCap's proposed sale and reorganization plan, the role of ResCap's board, alternatives to ResCap's proposals, claims against officers and directors, claims ResCap proposes to release, and the value of the releases. The report notes Judge Glenn said in June that creditors won't be permitted to vote on a ResCap reorganization plan until the examiner's report is completed. The $473.4 million of ResCap senior unsecured notes due April 2013 last traded Aug. 6 for 24 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $2.1 billion in third-lien 9.625% secured notes due 2015 last traded on Aug. 2 for 99.5 cents on the dollar, Trace reported. 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. 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. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. According to Bloomberg News, following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. 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). RIDGE MOUNTAIN: Has OK to Hire Harris Beach as Bankruptcy Counsel ----------------------------------------------------------------- The Hon. Margaret Cangilos-Ruiz of the U.S. Bankruptcy Court for the Northern District of New York granted Ridge Mountain LLC permission to employ Harris Beach PLLC as its Chapter 11 counsel. As reported by the Troubled Company Reporter on June 13, 2012, the attorneys likely to work on the case and their normal hourly rates are: Lee W. Woodard, Esq. $375 David M. Capriotti, Esq. $375 Wendy A. Kinsella, Esq. $375 Kevin W. Tompsett, Esq. $310 Kelly C. Griffith, Esq. $275 Paralegals $125 About Ridge Mountain Ridge Mountain LLC filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 12-31090) in Syracuse on June 4, 2012. Ridge Mountain operates that Mountain Brook Apartments in Chattanooga, Tennessee, and the Ridgemont Apartments in Red Bank, Tennessee. Ridge Mountain disclosed $16.5 million in assets and $23.6 million in liabilities. The apartment secures a $22 million debt to U.S. Bank, N.A. Judge Margaret M. Cangilos-Ruiz presides over the case. The petition was signed by Patrick Phelan, president of First Salina Prop., managing member. RIDGE MOUNTAIN: US Bank Wants Daniel Ford to Continue as Receiver ----------------------------------------------------------------- Lender U.S. Bank, National Association, asks the U.S. Bankruptcy Court for the Northern District of New York to enter an order authorizing Daniel Ford, a Senior Vice President/Director of Property Management for Freeman Webb Incorporated, to continue as receiver of the Ridge Mountain, LLC mortgaged property: (a) Mountain Brook Apartments, 280 unit multi-family residential apartment building located in Chattanooga, Tennessee; and (b) Ridgemont Apartments, 226 unit multi-family residential apartment building located in Red Bank, Tennessee. The Lender is the successor in interest to Bank of America, National Association, successor by merger to LaSalle Bank National Association, as trustee for the registered holders of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-CIBC9. Prior to the Petition Date, the Debtor executed that certain Promissory Note A, dated May 1, 2004, payable to CIBC, Inc., in the original principal amount of $16.925 million and that certain Promissory Note B, dated May 7, 2004, payable to CIBC, in the original principal amount of $1.075 million. The Notes are secured by a Deed of Trust, Assignment of Leases and Rents and Security Agreement, dated May 7, 2004, executed by the Debtor in favor of First American Title Insurance Company, as Trustee, for the benefit of the original lender, evidencing a lien on the Mortgaged Property. Prior to the Petition Date, the Debtor was in default under the terms of the Notes and Deed of Trust. The Debtor's defaults included: a. failure to pay when due the entirety of incurred utility charges which are incurred, which in turn resulted in certain essential services, including water service, being discontinued to certain portions of the Mortgaged Property; b. failure to pay taxes which had become due, which in turn resulted in multiple tax liens being attached to the Mortgaged Property; c. failure to repair fire damage to a portion of the property at Mountain Brook Apartments, and based on its failure to maintain the improvements in a manner that they are structurally sound, in good repair and free of defects in materials and workmanship; and e. failure of the improvements to comply with and remain in compliance with all applicable statutes, rules, regulations and private covenants relating to the ownership, construction, use or operation of the property, including all applicable health, fire and building codes. In September 2010, the Chancery Court for Hamilton County, Tennessee Eleventh Judicial District, appointed, at the behest of the Lender, Mr. Ford as the Receiver. The State Court directed that all rents and other proceeds from the Mortgaged Property due on Oct. 1, 2010, were to be delivered to and held by the Receiver pending further order of the State Court. Subsequent to his appointment, the Receiver issued his initial reports dated Oct. 18, 2010, and Nov. 1, 2010. In his initial reports, the Receiver validated the Lender's assertions as to the deplorable, and in some cases dangerous, conditions that existed at the Mortgaged Property due to the Debtor's gross mismanagement. By contrast, the condition of the Mortgaged Property has significantly improved under the Receiver's possession and management, such that the Receiver's continued management and control over the Mortgaged Property is in the best interests of the creditors of this estate. The Lender also seeks the issuance of court order, (a) excusing the Receiver from compliance with Sections 543(a) and (b) of the Bankruptcy Code, (b) authorizing the Receiver to continue to collect cash, rents and other proceeds from the operation of the Mortgaged Property, which amounts constitute the "cash collateral" of the Lender, and to disburse the funds in the normal course to the extent required to operate and maintain the Mortgaged Property, and (c) granting the Lender such other and further relief as is just and proper. The Lender is represented by: Douglas K. Clarke, Esq. Steven E. Fox, Esq. Brett J. Nizzo, Esq. RIEMER & BRAUNSTEIN LLP Times Square Tower Seven Times Square, Suite 2506 New York, NY 10036 Tel: (212) 789-3100 E-mail: dclarke@riemerlaw.com sfox@riemerlaw.com bnizzo@riemerlaw.com About Ridge Mountain Ridge Mountain LLC filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 12-31090) in Syracuse on June 4, 2012. Ridge Mountain operates that Mountain Brook Apartments in Chattanooga, Tennessee, and the Ridgemont Apartments in Red Bank, Tennessee. Ridge Mountain disclosed $16.5 million in assets and $23.6 million in liabilities. The apartment secures a $22 million debt to U.S. Bank, N.A. Judge Margaret M. Cangilos-Ruiz presides over the case. Lee E. Woodard, Esq., at Harris Beach PLLC, serves as the Debtor's counsel. The petition was signed by Patrick Phelan, president of First Salina Prop., managing member. ROCK LAW: Case Summary & 5 Unsecured Creditors ---------------------------------------------- Debtor: The Rock Law Group, P.A. 1760 Fennell Street Orlando, FL 32751 Bankruptcy Case No.: 12-10536 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Christopher C. Todd, Esq. MCINTYRE, PANZARELLA, THANASIDES, ET AL 400 N. Ashley Drive, Suite 1500 Tampa, FL 33602 Tel: (813) 899-6059 Fax: (813) 899-6069 E-mail: chris@mcintyrefirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its five unsecured creditors is available for free at http://bankrupt.com/misc/flmb12-10536.pdf The petition was signed by Andrew P. Rock, Esq., president. RON M. LAWRENCE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Ron M. Lawrence, Inc. 3164 Cushman Circle, SW Suite B-2 Atlanta, GA 30311 Bankruptcy Case No.: 12-69566 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtor's Counsel: Angelyn M. Wright, Esq. THE WRIGHT LAW OFFICE, P.C. 160 Clairemont Avenue - Ste. 200 P.O. Box 2890 Decatur, GA 30031-2890 Tel: (404) 373-9933 E-mail: twlopc@earthlink.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Ronald M. Lawrence, president. ROSETTA GENOMICS: Offering 5.5 Million of Ordinary Shares --------------------------------------------------------- Rosetta Genomics Ltd. announced the pricing of an underwritten public offering of 5,500,000 ordinary shares at a public offering price of $5.00 per share. The gross proceeds to Rosetta from this offering are expected to be approximately $27.5 million, before deducting underwriting discounts and commissions and other offering expenses payable by Rosetta. The offering is expected to close on or about Aug. 8, 2012, subject to the satisfaction of customary closing conditions. In addition, Rosetta has granted the underwriter a 45-day option to purchase up to 825,000 additional ordinary shares to cover over-allotments, if any. Rosetta plans to use the net proceeds from the offering primarily to fund its operations and for other general corporate purposes, including, but not limited to, repayment or refinancing of future indebtedness or other corporate borrowings, working capital, intellectual property protection and enforcement, capital expenditures, investments, acquisitions or collaborations, research and development and product development. Aegis Capital Corp. is acting as the sole book-running manager for the offering. A registration statement on Form F-1 relating to the shares was filed with the Securities and Exchange Commission and was declared effective on Aug. 2, 2012. A copy of the Underwriting Agreement is available for free at: http://is.gd/CBIgBh About Rosetta Located in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. In its auditors' report for the 2011 financial statements, Kost Forer Gabbay & Kasierer, in Tel-Aviv, Israel, expressed substantial doubt about Rosetta Genomics' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and generated negative cash flows from operating activities in each of the three years in the period ended Dec. 31, 2011. The Company reported a net loss after discontinued operations of $8.83 million on $103,000 of revenues for 2011, compared with a net loss after discontinued operations of $14.76 million on $279,000 of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.04 million in total assets, $2.40 million in total liabilities, and a stockholders' deficit of $356,000. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, "We have used substantial funds to discover, develop and protect our microRNA tests and technologies and will require substantial additional funds to continue our operations. Based on our current operations, our existing funds, including the proceeds from the January 2012 debt financing, will only be sufficient to fund operations until late May, 2012. We intend to seek funding through collaborative arrangements and public or private equity offerings and debt financings. Additional funds may not be available to us when needed on acceptable terms, or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then-existing shareholders may result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our research or development programs. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development or approved tests or products that we would otherwise pursue on our own. Our failure to raise capital when needed will materially harm our business, financial condition and results of operations, and may require us to seek protection under the bankruptcy laws of Israel and the United States." SABANA DEL PALMAR: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sabana Del Palmar, Inc. dba Project Name: Mirabella Village & Club 250 West Main, PR 2 Intersection PR 871 Sierra Bayamon Hato Tejas Bayamon, PR 00957 Bankruptcy Case No.: 12-06177 Chapter 11 Petition Date: August 5, 2012 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carmen D Conde Torres, Esq. C.CONDE & ASSOC. 