/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120814.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 14, 2012, Vol. 16, No. 225 Headlines 1080 UTICA: Voluntary Chapter 11 Case Summary 122 FIRST: Case Summary & 20 Largest Unsecured Creditors A123 SYSTEMS: Net Loss Widens to $82.9-Mil. in Q2 of 2012 ACCREDITED MEMBERS: Alcoy Int'l Discloses 25.4% Equity Stake ADVANCED COMPUTER: Banco Bilbao Opposes Cash Collateral Use ALLISON TRANSMISSION: Moody's Rates $500MM Sr. Secured Loan 'Ba3' ALLISON TRANSMISSION: S&P Rates New $500-Mil. Term Loan 'BB-' AMBAC FINANCIAL: Incurs $813.3 Million Net Loss in Second Quarter AMCARE HEALTH: Returns 15.3MM to Oklahoma Hospital and Doctors AMERICA'S SUPPLIERS: Reports Net Income of $95,800 in 2nd Quarter AMERICAN AIRLINES: MCM Drops Motion on "Forward Contract" AMERICAN AIRLINES: Wayne County Authority Set-Off Approved AMERICAN AIRLINES: Grants Adequate Protection to Finance Parties AMERICAN AIRLINES: Faces $162.4-Mil. in Civil Penalties AMERICAN DIAGNOSTIC: Court Confirms Reorganization Plan AMERICAN NATURAL: TCA Global Discloses 9.3% Equity Stake ANCHOR BANCORP: Incurs $3.4 Million Net Loss in Fiscal Q1 APPLETON PAPERS: Files Form 10-Q, Incurs $48.8MM Net Loss in Q2 APPLIED MINERALS: Delays Form 10-Q for Second Quarter ATP OIL: Preparing for Bankruptcy; In Talks for $600MM Loan ATTACK ATHLETICS: Appeals Dismissal of Chapter 11 Case AVED GROUP: Case Summary & 9 Unsecured Creditors BAKERSFIELD GROVE: Receiver Has Access to Cash Collateral BALLANTYNE RE: Fitch Affirms Junk Ratings on Three Note Classes BANKATLANTIC BANCORP: Appoints John Grelle as CFO and PAO BATAA/KIERLAND: Plan Confirmed But JPMCC Still Has Objections BEAZER HOMES: CEO Nick Jensen Resigns; Kevin Cook Takes Over BEAZER HOMES: Closing of Citibank Credit Pact Moved to Sept. 30 BECKER LANE: Voluntary Chapter 11 Case Summary BERKELEY COFFEE: Recurring Losses Cue Going Concern Doubt BIOCORAL INC: Delays Form 10-Q for Second Quarter BIOLASE INC: Had $1.9 Million Net Loss in Second Quarter BION ENVIRONMENTAL: Announces Approval of New Canadian Patent BIOFUEL ENERGY: Incurs $12.4 Million Net Loss in Second Quarter BLUE RAVEN: May be Converted to Chapter 7 Today BON-TON STORES: FMR LLC Discloses 11.7% Equity Stake BROADVIEW NETWORKS: High River Urges Vote Against Broadview Swap BUSICK INSULATED: Case Summary & 12 Unsecured Creditors CAMBIUM LEARNING: Moody's Cuts CFR to 'B3'; Outlook Remains Neg. CAPITOL BANCORP: Incurs $10.6 Million Net Loss in Second Quarter CAPITOL CITY: Amends First Quarter Form 10-Q CEL-SCI CORP: Had $835,400 Net Loss in June 30 Quarter CENTRAL EUROPEAN: To Restate 2010 and 2011 Periodic Reports CINRAM INT'L: Has $91.8-Mil. Net Loss in Second Quarter CHABAD HOUSE: Case Summary & 3 Unsecured Creditors CHINA BAK BATTERY: Posts $27.6 Million Net Loss in June 30 Quarter CITY NATIONAL: Suspending Filing of Reports with SEC COMPLETE GENOMICS: Posts $18.8 Million Net Loss in Second Quarter COMSTOCK MINING: Longview Fund Discloses 6.2% Equity Stake CONVERTED ORGANICS: Incurs $1.6 Million Net Loss in 2nd Quarter CUMULUS MEDIA: Reports $8.1 Million Net Income in Second Quarter DEAN FOODS: S&P Affirms 'B+' Corp. Credit Rating; Outlook Positive DEEP DOWN: Reports $639,000 Net Income in Second Quarter DELTA PETROLEUM: Interior Department Has Plan Objections DEWEY & LEBOEUF: BALC Wants Stay Lifted on Non-Wind-Down Property DEWEY & LEBOEUF: Theirhoff OK'd as German Wind Down Counsel DEX ONE: Regains Compliance with NYSE's $1.00 Closing Price Rule DIALOGIC INC: Incurs $18 Million Net Loss in Second Quarter DIGITALGLOBE INC: S&P Affirms 'BB' CCR on GeoEye Acquisition DUNE ENERGY: Midyear Proved Reserves Increased by 21.5% EASTMAN KODAK: Delays Announcement of Auction Results ECOSPHERE TECHNOLOGIES: Files Form 10-Q, Posts $920K Income in Q2 EDIETS.COM INC: Sells Corporate Services Business to Nutrio LLC EDISON MISSION: Moody's Cuts Rating on Sr. Unsec. Notes to 'Ca' EMMIS COMMUNICATIONS: FM Station Purchase Price Reverts to $110MM ENERGY FUTURE: Prices Private Placement of Senior Secured Notes ENERGY FUTURE: Intends to Offer $750 Million Sr. Secured Notes EPICEPT CORP: Reports $2.9 Million Net Income in Second Quarter ESSEX PORTFOLIO: Fitch Assigns 'BB+' Preferred Stock Rating EURAMAX INTERNATIONAL: Incurs $15.6-Mil. 2nd Quarter Net Loss FENTURA FINANCIAL: To Cease Filing Periodic Reports with SEC FIRST NATIONAL: Posts $335,000 Net Loss in 2011 FIRST SECURITY: Incurs $7.3 Million Net Loss in Second Quarter FLURIDA GROUP: Reports $16,325 Net Income in Second Quarter FNB UNITED: Incurs $18.1 Million Net Loss in Second Quarter FORD MOTOR: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Pos FTMI REAL ESTATE: Updated Case Summary & Creditors Lists GENERAL MARITIME: Suspending Filing of Reports with SEC GEOKINETICS INC: Had $27.5 Million Net Loss in Second Quarter GEOMET INC: Amends Credit Agreement with Bank of America GMX RESOURCES: Incurs $103.3 Million Net Loss in Second Quarter GMX RESOURCES: Has Exchange Offers for Convertible Senior Notes HANMI FINANCIAL: Files Form 10-Q, Posts $55.7MM Income in Q2 H&P INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors HARBORSIDE 17: Wants Access to Lender's Cash Collateral HARBORSIDE 17: Files Schedules of Assets and Liabilities HUB INT'L: Incremental Term Loan No Impact on Moody's B3 CFR/PDR INOVA TECHNOLOGY: Amends 375 Million Common Shares Offering INTERLEUKIN GENETICS: Mary Chowning Elected to Board of Directors INTERNATIONAL MEDIA: OK'd to Use NRJ II's Cash for 401(k) Loans IVANHOE ENERGY: Posts $4.7 Million Net Loss in Second Quarter JAMES RIVER: Incurs $25.7 Million Net Loss in Second Quarter JBI INC: Had $4.0 Million Net Loss in Second Quarter JC PENNEY: Moody's Lowers Corp. Family Rating to 'Ba3' JONES SODA: Had $459,000 Net Loss in Second Quarter K-V PHARMACEUTICAL: Receives Interim Approval to Use Cash KINDER MORGAN: S&P Keeps 'BB' Issuer Credit Rating KNIGHT CAPITAL: Pre-Tax Earnings Down 81.8% in Q2 2012 vs Q2 2011 KNIGHT CAPITAL: Files Form 10-Q, Reports $3.3MM Net Income in Q2 KOPPERS INC: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Stable LA JOLLA: Incurs $7.7 Million Net Loss in Second Quarter LANDMARK MEDICAL: RI Seeking Court Order for $5 Million Payment LAS VEGAS RAILWAY: Posts $90,500 Net Loss in June 30 Quarter LEHMAN BROTHERS: WL Ross to Take Majority Stake in Navigator LEVEL 3: Borrowings Under Existing Credit Pact Hiked By $1.4BB LSP ENERGY: Court OKs PA Consulting as Energy Expert Advisor MERRIMACK PHARMACEUTICALS: Incurs $20.1 Million Net Loss in Q2 MF GLOBAL: Judge Approves Deal Between CME Group & Trustee MGM RESORTS: Files Form 10-Q, Incurs $145.4MM Net Loss in Q2 MICHIGAN FINANCE: Moody's Retains Review on 'Caa1' Debt Rating MILESTONE SCIENTIFIC: Incurs $164,000 Net Loss in Second Quarter MORGAN INDUSTRIES: Boatmaker Sells Most Assets for $2.5 Million MOUNTAIN PROVINCE: Incurs C$4 Million Net Loss in Second Quarter MPG OFFICE: Files Form 10-Q; Posts $80.2MM Net Income in 2nd Qtr. NAVISTAR INT'L: Moody's Rates $1-Bil. Sr. Secured Term Loan 'Ba2' NET ELEMENT: Incurs $2.1 Million Net Loss in Second Quarter NEW WESTERN ENERGY: Has $110,400 Net Loss in Second Quarter NEXTWAVE WIRELESS: Polygon Management Holds 12.4% Equity Stake NEXTWAVE WIRELESS: Avenue Capital Discloses 24.9% Equity Stake NORTHAMPTON GENERATING: Cash Collateral Use Extended to Sept. 14 ODYSSEY DIVERSIFIED: Case Summary & Largest Unsecured Creditor ORAGENICS INC: Had $6.93 Million Net Loss in Second Quarter PARADOR VISTAMAR: Case Summary & 14 Unsecured Creditors PASCO COUNTY: Moody's Confirms Ba3 Rating on Mortgage Rev. Bonds PASSIONATE PET: Nevada Holding Company Has Not Filed Bankruptcy PATIENT SAFETY: Incurs $656,900 Net Loss in Second Quarter PATRIOT COAL: Incurs $354.3 Million Net Loss in Second Quarter PEAK RESORTS: Wants to Hire Harris Beach as Bankruptcy Counsel PEAK RESORTS: FDIC Loan Requires Plan or Sale Offer by Yearend PEMCO WORLD: Sun Capital Authorized to Buy Assets in Debt Swap PEREGRINE DEVELOPMENT: Oct. 4 Hearing on Plan, Conversion Bid PEREGRINE FINANCIAL: Wasendorf Indicted, Faces 155 Yrs in Prison PETER DEHAAN: Can Access Northwest Farm Credit Cash Collateral PHH CORP: Fitch to Rate $275-Mil. Sr. Unsecured Notes at 'BB' PHYSICAL PROPERTY: Has HK$175,000 Net Loss in Second Quarter PINNACLE AIRLINES: AFA Replaces United Steelworkers in Committee PLAYPOWER HOLDINGS: S&P Cuts CCR to 'B-' on Weak Credit Measures PLY GEM HOLDINGS: Posts $5.2 Million Net Income in Second Quarter PONCE TRUST: Amends Plan and Disclosure Statement PONTIAC, MI: Moody's Assigns 'Caa1' Issuer Rating POWERWAVE TECHNOLOGIES: Has $42.5-Mil. Net Loss in Second Quarter PROTEONOMIX INC: Thomas Monahan Succeeds Michael Cohen as CFO PROVIDIAN REALTY: Case Summary & 2 Unsecured Creditors QUALITY DISTRIBUTION: Files Form 10-Q; Posts $28.8MM Income in Q2 QUANTUM CORP: Files Form 10-Q; Incurs $17.5MM Loss in Fiscal Q1 QUANTUM FUEL: Incurs $7.1 Million Net Loss in Second Quarter R.W.S. ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors RESIDENTIAL CAPITAL: Aurora Bank Fails in Bid to Lift Stay RESIDENTIAL CAPITAL: Gilberts Fail to Dismiss ResCap Case RESIDENTIAL CAPITAL: RBS Wants Stay Relief to Foreclose on Asset RESIDENTIAL CAPITAL: U.S. Bank Seeks Stay Relief to Foreclose RESPONSE BIOMEDICAL: Had C$2.4 Million Net Loss in Second Quarter RG STEEL: Authorized to Sell Two Plans for $22 Million RG STEEL: Sells Sparrows Point Mill to Hilco for $72-Mil. RITZ CAMERA: Wins OK for KCC to Provide Administrative Services RITZ CAMERA: Cole Schotz Approved as Bankruptcy Counsel RITZ CAMERA: Committee Taps Cooley LLP as Lead Bankruptcy Counsel RITZ CAMERA: Committee Taps Richards Layton as Delaware Counsel ROBLEX AVIATION: Case Summary & 11 Unsecured Creditors ROC FINANCE: Moody's Affirms 'B3' CFR; Outlook Stable ROCKWOOD SPECIALTIES: Moody's Raises CFR to Ba1; Outlook Stable ROTECH HEALTHCARE: Incurs $13.6-Mil. Net Loss in Second Quarter ROTECH HEALTHCARE: David Meador Named Chief Financial Officer RT MIDWEST: Ruby Tuesday Moves to Bid on Franchisee Locations RYLAND GROUP: Invesco Ltd. Lowers Equity Stake to 4.9% SABRE INDUSTRIES: S&P Assigns 'B+' Corporate Credit Rating SEALED AIR: S&P Cuts Corp. Credit Rating to 'BB-'; Outlook Stable SHANNON TERRACE: Case Summary & 3 Unsecured Creditors SHERIDAN GROUP: Incurs $15,338 Net Loss in Second Quarter SKINNY NUTRITIONAL: Withdraws Series A Certificate of Designation SOLUTIA INC: S&P Wthdraws 'BB' CCR on Eastman Chemical Acquisition SOMAXON PHARMA: Posts $2.2 Million Net Loss in Second Quarter SOUTHERN OAKS: Exclusive Plan Filing Period Extended to Aug. 28 SPEEDEMISSIONS INC: Had $75,967 Net Loss in Second Quarter SPRINT NEXTEL: Offering $1.5 Billion of 7.000% Notes STEREOTAXIS INC: Files Form 10-Q; Posts $2.8MM Net Income in Q2 T3 MOTION: Rod Keller Appointed to Board of Directors TELECONNECT INC: Kees Lenselink Resigns from Board of Directors TELIK INC: Had $2.05 Million Net Loss in Second Quarter THOMPSON CREEK: S&P Lowers CCR to 'CCC+' on Weak Performance TITAN PHARMACEUTICALS: Incurs $1.7MM Net Loss in Second Quarter TOLLAND PARTNERS: Voluntary Chapter 11 Case Summary TRANS-LUX CORP: Phases Out Executive Vice President Position TRANSWITCH CORPORATION: Has $6 Million Net Loss in Second Quarter TRAVELPORT HOLDINGS: Files Form 10-Q; Incurs $20MM Loss in Q2 TRI-VALLEY CORP: Meeting to Form Panel Set for Aug. 20 TRIAD GROUP: Case Summary & 20 Largest Unsecured Creditors UNI-PIXEL INC: Selling 3 Million Common Shares at $5.25 Apiece UNIGENE LABORATORIES: Incurs $5.4 Million Net Loss in 2nd Quarter US FIDELIS: Judge to Confirm Committee's Liquidating Plan USI HOLDINGS: Moody's Rates $10MM Incremental Term Loan 'B1' USI HOLDINGS: S&P Rates $100MM Incremental Sr. Sec. Term Loan 'B' VALENCE TECHNOLOGY: Incurs $3.8-Mil. Net Loss in June 30 Quarter VERENIUM CORP: BlackRock Discloses 4.9% Equity Stake VISUALANT INCORPORATED: Had $737,600 Net Loss in June 30 Quarter WARNER MUSIC: Incurs $32 Million Net Loss in Fiscal Q3 WARNKE-LOMBARD: Case Summary & 24 Largest Unsecured Creditors WARNKE-MCDONALD: Case Summary & 24 Largest Unsecured Creditors WAVE SYSTEMS: Incurs $6.5 Million Net Loss in Second Quarter WEST CORP: Moody's Affirms Ba3 Rating on Upsized Credit Facility WEST CORP: S&P Cuts Senior Debt Rating to 'B+' on Term Loan Upsize WESTMORELAND COAL: Files Form 10-Q; Incurs $13.6-Mil. Loss in Q2 WPCS INTERNATIONAL: To Transfer Trading to NASDAQ Capital ZALE CORP: BlackRock Discloses 3.8% Equity Stake ZHONE TECHNOLOGIES: Posts $2.1 Million Net Loss in Second Quarter ZOGENIX INC: Files Form 10-Q; Incurs $17.2-Mil. Net Loss in Q2 ZOGENIX INC: Federated Investors Discloses 28.4% Equity Stake * Fitch Expands Debt Instrument Ratings to Rating Scale * S&P Says Corporate Default Rate to Rise 3.7% in 2013 Q2 * Bankruptcy Lawyer Permanently Disbarred in Alabama * Circuit Court Gives Broad Interpretation to Exemption * Large Companies With Insolvent Balance Sheet ********* 1080 UTICA: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: 1080 Utica LLC 775 Flatbush Avenue, Ground Floor Brooklyn, NY 11226 Bankruptcy Case No.: 12-45820 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Bruce Weiner, Esq. ROSENBERG MUSSO & WEINER LLP 26 Court Street, Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 E-mail: rmwlaw@att.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Neville Patterson, managing member. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- 1210 Utica Avenue Realty Corp. 07-42474 -- 122 FIRST: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: 122 First Pizza Inc. aka 137 Beach Corp. 122 First Avenue New York, NY 10009 Bankruptcy Case No.: 12-13403 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Jonathan S. Pasternak, Esq. RATTET PASTERNAK, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 E-mail: jsp@rattetlaw.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/nysb12-13403.pdf The petition was signed by James McGown, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- East River Mortgage Corp. 12-10861 03/02/12 A123 SYSTEMS: Net Loss Widens to $82.9-Mil. in Q2 of 2012 --------------------------------------------------------- A123 Systems, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $82.89 million on $16.98 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $55.39 million on $36.35 million of total revenue for the comparable period a year earlier. For the six months ended June 30, 2012, the Company reported a net loss of $207.93 million on $27.87 million of revenue, compared with a net loss of $109.06 million on $54.45 million of revenue for the same period of 2011. Product revenue for the three months ended June 30, 2012, decreased $18.08 million, or 61.1%, from the same period a year ago, while services revenue decreased $1.29 million, or 19.0%, from the same period a year ago. Product revenue for the six months ended June 30, 2012, decreased $26.24 million, or 58.3%, from the same period a year ago, while services revenue decreased $341,000, or 3.6%, from the same period a year ago. The Company's balance sheet at June 30, 2012, showed $494.97 million in total assets, $388.00 million in total liabilities, and stockholders' equity of $106.97 million. The Company said, "We have incurred significant net losses and negative operating cash flows since inception. At June 30, 2012, we had an accumulated deficit of $856.9 million, including a $207.9 million net loss incurred for the six months ended June 30, 2012. We had $47.7 million in cash and cash equivalents at June 30, 2012, down from $186.9 million at Dec. 31, 2011." "On March 26, 2012, we launched a field campaign to replace battery modules and packs that may contain defective prismatic cells produced at our Livonia, Michigan manufacturing facility. The cost of this field campaign is estimated at $51.6 million. In addition, we recorded an inventory charge of approximately $15.2 million related to inventory produced at our Michigan facilities that may be defective. As a result of this field campaign and the charge for existing prismatic cell inventory, we have begun to rebuild our inventory and manage our backlog for existing customer orders while simultaneously replacing the defective customer modules and packs. As a result of this field campaign, we expect to continue to incur significant net losses and negative operating cash flows over the next several quarters." "On May 11, 2012, we amended our revolving credit facility with our lead bank. This amendment eliminated the borrowing facility and provided for up to $15.0 million as security for letters of credit. All outstanding letters of credit are required to be cash collateralized at 105% of their face amount. At June 30, 2012, we had $10.8 million of restricted cash to collateralize primarily the outstanding letters of credit." "At June 30, 2012, we had $47.7 million of cash and cash equivalents. Additionally, $30.0 million of cash was released from restricted cash on July 6, 2012. Our credit facility and the 2013 Senior Notes contain a covenant requiring us to maintain an unrestricted cash balance of at least $40.0 million. During the six months ended June 30, 2012, we used on average $18.0 million to $25.0 million per month in net operating and investing cash flows. Based on our historical use of cash, we expect our cash balance to fall below this required minimum by the end of August 2012." "The above circumstances, along with our history and near term forecast of incurring significant net losses and negative operating cash flows, raise substantial doubt on our ability to continue as a going concern." The Company is currently in discussions with the holders of the 2013 Senior Notes and its lead bank that holds the revolving credit facility to modify the respective agreements to reduce the minimum unrestricted cash balance from $40.0 million to a lower amount. A copy of the Form 10-Q is available for free at: http://is.gd/3EeW90 A123 Systems, Inc., which has corporate offices in Waltham, Massachusetts, designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. ACCREDITED MEMBERS: Alcoy Int'l Discloses 25.4% Equity Stake ------------------------------------------------------------ In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Alcoy International disclosed that, as of July 25, 2012, it beneficially owns 30,647,636 shares of common stock of Hangover Joe's Holding Corporation, formerly known as Accredited Members Holding Corporation, representing 25.47% of the shares outstanding. A copy of the filing is available for free at http://is.gd/DR2hsZ About Accredited Members Colorado Springs, Colo.-based Accredited Members Holding Corporation currently provides various services and products both directly and through its subsidiary corporations Accredited Members, Inc. ("AMI"), and AMHC Managed Services ("AMMS"), which provides management services to third parties including services typically provided by executive level personnel on a fix-contract basis. Through August 2011, the Company provided services through its subsidiary World Wide Premium Packers, Inc. ("WWPP"). The Company's balance sheet at March 31, 2012, showed $2.11 million in total assets, $2.15 million in total liabilities, and a stockholders' deficit of $40,790. As reported in the TCR on April 9, 2012, GHP Horwath, P.C., in Denver, Colorado, expressed substantial doubt about Accredited Members' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company reported a net loss of approximately $3,461,000 and used net cash in operating activities of approximately $2,125,000 in 2011, and has an accumulated deficit of approximately $7,570,000 at Dec. 31, 2011. ADVANCED COMPUTER: Banco Bilbao Opposes Cash Collateral Use ----------------------------------------------------------- Banco Bilbao Vizcaya Argentaria Puerto Rico last month filed a motion asking the bankruptcy judge to prohibit Advanced Computer Technology Inc. from using cash that representing collateral for credit provided by the bank. The bank said that the Debtor has not responded to its communications to explore the terms and conditions for the interim use of cash collateral. Banco Bilbao is represented by: William Santiago-Sastre, Esq. DE DIEGO LAW OFFICES, PSC PO BOX 79552, Carolina, PR 00984-9552 Tel: 787-622-3939 Fax: 787- 622-3941 E-mail: wssbankruptcy@gmail.com About Advanced Computer San Juan, Puerto Rico-based Advanced Computer Technology, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-04454) in Old San Juan on June 6, 2012. The Debtor, an information system consulting firm, disclosed $10.34 million in assets and $6.176 million in liabilities in its schedules. It said software and licenses rights are worth $6.30 million. The value of its 100% ownership of Sprinter Solutions, Inc., is unknown. Bankruptcy Judge Brian K. Tester presides over the case. Charles Alfred Cuprill, PSC Law Office, serves as the Debtor's counsel. The petition was signed by Osvaldo Karuzic, chief executive officer. ALLISON TRANSMISSION: Moody's Rates $500MM Sr. Secured Loan 'Ba3' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Allison Transmission, Inc.'s (Allison) new $500 million senior secured term loan B-3 facility. In a related action Moody's affirmed Allison's Corporate Family and Probability of Default Ratings at B1, and affirmed the ratings of the company's existing senior secured bank debt and senior unsecured notes at Ba3 and B3, respectively. The proceeds from the new term loan B-3 facility will be used to refinance a portion of the company existing senior secured term loan B-1 facility due 2014 and thereby extend the maturity of this refinanced portion to 2019. The Speculative Grade Liquidity Rating also was affirmed at SGL-2. The rating outlook is stable. Rating assigned: New senior secured term loan B-3 due 2019, Ba3 (LGD3, 42%); Ratings affirmed: Corporate Family rating, at B1; Probability of Default rating, at B1; Senior secured revolving credit facility due 2014, at Ba3 (LGD3, 42%); Remaining senior secured term loan B-1 due 2014, at Ba3 (LGD3, 42%); Existing senior secured term loan B-2 due 2017, at Ba3 (LGD3, 42%); 7.125% Senior Notes due 2019, at B3 (LGD6, 92%); Speculative Grade Liquidity Rating, SGL- 2 Ratings Rationale Allison's B1 Corporate Family Rating incorporates the combination of the company's high leverage and strong competitive position as the leader in manufacturing commercial vehicle fully automatic transmissions. Allison has been a consistent generator of free cash flow over the recent years and has used cash balances to reduce debt. The company is the largest provider of fully automatic transmissions for Class 4 through 8 commercial vehicles in North America. Allison's diverse end-markets include largely non long-haul highway truck markets, buses, motor homes, off- highway markets, and military vehicles. This diversity has helped to mitigate slowing demand from the company's municipal government and off-highway markets. The stable outlook continues to incorporate Allison's strong competitive position as a supplier of fully automatic transmissions and strong profit margins. The company's credit metrics should continue to support the assigned rating as the pace of growth in commercial vehicle unit volumes in North America gradually improves. Allison's SGL-2 Speculative Grade liquidity rating continues to reflect Moody's expectation of a good liquidity profile supported by free cash flow generation over the next twelve months and availability under the $400 million revolving credit facility due August 2014. Moody's expects Allison to be free cash flow positive over the next twelve months, consistent with trends over the recent years. The company's strong profit margins should more than support higher levels of capital expenditures and modest required amortization of $8 million under the term loan B-2 under over the coming twelve months. Liquidity also is supported by $371.7 million of availability, net of $28.3 million of issued letter of credit, under the revolving credit facility as of June 30, 2012. Cash balances as of June 30, 2012 were $112.1 million. The principal financial covenant is a total senior secured leverage ratio test which is set at 5.5x for the duration of the facility. As of June 30, 2012 the test measured 3.19x. The company is expected to have ample covenant cushion over the near-term to maintain operating flexibility. The rating or outlook would be favorably affected if Debt/EBITDA approaches 3.5x or if further improvement in margins results in EBITA/Interest being consistently above 3.5x. The rating or rating outlook would be adversely impacted if renewed economic pressures or an inability to contain costs were to result in a deterioration in EBIT margins below 17%, if for any reason EBITA/Interests were to fall back below 2.0x, if Debt/EBITDA were to increase above 5.0x, or if the company's liquidity profile were to weaken. The principal methodology used in rating Allison Transmission, Inc. was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Allison Transmission, Inc., headquartered in Indianapolis, IN, designs and manufactures fully automatic transmissions for commercial and military vehicles. Revenues in 2011 were roughly $2.2 billion. Allison is a public company, owned primarily by affiliates of The Carlyle Group, and affiliates of Onex Corporation. Allison is a public company, owned primarily by affiliates of The Carlyle Group, and affiliates of Onex Corporation. ALLISON TRANSMISSION: S&P Rates New $500-Mil. Term Loan 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior secured debt rating to Indianapolis-based global commercial- vehicle component supplier Allison Transmission Inc.'s new $500 million term loan due August 2019. "The new term loan (B-3 tranche) would refinance a portion of its original $3.1 billion secured term loan facility due in August 2014. In March 2012, Allison entered into an amendment to extend the maturity of $801.1 million in principal amount of this term loan to August 2017 from August 2014. The recovery rating on the new term loan is '2', the same as the existing facility, indicating our expectation of substantial recovery (70%-90%) to debtholders in the event of a default," S&P said. "We expect this transaction to be essentially leverage neutral as the company will use proceeds to refinance existing debt. As such, we estimate the company's debt to EBITDA leverage will remain relatively unchanged. Allison's leverage has consistently improved over the past year (4.3x as of June, 30 2012, compared with 5x at year-end 2011 and 6.2x as of March 31, 2011), but, absent any meaningful debt reduction, we believe it will remain between 4x and 4.5x until end-market demand rebounds more strongly. The company had about $3 billion of reported debt outstanding as of June 30, 2012," S&P said. "Our 'B+' corporate credit rating on Allison incorporates our assessment of its financial risk profile as 'aggressive,' with positive cash flow generation prospects over the next two years. We view the company's business risk profile as 'fair,' reflecting good profitability prospects (adjusted EBITDA margins of above 33%) and a strong market share (which we expect to persist for the next several years) as a supplier of fully automatic transmissions for a wide range of commercial vehicles, a fairly cyclical business," S&P said. RATINGS LIST Allison Transmission Inc. Corporate Credit Rating B+/Stable/-- New Rating Allison Transmission Inc. $500 mil. term loan due 2019 BB- Recovery Rating 2 AMBAC FINANCIAL: Incurs $813.3 Million Net Loss in Second Quarter ----------------------------------------------------------------- Ambac Financial Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $813.35 million on $5.96 million of total revenues before expenses and reorganization items for the three months ended June 30, 2012, compared with a net loss of $102.41 million on $148.19 million of total revenues before expenses and reorganization items for the same period a year ago. For the six months ended June 30, 2012, the Company reported a net loss of $560.02 million on $318.17 million of total revenues before expenses and reorganization items, compared to a net loss of $921.66 million on $351.47 million of total revenues before expenses and reorganization items for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/0jPFps About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMCARE HEALTH: Returns 15.3MM to Oklahoma Hospital and Doctors -------------------------------------------------------------- The Insurance Journal reports that health care providers across Oklahoma will be receiving checks worth more than $15.3 million this month, Oklahoma Insurance Commissioner John D. Doak announced. The funds are actual damages owed by the defunct health maintenance organization AmCare Health Plans of Oklahoma Inc., according to the Insurance Journal. The Insurance Journal notes that the first check, for $204,531, is being presented to Integris Bass Baptist Health Center. Oklahoma, Texas and Louisiana filed suit against AmCare Health Plans after it was placed in receivership in 2003, Insurance Journal recalls. The report relates that the company ceased operations in Oklahoma on Oct. 1, 2002. The Insurance Journal says that investigators found AmCare was severely undercapitalized and was manipulating its financial records by moving assets back and forth between sister companies in an attempt to appear solvent. The checks, administered through the Oklahoma Receivership Office, will complete principal payments to the affected providers. In 2006, the Oklahoma Insurance Department successfully petitioned the court for an early distribution of approximately $8.8 million, Insurance Journal notes. AMERICA'S SUPPLIERS: Reports Net Income of $95,800 in 2nd Quarter ----------------------------------------------------------------- America's Suppliers, Inc., filed its quarterly report on Form 10- Q, reporting net income of $95,822 on $4.14 million of revenues for the three months ended June 30, 2012, compared with a net loss of $220,752 on $4.18 million of revenues for the same period last year. For the six months ended June 30, 2012, the Company reported net income of $52,003 on $7.60 million of revenues, compared with a net loss of $347,538 on $7.53 million of revenues for the comparable period of 2011. The Company's balance sheet at June 30, 2012, showed $1.87 million in total assets, $1.78 million in total current liabilities, and shareholders' equity of $88,172. The Company said in the filing, "We have a recent history of operating losses and operating cash outflows. These factors raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from this uncertainty." A copy of the Form 10-Q is available for free at: http://is.gd/rnG7yC Scottsdale, Ariz.-based America's Suppliers, Inc., is an Internet- based provider of general merchandise through its wholly owned subsidiaries, DollarDays International, Inc., and WowMyUniverse.com. AMERICAN AIRLINES: MCM Drops Motion on "Forward Contract" --------------------------------------------------------- HTL Operating, LLC, d/b/a MCM Elegante Hotel, withdraw a motion for determination that its hotel accommodations agreement with American Eagle is a "forward contract." The prepetition agreement requires the hotel operator to provide hotel rooms for air crews at the rate of $69 a night at. HTL argues that it has the right to terminate the contract because a forward contract can be terminated under an exception to the automatic stay imposed in bankruptcy. HTL says American Eagle is in default under the contract because it has failed to pay outstanding and unpaid prepetition charges amounting to $27,679. A forward contract is defined in part as a contract "with maturity date more than two days after the contract was entered into." But AMR Corp. and its affiliates asked the Court to dismiss HTL's motion because MCM is seeking a declaratory judgment, which must be sought through an adversary proceeding. The Debtors also asserted the automatic stay remains in effect and American Eagle may assume or reject its agreement with MCM. MCM, the Debtors said, cannot take any action in violation of the automatic stay, including seeking to terminate the agreement or any other adverse action against American Eagle in connection with its alleged prepetition claims. The Debtors' contentions were supported by the official committee of unsecured creditors. In response to the Debtors' objections, MCM argued that the claim that the safe harbor protections in the Bankruptcy Code with respect to forward contracts were only intended to provide protection to contracts involving commodities that traded as part of the large financial market is erroneous. HTL nonetheless subsequently withdrew its motion without prejudice. 