254 San Jose Street 5th Floor San Juan, PR 00901-1523 Tel: (787) 729-2900 Fax: (787) 729-2203 E-mail: notices@condelaw.com Scheduled Assets: $262,415 Scheduled Liabilities: $49,594,964 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb12-06177.pdf The petition was signed by Michael J. Scarfia, president. SANTA YSABEL RESORT: Lender Seeks Chapter 11 Case Dismissal ----------------------------------------------------------- Yavapai-Apache Nation, Santa Ysabel Resort and Casino's biggest lender, is asking the bankruptcy judge in San Diego, Calif., to dismiss the Chapter 11 filing by the Iipay Nation of Santa Ysabel on grounds that tribes and some of the tribal businesses they own don't qualify for bankruptcy relief. In the bankruptcy petition, the casino described itself as an unincorporated company owned by the Iipay Nation of Santa Ysabel, a federally recognized tribe in Arizona. Katy Stech, writing for Dow Jones Newswires, recounts that the Yavapai-Apache Nation lent the casino $7 million and later bought the casino's debt from J.P. Morgan Chase. Santa Ysabel Casino had borrowed $26 million from JPMorgan to build a 37,000-square foot casino and a hotel. The tribe couldn't afford to pay for building materials and the hotel was never constructed, according to court papers. The casino opened in 2007 with poker tables and about 350 slot machines. Santa Ysabel Casino fell behind on loan payments, and the Yavapai-Apache Nation won a $9 million tribal court judgment in February. There's a hearing on the dismissal motion on Sept. 4 Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that in the motion to dismiss, the Apaches contend that it's actually the Iipay tribe that's in bankruptcy and that an Indian tribe is a governmental unit not eligible for bankruptcy. In support of dismissal, the Apaches cite an opinion by the U.S. Court of Appeals in San Francisco saying that a tribe is a governmental unit. The Apaches argue that the casino isn't a separately incorporated entity and thus can't file bankruptcy. According to Dow Jones, the Santa Ysabel casino is about to test the notion that Native American enterprises aren't eligible for protection under U.S. bankruptcy law. Dow Jones notes Native American tribes are considered sovereign nations, and the unincorporated businesses that they own aren't listed among the entities that qualify for Chapter 11 protection, though bankruptcy experts can't be sure that court protection is out of reach without any case law to back it up. "It isn't really clear that the tribe or a tribal instrumentality can be a debtor in bankruptcy," said attorney Aaron Harkins, Esq., a partner at Faegre Baker Daniels LLP's tribal and restructuring practices, according to Dow Jones. "The prevailing view in the industry is that they aren't." Dow Jones reports that casino attorney Ron Bender said the Iipay Nation's constitution gives the tribe's chairman the power to put tribal businesses into bankruptcy. He said the case raises issues that are "novel, complex, and of an unusual nature due to the involvement of gaming laws, Indian gaming laws, Indian tribal law, and federal Indian laws." According to Dow Jones, Mr. Bender described the dismissal request as part of the lender's effort to "destroy the debtor and cause a shutdown of the debtor's casino," which employs 120 people. Mr. Bender was unavailable to comment further. Dow Jones relates a spokeswoman for the Yavapai-Apache referred questions to the tribe's bankruptcy attorneys, who weren't available for immediate comment. Dow Jones notes Santa Ysabel's filing has rattled some of the major lenders to Native American tribes. Since the economic downturn, some banks have begrudgingly restructured at least $1.7 billion worth of lending agreements with tribes that couldn't afford debt payments on their gambling operations, according to a report from Fitch Ratings. Even though tribal casinos suffered during the economic downturn, they have opted not to enter the uncertain and expensive Chapter 11 process. Analysts have said that out-of-court restructurings so far have rendered fair results. Creditors also have also been unwilling to test the bankruptcy waters, scared off by the uncertainty over how the bankruptcy law could come into conflict with tribal law. Dow Jones recounts an Alaska Native corporation filed for bankruptcy protection after the Exxon Valdez oil spill in 1989 hurt its fishing operations, and the tribally chartered Si Tanka University in South Dakota filed in 2008. Their eligibility to seek creditor protection was never questioned by the courts or creditors. WSJ also relates the Sault Ste. Marie Tribe of Chippewa Indians put its Greektown Casino in Detroit under bankruptcy protection in 2008, but the case didn't raise eyebrows because the casino itself wasn't located on tribal land. About Santa Ysabel Resort and Casino Santa Ysabel Resort & Casino -- http://www.santaysabelcasino.com/ -- operates a casino located off of Highway 79 in North San Diego County overlooking Lake Henshaw on tribal Indian reservation land in Santa Ysabel, California. The Casino is housed in a one-story, 37,000 square-foot building with 349 class III slot machines, four poker tables, six table games, and a restaurant and bar with 200- person seating capacity. The Casino employs roughly 120 people and is the largest employer in Santa Ysabel. The Casino is owned by the Iipay Nation of Santa Ysabel, formerly known as the Santa Ysabel Band of Mission (Diegueno) Indians, a federally recognized Indian tribe. The Casino is operated pursuant to the Indian Gaming Regulatory Act under title 25 of the United States Code. The Casino was funded with a primary loan from JP Morgan in the amount of roughly $26,000,000 and a secondary loan from the Yavapai Apache Nation in the amount of $7,000,000. In 2009 the YAN purchased the JP Morgan Debt. The Casino also has $1.3 million in unsecured trade debt. The Iipay Nation of Santa Ysabel, a federally recognized Indian Tribe, filed a resolution authorizing the Chapter 11 bankruptcy filing of Santa Ysabel Resort and Casino (Bankr. S.D. Calif. Case No. 12-09415) in San Diego on July 2, 2012. The Debtor estimated assets of up to $50 million and liabilities of up to $100 million. Judge Hon. Peter W. Bowie presides over the case. Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles, serves as counsel. Virgil Perez, the Santa Ysabel tribal Chairman, signed the Chapter 11 petition. SDA INC: Files Schedules of Assets and Debts -------------------------------------------- SDA, Inc., filed with the U.S. Bankruptcy Court for the District of New Jersey its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $2,000,000 B. Personal Property $12,488,882 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $13,160,750 E. Creditors Holding Unsecured Priority Claims $689,198 F. Creditors Holding Unsecured Non-priority Claims $9,411,316 ----------- ----------- TOTAL $14,488,882 $23,261,264 A full text copy of the schedules of assets and liabilities is available for free at http://bankrupt.com/misc/SDA_INC_sal.pdf About Strauss Discount Auto 155 Route 10 Associates, Inc., SDA, Inc., and Wayne Philadelphia Associates, Inc., sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 12-24414 to 12-24416) on June 5, 2012, in Newark, New Jersey. SDA is a regional retailer of after-market automotive parts and accessories and operator of automotive service centers and owns commercial real estate located in Wayne, New Jersey. Subsidiaries Route 10 Associates and Wayne Philadelphia own commercial real estate located in East Hanover and Wayne, respectively. The Debtors ceased operations before its filed for bankruptcy in June 5, 2012. This is the fourth bankruptcy filing by the Strauss Discount Auto business. SDA's capital structure, for the most part, was formed in late 2010 when SDA's predecessor, Autobacs Strauss, Inc., reorganized under Chapter 11 (Bankr. D. Del. Case No. 09-10358). Autobacs Strauss Inc.'s plan of reorganization was confirmed on Sept. 15, 2010, and became effective on Oct. 6, 2010. Strauss had 111 stores in 1998, when it first filed for bankruptcy. Bankruptcy Judge Novalyn L. Winfield presides over the 2012 bankruptcy. Kenneth Rosen, Esq., at Lowenstein Sandler PC, serves as the Debtors' counsel. PricewaterhouseCoopers LLP serves as financial advisors. SDA estimated $10 million to $50 million in both assets and debts. The petitions were signed by Joseph Catalano, president. SHEA LTD: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Shea, Ltd. 217 Conquest Blvd. Edinburg, TX 78539 Bankruptcy Case No.: 12-70471 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: Richard L Fuqua, II, Esq. FUQUA & ASSOCIATES, PC 5005 Riverway, Ste. 250 Houston, TX 77056 Tel: (713) 960-0277 E-mail: fuqua@fuquakeim.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Hector Casas, trustee of Shea Management Trust, general partner. SIGNATURE GROUP: Company-Nominees Officially Elected to Board ------------------------------------------------------------- Signature Group Holdings, Inc. disclosed that IVS Associates, Inc., the independent inspector of election for the Company's annual meeting of stockholders held on July 24, 2012, has tabulated and certified the voting results for the Annual Meeting. As confirmed by these final results, the stockholders have elected all five of the company's director nominees - G. Christopher Colville, John Koral, Patrick E. Lamb, Craig F. Noell and Philip G. Tinkler - to the company's board of directors. Craig Noell, Chief Executive Officer of Signature, said, "We are pleased that our stockholders recognized the progress we have made and supported our experienced and qualified director nominees. The newly elected Board is committed to continuing to execute the Company's current business plan for growth and to enhance value for our stockholders." The Company also reported that the final results confirmed that stockholders voted to approve an amendment to the Amended and Restated Signature Group Holdings, Inc. 2006 Performance Incentive Plan that increased the authorized number of shares of company common stock that may be issued under the Incentive Plan; ratified the appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company's independent registered public accounting firm; and approved the adjournment of the Annual Meeting to a later date or dates, if necessary, to permit further solicitation of proxies to approve an amendment to the Company's Amended and Restated Articles of Incorporation to increase the authorized number of shares of Company common stock. The tabulation of stockholder votes for the proposal to approve an amendment to the Amended and Restated Articles of Incorporation to increase in the authorized shares of company common stock has not been finalized, since the Annual Meeting was adjourned to a later date with respect to this proposal. About Signature Group Signature Group Holdings, Inc. -- http://www.signaturegroupholdings.com/-- is a diversified0 business and financial services enterprise with principal activities in industrial distribution and special situations debt. Signature has significant capital resources and is actively seeking acquisitions as well as growth opportunities for its existing businesses. The Company was formerly a $9 billion in assets industrial bank and financial services business that reorganized during a two year bankruptcy period. The reorganization provided for Signature to maintain Federal net operating loss tax carryforwards in excess of $850 million. Fremont General Corp. filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 08-13421) on June 18, 2008. Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represented the Debtor as counsel. Kurtzman Carson Consultants LLC was the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represented the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. Fremont General emerged from bankruptcy and filed Amended and Restated Articles of Incorporation with the Secretary of State of Nevada on June 11, 2010, which, among other things, changed the Debtor's name to Signature Group Holdings, Inc. Signature's plan of reorganization became effective on June 11, 2010. The name change also took effect as of that date. SIRIUS INT'L: Fitch Affirms 'BB+' Rating on $250MM Pref. Shares --------------------------------------------------------------- Fitch Ratings has affirmed all Issuer Default Ratings (IDRs), debt and Insurer Financial Strength (IFS) ratings for White Mountains Insurance Group, Ltd. (White Mountains) and its holding company subsidiaries and property/casualty insurance subsidiaries, including OneBeacon Insurance Group, Ltd.'s subsidiaries (OneBeacon; 75.2% ownership by White Mountains) and Sirius International Insurance Group, Ltd.'s subsidiaries (Sirius Group; 100% ownership by White Mountains). The Rating Outlook is Stable. Fitch's rating rationale for the affirmation of White Mountains' ratings reflects the company's low financial and operating leverage, opportunistic business approach and favorable financial flexibility. The ratings also reflect anticipated challenges in the overall competitive, but generally improving property/casualty market rate environment, and sizable levels of run-off reserves and asbestos and environmental (A&E) exposure that have the potential for adverse reserve development. White Mountains posted net income of $120 million through the first six months of 2012, improved from a $17 million net loss for the comparable prior year period due to reduced catastrophe losses thus far in 2012. The company posted sizable net income of $768 million for full year 2011, driven by a $678 million gain on the sale of Esurance and Answer Financial to The Allstate Corporation in October 2011. OneBeacon posted favorable GAAP combined ratios of 94% for the first six months of 2012 and 96% for full year 2011. Sirius Group posted a GAAP combined ratio of 83% for the first six months of 2012. This is improved from 100% for full year 2011, which saw 24 points of catastrophe losses driven by the Japanese earthquake and tsunami, the New Zealand earthquakes, floods in Thailand, and severe weather and tornados in the Midwestern U.S. White Mountains' financial leverage ratio continues to be modest at 13.6% at June 30, 2012 and 12.7% at Dec. 31, 2011. This is down from 16.3% at Dec. 31, 2010 due to $150 million in repurchases of OneBeacon's outstanding debt in 2011 and a 3% net increase in White Mountains' adjusted common shareholders' equity since year-end 2010, as strong net income has been partially offset by increased common share repurchases. White Mountains utilizes a conservative amount of operating leverage with net premiums written to total shareholders' equity of 0.42x in 2011, which is down considerably from recent years as premiums have declined almost 50% since 2006 following the recent sale of businesses, while total equity has declined only 8%. Fitch's ratings reflect White Mountains' disciplined underwriting and operating strategy as the company continually evaluates the best use of its financial resources and actively manages and deploys its capital opportunistically. This strategy includes selling those businesses that either do not fit within the core operations of the company or have value to other companies/buyers as entities or renewal rights in excess of White Mountains' assessment of their value. White Mountains' sale transactions over the last several years have freed up capital that previously supported the business writings, providing financial flexibility that the company can use to support additional business writings, investment opportunities, debt reduction, dividends, or share repurchases. However, Fitch expects that White Mountains will continue to maintain a level of insurance company capitalization that is consistent with the current ratings. Key rating triggers that could lead to an upgrade include improvement in operating results in line with higher rated peers, overall flat to favorable loss reserve development, debt-to-total capital maintained below 20%, run rate operating earnings-based interest and preferred dividend coverage of at least 5x, continued strong capitalization of the insurance subsidiaries and increased stability in longer term strategic operations and results. Key rating triggers that could lead to a downgrade include significant adverse loss reserve development, future earnings that are significantly below industry levels, sizable deterioration in insurance subsidiary capitalization, debt-to-total capital maintained above 30% and additional A&E losses for OneBeacon significantly above the remaining $198 million available limit under the $2.5 billion National Indemnity Company cover. Fitch affirms the following ratings with a Stable Outlook: White Mountains Insurance Group, Ltd. -- IDR at 'BBB+'. OneBeacon U.S. Holdings, Inc. -- IDR at 'BBB+'; -- $270 million 5.875% due May 15, 2013 at 'BBB'. Sirius International Group, Ltd. -- IDR at 'BBB+'; -- $400 million 6.375% due March 20, 2017 at 'BBB'; -- $250 million perpetual non-cumulative preference shares at 'BB+'. OneBeacon Insurance Group and Their Members: Atlantic Specialty Insurance Company Camden Fire Insurance Association (The) Employers' Fire Insurance Company (The) Essentia Insurance Company Homeland Insurance Company of New York Northern Assurance Company of America (The) OneBeacon America Insurance Company OneBeacon Insurance Company OneBeacon Midwest Insurance Company Pennsylvania General Insurance Company Traders & General Insurance Company -- IFS at 'A'. Sirius International Insurance Corporation Sirius America Insurance Company -- IFS at 'A-'. SL GREEN: S&P Gives 'B+' Rating on $100MM Series I Preferred Stock ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' rating to the proposed $100 million series I cumulative redeemable preferred stock issued by SL Green Realty Corp. The company indicated that it intends to use net proceeds from the offering for general corporate purposes, including redeeming shares of its (higher- coupon) series C preferred stock, which would marginally improve fixed-charge coverage (FCC) measures, and/or to repay outstanding debt. "Standard & Poor's 'BB+' corporate credit rating and stable outlook on SL Green Realty Corp. and its operating subsidiaries, SL Green Operating Partnership L.P. and Reckson Operating Partnership L.P. (collectively, SL Green), reflect a well- positioned office portfolio that should continue to outperform its markets in terms of occupancy. Management's asset recycling activity continues to improve portfolio asset quality; however, the company's portfolio maintains considerable geographic and financial services-related tenant concentrations. SL Green's debt service and FCC measures are somewhat low, although this is partly due to the company replacing a portion of its short-term debt with more costly longer-term capital (including common equity) over the prior year. We consider the company's financial profile as 'significant' and its business profile as 'satisfactory'. We anticipate deleveraging in 2012, along with incremental revenue from recent opportunistic investments (with low current yield), to support FCC improvement this year," S&P said. RATING LIST SL Green Realty Corp. Rating Corporate credit BB+/Stable/-- RATING ASSIGNED SL Green Realty Corp. Rating $100 mil. pfd stock B+ SNK ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: SNK Enterprises, Inc. dba Country Hearth Inn 3886 Biggin Church Road North Jacksonville, FL 32224 Bankruptcy Case No.: 12-05073 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Brett A. Mearkle, Esq. LAW OFFICE OF BRETT A. MEARKLE, P.A. 8777 San Jose Boulevard, Suite 801 Jacksonville, FL 32217 Tel: (904) 352-1342 Fax: (904) 352-1814 E-mail: bmearkle@mearklelaw.com Scheduled Assets: $1,218,284 Scheduled Liabilities: $2,871,446 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb12-05073.pdf The petition was signed by Narendra Naik, managing member. SOLYNDRA LLC: Plan Justifies Exclusivity Through August ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that Solyndra LLC, the liquidated solar panel maker partially funded by the U.S. Energy Department, was given an extension until Aug. 31 of the exclusive right to propose a Chapter 11 plan. According to the report, Solyndra filed a liquidating plan at the end of July. The U.S. Bankruptcy Court in Delaware scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The plan is based on settlements with the creditors' committee, workers who were fired without the required 60 days' notice, and secured lenders. The plan will pay from 2.5% to 6% to unsecured creditors of Solyndra with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. So-called Tranche A lenders, with $69.7 million in claims, are projected for a 50% to 100% recovery. Tranche B lenders, owed $142.8 million, could receive nothing. In the most favorable case, their recovery would be 17%. Tranche D lenders with $385 million in claims and Tranche E lenders owed $186.6 are likely to receive nothing. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. ST. JOHN'S RIVERSIDE: S&P Raises Rating on Revenue Debt to 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Yonkers Industrial Development Agency, N.Y.'s revenue debt, issued for St. John's Riverside Hospital (SJRH), one notch to 'B+' from 'B'. The outlook is positive. "The upgrade and positive outlook reflect Standard & Poor's assessment of the hospital's measurable improvement in operations in fiscal 2011 that generated, what Standard & Poor's considers, solid coverage, driven by increasing volume and improved, though still weak, liquidity. The rating actions also reflect the rating service's view of the hospital's improved operations over the past two-and-a-half years compared with previous periods despite some softness in the current year compared to the past year's, in Standard & Poor's opinion, very strong performance. Standard & Poor's believes the continued strength in SJRH's operations will allow for sustained cash flow improvement; in addition, the rating service expects liquidity over the next several years to continue to improve," S&P said. "We believe the hospital will likely sustain its recently demonstrated positive operations over the next two years, allowing for continued liquidity improvement. We also believe management's renewed commitment to maintaining this improvement, evidenced by several current expense initiatives at the hospital, will likely continue to help strengthen operations," said Standard & Poor's credit analyst Margaret McNamara. "A higher rating is possible over the two-year outlook period if management can maintain the current operating performance with margins at about 4% and if management were to continue to generate, what we consider, strong cash flow that allows for continued liquidity improvement, specifically days' cash on hand in excess of 50 days'. A lower rating or stable outlook, however, could occur if liquidity were to decrease to levels similar to fiscal 2010 or if volume were to decrease, resulting in operational deterioration." More specifically, the rating reflects Standard & Poor's opinion of the hospital's: - Improved operating and profit margins at 6.59% and 6.76% in fiscal 2011 compared with 2.09% and 2.39% in fiscal 2010; - Improved debt service coverage due to improved cash flow; - Improved balance sheet metrics, measured by days' cash on hand, which increased to 41 days' in fiscal 2011 from 24 days' in fiscal 2010; and - Large and stable admission base that has grown consistently over the past four years but now appears to be stabilizing. "Despite SJRH's improvement in operations and liquidity in fiscal 2011 and through the second quarter of fiscal 2012, ended June 30, 2012, the balance sheet, which remains, in the rating service's opinion, weak -- evidenced by SJRH's limited liquidity, very high average age of plant, and pension plan with a funded status of 65% at fiscal year-end 2011 -- currently precludes a higher rating," S&P said. "A gross receipts pledge of St. John's and a mortgage on the facility secure the bonds," S&P said. STEREOTAXIS INC: Posts $2.8 Million Net Income in Second Quarter ---------------------------------------------------------------- Stereotaxis, Inc., reported net income of $2.80 million on $10.51 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $9.69 million on $11.60 million of total revenue for the same period a year ago. The Company reported a net loss of $3 million on $22.79 million of total revenue for the six months ended June 30, 2012, compared with a net loss of $19.24 million on $21.82 million of total revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $36.61 million in total assets, $50.09 million in total liabilities and a $13.47 million total stockholders' deficit. "In the second quarter, we generated two new Niobe ES orders and upgraded 22 customer sites, bringing the total upgrade installations to 41 in the first half of the year and surpassing our milestone," said Michael P. Kaminski, president and chief executive officer of Stereotaxis. "Clinical adoption at Niobe ES sites strengthened as utilization rose 28% during the first half of 2012, compared to the year ago period. Overall, the pipeline of interest in our Epoch Solution robotic system grew stronger and we are encouraged by our steady progress in driving the system into the existing customer base." A copy of the press release is available for free at: http://is.gd/Bx7P4O About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32.0 million for 2011, compared with a net loss of $19.9 million for 2010. STOCKTON, CA: Judge Powerless to Reinstate Health Benefits ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that the bankruptcy judge handling the municipal bankruptcy for Stockton, California, ruled Aug. 6 that he lacks power to force the city to reinstate retiree health benefits. Instead, retirees must file claims, participate in the bankruptcy and receive distributions to which they are entitled under a municipal debt adjustment plan, the judge said. The report relates that an association of retirees filed suit in bankruptcy court on July 10, asking U.S. Bankruptcy Judge Christopher M. Klein to force the city to reinstate health benefits. The city had decided to reduce or eliminate retiree health benefits in connection with its Chapter 9 filing. The report notes the retirees argued that they have vested contractual rights to health coverage protected by both the federal and California constitutions. According to the report, Judge Klein in a 40-page opinion filed Aug. 6 disagreed with the retirees' contentions. Dismissing the retirees' lawsuit, Judge Klein relied on Section 904 of the U.S. Bankruptcy Code, which prohibits the bankruptcy court from interfering with the property or revenue of a municipality in bankruptcy. Judge Klein explained how the provision was added to bankruptcy law as a protection against intrusions into state sovereignty. Judge Klein said he was powerless to compel reinstatement of health benefits even though it "may lead to tragic consequences." according to the report. The report relates the judge explained how the retirees aren't left empty handed. Retirees are entitled to file claims for lost benefits, vote for or against any plan the city proposes, participate in the Chapter 9 process, and receive distributions provided under whatever plan is ultimately approved, the judge said. The report notes Judge Klein pointed out that Section 1114 of the Bankruptcy Code isn't applicable in Chapter 9 cases. That provision prohibits a company in Chapter 11 reorganization from reducing retiree benefits without first undergoing an extensive court litigation process. About Stockton, California 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. STONEY'S NORTH: Bankruptcy Filing Blocks Eviction Proceeding ------------------------------------------------------------ Steve Green at Vegas Inc. reports that Stoney's North Forty LLC has filed for Chapter 11 bankruptcy protection to block eviction proceedings. North Forty owns a barbecue restaurant and saloon in northwest Las Vegas, Nevada. The report says the company is associated with the Stoney's Rockin' Country bars on Las Vegas Boulevard South and in Evansville, Indiana, though they're not part of the bankruptcy proceedings. According to the report, the Company was hit with an eviction lawsuit in Las Vegas Justice Court on July 13 by Centennial Center LLC, its landlord for the premises at 5990 Centennial Center Blvd. The report relates Christopher Lowden, one of the managers of North Forty, said in a court declaration that the business fell behind on rental payments because the downturn in the Las Vegas economy caused a "significant decrease in business revenue." The report, citing court documents, says North Forty didn't immediately disclose detailed financial information. It did say Centennial Center is owed more than $600,000 and that its estimated liabilities top $1 million. The report says the Company's assets are valued at between $100,000 and $500,000. SUNFLOWER HOSPITALITY: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Sunflower Hospitality, LLC dba LaQuinta Inns & Suites 55899 Twenty Nine Palms Hwy. Yucca Valley, CA 92284 Bankruptcy Case No.: 12-35102 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Arthur I. Ungerman, Esq. One Glen Lakes Tower 8140 Walnut Hill Ln., No. 301 Dallas, TX 75231 Tel: (972) 239-9055 Fax: (972) 239-9886 E-mail: arthur@arthurungerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Avtar Gadria, managing member. T3 MOTION: Due Date of JMJ Financial Note Extended to August 3 -------------------------------------------------------------- T3 Motion, Inc., and JMJ Financial entered into an amendment which extended the due date of the $275,000 Note until Aug. 3, 2012. T3 Motion entered into a Securities Purchase Agreement with JMJ Financial on July 10 2012. In connection with the Purchase Agreement, the Company and JMJ also entered into a Secured Promissory Note Agreement and a Security Agreement. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, JMJ provided a senior secured bridge loan to the Company in the aggregate principal amount of $275,000. The Note was originally due 21 days following receipt of the net proceeds, or July 31, 2012. About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. After auditing the 2011 results, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and has had negative cash flows from operations since inception, and at Dec. 31, 2011, has an accumulated deficit of $54.9 million. The Company reported a net loss of $5.50 million in 2011, compared with a net loss of $8.32 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.37 million in total assets, $2.47 million in total liabilities and $903,439 in total stockholders' equity. TANNIN INC: Brantley & Associates OK'd for Real Estate Appraisal ---------------------------------------------------------------- Tannin, Inc., obtained authorization from the U.S. Bankruptcy Court for the Southern District of Alabama to employ Brantley & Associates to provide real property appraisal services to the Debtor during its reorganization. As reported by the Troubled Company Reporter on June 26, 2012, Brantley & Associates will perform appraisal on the Debtor's several real property, including approximately 21-acre parcel of unimproved real property and two lots which are mortgaged to Vision Bank. The Debtor's Plan of Reorganization proposes to convey the 21-acre parcel of property to mortgage Vision Bank to the secured creditor in satisfaction of its debt. 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. TFG PROPERTIES: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: TFG Properties, LLC 13849 Park Center Road Herndon, VA 20171 Bankruptcy Case No.: 12-14788 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Nathan A. Fisher, Esq. 3977 Chain Bridge Road, #2 Fairfax, VA 22030 Tel: (703) 691-1642 Fax: (703) 691-0192 E-mail: Fbarsad@cs.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb12-14788.pdf The petition was signed by Carlo Puller, managing member. TEXAS LAND: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Texas Land & Realty, LLC 3534 Fairmount Dallas, TX 75219 Bankruptcy Case No.: 12-35120 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Michael Wiss, Esq. MICHAEL J WISS AND ASSOCIATES 11882 Greenville Ave. Suite 111, Box 11 Dallas, TX 75243 Tel: (972) 889-9050 Fax: (972) 889-1175 E-mail: mjwiss@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A copy of the Company's list of three unsecured creditors is available for free at http://bankrupt.com/misc/txnb12-35120.pdf The petition was signed by Dale Foster, member. THELEN LLP: Judge OKs Case Trustee's Clawback Deal With Ex-Partner ------------------------------------------------------------------ Maria Chutchian at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Allan L. Gropper on Tuesday signed off on the latest settlement between Thelen LLP's Chapter 7 trustee and a former partner, resolving claims surrounding the attorney's compensation in the years the firm was nearing its end. Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner -- http://thelen.com/-- is a bicoastal American law firm in process of dissolution. It was formed as a product between two mergers between California and New York-based law firms, mostly recently in 2006. Its headcount peaked at roughly 600 attorneys in 2006, and had 500 early in 2008, with offices in eight cities in the United States, England and China. In October 2008, Thelen's remaining partners voted to dissolve the firm. As reported by the Troubled Company Reporter on Sept. 22, 2009, Thelen LLP filed for Chapter 7 protection. The filing was expected due to the timing of a writ of attachment filed by one of Thelen's landlords, entitling the landlord to $25 million of the Company's assets. The landlord won approval for that writ in June 2009, but Thelen could void the writ by filing for bankruptcy within 90 days of that court ruling. Thelen, according to AM Law Daily, has repaid most of its debt to its lending banks. THERATECHNOLOGIES INC: Gets Minimum Bid Price Notice ---------------------------------------------------- Theratechnologies Inc. disclosed that it received a letter from the listing qualifications department staff of the NASDAQ Stock Market LLC (NASDAQ) on Aug. 7, 2012 notifying Theratechnologies that, for the last 30 consecutive business days, the bid price of its common shares had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements set forth in NASDAQ Listing Rule 5450(a) (1). Pursuant to NASDAQ Listing Rule 5810(c) (3) (A), Theratechnologies has 180 calendar days, or until Feb. 4, 2013, to regain compliance with the minimum bid price requirement. If at any time before this date Theratechnologies' common shares have a closing bid price of $1.00 or more for a minimum of 10 consecutive business days, NASDAQ staff will notify Theratechnologies that it has regained compliance. As a result, the notice has no effect at this time on the listing of Theratechnologies' common shares on the NASDAQ Global Market, which will continue to trade under the symbol "THER". If Theratechnologies does not regain compliance with NASDAQ Listing Rule 5450(a)(1) by Feb. 4, 2013, Theratechnologies may be eligible for more time if it submits an application to transfer its securities to the NASDAQ Capital Market. Following submission of the application, Theratechnologies may be eligible for an additional 180-day period to regain compliance with the minimum bid price requirement if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, for the NASDAQ Capital Market and provides notice of its intention to cure the deficiency during the second compliance period. Should NASDAQ conclude that Theratechnologies will not be able to cure the deficiency, NASDAQ will provide notice that its securities will be subject to delisting. Alternatively, Theratechnologies may appeal NASDAQ's decision to a Listing Qualifications Panel. Theratechnologies intends to monitor the bid price for its common shares between now and Feb. 4, 2013, and will assess all its available options under the circumstances during this period. Theratechnologies (CA:TH) -- http://www.theratech.com/-- is a specialty pharmaceutical company that discovers and develops innovative therapeutic peptide products, with an emphasis on growth-hormone releasing factor peptides. TRAVELPORT HOLDINGS: Antonios Basoukeas Named Group Vice Pres. -------------------------------------------------------------- Travelprt Limited's Board of Directors appointed Antonios (Tony) Basoukeas as the Company's Group Vice President and Group Financial Controller. Mr. Basoukeas joined Travelport in January 2009 and has served as Head of Financial Planning, Reporting and Commercial Finance. Prior to joining Travelport, Mr. Basoukeas served in various roles with General Electric Corporation since 1990, including the role of Chief Financial Officer of GE SeaCo, the container leasing part of General Electric. Prior to General Electric, Mr. Basoukeas held positions with Del Monte Corporation and KMPG Peat Marwick, where he obtained his Certified Public Accounting accreditation. About Travelport Holdings Travelport Holdings is the direct parent of Travelport Limited, is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in 160 countries and approximately 3,500 employees, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business, which hosts mission critical applications and provides business and data analysis solutions for major airlines. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures, and Travelport management. Travelport Holdings Limited is a holding company with no direct operations. Its principal assets are the direct and indirect equity interests it holds in its subsidiaries, including Travelport Limited. The Company's balance sheet at Dec. 31, 2011, showed $3.34 billion in total assets, $4.30 billion in total liabilities, and a $957 million total deficit. * * * As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on travel services provider Travelport Holdings Limited (Travelport Holdings) and indirect subsidiary Travelport LLC (Travelport) to 'SD' (selective default) from 'CC'. The downgrades follow the implementation of a capital restructuring, which was necessary because of the Travelport group's high leverage, weak liquidity, and the upcoming maturity of its $693 million (as of end-June 2011) PIK loan in March 2012. "According to our criteria, we view this restructuring as a distressed exchange and tantamount to a default (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009, on RatingsDirect on the Global Credit Portal)," S&P related. TRI-VALLEY: In Chapter 11; DIP Lenders Require Quick Sale --------------------------------------------------------- Tri-Valley Corporation and three affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-12291) on Aug. 7 with funding from lenders that require a prompt sale of the business. The Company has received a debtor-in-possession financing commitment of $11,048,078 by its senior secured lender George T. Gamble 1991 Trust, of which $3,850,000 represents new credit availability, to support the Debtors' business operations during the Chapter 11 cases. According to the motion filed with the bankruptcy court seeking approval of the DIP financing, the loans will mature Nov. 15, 2012 or earlier if milestones are not achieved. The Debtors are required to: * file a motion for approval of the auction procedures within 5 days following the Petition Date; * obtain approval of the auction procedures within 30 days of the Petition Date; * conduct the auction within 75 days of the Petition Date; * obtain approval of the sale within 80 days of the Petition Date; and * close the sale of the assets within 90 days of the Petition Date Tri-Valley already owes Gamble $7,198,079 for secured loans provided prepetition. The Debtors also owe $527,800 under an unsecured promissory note issued to Gary D. Borgna and related entities. The Debtors estimate that the total unsecured debt, including the note, is $9.4 million Bankruptcy Sale Best Option Maston N. Cunningham, president and CEO of Tri-Valley, said in a court filing that the Debtors have sought Chapter 11 protection due to insufficient cash flow from operations, disputes concerning the Opus Partnership, and an investigation by the U.S. Securities and Exchange Commission. The Company reported net losses of $8.7 million and $11.7 million in 2010 and 2011. The company said in a statement announcing the bankruptcy filing that during the month of June 2012, the Company worked with FTI Consulting, Inc., the Company's financial advisor, to evaluate cash flows and assess its liquidity. In June and early July, the Company, representatives of the Gamble Trust and the Opus Special Committee ("OSC"), met to discuss potential solutions to the Debtors' pressing need for capital and the strategic alternatives available under present circumstances. After further consultation with the Gamble Trust, the OSC and their respective advisors prior to the filing date, the Company concluded that the only feasible way to repay creditors and generate a substantial return to Opus investors was to seek to sell substantially all of the Debtors' assets, including those at Pleasant Valley and Claflin, in a competitive sale process under Section 363 of the Bankruptcy Code. The Debtors intend to propose a Chapter 11 plan that simultaneously (i) resolves the outstanding claims between Opus, and Tri-Valley and TVOG, and (ii) distributes the expected proceeds of sale fairly and equitably. Mr. Cunningham said, "Uncertainties surrounding, among other things, the outstanding alleged claims by Opus and the ongoing inquiry by the staff of the Securities and Exchange Commission, have made the Company unattractive for the significant additional funding that would have been required to avoid the bankruptcy process and continue exploring strategic alternatives. We expect that a robust sale process for our oil, gas and mineral assets, and for Opus' oil and gas assets, will produce a substantial recovery for Tri-Valley creditors and for investors in the Opus partnership." The Debtors have filed a series of motions with the Bankruptcy Court to assure the continuity and stability of operating their respective businesses, including the payment of wages and the continuation of benefit programs. The Company expects operations to continue as usual throughout this process. The Company believes that there may not be any value for Tri- Valley stockholders resulting from the bankruptcy process, given, among other things, the priority of claims of the Company's secured and unsecured creditors and the resolution of the outstanding alleged claims between Opus, Tri-Valley and TVOG. Sale Motion and Plan While not filed as part of the first day motions, the Debtors intend to file pleadings within five days of the Petition Date seeking to establish procedures for a sale of substantially all assets, including those related to Pleasant Valley and Claflin. Within the next 30 days, the Debtors further intend topropsoe a Chapter 11 plan for distribution of the proceeds generated by the sale. About Tri-Valley Tri-Valley Corporation (OTQCB: TVLY) -- http://www.tri-valleycorp.com/-- explores for and produces oil and natural gas in California and has two exploration-stage gold properties in Alaska. K&L Gates LLP serves as bankruptcy counsel. Attorneys at Landis Rath & Cobb LLP serve as Delaware and conflicts counsel. The Debtors have tapped Epiq Bankruptcy Solutions, LLC, as claims agent. TRIUS THERAPEUTICS: Incurs $14.4-Mil. Net Loss in Second Quarter ---------------------------------------------------------------- Trius Therapeutics, Inc., reported a net loss of $14.41 million on $6.22 million of total revenues for the three months ended June 30, 2012, compared with a net loss of $9.98 million on $2.85 million of total revenues for the same period a year ago. The Company reported a net loss of $22.01 million on $16.05 million of total revenues for the six months ended June 30, 2012, compared with a net loss of $20.05 million on $5.57 million of total revenues for the the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $94.76 million in total assets, $16.56 million in total liabilities and $78.20 million in total stockholders' equity. A copy of the press release is available for free at: http://is.gd/Cqa3ph About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. In the Form 10-K for the year ended Dec. 31, 2011, the Company said it has incurred losses since its inception and it anticipates that it will continue to incur losses for the foreseeable future. As of December 31, 2011, the Company had an accumulated deficit of $95.4 million. The Company has funded, and plan to continue to fund, its operations from the sale of securities, through research funding and from collaboration and license payments, including payments under the Bayer collaboration. However, the Company has generated no revenues from product sales to date. The Company reported a net loss of $18.25 million in 2011, a net loss of $23.86 million in 2010, and a net loss of $22.68 million in 2009. TRONOX INC: Shareholders Suit Settled Against Kerr-McGee -------------------------------------------------------- Tronox Inc. shareholders are asking a New York federal judge to grant preliminary approval of a settlement of a multidistrict litigation against Kerr-McGee Corp. and its former auditor Ernst & Young LLP According to Bankruptcy Law360, the deal would require a $2 million payment by Ernst & Young and a $35 million payment by Kerr-McGee, its parent company Anadarko Petroleum Corp. and several former executives. Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that filed in 2009, the shareholders' suit alleged that Tronox Inc. shareholders were defrauded when the company was spun off in 2005 from then-parent Kerr-McGee, which was later acquired by Anadarko. The Bloomberg report disclosed the shareholder suit is separate from the lawsuit currently on trial in U.S. Bankruptcy Court in Manhattan, where Tronox and the U.S. government are attempting to prove that Kerr-McGee should be held liable for billions of dollars in environmental liabilities. A recess in the trial to permit settlement talks failed. The trial recommenced in late July. Kerr-McGee is now presenting witnesses in defense. The bankruptcy judge is trying the case without a jury. The lawsuit in district court being settled is In re Tronox Inc. Securities Litigation, 09-cv-6220, U.S. District Court, Southern District of New York (Manhattan). The lawsuit in bankruptcy court is Tronox Inc. v. Anadarko Petroleum Corp. (In re Tronox Inc.), 09-1198, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Tronox Inc. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09- 10156) on Jan. 13, 2009, before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represented the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants served as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders were appointed in the cases. The Creditors Committee retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until Sept. 30, 2008, Tronox was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors' First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated Nov. 5, 2010. Under the Plan, Tronox reorganized around its existing operating businesses, including its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi; Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia. VERENIUM CORP: Incurs $2.5 Million Net Loss in Second Quarter ------------------------------------------------------------- Verenium Corporation reported a net loss attributable to the Company of $2.47 million on $15.69 million of total revenue for the three months ended June 30, 2012, compared with a net loss attributable to the Company of $1.46 million on $15.13 million of total revenue for the same period during the prior year. The Company reported net income attributable to the Company of $27.64 million on $32.92 million of total revenue for the six months ended June 30, 2012, compared with net income attributable to the Company of $2.34 million on $28.53 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $52.31 million in total assets, $13.83 million in total liabilities and $38.47 million in stockholders' equity. "The first half of the year proved to be an important turning point for Verenium," said James Levine, President & Chief Executive Officer at Verenium. "With the recent move into our new facility completed and our debt repaid, we are focused on growing our business through the sales of our current marketed products, developing our product pipeline, and establishing future collaborations and partnerships." A copy of the press release is available for free at: http://is.gd/pBqMMc About Verenium Corporation Cambridge, Mass.