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: Wayne County Authority Set-Off Approved ---------------------------------------------------------- AMR Corp. and its affiliates obtained approval of a stipulation with Wayne County Airport Authority. The Debtors and the Authority are parties to an Airport Use and Lease Agreement, dated July 31, 2008. Pursuant to the Airport Agreement, American Airlines pays the Authority an estimated monthly charge of approximately $500,000, which includes fixed and variable rent and landing fees each month for the use of various facilities at Detroit Metropolitan Wayne County Airport and services provided by the Authority at DTW. At the end of each fiscal year, the Authority conducts a reconciliation of American Airlines' actual obligations under the Airport Agreement for that year and either refunds any amounts paid by American Airlines in excess of American Airlines' actual obligations or requests payment from American Airlines for any deficiency. As of the Petition Date, American Airlines owes the Authority $298,610 on account of the Airport Agreement for the use of various facilities at DTW and for services provided by the Authority prior to the Petition Date. However, pursuant to a recent Reconciliation, the Authority has determined that a refund of $448,600 is due to American Airlines for the prepetition period under the Airport Agreement. The Parties have agreed that, pursuant to section 553(a) of the Bankruptcy Code, the Authority is permitted to set off the amount it is owed on account of the Authority Prepetition Claim against the Reconciliation Amount in full satisfaction of the Authority Prepetition Claim. The Parties have further agreed that, after the Setoff, there will be $149,990 of the Reconciliation Amount due and owing to American Airlines, which shall be paid to the Debtors within 10 business days after entry of a final, non- appealable order of the Court approving the Stipulation. 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: Grants Adequate Protection to Finance Parties ---------------------------------------------------------------- The Bankruptcy Court approved the stipulation between AMR Corp. and its affiliates and U.S. Bank Trust National Association, not in its individual capacity but solely as Trustee and Security Agent, concerning adequate protection with respect to the aircraft finance transactions relating to aircraft bearing FAA registration numbers: -- N909AN -- N910AN -- N912AN -- N914AN -- N915AN -- N916AN -- N917AN -- N918AN -- N919AN -- N399AN -- N778AN -- N779AN The Court also approved a stipulation between the Debtors and Bank of America, as trustee and security agent, concerning adequate protection with respect to aircraft finance transactions relating to aircraft bearing FAA registration numbers N7506, N3507A and N7509. 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: Faces $162.4-Mil. in Civil Penalties ------------------------------------------------------- The Federal Aviation Administration is seeking $162.4 million of potential civil penalties from AMR Corp. for alleged safety violations, according to an August 6 report by The Wall Street Journal. The agency is seeking a total of $156.5 million from American Airlines Inc. alone for alleged maintenance problems going back to 2007. That sum includes $24.2 million in civil penalty, which was proposed in 2010 for the company's alleged maintenance lapses that grounded its fleet of Boeing Co. MD-80s in 2008. In a statement, the FAA said it filed its claims "to protect the interest of U.S. taxpayers." "The documents detail both proposed and potential civil penalties in connection with ongoing enforcement cases involving both American Airlines and American Eagle," the agency said. The FAA said it cannot discuss the details of the individual investigations as those cases remain open. Because the agency had to file its claims by the July 16 deadline in AMR's bankruptcy case, a number of major investigations are still under way and American Airlines has not received formal penalty letters about them, The Journal reported. The largest potential penalties listed for individual enforcement cases are $39.3 million for allegedly not fixing wiring on Boeing 757 jets; $28.8 million for landing gear issues on Boeing 777; and $27.6 million for not meeting the required modification to Boeing 767 engine nacelle mounts and wing structures, according to the report. Michael Trevino, a spokesman for AMR, said the company is aware of the FAA's potential claims, Bloomberg News reported. "The claims process is a routine part of any Chapter 11 filing," Trevino said in an e-mailed statement. "It is not an admission that money is owed nor is it an admission that the amount cited is correct." Mr. Trevino said the FAA and American Airlines clashed during 2008 over the agency's partial shutdown of the airline. Since then, the airline has made improvements in its maintenance procedures and worked with the agency to improve relations, Bloomberg News reported. In all, AMR received nearly 8,900 claims under its bankruptcy filing totaling $95 billion by the July 16 deadline since its bankruptcy filing. In a recent Securities and Exchange Commission filing, the company said: "Through the claims resolution process, we expect to identify many claims that we believe should be disallowed . . . because they are duplicative, are without merit, are overstated or for other reasons." 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 DIAGNOSTIC: Court Confirms Reorganization Plan ------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois confirmed American Diagnostic Medicine Inc.'s Second Amended Joint Chapter 11 Plan of Reorganization, which was filed on July 10, 2012. The July 26, 2012 order also approved on a final basis the disclosure statement explaining the terms of the Plan. The Debtor and Reorganized Debtor: (i) are authorized to take all actions necessary or appropriate to enter into, implement and consummate the contracts, instruments, releases, leases, indentures, and other agreements or documents created in connection with the Plan, including, without limitation, the ADM Creditor Trust Agreement, the Unsecured Creditor Notes, the Cardinal Health Note, the Stock Pledge, and the Sale of the New Equity, if applicable; and (ii) may otherwise perform all of their obligations under the Plan. A post-confirmation status conference will be held before the Court on Sept. 12, 2012, at 10:30 a.m. As reported in the TCR on July 25, 2012, according to the Disclosure Statement, main secured creditor Cardinal Health would recover 75% of its $3 million secured claim. Holders of general unsecured claims aggregating $1.25 million and PNC Equipment Finance LLC's $1.95 million claims on account of the rejection of equipment leases will have a recovery of 50% to 75%. Equity holders won't recover anything. A copy of the Disclosure Statement dated July 10, 2012, is available for free at: http://bankrupt.com/misc/American_Diagnostic_DS_071012.pdf The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois entered orders authorizing the Debtor to use cash collateral to fund the Chapter 11 case. In July she entered an order authorizing American Diagnostic to continue using cash collateral until July 31, 2012. As of the Petition Date, the Debtor owes Cole Taylor Bank $829,485 in secured loans. It also owed Cardinal Health 414, LLC, $3,362,393 under a junior secured loan. About American Diagnostic Batavia, Illinois-based American Diagnostic Medicine Inc. provides imaging technologies to hospitals, clinics, cardiologists, internal medicine groups and other health care providers throughout the United States. It filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-03368) on Jan. 28, 2011. Joshua D. Greene, Esq., and Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, serve as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $11.3 million in total assets and $11.1 million in total debts. AMERICAN NATURAL: TCA Global Discloses 9.3% Equity Stake -------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, TCA Global Credit Master Fund LP disclosed that, as of Dec. 29, 2011, it beneficially owns 1,764,706 shares of common stock of American Natural Energy Corporation representing 9.32% of the shares outstanding. A copy of the filing is available for free at http://is.gd/7Gqjlt 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. ANCHOR BANCORP: Incurs $3.4 Million Net Loss in Fiscal Q1 --------------------------------------------------------- Anchor Bancorp Wisconsin Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss available to common equity of $3.41 million on $26.99 million of total interest income for the three months ended June 30, 2012, compared with a net loss available to common equity of $8.15 million on $36.11 million of total interest income for the same period during the previous year. The Company's balance sheet at June 30, 2012, showed $2.78 billion in total assets, $2.81 billion in total liabilities and a $28.50 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/JJiV6X About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank fsb, each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Corporation and the Bank continue to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the Orders. The Corporation and the Bank continue to consult with the successors to the OTS, Federal Reserve, the the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation on a regular basis concerning the Corporation's and Bank's proposals to obtain outside capital and to develop action plans that will be acceptable to federal regulatory authorities, but there can be no assurance that these actions will be successful, or that even if one or more of the Corporation's and Banks proposals are accepted by the Federal regulators, that these' proposals will be successfully implemented. While the Corporation's management continues to exert maximum effort to attract new capital, significant operating losses in fiscal 2009, 2010 and 2011, significant levels of criticized assets and low levels of capital raise substantial doubt as to the Corporation's ability to continue as a going concern. If the Corporation and Bank are unable to achieve compliance with the requirements of the Orders, or implement an acceptable capital restoration plan, and if the Corporation and Bank cannot otherwise comply with those commitments and regulations, the OCC or FDIC could force a sale, liquidation or federal conservatorship or receivership of the Bank. The Company reported a net loss of $36.73 million on $127.25 million of total interest income for the fiscal year ended March 31, 2012, a net loss of $41.17 million on $166.46 million of total interest income for the year ended March 31, 2011, and a net loss of $176.91 million on $217.08 million of total interest income for the year ended March 31, 2010. McGladrey LLP, inMadison, Wisconsin, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that all of the subsidiary bank's regulatory capital amounts and ratios are below the capital levels required by the cease and desist order. The subsidiary bank has also suffered recurring losses from operations. Failure to meet the capital requirements exposes the Corporation to regulatory sanctions that may include restrictions on operations and growth, mandatory asset dispositions, and seizure of the subsidiary bank. In addition, the Corporation's outstanding balance under the Amended and Restated Credit Agreement is currently in default. These matters raise substantial doubt about the ability of the Corporation to continue as a going concern. APPLETON PAPERS: Files Form 10-Q, Incurs $48.8MM Net Loss in Q2 --------------------------------------------------------------- Appleton Papers Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing 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 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 Paper's balance sheet at July 1, 2012, showed $565.44 million in total assets, $875.19 million in total liabilities and a $309.74 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/SKYyDs 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. * * * 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. APPLIED MINERALS: Delays Form 10-Q for Second Quarter ----------------------------------------------------- Applied Minerals, Inc., spent additional time re-evaluating its warrant derivative liability, including the technique utilized to measure the liability. The Company also, as previously disclosed, engaged new auditors who performed their first review of the Company's quarterly results for the second quarter of 2012. As a result of the review of the warrant derivative liability and additional review time required by new auditors with respect to such liability, timely filing of the Form 10-Q for the second quarter of 2012 is impracticable without undue hardship and expense to the registrant. The Company undertakes the responsibility to file that report no later than five days after its original prescribed due date. About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. The Company reported a net loss attributable to the Company of $7.48 million in 2011, a net loss attributable to the Company of $4.76 million in 2010, and a net loss attributable to the Company of $6.76 million in 2009. The Company's balance sheet at March 31, 2012, showed $10.68 million in total assets, $5.24 million in total liabiilties and $5.44 million in total stockholders' equity. Going Concern The Company has incurred material recurring losses from operations. At March 31, 2012, the Company had a total accumulated deficit of approximately $43,084,500. For the three months ended March 31, 2012, and 2011, the Company sustained net losses from exploration stage before discontinued operations of approximately $4,056,700 and $1,695,100, respectively. The Company said that these factors indicate that it may be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is contingent upon its ability to generate revenue and cash flow to meet its obligations on a timely basis and management's ability to raise financing or dispose of certain non-core assets as required. If successful, this will mitigate the factors that raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning At Dec. 31, 2011, and 2010, the Company had accumulated deficits of $39,183,632 and $31,543,411, respectively, in addition to limited cash and unprofitable operations. For the year ended Dec. 31, 2011, and 2010, the Company sustained net losses before discontinued operations of $7,476,864 and $4,891,525, respectively. As of March 15, 2012, the Company has not commercialized the Dragon Mine and has had to rely on cash flow generated from the sale of stock and convertible debt to fund its operations. If the Company is unable to fund its operations through the commercialization of the Dragon Mine, the sale of equity or debt or a combination of both, it may have to file bankruptcy. ATP OIL: Preparing for Bankruptcy; In Talks for $600MM Loan ----------------------------------------------------------- The Wall Street Journal's Mike Spector and Ryan Dezember, citing a person familiar with the matter, report that ATP Oil & Gas Corp. is negotiating a $600 million loan that would help keep the company running during bankruptcy proceedings. That source said ATP could file for bankruptcy protection in coming days. The source said ATP was in discussions with senior creditors Friday afternoon about the parameters of the financing and possible bankruptcy filing. WSJ notes Bloomberg and S&P Leveraged Commentary & Data earlier reported on the financing discussions and potential bankruptcy filing. After the market closed Friday, ATP said it was unable to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, "due to the difficulty in completing and obtaining the required financial and other information without unreasonable effort and expense." ATP said it is unable to determine whether or not there will be any significant changes in its results of operations from the quarter ended June 30, 2011, as it is still in the process of compiling the information necessary for the preparation of its financial statements. WSJ relates ATP shares fell 73% Friday to 36 cents. The stock has lost nearly 95% since May. Meanwhile, ATP's 11.875% bonds due 2015 have fallen 57% in the last year, including 2% Friday, to 36 cents on the dollar. Bloomberg News, citing two people familiar with the matter, reported late in July that bondholders are organizing for a potential restructuring. One of those sources, who declined to be identified because he's involved in the process, told Bloomberg that investors interviewed potential advisers. The process isn't public, he said. "We expect either bankruptcy or an announcement of some sort from somebody on a potential reorganization," Bob Bruce, manager of the $350 million Bruce Fund Inc., which held about $9 million of the 11.875% notes as of March, said in a telephone interview July 26, according to Bloomberg. "We just keep our fingers crossed that a miracle will happen." Mr. Bruce said he hadn't heard from any bondholder group or advisers. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. The Company's balance sheet at March 31, 2012, showed $3.63 billion in total assets, $3.48 billion in total liabilities, $115.81 million in redeemable noncontrolling interest, $71.18 million in 8% convertible perpetual preferred stock, and a $34.44 million total shareholders' deficit. * * * As reported by the Troubled Company Reporter on Aug. 3, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on ATP to 'CCC' from 'CCC+' The outlook is negative. S&P raised its issue rating on the company's senior unsecured notes to 'CCC' from 'CCC-' (same as the corporate credit rating). "The downgrade reflects our expectation that ATP's liquidity is currently limited relative to projected fixed charges over the next three months," said Standard & Poor's credit analyst Christine Besset. "Because of various operational issues faced by the company, we believe that cash flow in second-quarter 2012 will be below our forecasts, leaving ATP with lower-than-expected liquidity at the end of the quarter. We estimate that current liquidity and operating cash flow over the next three months will be insufficient to cover capital expenditures (capex), royalty interest payments and November bond interests without a cut in capital spending or outside financing." "The recovery rating revision reflects a change in our valuation of the company's reserves," added Ms. Besset. "Given the heightened risk of a near-term default, we are now valuing the reserves using price assumptions which are close to the current price environment rather than the low commodity prices we generally assume for most E&P companies." "The negative outlook reflects the looming liquidity shortfall. We could take a negative rating action if the company is unable to secure additional funding this year or is unsuccessful in developing planned 2012 wells, jeopardizing its liquidity situation for 2013. We may revise the outlook to positive if ATP finds additional financing and increases production, cash flow, and liquidity to fund 2012 and 2013 fixed charges -- likely in conjunction with continued high commodity prices," S&P said. As reported by the TCR on May 9, 2012, Moody's Investors Service affirmed ATP's Caa2 Corporate Family Rating. The Caa2 Corporate Family Rating reflects ATP's small production and cash flow base, low drilling risk diversification, high proportion of proved undeveloped reserves and short PD (proved developed) reserve life, extremely high leverage and chronic liquidity challenges. ATTACK ATHLETICS: Appeals Dismissal of Chapter 11 Case ------------------------------------------------------ ESPNChicago.com, citing multiple news reports, says former National Basketball Association star player Michael Jordan stands to lose as much as $1.5 million in a possible foreclosure of a gym he invested in. The Chicago Sun-Times and Chicago Tribune reported that a judge recently rejected a Chapter 11 bankruptcy filing by the company of Tim Grover, who owns Attack Athletics Gym on Chicago's West Side. Mr. Grover filed for bankruptcy in April in order to stave off foreclosure, according to the papers, but a judge dismissed the filing on July 11. Attack Properties LLC has appealed the ruling, according to the papers, and that appeals process could take a month. In the meantime, the mortgage holder is free to pursue a foreclosure sale, the papers reported. The gym, formerly known as Hoops, was built in 2007. It is a 65,000-square-foot facility, according to its Web site, and has four NBA-sized basketball courts and a 10,000-square-foot weight room. ESPNChicago.com relates Mr. Grover used his relationship with Mr. Jordan to build a lucrative business and would work with some of the biggest stars in the NBA, including Kobe Bryant, Dwyane Wade and Tracy McGrady. Michael Finley also has been a client, and the Sun-Times reported Mr. Finley is listed as a creditor, having guaranteed a $2 million loan. AVED GROUP: Case Summary & 9 Unsecured Creditors ------------------------------------------------ Debtor: Aved Group, LLC 1945 Cornell Avenue, Suite D Melrose Park, IL 60160 Tel: (708) 681-6030 Bankruptcy Case No.: 12-31659 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Timothy A. Barnes Debtor's Counsel: Aaron Spivack, Esq. LAW OFFICES OF AARON SPIVACK 811 W. superior Chicago, IL 60642 Tel: (312) 275-0188 E-mail: law@aspivack.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 nine largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb12-31659.pdf The petition was signed by Holly Randazo, member. BAKERSFIELD GROVE: Receiver Has Access to Cash Collateral --------------------------------------------------------- The judge handling Bakersfield Grove Limited LLC's Chapter 11 case approved a stipulation authorizing Steven M. Speier in his capacity as receiver for the property of the Debtor, until the earlier of plan confirmation, dismissal or conversion of the case. The stipulation was entered into by the Debtor, U.S. Bank National Association, a national banking association, as successor-in- interest to the Federal Deposit Insurance Corporation, as receiver for Downey Savings & Loan, F.A., of Newport Beach, California, and Mr. Speier. As adequate protection for the use of cash collateral, the bank will receive payments, liens on rents and profits generated postpetition, and claim of the highest administrative priority in the amount of any decline in the value of the collateral. About Bakersfield Grove Limited Brea, California-based Bakersfield Grove Limited, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-13157) on March 12, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), has property located at Panama Lane, in Bakersfield, California. Judge Erithe A. Smith presides over the case. Kathy Bazoian Phelps, Esq., at Danning, Gill, Diamond & Kollitz, LLP. The petition was signed by Robert M. Clark, president of managing member. BALLANTYNE RE: Fitch Affirms Junk Ratings on Three Note Classes --------------------------------------------------------------- Fitch Ratings has affirmed and assigned Recovery Estimates (REs) to the following tranches of Ballantyne Re Plc (Ballantyne Re): -- Class A-1 notes at 'CCsf'; RE35%; -- Class B-1 notes at 'Csf'; RE0%; -- Class B-2 notes at 'Csf'; RE0%. Fitch's rating rationale is based on the significant mark-to- market losses Ballantyne Re has experienced in its investment portfolio of residential-mortgage-backed (RMBS) and asset-backed securities (ABS). Ballantyne Re's liabilities exceed the current book value of its assets by a significant margin. Interest payments on class A-1 are current, and Fitch expects interest on class A-1 to remain current for the foreseeable future. However, Fitch believes that absent a remarkable recovery in RMBS/ABS values it is probable that Ballantyne Re will eventually be unable to pay interest or full principal on the class A-1 notes. Based on current market values, Fitch expects a principal recovery of 35% on the class A notes. Fitch believes default is inevitable on the class B-1 and B-2 notes and does not expect holders of these notes to receive any further interest or principal payments. Fitch has placed the 'sf' designation on these esoteric notes to signify to investors that, although it may not be a true structured finance security, it contains several transaction elements and risk mitigants to resemble a structured finance transaction. Key rating drivers for Ballantyne Re's ratings that could lead to an upgrade or upward revision in recovery estimates include: -- Investment portfolio recovery. The value of assets would need to increase by $1 billion for the class A-1 notes to fully recover principal and by $1.1 billion for both class A- 1 and class B note holders to fully recover principal. -- Significant profits emerge from the life insurance book. Key rating drivers for Ballantyne Re's ratings that could lead to a downgrade or downward revision in Recovery Rating include: -- Investment portfolio decline; -- Life insurance losses exceed expectation. Ballantyne Re is a special purpose public limited company incorporated and registered in Ireland. The company was established for the limited purpose of entering into a reinsurance agreement and conducting activities related to the notes' issuance. Ballantyne Re issued the notes to finance excess reserve requirements under Regulation XXX for the block of business ceded under the reinsurance agreement. BANKATLANTIC BANCORP: Appoints John Grelle as CFO and PAO --------------------------------------------------------- John K. Grelle was appointed as Chief Financial Officer and principal accounting officer of BBX Capital Corporation, formerly known as BankAtlantic Bancorp, Inc. Mr. Grelle, age 68, also serves as Chief Financial Officer of BFC Financial Corporation. BFC currently owns shares of the Company's Class A Common Stock and Class B Common Stock representing in the aggregate approximately 75% of the total voting power of the Company's common stock. Mr. Grelle joined BFC as acting Chief Financial Officer on Jan. 11, 2008, and was appointed Executive Vice President and Chief Financial Officer on May 20, 2008, and Chief Risk Officer on Sept. 16, 2011. Mr. Grelle also served as Executive Vice President, Chief Financial Officer and principal accounting officer of Woodbridge Holdings Corporation from May 2008 until September 2009 when it merged with and into a wholly owned subsidiary of BFC. Prior to joining BFC, Mr. Grelle served as a Partner of Tatum, LLC, an executive services firm. From 2003 through October 2007, when Mr. Grelle joined Tatum, LLC, Mr. Grelle was the founder and principal of a business formation and strategic development consulting firm. From 1996 through 2003, Mr. Grelle served as Senior Vice President and Chief Financial Officer of ULLICO Inc. and, from 1993 through 1995, he served as Managing Director of DCG Consulting. Mr. Grelle has also been employed in various other executive and financial positions throughout his career, including Chairman and Chief Executive Officer of Old American Insurance Company; Controller of the Financial Services Division of American Can Company (later known as Primerica); Chairman, President and Chief Executive Officer of National Benefit Life, a subsidiary of Primerica; President of Bell National Life; Senior Vice President and Chief Financial Officer of American Health and Life; Controller of Sun Life America; and Director of Strategic Planning and Budgeting for ITT Hamilton Life. Mr. Grelle is a former member of the board of directors of the N.Y. Council of Life Insurers. Mr. Grelle's compensation, if any, for his services on behalf of the Company has not yet been determined. About BankAtlantic Bancorp BankAtlantic Bancorp (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a bank holding company and the parent company of BankAtlantic. BankAtlantic -- "Florida's Most Convenient Bank" with a Web presence at http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets and more than 100 stores, and is one of the largest financial institutions headquartered junior in Florida. BankAtlantic has been serving communities throughout Florida since 1952 and currently operates more than 250 conveniently located ATMs. BankAtlantic reported a net loss of $28.74 million in 2011, a net loss of $143.25 million in 2010, and a net loss of $185.82 million in 2009. BankAtlantic's balance sheet at March 31, 2012, showed $3.84 billion in total assets, $3.87 billion in total liabilities and a $31.56 million total deficit. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Further, the holding company must also submit a capital plan to maintain and enhance its capital position. BATAA/KIERLAND: Plan Confirmed But JPMCC Still Has Objections -------------------------------------------------------------- The court in Arizona on July 10 entered a memorandum decision confirming the amended Chapter 11 plan of reorganization dated Sept. 2, 2011 of Bataa/Kierland, LLC. The senior lender, JPMCC 2007-CIBC 19 East Greenway, LLLC, has an objection to the proposed plan confirmation order that was submitted by the Debtor. In a filing dated July 23, JPMCC wants certain provisions deleted. It also says that while the proposed order properly reflects the Court's ruling that the value of the Debtor's real property is $7.7 million, it does not reflect the ruling that the secured lender's post-confirmation secured claim must include the value of the Debtor's cash collateral. Terms of the Sept. 2 Plan were previously reported by the Troubled Company Reporter. According to the Disclosure Statement, the Plan funding will include the Debtor's funds on hand, operations of the Property, and a capital infusion by the interest holder or a successful bidder, if an auction is held. The existing owner will purchase the equity interests in the Reorganized Debtor for $240,000. Of the amount, $42,000 will be allocation for unsecured claims. If JPMCC does not make the 11 U.S.C. Sec. 1111(b) election, the amount of its secured claim will be limited to the value of its collateral, and the secured claim will be paid in full, with interest, over a period of seven years. If JPMCC makes the election, then the entire allowed claim will be treated as fully secured and JPMMC will receive monthly payments with the remaining balance to be paid on the 21s anniversary of the effective Date of the Plan. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/bataa.doc103.pdf JPMCC is represented by: Ethan B. Minkin, Esq. Andrew A. Harnisch, Esq. Jaclyn D. Foutz, Esq. Dean C. Waldt, Esq. Jon T. Pearson, Esq BALLARD SPAHR LLP 1 East Washington Street, Suite 2300 Phoenix, AZ 85004-2555 Telephone: 602-798-5400 E-mail: minkine@ballardspahr.com harnischa@ballardspahr.com foutzj@ballardspahr.com waldtd@ballardspahr.com pearsonj@ballardspahr.com About Bataa/Kierland Bataa/Kierland, LLC, owns and operates a Class "A" office building known as Kierland Corporate Center located at 7047 E. Greenway Parkway, Scottsdale, Arizona. It filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-05850) on March 9, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Polsinelli Shughart PC serves as the Debtor's bankruptcy counsel. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Bataa/Kierland have expressed interest in serving on a committee. BEAZER HOMES: CEO Nick Jensen Resigns; Kevin Cook Takes Over ------------------------------------------------------------ Dialogic Inc. entered into a letter agreement with Nick Jensen pursuant to which Mr. Jensen resigned as the Company's Chief Executive Officer effective Aug. 9, 2012. Mr. Jensen will continue to serve as a member of the Board of Directors. The Letter Agreement also set forth Mr. Jensen's ongoing role as a consultant to the Company for a period beginning Aug. 9, 2012, and ending Sept. 30, 2013. Under the terms of the Agreement, Mr. Jensen is entitled to consulting fees at the rate of C$41,666 per month between September 2012 and December 2012 and C$33,333 per month between January 2013 and March 2013. For services performed from April 1, 2013, Mr. Jensen will be entitled to one cash performance-based award, which such payment and performance goal will be determined by the independent members of the Board prior to Dec. 31, 2012. Mr. Jensen's separation was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. On Aug. 9, 2012, the Board appointed Kevin Cook, the Company's President and Chief Operating Officer, as Chief Executive Officer. Mr. Cook is 54 years old and has served as the Company's President and Chief Operating Officer since December 2011. Mr. Cook previously served as the Company's Executive Vice President, Worldwide Field Operations from October 2010 to December 2011 and as Dialogic Corporation's Senior Vice President, Worldwide Sales and Support since October 2008. From January 2005 to August 2008 Mr. Cook served as Vice President, North America at Avaya Inc., and from 2003 to 2004 as Vice-President of Avaya Global Services. On Aug. 9, 2012, the Company entered into an offer letter with Mr. Cook. Under the terms of the offer letter, Mr. Cook is entitled to an annual base salary of US$500,000 and an annual performance- based incentive bonus of up to US$400,000 at the discretion of the Board based on achievement of performance objectives as determined by the Board; provided however, that Mr. Cook's incentive bonus will be US$200,000 for the second half of 2012 based on corporate and individual goals to be approved by the Board on or before Aug. 15, 2012. Furthermore, Mr. Cook is entitled to receive compensation for commissions he earned under the Company's sales incentive plan between Jan. 1, 2012, and June 30, 2012, at the rate of US$300,000 per annum at 100% of target, as well as retention incentive compensation payments pursuant to his prior employment agreement with the Company in multiple payments of US$50,000 on each of Aug. 15, 2012, Feb. 15, 2013, and Aug. 15, 2013, subject to his continuous service and certain corporate and individual goals set forth by the Board. Annual Meeting Results The 2012 annual meeting of stockholders of the Company was held on Aug. 8, 2012, at which Dion Joannou, Patrick S. Jones and Michael West were elected as directors to hold office until the 2015 Annual Meeting of Stockholders. In addition, each of Nick Jensen and Giovani Richard Piasentin will continue to serve as directors until the 2013 Annual Meeting of Stockholders and until his successor is elected and has qualified, or until his earlier death, resignation or removal. Each of Nick DeRoma and Rajneesh Vig will continue to serve as directors until the 2014 Annual Meeting of Stockholders and until his successor is elected and has qualified, or until his earlier death, resignation or removal. The stockholders approved: (a) the issuance of the 18,000,000 shares of the Company's common stock issuable upon the exercise of the warrants issued pursuant to the subscription agreement entered into by and among the Company and certain investors on March 22, 2012, as amended, in connection with the restructuring of the Company's debt obligations; (b) the issuance of the 39,971,766 shares of the Company's common stock issuable upon the conversion of the convertible promissory notes issued under the securities purchase agreement entered into by and among the Company and certain investors on April 11, 2012, as amended; (c) the one-time stock option exchange program which would allow employees, officers and directors of the Company and its affiliates to surrender their options that have an exercise price above $1.00 and above the closing price of the Company's common stock on the closing date of that exchange program for cancellation, in exchange for new options; (d) the amendment and restatement of the Company's 2006 Equity Incentive Plan to (a) provide for a one-time 1,600,000 share increase in the number of shares available for issuance under the 2006 Plan and (b) increase and reapprove certain stock award limits set forth in the 2006 Plan for compliance with certain provisions of the Internal Revenue Code of 1986, as amended; and (e) the selection by the Audit Committee of the Board of KPMG LLP as the Company's independent registered public accounting firm for the year ending Dec. 31, 2012. A copy of the Form 8-K is available for free at: http://is.gd/JpMuwH About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. The Company's balance sheet at June 30, 2012, showed $140.76 million in total assets, $188 million in total liabilities and a $47.23 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. BEAZER HOMES: Closing of Citibank Credit Pact Moved to Sept. 30 --------------------------------------------------------------- Beazer Homes USA, Inc., entered into a 3rd Extension and Amendment to the Company's Amended and Restated Credit Agreement, dated as of Aug. 5, 2009, by and between the Company and Citibank, N.A. The Amendment extends the termination date of the Credit Agreement from Aug. 2, 2012, to Sept. 30, 2012. The Company expects to replace its existing revolving credit facility under the Credit Agreement with a new revolving credit facility. A copy of the Amendment is available for free at: http://is.gd/usmpiN On Aug. 8, 2012, the Company entered into amendments for each of its Delayed-Draw Term Loan Facilities with Citibank, N.A., and Deutsche Bank AG Cayman Islands Branch. The Delayed-Draw Term Loan Amendments (i) allow the Company to draw down additional funds under each of the Delayed-Draw Term Loan Facilities and (ii) amend the definitions of Commitment Termination Date and Put Date. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at June 30, 2012, showed $1.82 billion in total assets, $1.64 billion in total liabilities and $179.07 million in total stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "negative" outlook, from Standard & Poor's, (ii) 'Caa2' probability of default and corporate family ratings from Moody's, and (iii) 'CCC' issuer default rating from Fitch Ratings. Fitch said in September 2011 that the downgrade from 'B-' to 'CCC' reflects Fitch's belief new housing activity will remain weak through at least 2012 and the company's liquidity position is likely to erode in the next 18 months. In July 2012, Fitch said that while it expects better prospects for the housing industry this year, there are still significant challenges facing the housing market, which are likely to meaningfully moderate the early stages of this recovery. Moody's said in July 2012 that the 'Caa2' CFR reflects Moody's expectation that Beazer's operating and financial performance, while improving, will remain weak through fiscal 2013. Moody's expects that Beazer's cash flow generation will continue to be weak in fiscal 2012 and 2013. "Our current rating outlook on Beazer is negative. We would consider a downgrade if the company's EBITDA growth fails to meet our expectations or if the downturn in the housing market lingers longer than we expect and unit volume remains depressed," S&P said in July 2012. BECKER LANE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Becker Lane, LLC 5830 W. Thunderbird Rd. Suite B-310 Glendale, AZ 85306 Bankruptcy Case No.: 12-18011 Chapter 11 Petition Date: August 10, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Shelton L. Freeman, Esq. DECONCINI MCDONALD YETWIN & LACY PC 6909 East Main St. Scottsdale, AZ 85251 Tel: (480) 398-3100 Fax: (480) 398-3101 E-mail: tfreeman@lawdmyl.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 Bradley J. Willcox, member. BERKELEY COFFEE: Recurring Losses Cue Going Concern Doubt --------------------------------------------------------- MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Berkeley Coffee & Tea Inc.'s ability to continue as a going concern, following the Company's results for the fiscal year ended April 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations, which raises substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $45,730 on $220,421 of revenue for fiscal 2012, compared with a net loss of $205,594 on $43,074 of revenue for fiscal 2011. The Company's balance sheet at April 30, 2012, showed $4.62 million in total assets, $4.59 million in total liabilities, and shareholders' equity of $32,816. A copy of the Form 10-K is available for free at: http://is.gd/Oz68Zg Shanghai, China-based Berkeley Coffee & Tea Inc. was incorporated on March 27, 2009, in the State of Nevada. Berkeley Coffee expects to generate revenue from the marketing and sale of green coffee beans from Yunnan, China, into the United States. It plans to sell green bean coffee grown in China directly to coffee wholesalers, coffee brokers and coffee roasters in the United States. BIOCORAL INC: Delays Form 10-Q for Second Quarter ------------------------------------------------- BIOCORAL, INC., was not able to complete the preparation, review and filing of its quarterly report on Form 10-Q for the quarterly period ended June 30, 2012, within the prescribed time period without unreasonable effort and expense. BIOCORAL expects to file the Form 10-Q on or before Aug. 14, 2012. About Biocoral, Inc. Headquartered in La Garenne Colombes, France, Biocoral, Inc. -- http://www.biocoral.com/-- was incorporated under the laws of the State of Delaware on May 4, 1992. Biocoral is a holding company that conducts its operations primarily through its wholly- owned European subsidiaries. The Company's operations consist primarily of research and development and manufacturing and marketing of patented high technology biomaterials, bone substitute materials made from coral, and other orthopedic, oral and maxillo-facial products, including products marketed under the trade name of Biocoral. Most of the Company's operations are conducted from Europe. The Company has obtained regulatory approvals to market its products throughout Europe, Canada and certain other countries. The Company owns various patents for its products which have been registered and issued in the United States, Canada, Japan, Australia and various countries throughout Europe. However, the Company has not applied for the regulatory approvals needed to market its products in the United States. Michael T. Studer CPA P.C., in Freeport, New York, noted that the Company's present financial condition raises substantial doubt about its ability to continue as a going concern. The independent auditors added that the Company had net losses for the years ended Dec. 31, 2011, and 2010, respectively. Management believes that it is likely that the Company will continue to incur net losses through at least 2012. The Company had a working capital deficiency of approximately $1,570,000 and $2,125,000, at Dec. 31, 2011 and 2010, respectively. The Company also had a stockholders' deficit at Dec. 31, 2011, and 2010, respectively. Biocoral reported a net loss of $920,103 in 2011, compared with a net loss of $703,272 in 2010. The Company's balance sheet at March 31, 2012, showed $1.38 million in total assets, $4.81 million in total liabilities and a $3.42 million total stockholders' deficit. BIOLASE INC: Had $1.9 Million Net Loss in Second Quarter -------------------------------------------------------- BIOLASE, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.88 million on $12.18 million of net revenue for the three months ended June 30, 2012, compared with a net loss of $753,000 on $12.08 million of net revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $3.55 million on $24.50 million of net revenue, compared with a net loss of $1.50 million on $22.64 million of net revenue for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $28.21 million in total assets, $17.61 million in total liabilities, and stockholders' equity of $10.60 million. The Company said in the filing: "We have suffered recurring losses from operations and have not generated cash from operations for the three years ended December 31, 2011. Our inability to generate cash from operations, the potential need for additional capital, and the uncertainties surrounding our ability to raise additional capital, raises substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/jjhwsk Irvine, Calif.-based BIOLASE, Inc., incorporated in Delaware in 1987, is a medical technology company operating in one business segment that develops, manufactures, and markets lasers, and also markets and distributes dental imaging equipment and other products designed to improve technologies for applications and procedures in dentistry and medicine. BION ENVIRONMENTAL: Announces Approval of New Canadian Patent ------------------------------------------------------------- Bion Environmental Technologies, Inc.'s Canadian patent application 2503166 entitled "Low Oxygen Biologically Mediated Nutrient Removal" has been approved. The patent application was made on April 18, 2005; upon publication and issuance, the patent will be officially granted and will remain in force until April 18, 2024. The new patent provides protection of the core Bion process's ability to convert and remove both nitrogen and phosphorous from the effluent stream. The patent describes the removal of both nitrogen and phosphorus similar to the United States patents in hand. James Morris, Ph.D., P. E., Bion's chief technology officer, stated, "Canada represents a large potential market and this patent assures Bion's ability to deploy our technology in this important agricultural powerhouse." The Canadian patent substantially strengthens the Company's international IP portfolio, with active patents now held in Canada, New Zealand and Mexico, and additional applications under consideration for the European Union, Brazil, Argentina and Australia. Bion holds seven US patents, with one pending. About Bion Environmental Bion Environmental Technologies Inc.'s patented and proprietary technology provides a comprehensive environmental solution to a significant source of pollution in US agriculture, large scale livestock facilities known as Confined Animal Feeding Operations. Bion's technology produces substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon the Company's operations and research to date (and third party peer review). As of March 31, 2012, Bion had total assets of $8,528,685, total liabilities of $9,214,838 and total deficit of $728,678. "The Company has not generated revenues and has incurred net losses (including significant non-cash expenses) of approximately $6,998,000 and $2,976,000 during the years ended June 30, 2011, and 2010, respectively, and a net loss of approximately $5,831,000 for the nine months ended March 31, 2012. At March 31, 2012, the Company has a working capital deficit and a stockholders' deficit of approximately $383,000 and $814,000 respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern.," the Company said in its quarterly report for the period ended March 31, 2012. BIOFUEL ENERGY: Incurs $12.4 Million Net Loss in Second Quarter --------------------------------------------------------------- Biofuel Energy Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $12.41 million on $122.82 million of net sales for the three months ended June 30, 2012, compared with a net loss of $8.31 million on $168.53 million of net sales for the same period a year ago. The Company reported a net loss of $23.50 million on $262.23 million of net sales for the six months ended June 30, 2012, compared with a net loss of $17.36 million on $326.53 million of net sales for the same period during the prior year. The Company reported a net loss of $10.36 million in 2011, compared with a net loss of $25.22 million during the prior year. BioFuel Energy's balance sheet at June 30, 2012, showed $275.09 million in total assets, $197.90 million in total liabilities and $77.18 million in total equity. Bankruptcy Warning "Drought conditions in the American Midwest have significantly impacted this year's corn crop and caused a significant reduction in the anticipated corn yield," the Company said in its quarterly report for the period ended June 30, 2012. "Since the end of the second quarter, this has led to a dramatic increase in the price of corn and a corresponding narrowing in the crush spread. Should current commodity margins continue for an extended period of time, we may not generate sufficient cash flow from operations to both service our debt and operate our plants. We are required to make, under the terms of our Senior Debt Facility, quarterly principal payments in a minimum amount of $3,150,000, plus accrued interest. We cannot predict when or if crush spreads will fluctuate again or if the current commodity margins will improve or worsen. If crush spreads were to remain at current levels for an extended period of time, we may expend all of our sources of liquidity, in which event we would not be able to pay principal and interest on our debt. In the event crush spreads narrow further, we may choose to curtail operations at our plants or cease operations altogether until such time as crush spreads improve. Any inability to pay principal and interest on our debt would lead to an event of default under our Senior Debt Facility, which, in the absence of forbearance, debt service abeyance or other accommodations from our lenders, could require us to seek relief through a filing under the U.S. Bankruptcy Code. We expect fluctuations in the crush spread to continue." A copy of the Form 10-Q is available for free at: http://is.gd/C4JkPI About Biofuel Energy Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) -- http://www.bfenergy.com/-- aims to become a leading ethanol producer in the United States by acquiring, developing, owning and operating ethanol production facilities. It currently has two 115 million gallons per year ethanol plants in the Midwestern corn belt. BLUE RAVEN: May be Converted to Chapter 7 Today ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Blue Raven Technology Inc. sold the business in July and may see the Chapter 11 reorganization converted at a hearing today to liquidation in Chapter 7. According to the report, the U.S. Bankruptcy Court in Boston approved a transaction on July 25 intended to sell the business for $1.4 million to private-equity investor Leading Ridge Capital Partners LLC from Rockville, Maryland. The report relates in court papers filed last week, the U.S. Trustee said net proceeds from the sale were "less than projected." As a result, the company lacks enough cash to pay expenses arising during the Chapter 11 case. The U.S. Trustee, an arm of the Justice Department, filed a motion last week for conversion of the case to liquidation in Chapter 7. U.S. Bankruptcy Judge Frank J. Bailey responded by scheduling an emergency hearing Aug. 14. About Blue Raven Blue Raven Technology, Inc., filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-14693) on May 30, 2012. Blue Raven is a provider of parts and repair services for consumer electronics and computers. The Company had $17.7 million of revenue in 2011, an 18% decline from the year before. The company blamed its problems on the bankruptcies of electronics retailers that had been major customers. Bankruptcy Judge Frank J. Bailey presides over the case. David B. Madoff, Esq., at Madoff & Khoury LLP, in Foxboro, serves as counsel. The Debtor disclosed $2.143 million in assets and $8.284 million in liabilities as of the Chapter 11 filing. BON-TON STORES: FMR LLC Discloses 11.7% Equity Stake ---------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on Aug. 9, 2012, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 2,003,409 shares of common stock of Bon-Ton Stores Incorporated representing 11.719% of the shares outstanding. A copy of the filing is available at: http://is.gd/iZTrS9 About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 276 department stores, which includes 11 furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. Bon-Ton Stores reported $1.62 billion in total assets, $1.53 billion in total liabilities and $91.77 million in total shareholders' equity as of April 28, 2012. The Company incurred a net loss of $40.8 million on $640 million of net sales for the 13 weeks ended April 28, 2012. * * * In the Jan. 12, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Bon-Ton Stores Inc. to 'B-' from 'B'. "The downgrade reflects the continued deterioration of the company's performance, which has been below our expectations due to merchandising that has not resonated with its customers," said Standard & Poor's credit analyst David Kuntz. He added, "It incorporates our view that operations will remain weak in the near term and that credit protection measures will erode further over the next year." As reported by the TCR on July 13, 2012, Moody's Investors Service revised The Bon-Ton Stores, Inc.'s Probability of Default Rating to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's exchange of $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. The LD designation indicates that a limited default on the company's 2014 notes has occurred, as Moody's deem that this transaction is a distressed exchange. The LD designation will be removed in approximately 3 business days. Moody's also affirmed the company's Corporate Family Rating at Caa1 and affirmed the Caa3 rating assigned to the company's senior unsecured notes due 2014. BROADVIEW NETWORKS: High River Urges Vote Against Broadview Swap ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that High River LP urged holders of the Broadview Networks Holdings Inc. senior secured notes to vote against the debt-for- equity exchange being proposed by the telecommunications provider from Rye Brook, New York. High River said it owns $51 million of the $300 million in 11.375% first-lien senior secured notes maturing on Sept. 1. Aug. 13 is the last day for voting on Broadview's offer to exchange the existing notes for $150 million in new five-year secured notes and 97.5% of the new common stock. When the offer was made public, Broadview said the agreement was reached with holders of more than two-thirds of the secured notes and shares. According to the report, High River, affiliated with Carl Icahn, contends that the exchange won't pay senior noteholders in full, as advertised. High River believes that the projected value is "artificially inflated" according to the report because it's based on an assumption that revenue that won't decline so much as recent history indicates. High River faults the company's proposal for diluting the new stock with warrants being given to existing preferred shareholders. High River says that preferred shareholders are "the same people that control the board." High River, the report recounts, made a proposal to provide Broadview with $165 million in a cash equity investment and $10 million in loans in exchange for 70% of the new stock. Existing noteholders would receive $150 million in cash and 30% of the stock. The notes traded at 4:14 p.m. on Aug. 10 for 65.55 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Standard & Poor's predicted in July that holders wouldn't recover more than 30% following payment default. Out-of-Court or Chapter 11 As reported in the July 30 edition of the Troubled Company Reporter, Broadview and each of its direct and indirect subsidiaries entered into the First Amendment to the Restructuring Support Agreement, dated July 13, 2012, with holders representing more than 66-2/3% of the Company's outstanding 11-3/8% Senior Secured Notes due 2012 to amend the terms of the Support Agreement to, among other things, extend certain milestones and limit the applicability of select termination rights to the Required Consenting Noteholders. Among other things, the First RSA Amendment extends the date by when the Company is required to consummate the restructuring or commence chapter 11 cases prior to a termination triggering event from Aug. 17 to Aug. 24. On July 18, 2012, the Company, Broadview Networks, Inc., Broadview Networks of Massachusetts, Inc., Broadview Networks of Virginia, Inc., and Bridgecom International, Inc., entered into a Senior Revolving DIP Facility Commitment Letter with The CIT Group/Business Credit, Inc., pursuant to which CITBC has committed to provide to the Borrowers a Senior Revolving Debtor in Possession Credit Facility in an amount not to exceed $25,000,000. In the event that the chapter 11 cases are not commenced on or before Sept. 5, 2012, or the initial borrowing in respect of the DIP Credit Facility is not made on or before the fourth business day following the commencement of the chapter 11 cases, the DIP Commitment Letter and the commitment and undertakings of CITBC thereunder will automatically terminate unless CITBC, in its sole discretion, agrees to an extension. Before that date, CITBC may terminate its obligations under the DIP Commitment Letter as expressly provided therein. On July 19, 2012, the Company entered into Amendment No. 5 to the Credit Agreement, dated Aug. 23, 2006, by and among the Borrowers, the Lenders named therein and CITBC, as administrative agent, collateral agent and documentation agent. As a result of the Fifth Credit Agreement Amendment, the maturity date of the Company's revolving credit facility was extended from Aug. 1, 2012, to Sept. 5, 2012. A copy of the Amended Restructuring Agreement is available at: http://is.gd/Lp3WCF A copy of the Amended Credit Agreement is available at: http://is.gd/V2PTwk About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Ernst & Young LLP, in New York, N.Y., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has in excess of $300 million of debt due on or before September 2012. "In addition, the Company has incurred net losses and has a net stockholders' deficiency." The Company reported a net loss of $11.9 million for 2011, compared with a net loss of $18.8 million for 2010. The Company's balance sheet at March 31, 2012, showed $258.32 million in total assets, $373.35 million in total liabilities and a $115.03 million total stockholders' deficiency. * * * In the July 23, 2012, edition of the Troubled Company Reporter, Moody's Investors Service downgraded Broadview Networks Holdings, Inc. Corporate Family Rating (CFR) to Caa3 from Caa2 and the Probability of Default Rating (PDR) to Ca from Caa3 in response to the company's announcement that it has entered into a restructuring support agreement with holders of roughly 70% of its preferred stock and roughly 66-2/3% of its Senior Secured Notes. The company is expected to file a pre-packaged Chapter 11 Plan of Reorganization or complete an out of court exchange offer. As reported by the TCR on July 25, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Broadview to 'D' from 'CC'. "This action follows the company's announced extension on its revolving credit facility. We expect to lower the issue- level rating on the notes to 'D' once the company files for bankruptcy, or if it misses the Sept. 1, 2012 maturity payment on the notes," S&P said. BUSICK INSULATED: Case Summary & 12 Unsecured Creditors ------------------------------------------------------- Debtor: Busick Insulated Glass, Inc. 585 Osage Street Denver, CO 80204 Bankruptcy Case No.: 12-26688 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Aaron J. Conrardy, Esq. SENDER & WASSERMAN, P.C. 1660 Lincoln Street, Suite 2200 Denver, CO 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 E-mail: aconrardy@sendwass.com - and ? Harvey Sender, Esq. SENDER & WASSERMAN, P.C. 1660 Lincoln Street, Suite 2200 Denver, CO 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 E-mail: Sendertrustee@sendwass.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 12 unsecured creditors is available for free at http://bankrupt.com/misc/cob12-26688.pdf The petition was signed by Steven R. Busick, president. CAMBIUM LEARNING: Moody's Cuts CFR to 'B3'; Outlook Remains Neg. ---------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating (CFR) of Cambium Learning Group, Inc. to B3 from B2 due to rising leverage and free cash flow deterioration which is the result of persistent top line weakness. As part of the rating action, Moody's has also downgraded the company's Probability of Default Rating (PDR) to B3 from B2 and the ratings on the company's $175 million senior secured notes due 2017 to B3 (LGD 4- 54%) from B2 (LGD 4-54%). The outlook remains negative due to the company's sharp downward sales trajectory. Moody's has taken the following rating actions: Issuer: Cambium Learning Group, Inc. Downgrades: Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3 from B2 US$175M 9.75% Senior Secured Regular Bond/Debenture, Downgraded to B3 from B2 Ratings Rationale Cambium's B3 CFR reflects the company's small scale relative to competitors in the industry, its negative revenue trajectory and its high leverage. Cambium competes against much larger companies in a highly fragmented industry. In addition, the company's sales are reliant upon state and local funding, which is uncertain and under pressure due to government spending constraints. Cambium operates in a growing niche segment of the education services market. However, due to sales weakness the company has experienced double-digit order volume declines. Total company sales fell 22% during the first half of 2012 relative to the first half of 2011 and it remains to be seen if the company can stabilize the top line during the second half of 2012. Leverage is up sharply to over 8x (Moody's Adjusted, including capitalizing operating leases, recognizing pre-production costs as expense and adding the pension shortfall to debt) at the end of Q2 2012 as the company has been unable to cut costs in line with the drop in sales. Moody's expects that leverage will fall modestly through 2013 as cost cutting catches up with the lower sales level. Moody's believes Cambium will maintain good liquidity over the next 12-18 months due to its large cash position and undrawn revolver. However, Moody's forecasts negative free cash flow in 2012 and neutral cash flow in 2013. Cambium requires minimal capital expenditures and has no debt maturities prior to 2017. As of Q2 2012, Cambium had $32 million in cash and an undrawn asset backed revolver due 2014 which is not rated by Moody's. The facility has a total size of $40 million, but the base borrowing amount varies relative to the accounts receivable and inventory assets which serve as its collateral. As of June 30, 2012 revolver availablitiy was $31 million. Moody's could stabilize Cambium's outlook if sales growth returns and the company appears on track to return to positive free cash flow. Moody's could lower Cambium's ratings further if sales do not stabilize and EBITDA continues to deteriorate, such that leverage does not fall below 6x on a sustainable basis. Additionally, the ratings could face downward pressure if the company's liquidity deteriorates. Headquartered in Dallas, Texas, Cambium Learning Group, Inc. ("Cambium") provides research-based education solutions for students in Pre- K through 12th grade, including intervention curricula, educational technologies and services primarily focused on at risk students with special needs. The company reported net revenue for the last twelve months ended June 30, 2012 of approximately $153 million. The principal methodology used in rating Cambium Learning Group, Inc was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CAPITOL BANCORP: Incurs $10.6 Million Net Loss in Second Quarter ---------------------------------------------------------------- Capitol Bancorp Ltd. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $10.67 million on $19.94 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $17.50 million on $24.61 million of total interest income for the same period during the prior year. The Company reported a net loss of $19.61 million on $41.17 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $20.28 million on $51.10 million of total interest income for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $1.98 billion in total assets, $2.11 billion in total liabilities and a $131.91 million total deficit. Capitol's Chairman and CEO Joseph D. Reid said, "Another quarter of active management and resolution-oriented focus resulted in net loan charge-offs of $7.8 million for the second quarter of 2012, a significant decrease from $16.4 million for the corresponding period of 2011," added Mr. Reid. "In addition, for the second quarter of 2012, (excluding the effect of affiliate divestitures), total nonperforming loans have declined 15 percent and total nonperforming assets have fallen 12 percent on a linked-quarter basis (declining more than 25 percent and approximately 18 percent, respectively, from year-end totals). This continued decline is encouraging and we perceive these trendlines as an indication of continued improving fundamentals and a validation of the assumptions underlying the restructuring plan." Mr. Reid stated, "We are pleased to announce the results of the voting on the proposed voluntary restructuring plan, which were overwhelmingly favorable. The initiatives underlying the Standby Plan will provide resolution of our trust preferred securities and Capitol's senior debt, facilitating new equity investments in the Corporation. We are very optimistic about the plan, which will provide benefits to Capitol and all of its stakeholders. Additionally, the restructuring plan will help to restore the Corporation's capital ratios, as well as the capital ratios of our affiliate banks, providing a more stable platform for future growth and support. We are enthusiastic as we enter the next phase of the restructuring plan, and appreciate the continued support from our many stakeholders." A copy of the Form 10-Q is available for free at: http://is.gd/Xo305v Capitol Bancorp Limited (OTCQB: CBCR), which was founded in 1988, is a community banking company that has a network of separately chartered banks in 10 states and executive offices in Lansing, Michigan. Capitol previously announced plans to sell its controlling interests in several affiliate banks. The sales of two of these banks were completed in July 2012 and Capitol has also entered into an agreement to sell its interests in one additional affiliate in the Northwest region of the country. These three transactions represent nearly $200 million of assets. The pending divestiture is anticipated to be completed in 2012, pending regulatory approval and other contingencies. Capitol Bancorp Ltd. filed for bankruptcy (Bankr. E.D. Mich. Case No. 12-58409) on Aug. 9, 2012. The petitions were signed by Cristin K. Reid, corporate president. The petition was accompanied by a prepackaged reorganization plan after a proposed out-of-court restructuring failed to obtain enough support. Capitol said holders of senior notes, trust preferred securities, Series A preferred and common stock overwhelmingly voted to accept the Prepack Plan. The Debtor is represented by Daniel N. Adams, Esq., Edward Todd Sable, Esq., Joseph R. Sgroi, Esq., and Judy B. Calton, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detriot, Michigan. CAPITOL CITY: Amends First Quarter Form 10-Q -------------------------------------------- Capitol City Bancshares, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 1 to Form 10-Q for the quarter eneded March 31, 2012. The amendment was filed to reflect certain adjustments to the Company's books based upon the final results of a regulatory examination that concluded during the second quarter of 2012. These adjustments increased the provision for loan losses by $550,000 and other operating expenses by $360,937 for the three months ended March 31, 2012, decreasing net income by $910,937 from net income of $148,280 to a loss of $762,657. The Company's restated balance sheet at March 31, 2012, showed $298.37 million in total assets, $290.19 million in total liabilities and $8.17 million in total stockholders' equity. The Company originally reported $299.28 million in total assets, $290.19 million in total liabilities and $9.08 million in total stockholders' equity as of March 31, 2012. A copy of the amended Form 10-Q is available for free at: http://is.gd/NNXCjF About Capitol City Bancshares Atlanta, Georgia-based Capitol City Bancshares, Inc., was incorporated under the laws of the State of Georgia for the purposes of serving as a bank holding company for Capitol City Bank and Trust Company. The Bank operates a full-service banking business and engages in a broad range of commercial banking activities, including accepting customary types of demand and timed deposits, making individual, consumer, commercial, and installment loans, money transfers, safe deposit services, and making investments in U.S. government and municipal securities. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Nichols, Cauley and Associates, LLC, in Atlanta, Georgia, expressed substantial doubt about Capital City Bancshares' ability to continue as a going concern. The independent auditors noted that the Company is operating under regulatory orders to, among other items, increase capital and maintain certain levels of minimum capital. "As of Dec. 31, 2011, the Company was not in compliance with these capital requirements. In addition to its deteriorating capital position, the Company has suffered significant losses related to nonperforming assets, has experienced declining levels of liquid assets, and has significant maturities of liabilities within the next twelve months." CEL-SCI CORP: Had $835,400 Net Loss in June 30 Quarter ------------------------------------------------------ CEL-SCI Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $835,446 on $35,000 of revenue for the three months ended June 30, 2012, compared with a net loss of $3.11 million on $77,403 of revenue for the three months ended June 30, 2011. For the nine months ended June 30, 2012, the Company had a net loss of $12.91 million on $146,567 of revenue, compared with a net loss of $23.39 million on $784,036 of revenue for the nine months ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $19.92 million in total assets, $10.91 million total liabilities, and stockholders' equity of $9.01 million. As reported in the TCR on Dec. 27, 2011, BDO USA LLP, in Bethesda, Maryland, expressed substantial doubt about CEL-SCI's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company has suffered recurring losses from operations. A copy of the Form 10-Q is available for free at: http://is.gd/thj85f Vienna, Virginia-based CEL-SCI Corporation was formed as a Colorado corporation in 1983. CEL-SCI's business consists of (1) Multikine(R) (Leukocyte Interleukin, Injection) investigational cancer therapy; and (2) LEAPS technology, with two products, pandemic flu treatment for hospitalized patients and CEL-2000, a rheumatoid arthritis treatment vaccine, in development. CENTRAL EUROPEAN: To Restate 2010 and 2011 Periodic Reports ----------------------------------------------------------- Upon the recommendation of Central European Distribution Corporation's management, the Company's board of directors has concluded that the Company's financial statements for all reporting periods from and after Jan. 1, 2010, should no longer be relied upon primarily due to the fact that certain retroactive rebates and trade marketing expenses were not properly recorded by the Company's principal operating subsidiary in Russia, the Russian Alcohol Group. Following the Company's announcement on June 4th, the Audit Committee of the Company's board of directors initiated an internal investigation regarding the Company's retroactive rebates, trade marketing expenses and related accounting issues. The Company management has made a preliminary determination that the aggregate effect of the adjustments identified will result in a cumulative reduction of each of revenue and EBITDA for the period from Jan. 1, 2010, through Dec. 31, 2011, of approximately $49 million, and that the adjustments identified would result in impairment charges of approximately $10 million. The Company will not be able to file its quarterly report on Form 10-Q for the quarter ended June 30, 2012, until its internal investigation is complete, as the results of that investigation could affect its financial statements for the three and six month periods ended June 30, 2012, and the comparable periods in the prior year. The Company intends to file these reports with the SEC as soon as practicable following completion of its internal investigation. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. The Company's balance sheet at March 31, 2012, showed US$2.033 billion in total assets, US$1.674 billion in total liabilities, and stockholders' equity of US$358.45 million. According to the regulatory filing, "[C]ertain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, our Convertible Senior Notes are due on March 15, 2013. Our current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment on Convertible Notes and, unless the transaction with Russian Standard Corporation is completed as scheduled, the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at March 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern unless the transaction with Russian Standard is completed as scheduled." Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. CINRAM INT'L: Has $91.8-Mil. Net Loss in Second Quarter ------------------------------------------------------- Cinram International Income Fund reported consolidated revenue of $143.2 million in the 2012 second quarter compared to $147.5 million in the second quarter of 2011. For the first six months of 2012, revenue was $310.8 million, a 4% decrease from $324.2 million in the prior year comparable period, primarily as a result of lower standard DVD and CD revenue, partially offset by an increase in Blu-ray related revenue. The Fund reported a net loss for the second quarter of 2012 of $91.8 million or $0.21 per unit (basic), compared with a net loss of $97.4 million or $(1.60) per unit (basic) in 2011. A full text copy of Company's earnings release is available free at http://is.gd/H3XTC9 About Cinram International With headquarters in Toronto, Ontario, Canada, Cinram International Inc. is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. The Company on June 25, 2012, filed for reorganization protection under the Companies' Creditors Arrangements Act (Canada) in the Ontario Superior Court. Concurrently with that filing, Cinram's US subsidiaries filed under Chapter 15 of the United States Bankruptcy Code (Bankr. D. Del. Case Nos. 12-11882 to 12-11890). Pauline K. Morgan Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as U.S. counsel. FTI Consulting is the monitor in the CCAA case. Attorneys at Goodsman LLP represent Cinram in the CCAA case. On July 12, 2012, the Canadian Court approved the sale of substantially all of Cinram's assets and businesses in North America and Europe to newly formed subsidiaries of Najafi Companies. The sale was also approved by the U.S. Court on July 25, 2012. CHABAD HOUSE: Case Summary & 3 Unsecured Creditors -------------------------------------------------- Debtor: Chabad House at Johns Hopkins, LLC, Debtor 3701 North Charles Street Baltimore, MD 21218 Bankruptcy Case No.: 12-24686 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: Aryeh E. Stein, Esq. MERIDIAN LAW, LLC 600 Reisterstown Road, Suite 700 Baltimore, MD 21208 Tel: (443) 326-6011 E-mail: astein@meridianlawfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its three unsecured creditors is available for free at http://bankrupt.com/misc/mdb12-24686.pdf The petition was signed by Zev Gopin, managing member. CHINA BAK BATTERY: Posts $27.6 Million Net Loss in June 30 Quarter ------------------------------------------------------------------ China BAK Battery, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $27.60 million on $46.84 million of revenues for the three months ended June 30, 2012, compared with a net loss of $7.24 million on $47.13 million of revenues for the three months ended June 30, 2011. For the nine months ended June 30, 2012, the Company reported a net loss of $45.04 million on $151.38 million of revenues, compared with a net loss of $14.99 million on $157.37 million of revenues for the nine months ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $454.43 million in total assets, $362.74 million in total liabilities, and stockholders' equity of $91.69 million. According to the regulatory filing, the Company has a working capital deficiency, accumulated deficit from recurring net losses incurred for the current and prior reporting periods and significant short-term debt obligations maturing in less than one year as of June 30, 2012. These factors raise substantial doubts about the Company's ability to continue as a going concern. As reported in the TCR on Dec. 20, 2011, PKF, in Hong Kong, China, expressed substantial doubt about China BAK's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company has a working capital deficiency, accumulated deficit from recurring net losses incurred for the current and prior years and significant short-term debt obligations maturing in less than one year as of Sept. 30, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/vK9Ur7 Shenzhen, P.R.C.-based China BAK Battery, Inc., is a global manufacturer of lithium-based battery cells. The Company produces battery cells for OEM customers and replacement battery manufacturers. CITY NATIONAL: Suspending Filing of Reports with SEC ---------------------------------------------------- City National Bancshares Corporation filed a Form 15 with the U.S. Securities and Exchange Commission notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock. As of Aug. 8, 2012, there were 1,160 holders of the common shares. About City National Bancshares Newark, New Jersey-based City National Bancshares Corporation is a New Jersey corporation incorporated on Jan. 10, 1983. City National Bank, a wholly-owned subsidiary of CNBC, is a national banking association chartered in 1973 under the laws of the United States of America and has one subsidiary, City National Investments, Inc., an investment company which holds, maintains and manages investment assets for CNB. CNB provides a wide range of retail and commercial banking services through its retail branch network, although the primary focus is on establishing commercial and municipal relationships. The Company reported a net loss of $3.67 million in 2011, a net loss of $7.45 million in 2010, and a net loss of $7.82 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $358.44 million in total assets, $338.67 million in total liabilities and $19.77 million in total stockholders' equity. KPMG LLP, in Short Hills, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the period ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has entered into a consent order with the Office of the Comptroller of the Currency that raise substantial doubt about its ability to continue as a going concern. COMPLETE GENOMICS: Posts $18.8 Million Net Loss in Second Quarter ----------------------------------------------------------------- Complete Genomics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $18.83 million on $8.69 million of revenue for the three months ended June 30, 2012, compared with a net loss of $15.96 million on $5.87 million of revenue for the same period last year. For the six months ended June 30, 2012, the Company reported a net loss of $39.06 million on $12.60 million of revenue, compared with a net loss of $28.42 million on $12.70 million of revenue for the six months ended June 30, 2011. The Company had an accumulated deficit of $250.26 million as of June 30, 2012. The Company's accumulated deficit was $211.20 million as of Dec. 31, 2011. The Company's balance sheet at June 30, 2012, showed $95.18 million in total assets, $46.81 million in total liabilities, and stockholders' equity of $48.37 million. According to the regulatory filing, the Company has incurred net operating losses and significant negative cash flow from operations during every year since inception. At June 30, 2012, the Company had an accumulated deficit of $250.26 million. The Company said, "Management believes that based on the current level of operations, cash and cash equivalents balances and interest income the Company will earn on these balances will not be sufficient to meet the anticipated cash requirements for the six months beyond June 30, 2012. The Company's recurring operating losses and negative cash flow from operations and its requirement for additional funding to execute its business objectives beyond this period gives rise to substantial doubt as to the Company's ability to continue as a going concern." Engages Jefferies & Company as Financial Advisor The Company announced on June 5, 2012, that it has engaged Jefferies & Company, Inc., to act as financial advisor to the Company and to assist in its review of strategic alternatives, which could include a merger, business combination, equity investment or sale of the Company. "There can be no assurance that the Company will be successful in executing on any of these possible strategic alternatives. If the Company is unable to execute on one of these possible strategic alternatives or otherwise raise additional financing on a timely basis, it will need to significantly scale back or discontinue operations." PwC's Report on 2011 Financial Statements PricewaterhouseCoopers LLP's report dated March 8, 2012, on Complete Genomics' financial statements for the year ended Dec. 31, 2011, includes an explanatory paragraph stating that the Company's recurring losses from operations and significant negative cash flow from operations raise substantial doubt about its ability to continue as a going concern. "If we fail to raise additional capital in sufficient amounts and in a timely manner, we will be unable to operate our business as it is currently operated to Dec. 31, 2012." A copy of the Form 10-Q is available for free at: http://is.gd/9bEWFC Mountain View, California-based Complete Genomics, Inc., is a life sciences company that has developed and commercialized a DNA sequencing platform for whole human genome sequencing and analysis. The Company was incorporated in Delaware on June 14, 2005, and began operations in March 2006. COMSTOCK MINING: Longview Fund Discloses 6.2% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission dated Aug. 10, 2012, Longview Fund L.P. disclosed that it beneficially owns 4,053 shares of A-2 Convertible Preferred Stock representing 6,225,816 shares of Common Stock on an as converted basis and an additional 537,656 shares of common stock of Comstock Mining Inc. representing 6.251% of the shares outstanding. A copy of the filing is available for free at http://is.gd/uxydkJ About Comstock Mining Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based, gold and silver mining company with extensive, contiguous property in the historic Comstock district. The Company began acquiring properties in the Comstock in 2003. Since then, the Company has consolidated a substantial portion of the Comstock district, secured permits, built an infrastructure and brought the exploration project into test mining production. The Company continues acquiring additional properties in the Comstock district, expanding its footprint and creating opportunities for exploration and mining. The goal of the Company's strategic plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations by 2011, with annual production rates of 20,000 gold equivalent ounces. The Company reported a net loss of $11.61 million in 2011, compared with a net loss of $60.32 million in 2010. The Company's balance sheet at March 31, 2012, showed $40.97 million in total assets, $14.64 million in total liabilities, and $26.33 million in total stockholders' equity. CONVERTED ORGANICS: Incurs $1.6 Million Net Loss in 2nd Quarter --------------------------------------------------------------- Converted Organics Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.67 million on $627,280 of revenue for the three months ended June 30, 2012, compared with a net loss of $548,776 on $1.42 million of revenue for the same period during the prior year. The Company reported net income of $1.29 million on $1.02 million of revenue for the six months ended June 30, 2012, compared with a net loss of $2.39 million on $2.16 million of revenue for the same period a year ago. 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 June 30, 2012, showed $7.05 million in total assets, $6.91 million in total liabilities and $140,006 in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/pwSFqM 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. CUMULUS MEDIA: Reports $8.1 Million Net Income in Second Quarter ---------------------------------------------------------------- Cumulus Media Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $8.14 million on $281.04 million of net revenues for the three months ended June 30, 2012, compared with net income of $1.34 million on $62.24 million of net revenues for the same period during the prior year. The Company reported a net loss of $3.98 million on $517.03 million of net revenues for the six months ended June 30, 2012, compared with net income of $17.46 million on $113.90 million of net revenues for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $3.91 billion in total assets, $3.51 billion in total liabilities, $118.23 million in total redeemable preferred stock, and $278.50 million total stockholders' equity. Lew Dickey, Chairman & CEO stated, "The integration of Citadel, investment in growth and de-leveraging are our top priorities. We are making excellent progress on all three fronts." A copy of the Form 10-Q is available for free at: http://is.gd/Zfwpsx About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting are Missouri and Texas radio stations. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that the lenders under the 2011 Credit Facilities have taken security interests in substantially all of the Company's consolidated assets, and the Company has pledged the stock of certain of its subsidiaries to secure the debt under the 2011 Credit Facilities. If the lenders accelerate the repayment of borrowings, the Company may be forced to liquidate certain assets to repay all or part of such borrowings, and the Company cannot assure that sufficient assets will remain after it has paid all of the borrowings under those 2011 Credit Facilities. If the Company was unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and the Company could be forced into bankruptcy or liquidation. * * * Standard & Poor's Ratings Services in October 2011 affirmed is 'B' corporate credit rating on Cumulus Media. "The ratings reflect continued economic weakness and higher post- acquisition leverage than we initially expected," said Standard & Poor's credit analyst Jeanne Shoesmith. "They also reflect the combined company's sizable presence in both large and midsize markets throughout the U.S." DEAN FOODS: S&P Affirms 'B+' Corp. Credit Rating; Outlook Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Dean Foods Co. to positive from stable. "At the same time, we affirmed our 'B+' corporate credit rating, 'BB-' senior secured debt rating, and 'B-' senior unsecured debt rating on the company. Dean Foods' had about $3.55 billion of total debt outstanding at June 30, 2012. "The recovery rating on Dean Foods' senior secured credit facilities is '2', indicating our expectation for substantial (70% to 90%) recovery in the event of a payment default. The recovery rating on the $500 million 7% senior unsecured notes due 2016 and $400 million 9.75% senior unsecured notes due 2018 is '6', indicating our expectation of negligible (0% to 10%) recovery in the event of a payment default. We rate Dean Holding Co.'s (a subsidiary of Dean Foods) $142 million 6.9% senior unsecured notes due 2017 'B-' with a recovery rating of '6'," S&P said. "The outlook revision is based on Dean Foods' improved operating results, credit measures, and covenant cushion," said Standard & Poor's credit analyst Jeffrey Burian. "Additionally, we believe Dean Foods may further reduce its leverage over the next 12 months through the application of expected proceeds from its recently announced plans for an IPO for its WhiteWave-Alpro segment, and an interim refinancing transaction involving WhiteWave-Alpro and subsequent tax-free distribution to shareholders of its remaining interest in this business. We estimate that Dean Food's adjusted debt to EBITDA (including our standard adjustments) declined to about 4.8x at the end of the second quarter of 2012, from about 5.3x at the end of 2011, and covenant cushion continued to exceed 15% on financial covenants," S&P said. "We anticipate Dean Foods will sustain or slightly improve its credit measures. We estimate this would still apply following the spin-off despite the loss of EBITDA from this higher margin business, given the anticipated debt reduction associated with the proposed IPO and spin-off transactions. Our assessment also takes into consideration the uncertainty regarding the timing and final terms of these potential transactions. If Dean Foods successfully completes the proposed IPO transaction or distribution to shareholders, resulting in a reduction of the company's outstanding debt and corresponding improvement in credit metrics, we will evaluate the effect on our ratings at that time relative to our assessment of the company's business risk profile post spin-off and considering business conditions in the fluid milk market at the time of the spin-off. We believe a divestiture of WhiteWave-Alpro will weaken our assessment of Dean Foods' overall business risk profile. During the first six months of 2012, WhiteWave-Alpro represented about 18% of Dean Foods' overall sales and about 29% of operating income (before corporate overhead), reflecting the relatively higher margins associated with this growing business," S&P said. "The ratings on Dallas-based Dean Foods and its subsidiary, Dean Holding Co., reflect Standard & Poor's view that the company's financial risk profile is 'highly leveraged' and its existing business risk profile (including WhiteWave-Alpro) is 'fair,'" S&P said. "Key credit factors in our assessment of Dean Foods' business risk profile include the company's exposure to U.S. dairy industry conditions, characterized by reduced fluid milk demand, excess production capacity in many regions, a shift by consumers away from higher-margin branded milk sales as the economy weakened, and recently volatile raw milk and commodity input costs. Other key credit factors include Dean Foods' good market positions and brand portfolio, the company's extensive national refrigerated distribution network, and its rapidly growing value-added Morningstar and WhiteWave-Alpro segments. Dean Foods is the leading national dairy company in the U.S., with close to a 40% market share, and a portfolio of national, regional, local, and private-label brands with solid regional market positions," S&P said. "It is our opinion that Dean Foods remains exposed to challenging U.S. dairy industry conditions, despite some improvement in the first half of 2012, as its Fresh Dairy Direct segment represented 71% of first-half 2012 consolidated net sales. During 2011, a combination of rising input costs (including raw milk and butterfat), downward pressure on pricing, declining fluid milk volumes, and the continuing effects of a mix shift toward higher private-label sales as consumers traded down in a weak economy, and excess industry production capacity, among other factors, hurt Dean Foods' milk margins. Although raw milk costs declined over the past three quarters and milk pricing pressures have eased somewhat, this has not changed our view of the company's weakened medium- to long-term earnings prospects for its fresh dairy processing business, given the ongoing challenging industry conditions that have affected input costs, pricing, and volume. In addition, though we believe the Fresh Dairy Direct segment's direct store delivery distribution system benefits from its scale, it faces significant cost pressures from the proliferation of smaller customers it serves and the high cost of fuel," S&P said. "The company has been able to lessen the impact of these dairy processing business factors through cost reductions, improved operating efficiencies, and stronger performance in its other businesses segments. Additionally, product innovation-led growth and higher margins in the Morningstar and White Wave-Alpro segments continue to make significant contributions to Dean Foods' overall operating performance. These value-added segments represented nearly 45% of Dean Foods' operating income (before corporate overhead) in the first half of 2012 and provide product, market segment, and geographic diversification. As such, the divestiture of WhiteWave-Alpro would mitigate some of these benefits to our assessment of Dean Food' business risk profile," S&P said. "We estimate that Dean Foods' total net sales for the quarter ended June 30, 2012, decreased by about 5.3%. But its adjusted EBITDA margin improved to about 8.4% compared with 7.7% in the second quarter of 2011. The reduction in sales reflects, in large part, the pass-through of lower raw milk prices in product pricing in the Fresh Dairy Direct and Morningstar segments. Milk prices have recently begun to rise and we anticipate they will increase through the remainder of 2012 but not reach 2011 levels. All of the company's operating segments realized higher gross margins and operating margins during the second quarter. The Fresh Dairy Direct segment benefited from less milk margin pressure with retailers and continued to maintain relatively flat fluid milk volume in a contracting market," S&P said. "Our assessment of Dean Foods' highly leveraged financial risk profile reflects the company's significant, yet declining, debt obligations. We estimate the ratio of adjusted debt to EBITDA (including our standard debt adjustments for operating leases and underfunded pension obligations) for the 12 months ended June 30, 2012, declined to about 4.8x, compared with 5.3x at the end of the second quarter of 2011, reflecting both improved EBITDA and lower debt. This is now slightly better than the indicative leverage ratio range for a highly leveraged financial risk profile of greater than 5x. We also estimate that for the 12 months ended June 30, 2012, the ratio of adjusted funds from operations (FFO) to total debt was about 14.2%, compared with about 13.2% for the comparable prior-year period, and it remains modestly better than the indicative ratio range of less than 12% for a highly leveraged financial risk profile. We expect the company will be able to sustain or slightly improve these credit measures, which could result in a change in our financial risk assessment to aggressive," S&P said. S&P believes Dean Foods' operating results will continue to improve but remain constrained by weak dairy industry conditions, including declining volumes and overcapacity in the fluid milk business, and continuing margin pressure from high input costs. Key assumptions in Standard & Poor's 2012 forecast include: - A revenue decline of more than 3% mainly related to Fresh Dairy Direct and reflecting, in part, the impact of lower raw milk input costs relative to 2011. - A reported EBITDA margin near 6%, reflecting an increasing portion of operating income coming from higher-margin products at Morningstar and WhiteWave. - Continued input cost pressures, including raw milk, diesel fuel, and resins. S&P assumes milk costs decline gradually through the first half of 2012 and then increase through the remainder of the year, but remain below 2011 levels. This is subject to revision as the effects of continuing drought conditions and rising feed costs in the U.S. become clearer. - Capital expenditures of about $270 million. - Litigation settlement payments of about $60 million. - Net cash loss on sale of Consolidated Container Co. interest of $34 million. "Based on our forecast, which includes WhiteWave-Alpro, we expect credit measures to remain near recent levels over the near term, including projected adjusted debt to EBITDA of near 5x and FFO to total debt near 13% at the end of 2012. An application of IPO proceeds to debt reduction during 2012 could result in improved credit measures if Dean Foods is also able to sustain its operating performance improvement," S&P said. "The positive outlook on Dean Foods reflects our expectation that the company will maintain adequate liquidity and covenant cushion, and sustain credit measures at or better than current levels. Although we believe the company's business risk profile will weaken somewhat following the planned IPO and spin-off of its higher margin WhiteWave-Alpro business, we could consider an upgrade if Dean Foods sustains strengthened credit measures including an adjusted total debt-to-EBITDA ratio at about 4.5x or less and a ratio of FFO to total debt of about 15% or greater, which is in line with indicative ratios for an 'aggressive' financial risk profile, and the company's covenant cushion remains above 15%," S&P said. "We would consider revising the outlook to stable if the company's financial policies become more aggressive, if adjusted leverage increases above 5x, if its ratio of FFO to debt declines to 12% or below, or if the covenant cushion declines to below 15%. We estimate this could occur if sales growth declines and the EBITDA margin reaches low- to mid-single-digits, which we believe could result from significant deterioration in dairy processing industry Conditions," S&P said. DEEP DOWN: Reports $639,000 Net Income in Second Quarter -------------------------------------------------------- Deep Down, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $639,000 on $7.90 million of revenue for the three months ended June 30, 2012, compared with a net loss of $46,000 on $7.09 million of revenue for the same period a year ago. For the six months ended June 30, 2012, the Company reported net income of $339,000 on $12.77 million of revenue, compared with a net loss of $1.80 million on $13.37 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $33.34 million in total assets, $7.92 million in total liabilities and $25.41 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/XMJpF9 About Deep Down Houston, Tex.-based Deep Down, Inc. -- http://www.deepdowncorp.com/-- is an oilfield services company specializing in complex deepwater and ultra-deepwater oil production distribution system support services, serving the worldwide offshore exploration and production industry. During the Company's fiscal years ended Dec. 31, 2010, and 2009, the Company has supplemented the financing of its capital needs through a combination of debt and equity financings. Most significant in this regard has been the Company's debt facility the Company has maintained with Whitney National Bank. The Company's loans outstanding under the Amended and Restated Credit Agreement with Whitney become due on April 15, 2012. The Company will need to raise additional debt or equity capital or renegotiate the existing debt prior to such date. The Company is currently in discussions with several lenders who have expressed interest in refinancing its debt. The Company's plan is to refinance the outstanding indebtedness under the Restated Credit Agreement or seek terms with Whitney that will provide an extension of such Restated Credit Agreement along with additional liquidity. However, the Company cannot provide any assurance that any financing will be available to it on acceptable terms or at all. If the Company is unable to raise additional capital or renegotiate its existing debt, this would have a material adverse impact on the Company's business or would raise substantial doubt about its ability to continue as a going concern. In addition, as of Dec. 31, 2010, the Company was not in compliance with the financial covenants under the Restated Credit Agreement. On March 25, 2011 the Company obtained a waiver for these covenants as of Dec. 31, 2010. The Company reported net income of $2.13 million in 2011, compared with a net loss of $17.41 million in 2010. DELTA PETROLEUM: Interior Department Has Plan Objections -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Interior Department filed an objection in advance of the Aug. 15 hearing for confirmation of the plan of Delta Petroleum Corp. The Department contends that Delta has failed to obtain consent from the government for transferring federal oil and gas leases. The government proposed language for the confirmation order to rectify the alleged defects. Michigan taxing authorities and a creditor also filed objections. The report relates that confirming the plan will lead to formation of a joint venture with Laramie Energy II LLC. At an auction, Laramie was selected to sponsor the plan creating a joint venture two-thirds owned by Laramie and one-third by reorganized Delta. According to the report, the disclosure statement told holders of $267.7 million in unsecured note claims they could expect a recovery worth between 6% and 11.7% from receiving stock in reorganized Delta. Delta, in turn, will own one-third of the joint venture. Delta's unsecured creditors, with claims of about $3 million, will have the same percentage recovery from receipt of stock. In addition to stock in the joint venture, Delta will receive $75 million cash to be used in paying off about $50 million owing on a loan to finance the Chapter 11 case. The report notes the remainder of the cash will be applied toward expenses of the Chapter 11 effort. Delta is contributing all except about $8 million of its property to the joint venture. Laramie is contributing selected assets plus $75 million cash. The reorganization structure preserves some $885 million in net operating tax-loss carry forwards. The joint venture, to be called Piceance Energy LLC, will be financed in part with a $400 million revolving credit. Laramie, based in Denver, develops what it calls "unconventional gas resources" in the Rocky Mountains. Delta filed for bankruptcy reorganization in Dec. When the bankruptcy began, debt included $38.5 million outstanding on a secured loan with Macquarie Bank Ltd. The Bloomberg report disclosed the $150 million in senior subordinated debt last traded on Aug. 1 for 57 cents on the dollar, down from 81 cents on Jan. 26, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors' restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. Laramie Energy II LLC has been approved by the Court to serve as the sponsor for Delta's reorganization plan. Delta Petroleum has won approval for its disclosure statement explaining the Chapter 11 reorganization plan. There's a hearing to consider confirmation of the Plan on Aug. 15. DEWEY & LEBOEUF: BALC Wants Stay Lifted on Non-Wind-Down Property ----------------------------------------------------------------- Banc of America Leasing & Capital, LLC, asks the U.S. Bankruptcy Court Southern District of New York to grant relief from the automatic stay with respect to certain non-wind-down property of Dewey & Leboeuf LLP. A hearing on Aug. 23, 2012, at 10 a.m. has been set. Objections, if any, are due Aug. 16, at 4 p.m. BALC is represented by: Daniel F. Flores, Esq. Scott A. Zuber, Esq. WILSON ELSER MOSKOWITZ EDELMAN & DICKER LLP 150 East 42nd Street New York, NY 10017-5639 Tel: (212) 915-5769 Fax: (212) 490-3038 E-mail: daniel.flores@wilsonelser.com scott.zuber@wilsonelser.com 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. The Debtor disclosed $368,117,240 in assets and $348,817,408 in liabilities as of the Chapter 11 filing. 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. The Official Committee of Unsecured Creditors tapped Deloitte Financial Advisory Services LLP as its financial advisor. 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: Theirhoff OK'd as German Wind Down Counsel ----------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Dewey & Leboeuf LLP, to employ Theirhoff Muller & Partner as its German wind down counsel and consultants. Thierhoff is expected to: a) assist in the orderly and cost efficient wind down of the Frankfurt, Germany Office; b) provide advice on matters associated with German insolvency issues; c) provide consultancy advice and support as in the presentation of an estimated outcome statement in regards to the wind down of the Frankfurt Office; and d) perform other tasks as may be mutually agreed to with the Debtor relating to the wind down of the Frankfurt Office. Renate Muller, a partner at Thierhoff, told the Court that Thierhoff's professionals' normal billing rates range from EUR500 to EUR320 per hour. Mr. Muller assures the Court that Thierhoff is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Germany Offices As reported in the Troubled Company Reporter on July 9, 2012, German legal news website JuVe related that all equity partners at the Debtor's Frankfurt office have now found new homes. Joshua Freedman at The Lawyer said that Ashurst has picked up two Frankfurt partners from the Debtor, corporate lawyer Benedikt von Schorlemer and employment specialist Andreas Mauroschat. Mr. von Schorlemer will join Ashurst as a partner, while the City firm is also taking on the Debtor's corporate senior associate Jan Krekeler, The Lawyer states. Mr. Mauroschat, according to The Lawyer, will head Ashurst's German employment practice as its only employment partner in the jurisdiction. Litigator Tanja Pfitzner is setting up her own practice, JuVe reported. 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. The Debtor disclosed $368,117,240 in assets and $348,817,408 in liabilities as of the Chapter 11 filing. 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. The Official Committee of Unsecured Creditors tapped Deloitte Financial Advisory Services LLP as its financial advisor. 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. DEX ONE: Regains Compliance with NYSE's $1.00 Closing Price Rule ---------------------------------------------------------------- The New York Stock Exchange notified Dex One Corporation on June 4, 2012, that it had fallen below one of the NYSE's continued listing standards. Rule 802.01C of the NYSE Listed Company Manual requires that the average closing price of the Company's common stock over a consecutive 30 trading-day period equal or exceed $1.00 per share. On Aug. 7, 2012, the NYSE said that a calculation of the Company's average stock price for the 30-trading days ended Aug. 6, 2012, indicated that the stock price was above the NYSE's minimum requirement of $1.00 per share based on a 30-trading day average and that the Company is in compliance with the $1.00 share price continued listing criterion. About Dex One Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. Revenue was approximately $1.1 billion for the LTM period ended Sept. 30, 2010. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852). They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. The Company's balance sheet at June 30, 2012, showed $3.03 billion in total assets, $2.93 billion in total liabilities and $103.57 million in total shareholders' equity. * * * As reported in the April 2, 2012 edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) for Dex One Corporation's to Caa3 from B3 based on Moody's view that a debt restructuring is inevitable. Moody's has also changed Dex's Probability of Default Rating (PDR) to Ca/LD from B3 following the company's purchase of about $142 million of par value bank debt for about $70 million in cash. The Caa3 rating also reflects Moody's view that additional exchanges at a discount are likely in the future since the company amended its bank covenants to make it possible to repurchase additional bank debt on the open market through the end of 2013. As reported by the TCR on April 4, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). "The upgrade reflects our assessment of the company's credit profile after the completion of the subpar repurchase transaction in light of upcoming maturities, future subpar repurchases, and our expectation of a continued week operating outlook," explained Standard & Poor's credit analyst Chris Valentine. DIALOGIC INC: Incurs $18 Million Net Loss in Second Quarter ----------------------------------------------------------- Dialogic Inc. reported a net loss of $18.03 million on $38.55 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $11.26 million on $55.78 million of total revenue for the same period during the prior year. The Company reported a net loss of $32.81 million on $79.66 million of total revenue for the six months ended June 30, 2012, compared with a net loss of $32.54 million on $100.65 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $140.76 million in total assets, $188 million in total liabilities and a $47.23 million total stockholders' deficit. "This quarter's slowdown in global telecom spending has created a challenging revenue environment that directly impacted topline performance. In the face of these headwinds, we continue to take proactive steps to ensure the long-term success of our Next-Gen portfolio including Bandwidth Optimization Mobile Backhaul for 2G/3G and LTE networks, Core Switching, Session Border Controllers, Mobile Video and our PowerMedia Media Server software," said Kevin Cook, newly appointed President and Chief Executive Officer. A copy of the press release is available for free at: http://is.gd/0cGHY8 About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. DIGITALGLOBE INC: S&P Affirms 'BB' CCR on GeoEye Acquisition ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and 'BB+'issue-level ratings on Longmont, Colo.- based DigitalGlobe Inc. "At the same time, we removed those ratings from CreditWatch, where they were placed with negative implications on July 24, 2012. The rating outlook is negative," S&P said. "The affirmation reflects our view that the business risk benefits of DigitalGlobe's proposed acquisition of competitor GeoEye offset the effect of higher leverage associated with the proposed combination," said Standard & Poor's credit analyst Michael Weinstein. "We believe DigitalGlobe will continue to benefit from revenues from its EnhancedView service-level agreement (SLA) with the National Geospatial-Intelligence Agency (NGA), an arm of the U.S. government. Given the likelihood that the U.S. government will substantially reduce or eliminate its EnhancedView SLA with GeoEye, we believe it is less likely that the U.S. government will pursue further budget cuts that would affect DigitalGlobe's EnhancedView SLA over the next few years. As the potential sole provider of high-resolution commercial satellite imagery services for various agencies within the U.S. government, we believe DigitalGlobe is well positioned to retain its full share of expected revenues from the EnhancedView SLA. At the same time, the ratings recognize that government contracts are not guaranteed until Congress appropriates the funds and that, although unlikely, government agencies may terminate or suspend their contracts at any time. Pro forma for the GeoEye transaction, about half of DigitalGlobe's revenue will come from customers within the U.S. government, and we factor this customer concentration into our 'fair' business risk assessment," S&P said. "In acquiring GeoEye, DigitalGlobe would gain a stronger foothold in image processing and analytic services, which could help to drive ancillary revenue growth in future years, particularly in the commercial and international segments," added Mr. Weinstein. "DigitalGlobe currently has a relatively weak presence in the advanced imagery processing and analytics segments, and the combination with GeoEye provides the company with a full suite of imagery services that it can provide to existing and potential customers. The acquisition of GeoEye is subject to various regulatory approvals, but our base-case scenario envisions the transaction being completed in early 2013." "The GeoEye acquisition provides DigitalGlobe with significant scale benefits in the form of operational cost synergies and reduced capital spending to manage a combined three-satellite constellation system. We recognize the potential integration risks in realizing these synergies, which could keep leverage high through 2014 if expected savings do not materialize, and we incorporate this risk into our negative rating outlook," S&P said. "The outlook is negative, which reflects the expected heightened leverage associated with the acquisition of GeoEye, and possible integration risks, which could keep leverage elevated through 2014 if expected synergies do not materialize from the business combination. Given the significant customer concentration from the U.S. government at around 50% of the combined companies' revenues, it is unlikely that we would raise the rating unless revenues become more diversified, and FFO to debt rose above 35% on a sustained basis," S&P said. "Conversely, we could lower the rating if FFO to debt were to remain under 20% or if leverage were to remain above 4x on a sustained basis. As the transaction moves toward closing, we will continue to monitor regulatory approval hurdles for the GeoEye acquisition, but we do not expect these approvals to pose a threat to the closing of the transaction," S&P said. DUNE ENERGY: Midyear Proved Reserves Increased by 21.5% ------------------------------------------------------- Dune Energy, Inc., announced that its mid-year proved oil and gas reserves increased from 13.1 MMBOE at year-end 2011 to 16.1 MMBOE at June 30, 2012, or a 21.5% increase. Mid-Year 2012 Reserves Total proved reserves at June 30, 2012, were 7,012 Mbbl and 54,420 MMcf or 16,082 MBOE. This proved reserve base was 46% oil. Proved Developed Producing (PDP) reserves were 2,216 Mbbl and 15,719 MMcf or 4,836 MBOE. Proved Developed Non-Producing (PDNP) reserves were 1,630 Mbbl and 15,172 MMcf or 4,159 MBOE. Proved Undeveloped (PUD) reserves were 3,166 Mbbl and 23,529 MMcf or 7,087 MBOE. PDP reserves represented 30.1% of the total reserves, PDNP represented 25.9% of the total reserves and PUD represented 44.0% of the total reserves. PV@10% value, using SEC guidelines of the proved reserves, was $309.1 million. This calculation was based on the unweighted average of the first-day-of-the-month price for each month within the 12 month period prior to the end of the reporting period ($110.37 per barrel and $3.37 per Mcf.) This value was up almost 24% from year-end values using essentially similar oil prices but approximately 24% lower gas prices. Probable reserves were 960 Mbbl and 12,658 MMcf or 3,070 MBOE. Possible reserves were 2 Mbbl and 4,132 MMcf or 691 MBOE. PV@10% value using the same criteria as above is $75.4 million and $1.0 million respectively. This report was prepared by DeGolyer and MacNaughton in accordance with the reserves definitions of Rules 4-10(a) (1)-(32) of Regulation S-X under the Securities Act of 1933, as amended. DeGolyer and MacNaughton also prepared a report based on escalated prices of $98.48 per barrel and $4.660 per Mcf which did not result in a material difference in either PV@10% value or total reserves. Year-End 2011 Reserves Total proved reserves were 5,654 Mbbl and 45,523 MMcf or 13,241 MBOE. This proved reserve base was 43% oil. Proved Developed Producing (PDP) reserves were 2,341 Mbbl and 15,834 MMcf or 4,980 MBOE. Proved Developed Non-Producing (PDNP) reserves were 1,179 Mbbl and 14,611 MMcf or 3,614 MBOE. Proved Undeveloped (PUD) reserves were 2,135 Mbbl and 15,079 MMcf or 4,648 MBOE. PDP reserves represented 37.6% of the total reserves, PDNP represented 27.3% of the total reserves and PUD represented 35.1% of the total reserves. PV@10% value, using SEC guidelines of the proved reserves, was $249.9 million. This was based on the unweighted average of the first-day-of-the-month price for each month within the 12 month period prior to the end of the reporting period ($108.17 per barrel and $4.45 per Mcf.) Probable reserves were 534 Mbbl and 3,650 MMcf or 1,142 MBOE. Possible reserves were 1 Mbbl and 3,657 MMcf or 611 MBOE. PV@10% value using the same criteria as above was $36,356 and $2,367 respectively. Production for the first half of 2012 was 204.6 Mbbl and 1,529 MMcf or 459 MBoe. During the first half of the year drilling operations at Garden Island Bay in the SL 214 #917 and SL 214 #915 ST moved approximately 500 MBOE from the PUD category to the PDP or PDNP category. This drilling combined with a number of smaller workovers in various fields and minor revisions resulted in the sum of our PDP and PDNP reserves going up slightly from year end 2011 of 8,594 MBOE to 8,884 MBOE at June 30, 2012. The major upward change in our reserves occurred in the PUD category where reserves increased from 4,648 MBOE to 7,088 MBOE or a 52.4% increase. Essentially all of this increase occurred in our Leeville field as a result of a detailed 3-d Seismic and Engineering study which identified an additional 20 PUD locations within the field. We anticipate commencing drilling activity on the new PUD locations in the third quarter of the year. Mid-Year Redetermination of Borrowing Base We have submitted our new reserve report to the administrative agent for our revolving credit facility, in connection with the required semi-annual redetermination of our borrowing base under that facility. As part of that redetermination, we have initiated discussions regarding an amendment to one of the negative covenants in the credit agreement, which prohibits us from allowing, as of the last day of any fiscal quarter, our ratio of Total Debt (as of such day) to EBITDAX (for the immediately preceding four fiscal quarters ending on such day) to be greater than 4.0 to 1.0. The Company is in compliance with this covenant, however, its projections indicate that drawing down an amount sufficient to fully fund its capital spending contemplated in this latest reserve report, could cause the Company to exceed the 4.0 to 1.0 limit on this ratio and thus fail to comply with this financial covenant at the end of the third quarter of 2012. If the Company fails to reach an agreement with its bank lenders regarding an amendment to this financial ratio covenant that would increase the certainty of full access to the borrowing base, the Company may need to defer capital spending anticipated in this new reserve report along with exploration spending. Alternatively, the Company may seek other sources of capital including joint ventures in order to execute the plan contemplated in the reserve report and its anticipated exploration spending. James A. Watt, President and CEO of the company stated, "Our drilling activity allowed us to move significant reserves from a PUD category to either PDP or PDNP. The Leeville field study has set up the potential for a significant increase in reserves and production later in 2012 and into 2013. Our challenge is to determine the best way to exploit these opportunities as quickly as possible to add value for our shareholders recognizing the constraints of our cash flow, availability under our revolver and negative covenants of our credit agreement." About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company reported a net loss of $60.41 million in 2011, compared with a net loss of $75.53 million in 2010. The Company's balance sheet at June 30, 2012, showed $246.60 million in total assets, $123.28 million in total liabilities and $123.31 million in total stockholders' equity. * * * As reported by the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Dune Energy Inc. to 'SD' (selective default) from 'CC'. "The rating actions follow the company's announcement that it has completed the exchange offer for its 10.5% senior notes due 2012, which we consider a distressed exchange and tantamount to a default," said Standard & Poor's credit analyst Stephen Scovotti. "Holders of $297 million of principle amount of the senior secured notes exchanged their 10.5% senior secured notes for common stock, which in the aggregate constitute 97.0% of Dune's common stock post-restructuring, and approximately $49.5 million of newly issued floating rate senior secured notes due 2016. We consider the completion of such an exchange to be a distressed exchange and, as such, tantamount to a default under our criteria." In the Jan. 2, 2012, edition of the TCR, Moody's Investors Service revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to Caa3/LD from Ca following the closing of the debt exchange offer of the company's 10.5% secured notes. Simultaneously, Moody's upgraded the Corporate Family Rating (CFR) to Caa3 reflecting Dune's less onerous post-exchange capital structure and affirmed the Ca rating on the secured notes. The revision of the PDR reflects Moody's view that the exchange transaction constitutes a distressed exchange. Moody's will remove the LD (limited default) designation in two days, change the PDR to Caa3, and withdraw all ratings. EASTMAN KODAK: Delays Announcement of Auction Results ----------------------------------------------------- The Wall Street Journal's Mike Spector and Dana Mattioli report that Eastman Kodak Co. said Monday afternoon it has delayed disclosing the outcome of its patent auction, a few minutes before a deadline to select winning bidders "in light of continuing discussions with bidders." Kodak said its creditors supported the move, adding that the "ongoing" auction is "complex and dynamic." Kodak declined to comment further on the auction. WSJ says Kodak had been required to select winning bidders for the auction of 1,100 digital patents by 5 p.m. Monday under terms of court-approved bidding procedures. Kodak hoped to sell its entire patent portfolio when the auction began Wednesday, but bids started coming in all different shapes and sizes, with a range of offers and increased complexity, people familiar with the process said late last week, according to WSJ. In a report Friday, Dana Mattioli, Mike Spector and Ashby Jones, citing people familiar with the matter, said the patent auction has failed to generate the premium bids that the company and creditors had hoped for, with some suitors leaving Manhattan for home in the past few days. The sources told WSJ that all the bids received for Kodak's patents thus far were significantly below $500 million, as consortiums that include Apple Inc. and Google Inc. declined to engage in the sort of spirited bidding that drove up prices in an auction of Nortel Networks Inc. patents a year ago. Kodak had valued the patents at between $2.2 billion and $2.6 billion. WSJ notes proceeds from the sale must first be used to repay banks including Citigroup Inc. that provided Kodak with a $950 million bankruptcy loan. At the end of June, Kodak held $1.3 billion in cash, but the company continues to lose money, with its net loss for the first six months deepening to $665 million from $425 million a year earlier. WSJ relates the auction got under way on Wednesday at several New York law firms, including Sullivan & Cromwell LLP. Sources told WSJ bidding consortiums pit Apple Inc. and Google Inc. against each other and against private-equity firm Vector Capital Corp. Kodak was selling the patents in two lots: one portfolio related to capturing and processing images on cameras, smartphones and tablets; and another tied to storing and analyzing images. According to the report, bidders have put more value on the first group, dubbed the "digital capture" portfolio. Sources told WSJ Apple has teamed up with Microsoft Corp. and patent aggregation firm Intellectual Ventures Management LLC. Google's consortium includes patent aggregation firm RPX Corp. and three hardware companies that make phones based on Google's Android operating system: Samsung Electronics Co., LG Electronics Inc. and HTC Corp. On Monday, WSJ said a person familiar with the discussions indicated that at some point, those consortiums could join forces or change alliances to bid on Kodak's patents. 