-based Verenium Corporation (NASDAQ: VRNM) -- http://www.verenium.com/-- is a pioneer in the development and commercialization of high-performance enzymes for use in industrial processes. Verenium currently sells enzymes developed using its R&D capabilities to industrial customers globally for use in markets including biofuels, animal health and oil seed processing. The Company reported net income of $5.12 million in 2011 compared with a net loss of $5.35 million in 2010. Going Concern The Company had a loss from operations of $6.5 million for year ended Dec. 31, 2011, and had an accumulated deficit of $600.8 million as of Dec. 31, 2011. The holders of the 2007 Notes have the right to require the Company to purchase the 2007 Notes for a total cash amount equal to $34.9 million on April 2, 2012, plus accrued and unpaid interest to that date. The Company expects the holders of the 2007 Notes to exercise this right and, based on the Company's current cash resources and 2012 operating plan, the Company's existing cash resources will not be sufficient to meet the cash requirements to fund the Company's required repurchase of the 2007 Notes, planned operating expenses, capital expenditures and working capital requirements without additional sources of cash. If the Company is unable to fund the repurchase of the 2007 Notes when required or otherwise raise additional capital, the Company will need to defer, reduce or eliminate significant planned expenditures, restructure or significantly curtail the Company?s operations, sell some or all its assets, file for bankruptcy or cease operations. To the extent the Company restructures rather than repurchases all or any portion of the 2007 Notes, the Company may issue common shares or other convertible debt for the 2007 Notes that are restructured, which would result in substantial dilution to the Company's equityholders. There can be no assurance that the Company will be able to obtain any sources of financing on acceptable terms, or at all. These factors raise substantial doubt about the Company's ability to continue as a going concern. VIRANI & MANAV: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Virani & Manav LLC a Texas Limited Liability Company dba Knights Inn 9638 Plainfield Street Houston, TX 77036 Bankruptcy Case No.: 12-35882 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Karen R. Emmott, Esq. 4615 Southwest Freeway Suite 500 Houston, TX 77027 Tel: (713) 739-0008 Fax: (713) 481-6262 E-mail: karen.emmott@sbcglobal.net Scheduled Assets: $1,200,000 Scheduled Liabilities: $2,289,529 A copy of the Company's list of its 12 largest unsecured creditors is available for free at http://bankrupt.com/misc/txsb12-35882.pdf The petition was signed by Rajan Patel, managing member. WATSON VENTURES: Case Summary & 4 Unsecured Creditors ----------------------------------------------------- Debtor: Watson Ventures, LLC 3185 Longview Drive Sacramento, CA 95821 Bankruptcy Case No.: 12-34203 Chapter 11 Petition Date: August 1, 2012 Court: U.S. Bankruptcy Court Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: W. Steven Shumway, Esq. 2140 Professional Drive, #240 Roseville, CA 95661 Tel: (916) 789-8821 Scheduled Assets: $1,358,600 Scheduled Liabilities: $2,364,995 A copy of the Company's list of its four unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/caeb12-34203.pdf The petition was signed by Greg Watson, managing member. WHOLE FOODS: S&P Raises Corporate Credit Rating From 'BB+' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Austin, Texas-based Whole Foods Market Inc. to 'BBB-' from 'BB+'. The outlook is stable. "The rating action comes after Whole Foods' strong operating trends. Its EBITDA growth over the past year of about 21% has been somewhat better than we anticipated and has enhanced credit protection measures meaningfully," S&P said. "Given our operating forecast, we anticipate further improvement," said Standard & Poor's credit analyst Charles Pinson-Rose. "Moreover, the company has generated significant discretionary cash flow, and it now has sizable excess cash. With expected capital expenditures and likely dividend payments, we foresee Whole Foods generating further excess cash in the future." "The rating on Whole Foods reflects our assessment of its business risk as 'satisfactory,' which incorporates the company's strong position as the leader in the organic and natural food retailing sector, and our expectation that it will continue to outperform traditional grocery stores in the near and intermediate term. We also revised our assessment of Whole Foods' financial risk to 'intermediate' from 'significant.' This is based on the company's strong cash flow generation and forecasted credit ratios," S&P said. "The company's third-quarter results were slightly better than our expectations and meaningfully better than traditional grocery stores. Although we expect tepid economic expansion and sustained high unemployment, we believe such conditions will not inhibit performance at Whole Foods, since the natural and organic segment industry is growing considerably faster than the food retail industry as a whole. Furthermore, the company's pricing, promotional, and merchandising strategies have driven transactions and customer loyalty. Consequently, we believe the company is now less vulnerable to downturns in consumer spending," S&P said. "Our stable rating outlook on Whole Foods incorporates our expectations that the overall sales and profit growth trends should be strong in the near term. Nonetheless, we expect credit ratios to remain appropriate for our current financial risk assessment and rating category," S&P said. "If the company performs better than we anticipate, we would consider a higher rating. For example, if debt to EBITDA was in the low-2x area and FFO/debt was in the 30% range, we may consider a higher rating. We estimate this could occur in 2013 if EBITDA grew around 27%-29% and would track toward $1.4 billion, while operating lease commitments only grew 7%-8%. However, we would want to be sure that the company's financial policies would be such that future capital allocations would ensure that the company maintains credit ratios near those levels and liquidity remained adequate," S&P said. "Given the company's performance trends, we do not consider a downgrade as likely in the near term. However, we may consider a lower rating if the company adopts more aggressive financial policies and adds funded debt to finance returns to shareholder or acquisitions. However, we do not view either as likely. If leverage rises above 3x, we may consider a lower rating. With our estimated profitability and debt levels at the end of 2012, Whole Foods could increase debt by $500 million and be near that threshold," S&P said. WILTON HOLDINGS: S&P Assigns 'B' Corp. Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services ssigned its 'B' corporate credit rating to Woodridge, Ill.-based Wilton Holdings Inc. "At the same time, we assigned our 'B' issue-level rating to primary operating company subsidiary Wilton Brands LLC's proposed $400 million senior secured term loan due 2019. The recovery rating is '3', indicating our expectation that lenders would receive meaningful (50% to 70%) recovery in the event of payment default. For analytical purposes, we view Wilton and its other holding companies, including Cupcake Holdings LLC (Cupcake - not rated) and its operating subsidiaries, including Wilton Brands LLC, as one economic entity. The transaction is expected to close before Sept. 1, 2012. Our ratings are based on preliminary terms and documentation and could change based on final documents," S&P said. The rating outlook is stable. The amount of adjusted debt pro forma for the proposed refinancing is about $1 billion. "The ratings on Wilton Holdings Inc. reflect our view that the company's financial risk profile is 'highly leveraged' and that the business risk profile is 'vulnerable.' Wilton's highly leveraged financial risk profile reflects its weak credit metrics and our belief that it has an aggressive financial policy," said Standard & Poor's credit analyst Stephanie Harter. "The company is proposing to refinance its currently highly leveraged capital structure with new debt consisting of a $125 million asset-based lending (ABL) revolver due 2017 (not rated), a $400 million senior secured term loan due 2019, and $340 million of unsecured subordinated holding company debt due 2020 (to be issued at Wilton Sub Holdings Inc. - not rated). Wilton's vulnerable business risk profile reflects our view that the company participates in a competitive and highly fragmented industry, which has low barriers-to-entry and a narrow product and customer focus. We believe the company's products are also vulnerable to changes in consumer tastes and cutbacks in discretionary spending." "Wilton is very highly leveraged and will remain so after the refinancing. Pro forma for the refinancing and the last 12 months June 30, 2012 adjusted EBITDA, we estimate leverage to be very high at about 8x. Our leverage calculation includes the preferred equity units for Wilton's owners, which we treat as 100% debt in our financial ratios. These units are held at holding company parent, Cupcake Holdings LLC, which is largely owned and controlled by financial sponsor TowerBrook Capital Partners. We generally view the paid-in-kind (PIK) feature and the lack of a maturity date for these units as ineligible for 'equity-content' in this context because we view the deferability of payments feature to be most beneficial when that flexibility is reserved for periods of financial distress. Excluding the preferred equity units, we estimate total leverage under the proposed capital structure would still be high at about 6x, including holding company subordinated debt. We expect leverage to improve only slightly over the next 12 months as the company is not subject to a full-years' worth of debt amortization, and we expect minimal adjusted EBITDA growth in 2012. The company could use excess cash for debt prepayment beyond the requirements under the proposed credit agreement, acquisitions, or further product development. We understand that the proposed credit agreement would restrict dividend payments. Cash flow protection measures are also very weak, with our estimate of pro forma adjusted funds from operations (FFO) to adjusted total debt of about 7% at closing. Excluding the preferred equity units, FFO to adjusted total debt would be just under 10% at closing. These pro forma metrics, both including and excluding the preferred equity units, are within ranges for our indicative ratios of a highly leveraged financial risk profile of greater than 5x leverage and FFO-to-adjusted total debt of less than 12%. Given the company's significant debt burden, we expect cash flow protection measures to only improve slowly over the next one to two years absent debt prepayment," S&P said. "Wilton, with $675 million of total 2011 sales, is estimated to be the largest food and paper crafting company in the highly fragmented $30 billion crafts industry. Wilton Enterprises, the cake decorating division, accounts for about two-thirds of sales, with EK Success Brands, the crafts business, accounting for the remaining one-third of revenues. Wilton's products are sold under brands such as Wilton, Copco, EK Success, K&Company, Jolee's and through licensing agreements. The company holds a leading share in the niche cake decorating and bakeware categories, as well as in numerous arts and crafts categories. Although the company does not compete against other large players, it is our opinion that barriers to market entry are low, characterized by low capital expenditures requirements, which could lead to ongoing pressure from private label entrants. We believe the company's narrow product focus leaves it vulnerable to changes in consumer tastes. In addition, Wilton is exposed to customer concentration as its top 10 customers accounted for nearly 70% of 2011 net sales. Given the high