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. ECOSPHERE TECHNOLOGIES: Files Form 10-Q, Posts $920K Income in Q2 ----------------------------------------------------------------- Ecosphere Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $919,934 on $8.62 million of total revenues for the three months ended June 30, 2012, compared with a net loss of $1.54 million on $2.36 million of total revenues for the same period during the prior year. For the six months ended June 30, 2012, the Company reported net income of $1.66 million on $16.98 million of total revenues, compared to a net loss of $5.29 million on $4.59 million of total revenues for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $11.89 million in total assets, $4.61 million in total liabilities, $4.03 million in total redeemable convertible cumulative preferred stock, and $3.25 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/eig7U8 About Ecosphere Technologies Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a diversified water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC ("EES"), provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. The Company reported a net loss of $5.86 million in 2011, following a net loss of $22.66 million in 2010, and a net loss of $19.05 million in 2009. EDIETS.COM INC: Sells Corporate Services Business to Nutrio LLC --------------------------------------------------------------- eDiets.com, Inc., and the Company's wholly owned subsidiary, Nutrio.com, Inc., entered into an Asset Purchase Agreement with Nutrio, LLC. Under the Purchase Agreement and related Bill of Sale and Assignment and Assumption Agreement, Nutrio purchased all of the Sellers' right, title and interest in and to certain assets relating to the Sellers' corporate services business, which provides private label online nutrition, fitness and wellness programs to companies mainly in the health insurance, pharmaceutical and food industries. The transaction closed on Aug. 6, 2012, although certain post-closing obligations and covenants apply, including making certain filings and obtaining certain consents. The acquired assets include contracts with customers and suppliers, equipment, software and other intellectual property. In addition, the Sellers assigned rights to receive payments under certain contracts under the terms of an Assignment of Payments. The purchase price of $255,000 was adjusted dollar-for-dollar at closing to reflect, among other things, previously invoiced work, services and products to be delivered after closing. A copy of the Asset Purchase Agreement is available at: http://is.gd/3Vu4iN About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com Following the 2011 results, Ernst & Young LLP, 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 incurred recurring operating losses, was not able to meet its debt obligations in the current year and has a working capital deficiency. The Company's balance sheet at March 31, 2012, showed $2.29 million in total assets, $4.58 million in total liabilities, all current, and a $2.28 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that the continuation of its business is dependent upon raising additional financial support. In light of the Company's results of operations, management has and intends to continue to evaluate various possibilities. These possibilities include: raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the Company's assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company's existing stockholders or that result in the Company"s existing stockholders losing all of their investment in the Company. EDISON MISSION: Moody's Cuts Rating on Sr. Unsec. Notes to 'Ca' --------------------------------------------------------------- Moody's Investors Service downgraded the long-term ratings of Edison Mission Energy (EME) and its subsidiary, Midwest Generation Company, LLC (MWG), including EME's senior unsecured notes to Ca from Caa3 and EME's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Ca from Caa2. Moody's also downgraded MWG's senior secured pass-through certificates due 2016 to Caa1 from B2, and maintained EME's speculative grade liquidity rating at SGL-4. The rating outlook for EME and MWG is negative. "The rating action reflects the high probability of a default over the next several months as the capital structure appears likely to be restructured in light of expected weak cash flow, environmental capital requirements, and upcoming debt maturities," said A.J. Sabatelle, Senior Vice President at Moody's. "The rating action recognizes comments by EME's management in its recent SEC quarterly filings concerning the increased default prospects for EME and its subsidiary MWG, and factors in Moody's recovery prospects for security holders at EME and MWG in a default scenario," added Sabatelle. Ratings Rationale The downgrade acknowledges the challenging market for unregulated coal-fired generators, including EME, given low natural gas prices, which has impacted reduced electric prices and output. Both EME's and MWG's earnings and cash flow have declined materially in the first six months of 2012 from recent historical levels due to dwindling operating margins owing to lower revenues, reduced volumes and higher fuel costs. Moody's calculates that the year-over-year reduction in capacity revenues and the increase in fuel costs alone will together reduce operating margins and cash flow by approximately $300 million during 2012, leading to negative free cash flow generation. The downgrade considers the strain on EME's liquidity following the termination of EME's $564 million revolver in February 2012 and the expiration of MWG's $500 million revolver in June 2012. Prospectively, EME's only source of liquidity is unrestricted cash on the balance sheet which at June 30th was $879 million (including $177 million at MWG). EME's cash flow is further compromised by the near-term inability to receive tax payments under the tax-allocation agreement among affiliates including its parent, Edison International (EIX: Baa2 senior unsecured). At June 30, 2012, EME had recognized $961 million of income tax benefits related to federal tax credit carryforwards, federal net operating loss carryforwards and state net operating loss carryforwards, which if monetized would help to support EME's negative cash flow prospects. In EME's recent quarterly SEC filing, management indicated that it had entered into non-disclosure and engagements agreements with advisors representing certain of its unsecured bondholders for the purpose of engaging in discussions with the advisors and EIX regarding EME's financial condition. Moody's believes that EME's ability to reach a consensual agreement with bondholders will be challenging for several reasons including the need for EIX to retain an 80% ownership of EME in order for EME to remain a party to the tax-allocation agreement as the failure to maintain an 80% ownership would lead to a termination of EME's tax-allocation agreement. Moody's further believes that the amount of unencumbered assets across EME's platform is somewhat limited which raises questions about the willingness of bondholders to reach a consensual agreement. As such, Moody's believes that bankruptcy risk for EME has increased. With respect to MWG, management in its recent quarterly SEC filing, indicated that in light of the need to conserve cash over the next several years, a period when capacity revenues are low and lease payments include material principal amortization payments, the MWG lease may need to be restructured and MWG may also need to file for bankruptcy protection in part because of the interrelationship that exists between MWG and EME. The downgrade of MWG's secured lease to Caa1 from B2 factors in the increased default risk that exists at this subsidiary as MWG's financial results for the first six months of 2012 have declined precipitously from previous levels. For example, MWG's cash from operations for the first six months of 2012 was $28 million, a decline of $138 million from the $166 million recorded for the first six months of 2011. From 2008 through 2011, MWG's internal cash flow was sufficient to satisfy all MWG obligations and pay dividends of $796 million to EME. In light of low capacity prices for the next eighteen months, higher fuel costs, and low energy prices, MWG's internal cash flow generation is not likely to be sufficient to meet all of its cash requirements and with the expiration of the MWG revolver in June 2012, MWG's cash balance of $177 million remains its only reliable source of liquidity to fund required needs. The MWG secured lease is guaranteed by EME; its ability to provide funding under the guarantee is severely compromised by its own financial challenges. In this regard, Moody's believes that while default risk, either through a payment default or a restructuring of the MWG lease, has increased, recovery prospects for secured lease debt remain high given the modest level of remaining lease debt at MWG ($345 million) relative to the expected value for Powerton 5&6 and Joliet 7&8, the plants that secure the lease. While the value of coal-fired generation has declined throughout the country, the value of Powerton 5&6 and Joliet 7&8 would need to decline to below $135 per KW for leaseholders not to receive full recovery, a level that Moody's believes remains unlikely. EME's speculative grade liquidity rating of SGL-4 reflects Moody's concern about EME's internal sources of liquidity over the next four quarters given the generation of negative free cash flow, the lack of reliable external financing arrangements at the company and the pending $500 million debt maturity in June 2013. Management indicated in its most recent quarterly SEC filing that based on current projections and absent a restructuring of its obligations, the company is not expected to have sufficient liquidity to repay that $500 million. As mentioned, liquidity needs are being met with cash on hand which at June 30, 2012 was $879 million ($177 million at MWG). While many of the company's assets are pledged to creditors which places limits on the company's ability to raise additional liquidity from asset sales, the company owns unencumbered natural gas assets and has had success monetizing its wind assets during the last several years to bolster liquidity. The rating action continues to acknowledge the relationship that EME has with its parent, EIX, including the parent's clear position of not providing any direct or indirect credit support for EME and its subsidiaries. To that end, Moody's notes that the rating action results in a very wide (11-notch) rating differential between the senior unsecured ratings of EIX and EME, further substantiating the degree of separateness that Moody's believes exists between the parent and this subsidiary. Moody's views EME as being a financially distressed company, given its highly levered capital structure relative to its ability to generate sustainable cash flow. The continuing negative rating outlook factors in Moody's concern about liquidity challenges and the increased prospects of some form of debt restructuring in light of the near-term debt maturity profile. In light of this rating action and the increased probability of default, ratings are unlikely to be upgraded over the intermediate term horizon. The Probability of Default Rating will be downgraded should a default occur at EME. The ratings assigned to the individual debt instruments at EME and MWG largely incorporate Moody's expected recovery prospects for unsecured EME bondholders at the 35-65% range and for MWG's leaseholders (greater than 90% recovery). Downgrades: Issuer: Edison Mission Energy Probability of Default Rating, Downgraded to Ca from Caa2 Corporate Family Rating, Downgraded to Ca from Caa2 Senior Unsecured Regular Bond/Debenture, Downgraded to Ca/ 60%, LGD4 from Caa3 / 64%, LGD4 Issuer: Midwest Generation, LLC Senior Secured Pass-Through Certificates, Downgraded to Caa1/ LGD2, 15% from B2 / LGD2, 18% The methodologies used in this rating were Unregulated Utilities and Power Companies published in August 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Santa Ana, California, EME is an unregulated generation company and an indirect wholly-owned subsidiary of EIX. At December 31, 2011, EME had total assets of $8.3 billion. EMMIS COMMUNICATIONS: FM Station Purchase Price Reverts to $110MM ----------------------------------------------------------------- The First and Second Amendments to Put and Call Agreement between subsidiaries of Emmis Communications Corporation, a subsidiary of Grupo Radio Centro, S.A.B. de C.V. and certain of GRC's "Qualified Designees" provided that the Qualified Designees had the right to purchase radio station KXOS-FM (f/k/a KMVN-FM), Los Angeles, CA for $85.5 million on or before Aug. 8, 2012. Because the closing did not occur, the purchase price for the Station automatically reverts to $110 million and GRC's designation of the Qualified Designees is automatically rescinded. In all other respects, the Put and Call Agreement remains in full force and effect, as does the Local Programming and Marketing Agreement for the Station between Emmis and GRC dated April 3, 2009. Nonetheless, the parties are discussing a possible further amendment to the Put and Call Agreement as the Qualified Designees' banks have informed the parties that the financing process has been delayed but continues to move forward. However, no assurances can be given that agreement on any further amendment to the Put and Call Agreement will be reached. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at May 31, 2012, showed $350.94 million in total assets, $360.51 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $56.45 million total deficit. ENERGY FUTURE: Prices Private Placement of Senior Secured Notes --------------------------------------------------------------- Energy Future Intermediate Holding Company LLC and EFIH Finance Inc., both wholly-owned subsidiaries of Energy Future Holdings Corp., have priced a private offering of $250 million principal amount of 6.875% Senior Secured Notes due 2017 and $600 million principal amount of additional 11.750% Senior Secured Second Lien Notes due 2022. The offering is expected to close on or about Aug. 14, 2012, subject to customary closing conditions. The First Lien Notes will be issued under the Indenture, to be dated as of the Closing Date, among the Issuers and The Bank of New York Mellon Trust Company, N.A., as trustee. The New Second Lien Notes will be issued as additional notes under the Indenture, dated as of April 25, 2011, as supplemented by the first supplemental indenture, dated as of Feb. 6, 2012, the second supplemental indenture, dated as of Feb. 28, 2012, the third supplemental indenture, dated as of May 31, 2012, and the fourth supplemental indenture, to be dated as of the Closing Date, each among the Issuers and The Bank of New York Mellon Trust Company, N.A., as trustee, pursuant to which the Issuers previously issued $1.15 billion aggregate principal amount of 11.750% Senior Secured Second Lien Notes due 2022. The New Second Lien Notes will have identical terms, other than the issue date and issue price, and will constitute part of the same series, as the Existing Second Lien Notes. The Issuers intend to use a portion of the net proceeds from the offering to pay a dividend of $680 million to EFH in or before January 2013. EFH will use the proceeds of the dividend to repay the outstanding balance of the demand notes payable by EFH to its wholly-owned subsidiary Texas Competitive Electric Holdings Company LLC that have arisen from cash loaned by TCEH to EFH. Pending such use, that portion of the net proceeds from the offering will be deposited into an escrow account. Holders of the notes will have no security interest in the escrow account. The remaining net proceeds will be used for general corporate purposes, which may include the payment of dividends to EFH. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. The Company's balance sheet at June 30, 2012, showed $43.44 billion in total assets, $52.17 billion in total liabilities and a $8.73 billion total deficit. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. ENERGY FUTURE: Intends to Offer $750 Million Sr. Secured Notes -------------------------------------------------------------- Energy Future Intermediate Holding Company LLC and EFIH Finance Inc., both wholly-owned subsidiaries of Energy Future Holdings Corp. intend to commence a private offering of $250 million principal amount of Senior Secured Notes due 2017 and $500 million principal amount of additional 11.750% Senior Secured Second Lien Notes due 2022. The Issuers intend to use a portion of the net proceeds from the offering to pay a dividend to EFH in January 2013. EFH will use the proceeds of the dividend to repay the outstanding balance of demand notes that are payable by EFH to its wholly-owned subsidiary Texas Competitive Electric Holdings Company LLC that have arisen from cash loaned by TCEH to EFH. Pending such use, that portion of the net proceeds from the offering will be deposited into an escrow account. Holders of the notes will have no security interest in the escrow account. The remaining net proceeds will be used for general corporate purposes, which may include the payment of dividends to EFH. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. The Company's balance sheet at June 30, 2012, showed $43.44 billion in total assets, $52.17 billion in total liabilities and a $8.73 billion total deficit. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. EPICEPT CORP: Reports $2.9 Million Net Income in Second Quarter --------------------------------------------------------------- EpiCept Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.95 million on $6.60 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $4.34 million on $224,000 of total revenue for the same period during the prior year. The Company reported a net loss of $569,000 on $6.84 million of total revenue for the six months ended June 30, 2012, compared with a net loss of $6.80 million on $462,000 of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $5.30 million in total assets, $17.85 million in total liabilities and a $12.55 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/f242pV About EpiCept Corporation Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), approved in the European Union for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. In the United States, a pivotal trial is scheduled to commence in 2011. The Company has two other oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. Epicept reported a net loss of $15.65 million in 2011, a net loss of $15.53 million in 2010, and a net loss of $38.81 million in 2009. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Deloitte & Touche LLP, in Parsippany, New Jersey, noted that the Company's recurring losses from operations and stockholders' deficit raise substantial doubt about its ability to continue as a going concern. ESSEX PORTFOLIO: Fitch Assigns 'BB+' Preferred Stock Rating ----------------------------------------------------------- Fitch Ratings has assigned a 'BBB' rating to the $300 million 3.625% senior unsecured notes due August 2022 issued by Essex Portfolio L.P., the operating partnership of Essex Property Trust, Inc. (NYSE: ESS). The unsecured notes were issued at 98.99% of par to yield 3.747%. The company expects to use the proceeds to repay balances on its unsecured line of credit and for general corporate purposes. Fitch currently rates the company as follows: Essex Property Trust, Inc. -- Issuer Default Rating (IDR) 'BBB'; -- Preferred stock 'BB+'. Essex Portfolio L.P. -- IDR 'BBB'; -- Unsecured revolving credit facility 'BBB'; -- Senior unsecured term loans 'BBB'; -- Senior unsecured notes 'BBB'. The Rating Outlook is Positive. The Positive Outlook is driven by Fitch's expectation that ESS' near- to medium-term credit profile will improve to a level more consistent with a rating of 'BBB+', due to healthy apartment fundamentals combined with management's commitment to a conservative balance sheet and growth in the unencumbered asset pool. Since year-end 2011, ESS' leverage levels have declined, fixed charged coverage has improved, and the company maintains a good level of unencumbered assets that provides solid coverage of unsecured debt. Further supporting the ratings are the company's solid management team and long-term track record as astute operators and capital allocators in the multifamily sector. ESS' ratings are also supported by its strategy of owning assets in supply constrained, high barrier to entry, West Coast markets. Fitch views the strategy of owning assets in supply-constrained coastal markets as a credit positive as these markets also exhibit solid demand factors such as high cost of for-sale single-family housing and proximity to solid job growth markets. Fixed-charge coverage was 2.9 times (x) for the trailing twelve months ended June 30, 2012, which is strong for the 'BBB' rating, and is expected to rise above 3.0x through 2014. Fixed-charge coverage was 2.6x, 2.4x and 2.1x for the years ended Dec. 31, 2011, 2010 and 2009, respectively. In a stress case not anticipated by Fitch resulting in negative same-store NOI, fixed- charge coverage could sustain below 2.3x, which would be appropriate for a 'BBB' IDR. Fitch defines fixed-charge coverage as recurring operating EBITDA less Fitch's estimate of recurring capital improvements divided by interest incurred and preferred stock distributions. ESS' net debt to annualized 2Q'12 recurring operating EBITDA was 6.6x, compared with 7.7x and 8.3x at Dec. 31, 2011 and 2010, respectively. Fitch projects that leverage will decline to the mid-to-low 6.0x range through 2014, which is more appropriate for a 'BBB+' rated multifamily REIT with ESS' geographic concentration. In a stress case not anticipated by Fitch resulting in negative same-store NOI, leverage could sustain above 8.0x, which would be appropriate for a 'BBB-' IDR. Further supporting the ratings is a high ratio of unencumbered assets to unsecured debt. Based on applying a 7.5% cap rate to annualized 2Q'12 unencumbered net operating income (NOI), ESS' unencumbered assets covered unsecured debt 2.7x. The unencumbered pool is growing as the company replaces maturing secured debt with unsecured debt and funds new acquisition and development with equity and unsecured debt. As of June 30, 2012, approximately 50% of total NOI was unencumbered, up from 44% and 35% as of Dec. 31, 2011 and 2010, respectively. ESS has a manageable debt maturity schedule with only 10% of total debt (including pro rata share of JV debt) maturing from July 1, 2012 through Dec. 31, 2014. Fitch calculates that ESS' sources of liquidity exceed uses of liquidity by a ratio of 1.3x, which is appropriate for the 'BBB' rating. Sources include: unrestricted cash, availability under its unsecured revolving credit facility and expected retained cash flows from operating activities after dividend distributions. Uses include: pro rata share of debt maturities, remaining non-discretionary development expenditures and expected recurring capital expenditures. The ratings are supported by strong multifamily fundamentals in ESS' markets. ESS' same-property NOI increased by 9.2% in 2Q'12. Fitch anticipates that fundamentals will remain strong due to moderate job growth, limited new supply, and a high cost of for- sale single-family housing in ESS' markets. The ratings also point to the strength of ESS' long-tenured management team, including senior officers and property and leasing managers. Offsetting these credit strengths are the company's moderate level of secured debt, geographically concentrated portfolio, and growing active development pipeline. ESS historically has been primarily a secured borrower but began shifting in 2011 to an unsecured funding model. Pro forma for the $300 million bond issuance, the company has $915 million (36% of total debt) of unsecured debt on its balance sheet, compared to total debt of $2.5 billion. The 36% is low relative to multifamily REIT peers that generally maintain 50% or more of total debt as unsecured. Although Fitch highlights the company's supply-constrained market focus strategy as a credit positive, this is somewhat offset by the geographic concentration in Southern California (48.3% of multifamily NOI), San Francisco Bay Area (34.3%), and the Seattle metropolitan area (17.4%). 82.6% of multifamily NOI in 2Q'12 was derived from the state of California (Fitch rates California's general obligation bonds 'A-'; Outlook Stable). While ESS' SSNOI performance has exceeded a market-weighted PPR index, Fitch notes the seismic risks of the state and the potential for government budget dynamics to pressure property taxes. The company maintains an active development pipeline, with total development cost representing 18.7% of total undepreciated consolidated assets, with $595.5 million remaining to be spent, or 11.2% of total assets as of June 30, 2012. However, the majority of the current development pipeline is within JV's, and based on Essex's pro rata share, remaining costs to Essex are $360.4 million, or 6.8% of total assets. Should demand decrease in Essex's markets prior to completion, these projects could serve as a drag on cash flows due to longer than projected lease-up at less favorable rental rates. The two-notch differential between ESS' IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with a 'BBB' IDR. Based on 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis', these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. The following factors may result in an upgrade to 'BBB+': -- Fitch's expectation of net debt to recurring operating EBITDA sustaining below 7.0x (as of June 30, 2012 leverage was 6.6x based on annualized 2Q'12 EBITDA); -- Fitch's expectation of fixed charge coverage sustaining above 2.5x (coverage for the TTM ended June 30, 2012 was 2.9x); -- Consistent access to multiple sources of capital, including unsecured notes, term loans and common equity. The following factors may result in negative momentum on the ratings and/or Outlook: -- Leverage sustaining above 8.0x; -- Coverage sustaining below 2.0x; -- If operating fundamentals relapse similar to the environment of 2009 in the near term, rather than remaining strong as currently expected; -- A liquidity shortfall. EURAMAX INTERNATIONAL: Incurs $15.6-Mil. 2nd Quarter Net Loss ------------------------------------------------------------- Euramax Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $15.59 million on $223.79 million of net sales for the three months ended June 29, 2012, compared with a net loss of $2.12 million on $256.85 million of net sales for the three months ended July 1, 2011. For the six months ended June 29, 2012, the Company reported a net loss of $23.71 million on $422.47 million of net sales, as compared to a net loss of $10.45 million on $467.23 million of net sales for the six months ended July 1, 2011. The Company reported a net loss of $62.71 million in 2011, a net loss of $38.54 million in 2010, and a net loss of $85.62 million in 2009. Euramax's balance sheet at June 29, 2012, showed $632.52 million in total assets, $708.03 million in total liabilities, and a $75.51 million total shareholders' deficit. President and CEO Mitchell B. Lewis commented, "Our volume in the second quarter was impacted by the challenging economic environment in Europe as well as the severe drought conditions throughout much of the United States. Despite these overall sales declines, demand for our commercial products in the post frame construction, RV and transportation markets improved during the second quarter of 2012 compared to the prior year quarter. While operating income and adjusted EBITDA modestly declined year over year, declines were less than expected in light of weak sales demand. Initiatives taken by the Company to reduce overhead costs and streamline operations helped mitigate the impact of lower volumes and have contributed to an improvement in operating margins." A copy of the Form 10-Q is available for free at: http://is.gd/ObkPvN About Euramax Based in Norcross, Georgia, Euramax International, Inc., is a leading international producer of aluminum, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors and home centers in North America and Western Europe. The Company was acquired for $1 billion in 2005 by management and Goldman Sachs Capital Partners. Euramax Int'l has subsidiaries in Canada (Euramax Canada, Inc.), United Kingdom (Ellbee Limited and Euramax Coated Products Limited), and The Netherlands (Euramax Coated Products B.V.), and France (Euramax Industries S.A.). * * * As reported by the Troubled Company Reporter on April 24, 2009, Moody's Investors Service downgraded Euramax International's corporate family rating and probability of default rating to Ca from Caa1. Euramax was acquired for $1 billion in 2005 by management and Goldman Sachs Capital Partners. A "large portion of the purchase price was financed with debt," according to S&P. As reported by the TCR on July 30, 2009, Standard & Poor's Ratings Services raised its ratings on Norcross, Georgia-based Euramax International Inc., including the long-term corporate credit rating, to 'B-' from 'D'. "The ratings upgrade reflects the company's highly leveraged, although somewhat improved, financial risk profile following a recent out-of-court restructuring," said Standard & Poor's credit analyst Dan Picciotto. "As a result of the restructuring, Euramax's second-lien debtholders received equity and about half of its new $513 million of first-lien debt is pay-in-kind, providing some cash flow benefit," he continued. FENTURA FINANCIAL: To Cease Filing Periodic Reports with SEC ------------------------------------------------------------ Fentura Financial, Inc., intends to file a Form 15 with the Securities and Exchange Commission to deregister its common stock, no par value, under the Securities Exchange Act of 1934, as amended, which will terminate the Company's obligation to file periodic and annual reports with the Commission. The Company's board of directors has determined that the Company would benefit from that action by eliminating significant costs, including fees and expenses relating to the preparation and filing of periodic reports with the Commission, and by permitting management to spend less time on report preparation, which will allow them to devote full attention and effort to the Company's operations. The Company intends to continue to hold annual meetings and to provide its shareholders with financial information. About Fentura Financial Based in Fenton, Michigan, Fentura Financial, Inc., is a registered bank holding company, owns and controls The State Bank, Fenton, Michigan, and West Michigan Community Bank, Hudsonville, Michigan, both state nonmember banks, and two nonbank subsidiaries. Fentura Financial shares are traded over the counter under the FETM trading symbol. Fentura Financial, Inc., entered into a Written Agreement with the Federal Reserve Bank of Chicago on Nov. 4, 2010. Among other things, the Written Agreement requires that the Company obtain the approval of the FRB prior to paying a dividend; requires that the Company obtain the approval of the FRB prior to making any distribution of interest, principal, or other sums on subordinated debentures or trust preferred securities; prohibits the Company from purchasing or redeeming any shares of its stock without the prior written approval of the FRB; requires the submission of a written capital plan by Jan. 3, 2011, and; requires the Company to submit cash flow projections for the Company to the FRB on a quarterly basis. The Company reported a net loss of $1.51 million in 2011, compared with a net loss of $5.38 million in 2010. The Company's balance sheet at March 31, 2012, showed $306.46 million in total assets, $292.29 million in total liabilities and $14.17 million in total stockholders' equity. FIRST NATIONAL: Posts $335,000 Net Loss in 2011 ----------------------------------------------- First National Community Bancorp, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $335,000 on $29.07 million of net interest income before loan and lease losses for 2011, compared with a net loss of $31.72 million on $33.60 million of net interest income before loan and lease losses for 2010. The Company recorded a $523,000 provision for loan and lease losses in 2011 as compared to the $25.04 million provision recorded in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.103 billion in total assets, $1.063 billion in total liabilities, and shareholders' equity of $39.92 million. First National Community Bank (the "Bank") is under a Consent Order (the "Order") from the Office of the Comptroller of the Currency ("OCC") dated Sept. 1, 2010. The Company is also subject to a written Agreement (the "Agreement") with the Federal Reserve Bank of Philadelphia dated Nov. 24, 2010. As a result of the Consent Order, the Bank is required to achieve a total capital ratio of 13% and Tier I capital to average assets ratio of 9% by Nov. 30, 2010. As of Dec. 31, 2011, the Bank has not yet achieved these ratios. Furthermore, pursuant to the Order and the written Agreement, the Bank and the Company are currently prohibited from declaring or paying any dividends without prior regulatory approval. A copy of the 2011 Form 10-K is available for free at: http://is.gd/JUeF44 First National Community Bancorp reported a net loss of $526,000 on $7.38 million of net interest income before loan and lease losses for the three months ended March 31, 2011, compared with a net loss of $825,000 on $9.09 million of net interest income before loan and lease losses for the three months ended March 31, 2010. A copy of the Form 10-Q for the 2011 first quarter is available for free at http://is.gd/ZV69mL First National Community Bancorp reported net income of $189,000 on $7.41 million of net interest income before loan and lease losses for the three months ended June 30, 2011, compared with a net loss of $5.19 million on $8.76 million of net interest income before loan and lease losses for the three months ended June 30, 2010. A copy of the Form 10-Q for the 2011 second quarter is available for free at http://is.gd/yHCRFP First National Community Bancorp reported a net loss of $434,000 on $7.42 million of net interest income before loan and lease losses for the three months ended Sept. 30, 2011, compared with a net loss of $11.83 million on $8.20 million of net interest income before loan and lease losses for the three months ended Sept. 30, 2010. A copy of the Form 10-Q for the 2011 third quarter is available for free at http://is.gd/UfL3GM Headquartered in Dunmore, Pa., First National Community Bancorp, Inc., is a Pennsylvania corporation, incorporated in 1997 and is registered as a bank holding company under the Bank Holding Company Act ("BHCA") of 1956, as amended. The Company became an active bank holding company on July 1, 1998, when it acquired ownership of First National Community Bank (the "Bank"). The Bank is a wholly-owned subsidiary of the Company. The Company's primary activity consists of owning and operating the Bank, which provides customary retail and commercial banking services to individuals and businesses. The Bank provides practically all of the Company's earnings as a result of its banking services. FIRST SECURITY: Incurs $7.3 Million Net Loss in Second Quarter -------------------------------------------------------------- First Security Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.27 million on $9.58 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $5.39 million on $11.01 million of total interest income for the same period during the prior year. The Company reported a net loss of $13.10 million on $19.27 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $8.05 million on $22.51 million of total interest income for the same period a year ago. The Company reported a net loss of $23.06 million in 2011, a net loss of $44.34 million in 2010, and a net loss of $33.45 million in 2009. First Security's balance sheet at June 30, 2012, showed $1.11 billion in total assets, $1.05 billion in total liabilities and $53.99 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/ex6mhL About First Security Group First Security Group, Inc., is a bank holding company headquartered in Chattanooga, Tennessee, with $1.2 billion in assets as of Sept. 30, 2010. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A., has 37 full- service banking offices, including the headquarters, along the interstate corridors of eastern and middle Tennessee and northern Georgia and 325 full-time equivalent employees. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has recently incurred substantial losses. The Company is also operating under formal supervisory agreements with the Federal Reserve Bank of Atlanta and the Office of the Comptroller of the Currency and is not in compliance with all provisions of the Agreements. Failure to achieve all of the Agreements' requirements may lead to additional regulatory actions. FLURIDA GROUP: Reports $16,325 Net Income in Second Quarter ----------------------------------------------------------- Flurida Group, Inc., filed its quarterly report on Form 10-Q, reporting net income of $16,325 on $4.25 million of revenues for the three months ended June 30, 2012, compared with net income of $9,505 on $4.00 million of revenues for the same period a year ago. For the six months ended June 30, 2012, the Company reported net income of $42,423 on $7.59 million of revenues, compared with net income of $68,364 on $7.02 million of revenues for the comparable period of 2011. The Company's balance sheet at June 30, 2012, showed $6.70 million in total assets, $5.00 million in total liabilities, and stockholders' equity of $1.70 million. According to the regulatory filing, the Company's operating history and financial resources may raise doubt about its ability to continue as a going concern. "If the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations. In the three months ended June 30, 2012, the Company generated sales revenue of $4,246,446. The Company's most concentrated customer is Electrolux located in various countries. If Electrolux discontinue[s] the purchase which management believes is unlikely in near future, the Company may face the ability to continue as a going concern. However, due to the close relationship between the Company and its suppliers, Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., which are 100% owned by the founder, Jianfeng Ding, Zhong Nan Fu Rui and Qingdao Fubida Electronics Co.'s current customers can be served by the Company for the same quality of products and services. Besides, as of June 30, 2012, the cash and cash equivalent balance was $2,434,883, the management believes that the revenues will be generated and its cash flows will be maintained to cover its operational costs and the risk of going concern in long term is significantly low." A copy of the Form 10-Q is available for free at: http://is.gd/2P9DVP Chicago-based Flurida Group, Inc.'s business is the sale of appliance parts in Asia, Europe, Australia, North and South America. FNB UNITED: Incurs $18.1 Million Net Loss in Second Quarter ----------------------------------------------------------- FNB United Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $18.13 million on $20.43 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $48.97 million on $15.19 million of total interest income for the same period during the prior year. The Company reported a net loss of $28.99 million on $40.42 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $92.68 million on $30.66 million of total interest income for the same period a year ago. FNB United reported a net loss of $137.31 million in 2011, a net loss of $131.82 million in 2010, and a net loss of $101.69 million in 2009. The Company's balance sheet at June 30, 2012, showed $2.30 billion in total assets, $2.19 billion in total liabilities and $108 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/6u4rn2 About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. FORD MOTOR: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Pos -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Ford Motor Co. and Ford Motor Credit Co. LLC (Ford Credit) to positive from stable. "We affirmed our corporate credit ratings on the companies at 'BB+'. We also revised the outlook on the counterparty credit rating on FCE Bank PLC, Ford Credit's European bank, to positive from stable and affirmed our 'BBB-' rating," S&P said. "The outlook revision reflects, among other things, our view that Ford will act with increasing decisiveness and commitment to restructure Europe to profitability amid prospects for several more years of weak vehicle sales there," said Standard & Poor's credit analyst Robert Schulz. "If we believe Ford is on track to be profitable in Europe, this would improve the balance of profitability across regions and support an investment-grade rating. Accordingly, we would likely want to have a good understanding of 2014 prospects for profitability by region before an upgrade and do not expect to aise our rating on Ford until then. Indeed, we assume that profits and cash use in Europe will get worse before they get better," S&P said. "Standard & Poor's rating on Michigan-based Ford reflects our assessment of Ford's business risk profile as 'fair' and its financial risk profile as 'significant,' according to our criteria. Factors we consider include Ford's prospects for generating free cash flow and profits in its automotive manufacturing business because of improvement in its U.S. competitive position, the continuing recovery in U.S. industry sales, and its improved cost base in North America. Our base case assumes improvement for industry light-vehicle sales in North America in 2012 and 2013. We estimate Ford's automotive operating cash flow (before separation payments) during 2012 will be at least $2 billion to $3 billion (roughly equivalent to about 10% of estimated adjusted automotive and postretirement debt in 2012). We also assume Ford can sustain its pretax EBIT margin in North America in the upper-single-digit percentage area and in the mid- single-digit area in total for automotive operations. We assume Europe will report losses," S&P said. "We believe Ford's automotive operations in North America would remain profitable if industry light-vehicle sales fall well below the current level of 14 million but remain more than 11 million units. But cash flow will be sensitive to volume and cost headwinds -- including commodity prices and other cost increases -- and future production volatility, which could temper year-over- year cash flow generation. As the inventories of the Japanese automakers continue to recover, some non-Japanese automakers in the U.S. are losing market share, as we expected. We assume automakers competing in the U.S. market will continue to demonstrate the same discipline observed since late 2009 regarding the level of production and inventories relative to sales and that they will avoid excess inventories, incentives, and swings in production," S&P said. S&P believes underlying industry and business risks persist, most notably: -- Continuing exposure to the weak recovery in vehicle demand in key global markets, and declining sales in Europe because of economic weakness and political uncertainty; -- The eventual return in North America to more typical levels of industry volatility in sales and production; and -- Ford's still-high dependence on light trucks, particularly full-size pickups, for profitability in North America, although new car introductions in recent years have fared well. "We expect Ford's financial results to remain highly sensitive to future industry sales and product mix, actions by competitors, and other factors beyond its direct control (e.g., as higher raw material costs or fuel prices)," S&P said. S&P said its ratings reflect, among other factors, its expectations that: -- Ford's profitability in North America will continue; -- Ford will generate global automotive operating cash flow of $2 billion to $3 billion in the next few years; -- Retail market perception of Ford's products will not deteriorate; -- Ford's adequate liquidity and substantial cash balances will persist; and -- Losses and cash use in Europe in relation to the overall company will be manageable because of continued North American profits and positive cash flow. "Our economists forecast U.S. light-vehicle sales of about 14.1 million units in 2012, about 11% higher than 2011. Sales in the first seven months of 2012 have been about this annual rate after being considerably higher earlier in the year. We expect the rebound in light-vehicle sales to continue next year with about 14.7 million units," S&P said. "However, international markets have not performed well so far this year. South America generated a modest operating profit of $59 million while Asia-Pacific generated an operating loss of $161 million in the first half of the year. A variety of factors including industry capacity, competition, political matters relating to trade and foreign currency access, and product investments are driving the weaker results. Still, the largest risk factor, in our view, remains Europe," S&P said. "Our outlook for the major auto markets in Europe, Ford's second- largest market, is much less positive than for the U.S. market. We expect 2012 auto industry sales in Europe to be at least 5% below 2011 -- EU27 passenger car registrations were down 6.8% for the first six months of 2012 (but highly mixed: France was down 14.4%, Germany was up 0.7%). We believe losses in Europe for many nonluxury volume makers are likely for 2012 and perhaps 2013, primarily because of the excess capacity and a weak economy. We assume any losses or cash use in Europe will not become substantial enough to affect the ratings," S&P said. "Ford Credit's results continue to be solidly profitable, partly because of higher sales volumes, industrywide strength in used- vehicle prices (lower costs related to lease residuals), and reduced credit losses as consumer credit quality stabilizes at many financial institutions. Ford Credit reported a pretax profit of $438 million in the second quarter of 2012. We assume earnings in 2012-2013 will be lower than in past years because of less favorable developments on used-car residuals and credit reserves, but still solidly profitable," S&P said. "The positive outlook reflects our view that there is a one-in- three chance that we could raise our corporate credit rating on Ford to investment grade within 18 months--although this is not likely before late 2013. The most important factor in an upgrade to investment grade would be Ford's ability to improve the balance of profitability across regions. For an upgrade, we would expect Ford to be on track for sustainable profitability outside North America, particularly Europe--although, as noted, we think results in Europe will worsen before improving," S&P said. S&P said it could raise the rating if, in addition to regaining control over its ability to be profitable in Europe, the gradual improvement in light-vehicle demand continues in most other global markets and Ford's prospects for generating free cash flow and profits in its automotive manufacturing business continue to solidify such that the following factors were met: -- Ford sustains debt to EBITDA at about 2.5x; -- Pretax automotive profit margins reach the mid-single-digit area for total automotive and the high-single-digit area for North America; -- Liquidity at the automotive parent remains more than $30 billion; -- Automotive-related operating free cash flow remains at about 15% of debt; -- Ford successfully copes with the evolving competitive structure of the global auto industry, including continued demonstration of the preferences of the U.S. consumer toward Ford products, and Ford develops reasonable prospects for profitability in developing markets such as China; and -- Ford Credit continues to be profitable and demonstrates underwriting standards consistent with an investment-grade rating. "For the current rating, we assume Ford's revenues will grow at a low-single-digit pace and pretax margins will remain about 5%, supporting automotive operating cash flow (as reported) of $2 billion to $3 billion," S&P said. "We could revise our outlook to stable or lower our rating if adverse economic or competitive developments (e.g., prolonged sales decline, overproduction, excess inventory, increased incentives, or unfavorable shifts in customer demand) reduced the prospects for profitable and cash-positive results, or if Ford uses a substantial amount of cash in its automotive operations in any quarter and it seemed likely to continue," S&P said. FTMI REAL ESTATE: Updated Case Summary & Creditors Lists -------------------------------------------------------- Debtor: FTMI Real Estate, LLC 6700 W. Commercial Boulevard Lauderhill, FL 33319 Bankruptcy Case No.: 12-29214 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- FTMI Operator LLC 12-29215 Chapter 11 Petition Date: August 10, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray About the Debtors: FTMI Operator operates a health care business The Lenox on The Lake. The LENOX -- http://www.thelenox.com-- is South Florida's, newest state-of-the-art Assisted Living and Memory Care community, which has a serene lakeside setting and wonderful waterfront vistas. FTMI Real Estate, a single asset real estate under 11 U.S.C. Sec. 101(51B), owns The Lenox on The Lake facilities at 6700 Commercial Boulevard, in Lauderhill, Florida valued at $13 million. Secretary of Housing Urban Development has a $25.87 million claim secured by the property. Debtors' Counsel: Thomas L. Abrams, Esq. GAMBERG & ABRAMS 1776 N. Pine Island Road, #309 Plantation, FL 33322 Tel: (954) 523-0900 E-mail: tabrams@tabramslaw.com FTMI Real Estate's Scheduled Assets: $19,637,696 FTMI Real Estate's Scheduled Liabilities: $112,000 FTMI Operator's Scheduled Assets: $19,637,696 FTMI Operator's Scheduled Liabilities: $31,980,000 The petitions were signed by Jamie Harris, vice president. A. A copy of FTMI Operator's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb12-29215.pdf B. FTMI Real Estate's list of its six largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Secretary of Housing Urban Real Estate $25,868,002 Development of Washington DC 451 Seventh Street SW Washington, DC 20410 Lazer Aptheker Rosella Yedid PC FTMI Holdings - $76,652 225 Old County Rd Legal Services Melville, NY 11747 2006 Holland & Knight LLP Promissory Note $20,239 11050 Lake Underhill Road, Suite 864084 Orlando, FL 32825-5016 Pistorino & Alam Consulting Complaint Pending $15,285 Pistorino & Alam Consulting Claim for Services $15,249 Roger Towers PA Legal Services 2006 $15,000 GENERAL MARITIME: Suspending Filing of Reports with SEC ------------------------------------------------------- General Maritime Corporation filed with the U.S. Securities and Exchange Commision a Form 15 notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its Common Stock (par value $.01 per share), Debt Securities, Preferred Stock, Guarantees, Rights, Warrants, and Units. As of Aug. 9, 2012, there were 67 holders of common shares and 63 holders of warrants to purchase shares of common stock. About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. General Maritime emerged from Chapter 11 protection in May 2012. The Plan reflects the terms of a global settlement among the Company's main creditor constituencies. The plan gives unsecured creditors $6 million in cash, 25 of the new stock, and warrants for another 3%, for a predicted 5.41% recovery. GEOKINETICS INC: Had $27.5 Million Net Loss in Second Quarter ------------------------------------------------------------- Geokinetics Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $27.47 million on $134.79 million of revenues for the three months ended June 30, 2012, compared with a net loss of $39.44 million on $145.55 million of revenues for the same period last year. Consolidated Adjusted EBITDA (defined as Net Income (Loss) before Interest, Taxes, Other Income (Expense), Asset Impairments and Depreciation and Amortization) totaled $21.0 million for the three months ended June 30, 2012, compared to $8.8 million for the same period in 2011. The increase was primarily the result of increased productivity in the Company's Latin America seismic data acquisition operations, partially offset by decreased activity in the Company's North America and international seismic data acquisition operations. The Company had a loss applicable to common stockholders of $30.0 million for the three months ended June 30, 2012, compared to a loss applicable to common stockholders of $41.7 million for the same period in 2011. The decrease in net loss applicable to common stock holders resulted primarily from the same variables impacting Adjusted EBITDA as well as the decrease in multi-client amortization expense partially offset by higher foreign exchange losses, the decrease in the gains in the fair value of the Company's derivative liabilities, and increased income tax expense. Six Months Ended June 30 For the six months ended June 30, 2012, the Company had a net loss of $50.69 million on $298.29 million of revenues, compared with a net loss of $68.21 million on $333.19 million of revenues for the corresponding period of 2011. The Company had a loss applicable to common stockholders of $55.6 million for the six months ended June 30, 2012, compared to a loss applicable to common stockholders of $72.7 million for the same period in 2011. Balance Sheet The Company's balance sheet at June 30, 2012, showed $410.85 million in total assets, $580.10 million in total liabilities, $88.19 million of Series B-1 Senior Convertible Preferred Stock, and a stockholders' deficit of $257.44 million. Liquidity Concerns According to the regulatory filing, the Company continued to incur operating losses due to delays in project commencements, low asset utilization, idle crew costs and the Mexico liftboat incident, resulting in serious concerns about the Company's liquidity beginning in 2011 and continuing into 2012. To address these liquidity concerns, the Company initiated actions designed to improve its liquidity position by giving priority to generating cash flows while maintaining the Company's long-term commitment to providing high quality seismic data acquisition services. "However, we anticipate that additional efforts will be required to address the Company's high levels of indebtedness and we continue to work with our financial advisor to address these issues through a possible restructuring of the Company's indebtedness and existing capital structure. Given the Company's high levels of indebtedness and currently outstanding preferred stock which have preference over our common stock, we believe it is unlikely that any significant value would be ascribed to our common stock after any such restructuring. In addition, we may also be required to further curtail existing operations, reduce or delay capital expenditures or sell assets to meet our operating and debt service obligations, all of which would have a further material adverse effect on our liquidity and financial condition." "In addition to working with the Company's financial advisor regarding a possible restructuring of our indebtedness and capital structure, we are currently reviewing other alternatives and may adopt other strategies such as reducing or delaying capital investments, delaying bids on new sales or seeking to raise additional capital through debt or equity financing. However, the Company's current credit rating limits the Company's ability to access the debt capital markets and the recent low trading price of the Company's common stock severely limits the Company's ability to raise substantial capital in the equity capital markets. Among other restrictions, our Notes and the Whitebox Revolving Credit Facility also limit our ability to incur or guarantee additional debt or to grant additional liens on our assets which further limits our ability to raise additional capital through debt financing. The ability to timely raise sufficient capital may also be limited by NYSE MKT stockholder approval requirements for certain transactions involving the issuance of the Company's common stock or securities convertible into the Company's common stock." A copy of the Form 10-Q is available for free at: http://is.gd/5eMZF5 Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, is provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. These geophysical services include acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data surveys, data processing and integrated reservoir geosciences services for customers in the oil and natural gas industry, which include national oil companies, major international oil companies and independent oil and gas exploration and production companies worldwide. * * * On Sept. 30, 2011, Geokinetics Inc., was notified by Moody's Investor Services, Inc., and Standard and Poor's that they had downgraded the Company's credit rating to Caa2 and CCC+, respectively, because of litigation uncertainty related to the Mexico liftboat incident, low margins in international markets, tight liquidity and weak financial metrics in an improved oil and gas operating environment. On Dec. 16, 2011, the Company was notified that S&P had further downgraded Geokinetics' credit rating to CCC-, citing its expectations of weaker operating measures compared to its peers and reduced liquidity in the near future. GEOMET INC: Amends Credit Agreement with Bank of America -------------------------------------------------------- GeoMet, Inc., has executed an amendment to its bank credit agreement Bank of America, N.A., as administrative agent, that extends the time available for the Company to cure the existing borrowing base deficiency. Key terms of the amendment include: * Borrowing Base - The borrowing base, currently set at $115 million, will continue to be determined periodically in accordance with the current terms of the credit agreement. Outstanding loans up to the amount of the borrowing base will be classified as the "Tranche A Loan", with any additional loans outstanding being classified as the "Tranche B Loan". Should a future determination of the borrowing base result in a deficiency exceeding $33.6 million, the Company has 30 days to repay that excess. The next borrowing base determination is scheduled to be completed in December of this year. * Maturity Date of Credit Agreement - April 1, 2014 * Type of Credit Facility - The credit agreement will no longer provide for loans to be available on a revolving basis. As a result, the current outstanding loans, once repaid, may not be re-borrowed by the Company. * Mandatory Payments - On the first business day following the 24th day of each month the Company will reduce its loan in an amount equal to the sum of all amounts on deposit in the operating accounts maintained by the Company and any of its subsidiaries, except for (i) all outstanding checks or ACH payments and (ii) an amount equal to $1,000,000. That loan reduction will first be applied toward payment of the outstanding principal under the Tranche B Loan until repaid in full, and then toward payment of the outstanding principal under the Tranche A Loan. * Interest Rates/Fees - The margin on Libor based loans will increase from 2.75% to 3.00% on the Tranche A Loan and to 5.00% on the Tranche B Loan. The existing unused commitment fee is being replaced with a fee equal to a percentage of the Tranche B Loan outstanding, with such fee being payable on Dec. 1, 2012, and at the end of each 3-month period thereafter through Dec. 1, 2013. This fee will be 0.75% on Dec. 1, 2012, and will increase 0.25% each quarter to a maximum fee of 1.75% on Dec. 1, 2013. In addition, a fee equal to 0.50% of the initial Tranche B Loan was paid by the Company upon closing of the amendment. * Covenants - All financial covenants have been eliminated. The Company will be subject to a limitation on capital expenditures in 2012 and 2013 of $1,500,000 and $1,000,000, respectively. Also, the Tranche B Loan cannot increase as a result of a reduction in the borrowing base determination as of December 2012 by more than 50% of the aggregate principal payments made from the date of the amendment, or by more than 25% of the aggregate principal payments made since the prior determination for any reduction in any borrowing base determination thereafter. * Maximum Loan Balance - Loans outstanding under the credit agreement may not exceed certain amounts over the remaining term of the credit agreement, commencing with a maximum loan balance of $146.2 million at Sept. 30, 2012, and reducing as of the last day of each fiscal quarter through Dec. 31, 2013, at which time the maximum loan balance may not exceed $129.0 million. Commenting on the amendment Bill Rankin, GeoMet's president and chief executive officer said, "We are pleased to have reached an agreement that provides time to rectify our current borrowing base deficiency which resulted from the severe and rapid decline in natural gas prices beginning late last year. We believe this agreement was possible due to the Company's current hedge position and the long life, shallow decline of our natural gas properties. This structure allows us to continue to operate our properties in a normal manner and to reduce the deficiency with our free cash flow. We believe the unresolved deficiency has been an impediment in our efforts to find a strategic alternative, and this agreement should be constructive in those efforts." A copy of the Fourth Amendment is available for free at: http://is.gd/nxDIAo About Geomet Inc. Houston, Texas-based GeoMet, Inc., is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams ("coalbed methane" or "CBM") and non-conventional shallow gas. It was originally founded as a consulting company to the coalbed methane industry in 1985 and has been active as an operator, developer and producer of coalbed methane properties since 1993. Its principal operations and producing properties are located in the Cahaba and Black Warrior Basins in Alabama and the central Appalachian Basin in Virginia and West Virginia. It also owns additional coalbed methane and oil and gas development rights, principally in Alabama, Virginia, West Virginia, and British Columbia. As of March 31, 2012, it owns a total of approximately 192,000 net acres of coalbed methane and oil and gas development rights. The Company's balance sheet at March 31, 2012, showed $199.21 million in total assets, $176.64 million in total liabilities, $30.47 million of Series A convertible redeemable preferred stock, and a stockholders' deficit of $7.90 million. "As of May 11, 2012, we had $148.6 million outstanding under our Fifth Amended and Restated Credit Agreement," the Company said in its quarterly report for the period ending March 31, 2012. "As of March 31, 2012, we were in compliance with all of the covenants in our Credit Agreement. The Credit Agreement provides, however, that if the amount outstanding at any time exceeds the "borrowing base", we must provide additional collateral to the lenders or repay the excess as provided in the Credit Agreement. The borrowing base is set in the sole discretion of our lenders in June and December of each year based, in part, on the value of our estimated reserves as determined by the lenders using natural gas prices forecasted by the lenders." "Due to the decline in the bank group's price projections, we expect our outstanding loan balance at the June determination date will exceed the new borrowing base, resulting in a borrowing base deficiency. We do not have additional collateral to provide to the lenders and we expect that our operating cash flows would be insufficient to repay the expected borrowing base deficiency, as required under the Credit Agreement. As such, unless we amend the Credit Agreement, we may be in default under the agreement when the borrowing base is determined in June 2012. In addition, the elimination of the unused availability under the borrowing base, which is a factor in our working capital covenant, may result in a future default of that covenant under the Credit Agreement. We have begun discussions with our bank group; however, until the borrowing base for June 2012 has been determined, we will not know the amount of the deficiency. As of March 31, 2012, the debt is classified as long-term as we are not in violation of any debt covenants. Should we be in violation of any covenants which have not been waived or have a borrowing base deficiency as of June 30, 2012, some or all of the debt will be reclassified to current. There are no assurances that we will be able to amend our Credit Agreement or obtain a waiver. If we do obtain a waiver or an amendment, there can be no assurance as to the cost or terms of such an amendment." "These conditions raise substantial doubt about our ability to continue as a going concern for the next twelve months." GMX RESOURCES: Incurs $103.3 Million Net Loss in Second Quarter --------------------------------------------------------------- GMX Resources Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $103.31 million on $16.28 million of oil and gas sales for the three months ended June 30, 2012, compared with a net loss of $11.80 million on $32.85 million of oil and gas sales for the same period a year ago. For the six months ended June 30, 2012, the Company reported a net loss of $141.18 million on $33.68 million, compared to a net loss of $63.62 million on $62.23 million of oil and gas sales for the same period during the prior year. GMX Resources' balance sheet at June 30, 2012, showed $394.79 million in total assets, $462.46 million in total liabilities and a $67.67 million total deficit. James A. Merrill, chief financial officer said "The Company is continuing to make progress on the transition to an oil focused producer outlined in January 2011 when we announced the acquisition of our Bakken and Niobrara positions. We forecasted that 2012 was going to be financially challenging as we worked to grow our oil production which would lead to higher revenues to cover interest and operating costs. During the last 18 months, we have focused on the incremental steps necessary to achieve our goals particularly related to a disciplined and Bakken focused capital expenditure plan, reducing overall G & A expenses by at least 20% and keeping lease operating expenses flat to slightly declining in 2012 despite the higher overall lease operating expenses associated with oil wells. I am pleased to report that our current and expected 2012 capital expenditures are in-line with our $97 million capex budget announced earlier in the year and G&A expenses have decreased in the first half of 2012 and we expect to see greater savings in the second half of the year. We did not forecast the unprecedented pricing pressure that we have had to incorporate into our business plan and as a result we have been forced to account for larger than expected impairments. The Company continues to pro-actively address the need for even better drilling results, more liquidity and debt reduction through a variety of means." A copy of the Form 10-Q is available for free at: http://is.gd/DER6Ci About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. * * * In November 2011, Moody's downgraded the rating of GMX Resources' corporate family rating (CFR) to 'Caa3' from 'Caa1', the Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The outlook is negative. The downgrade of GMX's PDR and note ratings reflect the company's announcement that greater than 50% of the holders of the notes due 2019 have accepted a proposed exchange offer, which Moody's views as a distressed exchange. The lowering of the CFR and SGL ratings reflects Moody's expectation of potential liquidity issues through the first quarter of 2013, as well as elevated leverage following the issuance of at least $100 million of proposed secured notes under the exchange offer and a proposed $55 million volumetric production payment (VPP), both of which the company