level of customer concentration, we believe the loss of any key customer would be detrimental to Wilton's operations," S&P said. "While we believe that Wilton's products exhibit strong demand, including its online and in-person classroom educational programs, we view the company's products as discretionary purchases and subject to changes in consumer tastes as well as the overall economy's performance. However, sales have grown steadily during the past several quarters after experiencing further pressure from the end of 2010 into 2011, and the company's emergence from default following a restructuring in October 2009. Despite these headwinds, the company has managed to maintain double-digit EBITDA margins during the past several quarters. We expect that EBITDA margins could erode in the near term despite the company's ability to increase its prices to help offset higher costs for fuel, plastics, and sugar. We believe that the company is acquisitive and is also seeking to increase its international operations. Although expanding its product offerings and geographical footprint would provide Wilton with good growth prospects, the costs associated with these opportunities could negatively affect margins," S&P said. S&P expects Wilton's adjusted credit measures to decline slightly over 2012 as the PIK accretion on the holding company subordinated debt and preferred equity will outpace any debt amortization on the term loan. However, S&P expects credit metrics to improve in 2013 as the company uses excess cash flow to prepay debt. S&P's base-case scenario assumptions include: - Low-single-digit revenue growth from a full-year contribution from increased shelf space at existing customers, new products, and further entry into the grocery store channel; - Margins to remain near current levels; - No acquisitions over the next 12 months; and - Term loan debt reduction from free operating cash flow (FOCF) over the next 12 to 18 months; we estimate the company's FOCF to be more than $40 million and $50 million for 2012 and 2013. "Based on these assumptions, we estimate credit measures will increase slightly to just below 9x at fiscal year end 2012 due to PIK accretion outpacing term loan debt amortization. We also estimate FFO-to-total adjusted debt of about 4% at fiscal year-end 2012. We expect these measures to improve over 2013 to approaching 8x and 4.5%, respectively, from term loan debt repayment," S&P said. "The stable outlook reflects our expectation that the company will maintain its strong market positions and improved operating performance during the near term despite the current weak economic environment. In addition, in order to maintain current ratings with a stable outlook, we expect the company to slowly reduce leverage during the next 12 months. We could consider a downgrade if the company's operating results weaken due to declines in consumer spending, from constrained liquidity, or if covenant cushion under the new credit agreement falls below 15%. For this to occur, we estimate adjusted EBITDA would need to decline more than 15% (assuming debt levels do not significantly change from pro forma levels). An upgrade is not likely during the next year, given the company's highly leveraged capital structure," S&P said. WINDMILL INVESTMENT: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Windmill Investment Group, Inc. 402 E. Amman Road Bulverde, TX 78163 Bankruptcy Case No.: 12-52430 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: Dean William Greer, Esq. 2929 Mossrock, Suite 117 San Antonio, TX 78230 Tel: (210) 342-7100 Fax: (210) 342-3633 E-mail: dwgreer@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txwb12-52430.pdf The petition was signed by Walter C. Windsor, president. WOOTON GROUP: Hires M. Jonathan Hayes as Bankruptcy Counsel ----------------------------------------------------------- Wooton Group, LLC, asks for permission from the U.S. Bankruptcy Court to employ M. Jonathan Hayes as its general bankruptcy counsel. The firm will provide various services, including: a. preparation of the schedules and the additional forms required to begin the bankruptcy case; b. advice and assistance regarding compliance with the requirements of the United States Trustee; and c. advice regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regard to its assets and with respect to the claims of creditors. The firm's hourly rates are: Professional Rates ------------ ----- M. Jonathan Hayes $385 per hour Roksana Moradi $265 per hour Carolyn Afari $165 per hour M. Jonathan Hayes, Esq., a partner at the firm, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Wooton Group Beverly Hills, California-based Wooton Group LLC owns properties in Stockton and Fresno, California. Wooton Group filed a bare- bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-31323) in Los Angeles on June 19, 2012. The Debtor estimated assets of up to $50 million and liabilities of up to $10 million. WOOTON GROUP: Files Schedules of Assets and Liabilities ------------------------------------------------------- Wooton Group, LLC, filed with the Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,500,000 B. Personal Property $961 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,186,885 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $37,491 ----------- ----------- TOTAL $10,500,961 $7,227,376 About Wooton Group Beverly Hills, California-based Wooton Group LLC owns properties in Stockton and Fresno, California. Wooton Group filed a bare- bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-31323) in Los Angeles on June 19, 2012. The Debtor estimated assets of up to $50 million and liabilities of up to $10 million. The Law Office of M Jonathan Hayes, in Northridge, serves as counsel. ZIMCAL CORPORATION: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Zimcal Corporation 5353 Alpha Road, Suite 200 Dallas, TX 75240 Bankruptcy Case No.: 12-42104 Chapter 11 Petition Date: August 6, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Harold Baeck, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Janlaw Properties, Inc. 12-42102 08/06/12 * Eviction Warrant Alone Doesn't Terminate Lease ------------------------------------------------ Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that the U.S. Court of Appeals in Manhattan ruled on Aug. 2 that if a landlord obtains a warrant of eviction and the warrant wasn't carried out before bankruptcy, the lease hadn't expired under New York law. According to the report, concluding that the lease hadn't expired satisfied one of the requirements entitling the landlord to a claim for rent accruing during the bankruptcy case before the eviction warrant was executed, Circuit Judge Guido Calabresi ruled for the three judge panel, in overturning rulings by the bankruptcy court and the district court. Both lower courts believed that the eviction warrant by itself terminated the lease. The report relates Judge Calabresi said the case turned on Section 749(3) of the New York Real Property Actions & Proceedings Law, which says that an eviction warrant terminates the landlord-tenant relationship. However, the section also says that the court has power to vacate the eviction warrant before execution. Judge Calabresi concluded that the ability to vacate the warrant gives the tenant a "residual interest in the lease" until execution. Consequently, the lease hadn't expired, he said. Mr. Rochelle notes that finding that the lease hadn't expired didn't answer the question of whether the landlord was entitled to post-bankruptcy rent. The judge sent the case back to bankruptcy court for a determination of whether the lease nonetheless should be deemed to have been rejected, thus cutting off the landlord's right to payment of rent under Section 365(d)(3). The Bloomberg report disclosed Judge Calabresi said the issue hadn't been briefed or argued. Before deciding the novel issue, Judge Calabresi said he wanted the "bankruptcy court' specialized knowledge." The case is Super Nova 330 LLC v. Gazes, 11-1773, U.S. 2nd Circuit Court of Appeals (Manhattan). * Circuit Court Clarifies Procedures for Recoupment --------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that the U.S. Court of Appeals in St. Louis ruled Aug. 3 that there is no separate "balancing-of-the-equities" test in deciding whether a creditor is entitled to invoke the recoupment doctrine. According to the report, the opinion by Circuit Judge Duane Benton coincides with a 2005 case from the U.S. Court of Appeals in Boston reaching the same result. The case involved an individual eligible for disability payments from both Social Security and a private insurance policy. The case is Terry v. Standard Insurance Co. (In re Terry), 11-2582, U.S. 8th Circuit Court of Appeals (St. Louis). * Student Loan Debt Must Be Paid Like Other Claims -------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that U.S. District Judge Leonie M. Brinkema in Alexandria, Virginia, ruled on Aug. 1 that student loan debt must be paid like other claims paying a larger percentage of unsecured debt on a nondischargeable student loan amounts to unfair discrimination barring confirmation of a Chapter 13 plan. The case is Gorman v. Birts (In re Birts), 12-427, U.S. District Court Eastern District Virginia (Alexandria). * Moody's Sees High Refinancing Risk for Low-Rated Debt Issuers --------------------------------------------------------------- The 2012-2016 debt maturities of the 25 companies rated B3 with a negative outlook or lower identified in Moody's January refunding report total around $74 billion, as of May 31. That's down slightly from $81 billion reported in January (which reflected debt maturities as of November 15, 2011), says Moody's Investors Service in a new special comment "Refinancing Risk Remains High for Large US Debt Issuers With Weak Ratings." The decrease in maturities primarily reflects the withdrawal from the current list of two companies that filed for bankruptcy protection this year. Without these companies, the maturities as of May were little changed from November. The report is not the current list of the largest debt issuers rated B3 or lower. Rather it is an update of the 25 largest debt issuers identified in Moody's January report. Of the 25 companies identified in January, two - Houghton Mifflin and Hawker Beechcraft - filed for bankruptcy protection, five received an credit-rating upgrade, two received a two-notch downgrade and one, R.H. Donnelly, had a three-notch downgrade in connection with a distressed exchange in March 2012. In addition, seven companies had rating-outlook changes, with the majority being positive moves. "We believe sovereign-debt problems in Europe and the threat of global economic contagion represent some of the biggest refinancing risks and could disrupt both lending appetite and bond-market access just when high-yield companies need market access," said Kevin Cassidy, a Moody's Senior Credit Officer and author of the report Only six companies had less debt in May than in November. Only one company still has a 2012 maturity, but 10 companies will have to address 2013 maturities. "That some companies haven't taken advantage of the favorable market conditions and refinanced beyond 2016 may present an increasing liquidity risk given growing global economic uncertainties," noted Cassidy. "We believe many of these companies will need to restructure their debt, especially if their capital structures are untenable and if business fundamentals do not improve," Cassidy said. The largest B3 negative or lower debt issuers are Clear Channel Communications with more than $14 billion of debt due over the next four years, Texas Competitive Electric Holdings with almost $13 billion and Caesars Entertainment with over $9 billion due. * Moody's Sees High Re-Default Risk After Distressed Exchanges -------------------------------------------------------------- Historical evidence shows that the risk of re-default tends to remain high after sovereign distressed exchanges, Moody's Investors Service says in a new report that analyzes the modern history of sovereign bond defaults and the haircuts imposed on investors. The new report, entitled "Sovereign Defaults Series: Investor Losses in Modern-Era Sovereign Bond Restructurings," is available on http://www.moodys.com/ "Thirty-seven percent of the 30 sovereign debt exchanges since 1997 were followed by further default events," explains Elena Duggar, Moody's Group Credit Officer for Sovereign Risk and author of the report. "These high rates of re-default after a distressed exchange in the sovereign sector are similar to the experience in the global corporate sector and explain why ratings often remain low, in the Caa-C rating range, following distressed exchanges." Since 1997, there have been 30 distressed exchanges on sovereign bonds, by 22 sovereign issuers. Moody's new report pinpoints four key findings: (1) The average haircut experienced by investors in sovereign restructurings was 47%, comparable to the average loss experienced in the global corporate sector. The standard deviation around the average was large at 26%, with losses varying from 5% to 95%. (2) Sovereign bond defaults typically started as a missed payment and involved a sequence of default events before being resolved via a distressed exchange. When the initial debt exchanges were small in relation to total debt, they were followed by further exchanges of private or official debt, even when haircuts in the initial exchange were large. (3) Maturity extension was a much more common feature of restructurings than imposing nominal haircuts on the principal: the terms of the restructurings for all but one exchange included maturity extension, 81% involved reduction in interest rates, while 48% involved haircuts on the principal. (4) The loss experienced in sovereign bond restructurings was somewhat correlated with the country's debt-to-GDP ratio. In addition, losses have depended on the economic conditions in each country at the time of default, the features of the bond contracts, and on the dynamics of the debt-restructuring negotiations. * Bankruptcy Filings Fall 12 Percent in July 2012 ------------------------------------------------- American Bankruptcy Institute reports that total bankruptcy filings in the United States for July 2012 decreased 12 percent compared to the previous year, according to data provided by Epiq Systems, Inc. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Next Level FP LLC Bankr. D. Ariz. Case No. 12-17086 Chapter 11 Petition filed July 31, 2012 Filed as Pro Se In re Jeffery Khoner Bankr. D. Ariz. Case No. 12-17113 Chapter 11 Petition filed July 31, 2012 In re Jerry Strebig Bankr. D. Ariz. Case No. 12-17151 Chapter 11 Petition filed July 31, 2012 In re Alfred Valverde Bankr. N.D. Calif. Case No. 12-46359 Chapter 11 Petition filed July 31, 2012 In re Raymond Jackson Bankr. N.D. Calif. Case No. 12-55661 Chapter 11 Petition filed July 31, 2012 In re New London Transmissions Corp. dba Aamco Transmissions New London Transmissions Bankr. D. Conn. Case No. 12-21864 Chapter 11 Petition filed July 31, 2012 See http://bankrupt.com/misc/ctb12-21864.pdf represented by: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN E-mail: ressmul@yahoo.com In re Edward Quinlisk Bankr. N.D. Ill. Case No. 12-30587 Chapter 11 Petition filed July 31, 2012 In re Tarheel Forming Company, Inc. dba Tarheel Form and Rebar Bankr. E.D.N.C. Case No. 12-05495 Chapter 11 Petition filed July 31, 2012 See http://bankrupt.com/misc/nceb12-05495.pdf represented by: Danny Bradford, Esq. PAUL D. BRADFORD, PLLC E-mail: dbradford@bradford-law.com In re Tanaroji Ventures, LLC Bankr. E.D.N.C. Case No. 12-05496 Chapter 11 Petition filed July 31, 2012 See http://bankrupt.com/misc/nceb12-05496.pdf represented by: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC E-mail: bill@janvierlaw.com In re Top Floor, LLC Bankr. E.D.N.C. Case No. 12-05523 Chapter 11 Petition filed July 31, 2012 See http://bankrupt.com/misc/nceb12-05523.pdf represented by: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC E-mail: bill@janvierlaw.com In re Eduardo Ruberte Huertas Bankr. D.P.R. Case No. 12-06040 Chapter 11 Petition filed July 31, 2012 In re MM Interests LLC Bankr. E.D. Tex. Case No. 12-10476 Chapter 11 Petition filed July 31, 2012 See http://bankrupt.com/misc/txeb12-10476p.pdf See http://bankrupt.com/misc/txeb12-10476c.pdf represented by: Tagnia Fontana Clark MAIDA LAW FIRM, P.C. E-mail: maidalawfirm@gt.rr.com In re Kilpatrick, Luster & Co. CPA, PLLC aka Kilpatrick & Co., CPA, PLLC Bankr. D. Ariz. Case No. 12-17264 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/azb12-17264.pdf represented by: Harold E. Campbell, Esq. Campbell & Coombs, P.C. E-mail: heciii@haroldcampbell.com In re Ralph Hernandez Bankr. C.D. Calif. Case No. 12-28015 Chapter 11 Petition filed August 1, 2012 In re Robert Jimerson Bankr. M.D. Fla. Case No. 12-11907 Chapter 11 Petition filed August 1, 2012 In re In The Zone Health and Fitness, LLC Bankr. N.D. Ill. Case No. 12-30769 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/ilnb12-30769.pdf represented by: Mark L Radtke, Esq. Shaw Gussis Fishman Glantz, etal E-mail: mradtke@shawgussis.com In re Play Soccer Chicago LLC dba Sports Zone Bankr. N.D. Ill. Case No. 12-30760 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/ilnb12-30760.pdf represented by: Mark L Radtke, Esq. Shaw Gussis Fishman Glantz, etal E-mail: mradtke@shawgussis.com In re Tap in Cafe LLC dba Warehouse Event Center Bankr. N.D. Ill. Case No. 12-30764 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/ilnb12-30764.pdf represented by: Mark L Radtke, Esq. Shaw Gussis Fishman Glantz, etal E-mail: mradtke@shawgussis.com In re Melba Schwegmann Brown Bankr. E.D. La. Case No. 12-12300 Chapter 11 Petition filed August 1, 2012 In re Arvinder Bahal Bankr. D. Mass. Case No. 12-16460 Chapter 11 Petition filed August 1, 2012 In re Lifeline, Inc. Bankr. D. Md. Case No. 12-24222 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/mdb12-24222.pdf represented by: Jeffrey M. Sirody, Esq. Sirody, Freiman & Associates, P.C. E-mail: smeyers5@hotmail.com In re Myownbiz, LLC Bankr. D. Md. Case No. 12-24234 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/mdb12-24234.pdf represented by: Terry Morris, Esq. Morris Palerm, LLC E-mail: tmorris@morrispalerm.com In re Randy Brown Landscape, Inc. aka Randy Brown Landscaping, Inc. Bankr. E.D. Mich. Case No. 12-57853 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/mieb12-57853p.pdf See http://bankrupt.com/misc/mieb12-57853c.pdf represented by: Kimberly Ross Clayson, Esq. Schneider Miller, PC E-mail: kclayson@schneidermiller.com In re Chad Messersmith Bankr. D. Nebr. Case No. 12-41670 Chapter 11 Petition filed August 1, 2012 In re Risk Assessment & Management, Inc. Bankr. D. Nebr. Case No. 12-41671 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/neb12-41671p.pdf See http://bankrupt.com/misc/neb12-41671c.pdf represented by: Galen E. Stehlik, Esq. Lauritsen, Brownell, Brostrom, Stehlik E-mail: galens@lauritsenlaw.com In re Louis Pinto Bankr. D. Nev. Case No. 12-19009 Chapter 11 Petition filed August 1, 2012 In re Nostrand Wines & Liq Nostrand Wines & Liquors Inc. Bankr. E.D.N.Y. Case No. 12-45649 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/nyeb12-45649.pdf represented by: Morse Geller, Esq. Law Office of Morse Geller E-mail: mgadv1@aol.com In re Driton LLC dba Nino's Restaurant Bankr. S.D.N.Y. Case No. 12-13304 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/nysb12-13304.pdf represented by: Salvatore J. Liga, Esq. The Liga Law Group, P.C. E-mail: sliga@ligalaw.com In re 301 E. 47th St. Rest. Corp. dba Nino's Positano Bankr. S.D.N.Y. Case No. 12-13305 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/nysb12-13305.pdf Represented by: Salvatore J. Liga, Esq. The Liga Law Group, P.C. E-mail: sliga@ligalaw.com In re Arta LLC Bankr. S.D.N.Y. Case No. 12-13306 Chapter 11 Petition filed August 1, 2012 In re Ninos Tribeca Restaurant Ltd Bankr. S.D.N.Y. Case No. 12-13307 Chapter 11 Petition filed August 1, 2012 In re DSK, Inc. Bankr. E.D.N.C. Case No. 12-05595 Chapter 11 Petition filed August 1, 2012 See http://bankrupt.com/misc/nceb12-05595.pdf represented by: Travis Sasser, Esq. Sasser Law Firm E-mail: tsasser@carybankruptcy.com In re Herb Vest Bankr. E.D. Tex. Case No. 12-42062 Chapter 11 Petition filed August 1, 2012 In re E Eiseman Bankr. E.D. Wis. Case No. 12-31537 Chapter 11 Petition filed August 1, 2012 In re Landmark Fund I, LLC Bankr. C.D. Calif. Case No. 12-36746 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/cacb12-36746p.pdf See http://bankrupt.com/misc/cacb12-36746c.pdf represented by: Art Hoomiratana, Esq. Law Office of Art Hoomiratana In re G&G Construction USA, Inc. Bankr. D. Del. Case No. 12-12276 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/deb12-12276.pdf represented by: John D. McLaughlin, Jr., Esq. Ciardi Ciardi & Astin E-mail: jmclaughlin@ciardilaw.com In re Carl D. Jones and Sara A. Jones Bankr. S.D. Ga. Case No. 12-60436 Chapter 11 Petition filed August 3, 2012 In re Touched By An Angel Healthcare, Inc. Bankr. S.D. Ga. Case No. 12-11370 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/gasb12-11370p.pdf See http://bankrupt.com/misc/gasb12-11370c.pdf represented by: James T. Wilson, Jr., Esq. E-mail: brooke@jtwilsonlaw.com In re William Murphy Bankr. M.D. Fla. Case No. 12-10636 Chapter 11 Petition filed August 3, 2012 In re Builders Steel Supply, Inc. Bankr. D. Md. Case No. 12-24372 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/mdb12-24372.pdf represented by: Richard H. Gins, Esq. The Law Office of Richard H. Gins, LLC E-mail: richard@ginslaw.com In re Krishna Investments, LLC Bankr. W.D. Mo. Case No. 12-43223 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/mowb12-43223.pdf represented by: Erlene W. Krigel, Esq. Krigel & Krigel, P.C. E-mail: ekrigel@krigelandkrigel.com In re MGP Investments, LLC Bankr. W.D. Mo. Case No. 12-43222 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/mowb12-43222.pdf represented by: Erlene W. Krigel, Esq. Krigel & Krigel, P.C. E-mail: ekrigel@krigelandkrigel.com In re Safe Shot, LLC Bankr. D. Nev. Case No. 12-51836 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/nvb12-51836.pdf represented by: Gloria M. Petroni, Esq. Petroni & Nichols, Ltd. E-mail: topgun@renolaw.biz In re Valeriy Romanchenko Bankr. D. Nev. Case No. 12-19089 Chapter 11 Petition filed August 3, 2012 In re Joseph Treanor Bankr. D.N.J. Case No. 12-29392 Chapter 11 Petition filed August 3, 2012 In re Wee Love, Inc. Bankr. D.N.J. Case No. 12-29414 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/njb12-29414.pdf represented by: Ellen M. McDowell, Esq. McDowell Riga Posternock, P.C. E-mail: emcdowell@mrpattorneys.com In re Secretary Auto Repair, Inc. aka Mr. Auto Sales Bankr. S.D.N.Y. Case No. 12-13322 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/nysb12-13322.pdf represented by: Nestor Rosado, Esq. E-mail: neslaw2@msn.com In re 501 Grant Street Partners, LLC Bankr. W.D. Pa. Case No. 12-23890 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/pawb12-23890p.pdf See http://bankrupt.com/misc/pawb12-23890c.pdf represented by: Roger M. Bould, Esq. Keevican Weiss Bauerle & Hirsch, LLC E-mail: rbould@kwbhlaw.com In re Terri Blumling Bankr. W.D. Pa. Case No. 12-23888 Chapter 11 Petition filed August 3, 2012 In re Jose Pizarro Rohena Bankr. D.P.R. Case No. 12-06156 Chapter 11 Petition filed August 3, 2012 In re Benji's Special Educational Academy aka Theaola Robinson Bankr. S.D. Tex. Case No. 12-35722 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/txsb12-35722.pdf Filed pro se In re Gayle Hughes Bankr. W.D. Wash. Case No. 12-45424 Chapter 11 Petition filed August 3, 2012 In re Ryden Hazelhurst Marine, LLC Bankr. W.D. Wis. Case No. 12-14439 Chapter 11 Petition filed August 3, 2012 See http://bankrupt.com/misc/wiwb12-14439.pdf represented by: James T. Runyon, Esq. Runyon Law Offices, LLC E-mail: jtrunyon@runyonlawoffices.com In re Pete Enterprises, Inc. Bankr. N.D. Ohio Case No. 12-15744 Chapter 11 Petition filed August 4, 2012 See http://bankrupt.com/misc/ohnb12-15744.pdf represented by: Richard H. Nemeth, Esq. Nemeth & Barrett, LLC E-mail: rnemeth@ohbklaw.com ********* 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 ***