expects to be executed before the end of 2011. Moody's treats VPPs as debt in Moody's leverage calculations. The negative outlook reflects the potential for the CFR and note ratings to be lowered if liquidity deteriorates further. As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources Inc. to 'SD' (selective default) from 'CC'. "We also lowered the company's issue-level ratings to 'D' from 'CC', reflecting its completion of an exchange offer for a portion of its $200 million 11.375% senior notes due 2019," S&P said. "The rating actions follow the company's announcement that it has completed the exchange offer for its 11.375% senior notes due 2019," said Standard & Poor's credit analyst Paul B. Harvey. "The exchange offer included $53 million principle of 11.375% senior notes that accepted an exchange of $1,000 principle for $750 principle of new 11% senior secured notes due 2017. We consider the completion of such an exchange, at a material discount to par, to be a distressed exchange and, as such, tantamount to a default under our criteria." GMX RESOURCES: Has Exchange Offers for Convertible Senior Notes --------------------------------------------------------------- GMX Resources Inc. has commenced offers to exchange for (i) all of its existing 5.00% Convertible Senior Notes due 2013, of which $51,997,000.00 aggregate principal amount is currently outstanding, in exchange for (a) new Senior Second-Priority Secured Notes due 2018 and (b) shares of the Company's common stock, and (ii) a limited amount of its existing 4.50% Convertible Senior Notes due 2015 in exchange for the New Notes. Pursuant to the terms of the Exchange Offers, the Company is offering to exchange (a) for each $1,000.00 principal amount of 2013 Notes: (i) $1,000.00 principal amount of New Notes (up to an aggregate of approximately $52.0 million) and (ii) 288 shares of Common Stock; and (b) for each $1,000 principal amount of its Existing 2015 Notes, $700 principal amount of New Notes, subject to a maximum aggregate principal amount of New Notes issuable to all holders of Existing 2015 Notes equal to the excess of $60 million over the total aggregate principal amount of Existing 2013 Notes validly tendered and not validly withdrawn as of the Expiration Date. In no case will the Company issue New Notes in an aggregate principal amount in excess of $60 million. The Company will also pay accrued and unpaid interest on the Convertible Notes validly tendered (and not validly withdrawn) and accepted by the Company pursuant to the Exchange Offers through and including the settlement date of the Exchange Offers. The New Notes will mature in March 2018, be secured by substantially all of the assets of the Company and accrue interest at 9.0% per annum. At the Company's option, in lieu of paying interest in cash, the Company may, through the second anniversary of the settlement date, pay interest in the form of freely tradable shares of the Company's Common Stock, with the number of shares being based on a 10-day volume weighted average price, discounted to yield the equivalent of a 12% interest rate for interest so paid in shares. The Exchange Offer will expire at 11:59 p.m., New York City time, on Sept. 6, 2012, unless extende or earlier terminated by the Company. GMXR filed a Tender Offer Statement on Schedule TO, together with the Offering Memorandum and related Letters of Transmittal that are exhibits to the Tender Offer Statement on Schedule TO, with the Securities and Exchange Commission, a copy of which is available for free at http://is.gd/VMM1ya About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. GMX Resources' balance sheet at June 30, 2012, showed $394.79 million in total assets, $462.46 million in total liabilities and a $67.67 million total deficit. * * * In November 2011, Moody's downgraded the rating of GMX Resources' corporate family rating (CFR) to 'Caa3' from 'Caa1', the Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The outlook is negative. The downgrade of GMX's PDR and note ratings reflect the company's announcement that greater than 50% of the holders of the notes due 2019 have accepted a proposed exchange offer, which Moody's views as a distressed exchange. The lowering of the CFR and SGL ratings reflects Moody's expectation of potential liquidity issues through the first quarter of 2013, as well as elevated leverage following the issuance of at least $100 million of proposed secured notes under the exchange offer and a proposed $55 million volumetric production payment (VPP), both of which the company expects to be executed before the end of 2011. Moody's treats VPPs as debt in Moody's leverage calculations. The negative outlook reflects the potential for the CFR and note ratings to be lowered if liquidity deteriorates further. As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources Inc. to 'SD' (selective default) from 'CC'. "We also lowered the company's issue-level ratings to 'D' from 'CC', reflecting its completion of an exchange offer for a portion of its $200 million 11.375% senior notes due 2019," S&P said. "The rating actions follow the company's announcement that it has completed the exchange offer for its 11.375% senior notes due 2019," said Standard & Poor's credit analyst Paul B. Harvey. "The exchange offer included $53 million principle of 11.375% senior notes that accepted an exchange of $1,000 principle for $750 principle of new 11% senior secured notes due 2017. We consider the completion of such an exchange, at a material discount to par, to be a distressed exchange and, as such, tantamount to a default under our criteria." HANMI FINANCIAL: Files Form 10-Q, Posts $55.7MM Income in Q2 ------------------------------------------------------------ Hanmi Financial Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $55.77 million on $29.96 million of total interest and dividend income for the three months ended June 30, 2012, compared with net income of $8 million on $32.61 million of total interest and dividend income for the same period a year ago. The Company reported net income of $63.11 million on $60.25 million of total interest and dividend income for the six months ended June 30, 2012, compared with net income of $18.43 million on $66.49 million of total interest and dividend income for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $2.84 billion in total assets, $2.49 billion in total liabilities and $348.45 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/yKM4Lv About Hanmi Financial Headquartered in Los Angeles, California, Hanmi Financial Corp. (Nasdaq: HAFC) -- http://www.hanmi.com/-- is the holding company for Hanmi Bank, a state chartered bank with headquarters located at 3660 Wilshire Boulevard, Penthouse Suite A, in Los Angeles. Hanmi Bank provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. Going Concern At Dec. 31, 2011, the Bank had a tangible stockholders' equity to total tangible assets ratio of 12.48 percent. Accordingly, the Company is in compliance with the Final Order. Pursuant to the Written Agreement, the Company is also required to increase, and is required to maintain, sufficient capital at the Company and at the Bank that is satisfactory to the Federal Reserve Bank. Should the Company's asset quality erode and require significant additional provision for credit losses, resulting in consistent net operating losses at the Bank, the Company's capital levels will decline and the Company will need to raise capital to satisfy its agreements with the regulators and any future regulatory orders or agreements the Company may be subject to. The Bank is subject to additional regulatory oversight as a result of a formal regulatory enforcement action issued by the Federal Reserve Bank and the California Department of Financial Institutions. On Nov. 2, 2009, the members of the Board of Directors of the Bank consented to the issuance of the Final Order from the California Department Financial Institutions. On the same date, the Company and the Bank entered into the Written Agreement with the Federal Reserve Bank. Under the terms of the Final Order and the Written Agreement, the Bank is required to implement certain corrective and remedial measures under strict time frames. H&P INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: H&P Industries, Inc. 700 West North Shore Drive Hartland, WI 53029 Bankruptcy Case No.: 12-31924 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Debtor's Counsel: Steven H. Silton, Esq. HINSHAW & CULBERTSON LLP 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Tel: (612) 333-3434 E-mail: ssilton@hinshawlaw.com akulbeik@hinshawlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wieb12-31924.pdf The petition was signed by Donna Petroff, chief financial officer. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Triad Group, Inc. 12-31923 08/09/12 HARBORSIDE 17: Wants Access to Lender's Cash Collateral ------------------------------------------------------- Harborside 17 Partners, LLC, asks the Bankruptcy Court for entry of an order authorizing the Debtor to use cash collateral of Harborside Mortgage Lender, LLC. Prior to the filing of the petition, the Debtor entered into several obligations with Harborside Mortgage Lender, LLC. The Debtor estimates that the amount allegedly owed to Lender on these obligations is $15,975,000. The Debtor require the use of funds for operating its business and for the payment of expenses such as repairs, maintenance, utilities, fuel, and other expenses. The only sources of significant income for the Debtor are through its continued operations, the rental or sale of its slips, and the cash proceeds generated from such activities. In order to continue to operate, the Debtor requires access to the revenues generated from these activities to provide payment of its expenses. In exchange for the use of any cash collateral of the Lender, the Debtor proposes that the Lender should be allowed, as adequate protection for the use of the cash collateral, post-petition replacement liens and security interest on the same assets to which their liens attached prepetition, to the same extent and with the same validity and priority as existed on the date the petition for relief under chapter 11 was filed by the Debtor. The Debtor will maintain one or more Debtor-in-Possession bank accounts into which it will deposit all cash, checks, and other cash items that it receives. The Debtor represents that a reorganization and continuation of its operations will generate the greatest source of funds for creditors, including secured creditors. The Debtor will require access to the cash collateral generated by its operations in order to allow it to remain in business. If the use of cash collateral is not approved, the estate will suffer immediate and irreparable harm, in that it will not be able to pay its expenses from funds generated by operations. If the Debtor is unable to maintain constant cash flow, it cannot possibly succeed in bankruptcy. Orlando, Florida-based Harborside 17 Partners, LLC, filed a bare- bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04512) in Wilson, North Carolina on June 18, 2012. The Debtor disclosed assets of $32.01 million and liabilities of $16.88 million. The Debtor owns a marina, clubhouse, and yacht club located on approximately 9.94 acres of land, located at 111-B Street, Bridgeton, North Carolina. According to the schedules, the property is worth $31.99 million and secures a $15.98 million debt. The Debtor also holds a 100% interest in Bridgeton Harbor Management, LLC. A copy of the schedules filed with the petition is available at http://bankrupt.com/misc/nceb12-04512.pdf Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. Amy Bissette has been assigned as case manager. The petition was signed by Daniel R. Robison, manager of JUSA Management, LLC, manager. HARBORSIDE 17: Files Schedules of Assets and Liabilities -------------------------------------------------------- Harborside 17 Partners, LLC, filed with the Bankruptcy Court for the Eastern District of North Carolina its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $31,990,021 B. Personal Property 423,491 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $15,976,920 E. Creditors Holding Unsecured Priority Claims $151,572 F. Creditors Holding Unsecured Non-priority Claims $746,765 ----------- ----------- TOTAL $32,013,512 $16,875,257 A full-text copy of the schedules of assets and liabilities is available free at: http://bankrupt.com/misc/HARBORSIDE_17_sal_amended.pdf Orlando, Florida-based Harborside 17 Partners, LLC, filed a bare- bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04512) in Wilson, North Carolina on June 18, 2012. The Debtor owns a marina, clubhouse, and yacht club located on approximately 9.94 acres of land, located at 111-B Street, Bridgeton, North Carolina. According to the schedules, the property is worth $31.99 million and secures a $15.98 million debt. The Debtor also holds a 100% interest in Bridgeton Harbor Management, LLC. A copy of the schedules filed with the petition is available at http://bankrupt.com/misc/nceb12-04512.pdf Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. Amy Bissette has been assigned as case manager. The petition was signed by Daniel R. Robison, manager of JUSA Management, LLC, manager. HUB INT'L: Incremental Term Loan No Impact on Moody's B3 CFR/PDR ---------------------------------------------------------------- Moody's Investors Service said that Hub International Limited (Hub - corporate family rating B3, probability of default rating B3) has completed the syndication of an incremental $75 million borrowing under the accordion feature of its existing senior secured term loan. The company plans to use net proceeds for general corporate purposes, including potential acquisitions. The new borrowing does not affect Hub's corporate family rating or its debt ratings, which include a B1 rating on senior secured credit facilities, a Caa1 rating on senior unsecured notes and a Caa2 rating on subordinated notes. The rating outlook for Hub is stable. Ratings Rationale Hub's ratings reflect its solid market position in North American insurance brokerage, good diversification across products and geographic areas, and favorable operating margins. These strengths are tempered by Hub's high financial leverage and limited fixed charge coverage since its leveraged buyout in 2007. Other challenges include the relatively soft, but improving, market for commercial property & casualty insurance and the slow economic recovery. Moody's expects that Hub will continue to pursue a combination of organic growth and acquisitions. The acquisition strategy carries integration and contingent risks (e.g., exposure to errors and omissions). Hub's ability to absorb the incremental borrowing at its current rating level reflects the firm's healthy operating margins and EBITDA growth over the past several years, along with its favorable track record in acquiring small and mid-sized insurance brokers. Giving effect to the $75 million incremental borrowing, Moody's estimates that Hub's adjusted pro forma debt-to-EBITDA ratio for the 12 months through June would have been in the range of 6.5x-7x, and the firm's adjusted EBITDA coverage of interest would have been in the range of 1.5x-2x. The pro forma leverage ratio is weak for Hub's rating category but tempered by a large pro forma cash position associated with the incremental borrowing and by borrowing capacity under its revolving credit facilities ($75 million available at June 30, 2012). Moody's expects that proceeds from such borrowings would be deployed over time for EBITDA-enhancing acquisitions. Hub's pro-forma financing arrangement as of June 30, 2012, would have included a $100 million US senior secured revolver maturing in June 2016 (rated B1, $40 million outstanding), an $87 million Canadian senior secured revolver maturing in June 2016 (unrated, fully drawn), a $15 million Canadian overdraft facility maturing in June 2016 (unrated, undrawn), $832 million of senior secured term loans due in June 2017 (rated B1, includes the incremental borrowing of $75 million), a $169 million senior secured term loan due in December 2017 (rated B1), $305 million of senior unsecured notes due in December 2014 (rated Caa1), $395 million of subordinated notes due in June 2015 (rated Caa2) and $2 million of other borrowings. Factors that could lead to an upgrade of Hub's ratings include: (i) adjusted (EBITDA -- capex) coverage of interest exceeding 2x, (ii) adjusted free-cash-flow-to-debt ratio exceeding 5%, and (iii) adjusted debt-to-EBITDA ratio below 5.5x. Factors that could lead to a downgrade include: (i) adjusted (EBITDA -- capex) coverage of interest below 1.2x, (ii) adjusted free cash flow-to-debt ratio ratio below 2%, or (iii) adjusted debt-to-EBITDA ratio above 8x. Giving effect to the incremental facility, Hub's ratings (and revised loss given default (LGD) assessments) are as follows: Corporate family rating B3; Probability of default rating B3; $100 million senior secured revolving credit facility due June 2016 rated B1 (to LGD2, 28% from LGD2, 27%); $832 million senior secured term loan due June 2017 rated B1 (to LGD2, 28% from LGD2, 27%); $169 million incremental senior secured term loan due December 2017 rated B1 (to LGD2, 28% from LGD2, 27%); $305 million senior unsecured notes due December 2014 rated Caa1 (to LGD5, 73% from LGD5, 72%); $395 million subordinated notes due June 2015 rated Caa2 (LGD6, 90%). The principal methodology used in this rating was Moody's Global Rating Methodology for Insurance Brokers and Service Companies published in February 2012. Based in Chicago, Illinois, Hub is a major North American insurance brokerage firm providing a variety of property and casualty, life and health, employee benefits and risk management products and services through offices located in the US, Canada and Brazil. The company generated total revenue of $245 million and net income of $11 million in the first quarter of 2012, up from $212 million and $5 million in the first quarter of 2011. Shareholders' equity was $567 million as of March 31, 2012. INOVA TECHNOLOGY: Amends 375 Million Common Shares Offering ----------------------------------------------------------- Inova Technology, Inc., filed with the U.S. Securities and Exchange Commission an amended Form S-1 relating to the offering of up to 375,000,000 shares of common stock of the Company in a self-underwritten direct public offering, without any participation by underwriters or broker-dealers. The shares will be sold through the efforts of the Company's officers and directors. The proposed offering price is $0.01 per share. There is no minimum number of shares to be sold under this offering. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "INVA.OB". A copy of the amended prospectus is available for free at: http://is.gd/whQJWO About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $1.24 million for the year ended April 30, 2012, compared with a net loss of $3.35 million during the prior year. The Company's balance sheet at April 30, 2012, showed $8.67 million in total assets, $19.81 million in total liabilities and a $11.14 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. INTERLEUKIN GENETICS: Mary Chowning Elected to Board of Directors ----------------------------------------------------------------- Interleukin Genetics, Inc., held its annual meeting on Aug. 7, 2012, at which the shareholders: -- elected Mary E. Chowning to serve as a Class III director for a three-year term expiring at the Company's 2015 annual meeting of shareholders; -- ratified the appointment of Grant Thornton LLP as the Company's independent public accounting firm for the fiscal year ending Dec. 31, 2012; -- approved the Company's 2012 Employee Stock Purchase; and -- approved the proposal to increase the number of the authorized shares of the Company's common stock from 100,000,000 shares to 150,000,000 shares. The Purchase Plan provides eligible employees with the opportunity to purchase up to 750,000 shares of the Company's common stock, at a discount, on a tax-favored basis through payroll deductions in compliance with Section 423 of the Internal Revenue Code of 1986, as amended. The Purchase Plan replaces the Company's outstanding Employee Stock Purchase Plan which was terminated as almost all shares thereunder had been issued as of March 31, 2012. On Aug. 9, 2012, the Company filed a certificate of amendment with the Delaware Secretary of State to increase the number of the Company's authorized shares of common stock from 100,000,000 shares to 150,000,000 shares. The certificate of amendment became effective upon filing. About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Following the Company's financial results for the year ended Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts, expressed substantial doubt about Interleukin Genetics' ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $5.02 million during the year ended Dec. 31, 2011, and, as of that date, the Company's current liabilities exceeded its current assets by $12.27 million and its total liabilities exceeded total assets by $11.4 million. The Company reported a net loss of $5.0 million for 2011, compared with a net loss of $6.0 million for 2010. The Company's balance sheet at March 31, 2012, showed $1.93 million in total assets, $14.72 million in total liabilities, and a $12.79 million total stockholders' deficit. INTERNATIONAL MEDIA: OK'd to Use NRJ II's Cash for 401(k) Loans --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized International Media Group, Inc., et al., to use cash collateral of NRJ TV II, LLC, in an amount not to exceed $40,000, in connection with loans to certain employees for repayment of advances made under KSCI, Inc., 401(k) employee plan. On Feb. 14, 2012, the Court entered a final order authorizing the Debtors to use cash collateral of prepetition first lien lender on a final basis. Pursuant to the terms of the cash collateral, the Debtors are authorized, inter alia to use the cash collateral of NRJ II. The Debtors offer a 401(k) plan to employees who satisfy the plan's qualification requirement. Prior to the Petition Date, two employees of KSCI, Inc. took advances from the Debtor's 401(k) plan in amount totaling approximately $40,000. In connection with the sale to the purchaser, the Debtors intend to terminate their current 401(k) plan which would result in a final distribution to each of the plan participants. The Debtors have been advised that upon the termination of the 401(k) plan and the resulting distribution, an employee who has an outstanding loan will be taxed and will also be required to 10% penalty tax because each is under 59.5 years old. To prevent this result, the Debtors, with the consent of their lenders NRJ II and NRJ TV LA OpCo, LLC; NRJ TV LA License, Co., LLC, NRJ TV Hawii OpCo, LLC and NRJ TV Hawii License Co., LLC -- the purchaser, to use the cash collateral to provide loans to both employees to avoid the imposition of penalties and taxes as a result of the sale. The employees will then be required to re-borrow from the purchaser's 401(k) to repay the loans in full. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the pre-petition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets post-petition. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. International Media disclosed $206,825,047 in assets and $233,218,073 in liabilities as of the Chapter 11 filing. The petition was signed by Dennis J. Davis, chief restructuring officer. No trustee, examiner or committee has been appointed in any of the Debtors' cases. IVANHOE ENERGY: Posts $4.7 Million Net Loss in Second Quarter ------------------------------------------------------------- Ivanhoe Energy Inc. filed its quarterly report on Form 10-Q, reporting a net loss of US4.70 million on US$11.30 million of revenue for the three months ended June 30, 2012, compared with a net loss of US$4.11 million on US$9.53 million of revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of US15.36 million on US$19.21 million of revenue, compared with a net loss of US$15.24 million on US$17.72 million of revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed US$457.48 million in total assets, US$156.54 million in total liabilities, and stockholders' equity of US$300.94 million. At June 30, 2012, Ivanhoe had an accumulated deficit of US$313.86 million and working capital deficit of US$18.68 million, excluding assets held for sale. In the six months ended June 30, 2012, cash used in operating activities was US$11.08 million and the Company expects to incur further losses in the development of its business. As reported in the TCR on April 16, 2012, Deloitte & Touche LLP, in Calgary, Canada, said that as of Dec. 31, 2011, the Company had an accumulated deficit of US$298.5 million, and working capital of US$30.7 million, excluding assets held for sale and derivative financial liabilities, and during the year ended Dec. 31, 2011, cash used in operating activities was US$26.2 million and the Company expects to incur further losses in the development of its business. "These conditions indicate the existence of a material uncertainty that casts substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/DhVofm Vancouver, Canada-based Ivanhoe Energy Inc. is an independent international heavy oil development and production company focused on pursuing long term growth in its reserves and production. Ivanhoe plans to utilize advanced technologies, such as its HTL(TM) technology, that are designed to improve recovery of heavy oil resources. In addition, the Company seeks to expand its reserve base and production through conventional exploration and production of oil and gas. JAMES RIVER: Incurs $25.7 Million Net Loss in Second Quarter ------------------------------------------------------------ James River Coal Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $25.76 million on $277.35 million of total revenue for the three months ended June 30, 2012, compared with net income of $789,000 on $352.03 million of total revenue for the same period during the prior year. For the six months ended June 30, 2012, the Company reported a net loss of $41.42 million on $579.34 million of total revenue, compared to a net loss of $6.81 million on $516.61 million of total revenue for the same period during the previous year. James River's balance sheet at June 30, 2012, showed $1.34 billion in total assets, $982.24 million in total liabilities and $360.09 million in total shareholders' equity. Peter T. Socha, chairman and chief executive officer commented, "We are both pleased and cautious this quarter. In the operations area, we are very pleased to report that we have received five significant permits for our surface mining operations. Our operations team has put a tremendous amount of time and effort into obtaining these permits. They showed flexibility and creativity in working with state and federal regulatory authorities in finding solutions that would meet the needs of all parties. Our operations team has also continued to demonstrate their ability to quickly adapt to changing market conditions. Both the met and the thermal coal markets are in a state of transition. The met market has softened recently due to global macroeconomic concerns and a slight oversupply situation. We are cautious about the met market in the short term, but continue to be very enthusiastic about the demand for these coals going forward. The construction of global infrastructure is continuing. The thermal market is just beginning to show signs of recovery. We believe that this is due to production cutbacks throughout the industry as well as improved demand for both coal and natural gas due to warmer than normal temperatures. Our sales and marketing team has done a great job of shipping coal under existing contracts and finding pockets of opportunity in difficult markets. We continue to be pleased with our balanced approach to operating assets, customer markets, and financial stability." A copy of the Form 10-Q is available for free at: http://is.gd/yKdQfx About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. The Company reported a net loss of $39.08 million in 2011, compared with net income of $78.16 million in 2010. * * * As reported by the TCR on June 28, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Richmond, Va.- based James River Coal Co. to 'CCC+' from 'B-'. "The downgrade reflects our assessment that market demand for coal has deteriorated such that we expect James River Coal's performance will likely be materially lower than we previously expected," said Standard & Poor's credit analyst Megan Johnston. In April 2012, Moody's Investors Service affirmed the company's B3 corporate family rating (CFR) and SGL-3 speculative grade liquidity rating, indicating an adequate liquidity position. The B3 CFR is principally constrained by a high cost position, high leverage, meaningful decrease in thermal coal prices, and likelihood of margin compression in thermal coal business as existing contracts roll off over the next year. The ratings also consider relatively high thermal coal inventories and generally stagnant coal demand at the power utilities. JBI INC: Had $4.0 Million Net Loss in Second Quarter ---------------------------------------------------- JBI, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of US$4.05 million on US$179,420 of sales for the three months ended June 30, 2012, compared with a net loss of US$6.50 million on US$86,015 of sales for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of US$6.88 million on US$405,882 of sales, compared with a net loss of US$9.26 million on US$86,015 of sales for the same period of 2011. The Company's balance sheet at June 30, 2012, showed US$14.38 million in total assets, US$2.41 million in total liabilities, and stockholders' equity of US$11.97 million. The Company has experienced negative cash flows from operations since inception and has an accumulated deficit of US$41.43 million at June 30, 2012. As reported in the TCR on March 26, 2012, MSCM LLP in Toronto, Canada, expressed substantial doubt about JBI, Inc.'s ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has experienced negative cash flows from operations since inception and has accumulated a significant deficit. A complete text of the Form 10-Q is available for free at: http://is.gd/xwvIgB Thorold, Ontario, Canada-based JBI, Inc. (OTC QB: JBII) -- http://www.plastic2oil.com/-- is a North American fuel company that transforms unsorted, unwashed waste plastic into ultra-clean, ultra-low sulphur fuel without the need for refinement. JC PENNEY: Moody's Lowers Corp. Family Rating to 'Ba3' ------------------------------------------------------ Moody's Investors Service downgraded the long term ratings of J.C. Penney Company, Inc. ("JCP"), including its Corporate Family Rating and Probability of Default Rating to Ba3 from Ba1. At the same time, Moody's affirmed the Speculative Grade Liquidity rating of SGL-1 which represents very good liquidity. The rating outlook is stable. The following ratings were downgraded For J.C. Penney Company, Inc.: Corporate Family Rating to Ba3 from Ba1 Probability of Default Rating to Ba3 from Ba1 For J.C. Penney Corporation, Inc.: Senior unsecured to Ba3 (LGD 4, 59%) from Ba1 (LGD 4, 63%) Senior unsecured shelf to (P) Ba3 from (P) Ba1 The following rating is affirmed: Speculative Grade Liquidity rating at SGL-1 The downgrade to Ba3 acknowledges Moody's belief that JCP will continue to face sizable double digit sales declines for the remainder of 2012 until it anniversaries the launch of its new pricing strategy. The downgrade also acknowledges Moody's belief that JCP will face gross margin pressure in the third quarter as it works through the clearance of the second quarter excess inventory. As a result, Moody's no longer believes that JCP's credit metrics will return to levels indicative of a Ba1 rating over the next twelve to eighteen months. On August 10th, JCP announced second quarter results which were significantly worse than Moody's expectations of a -15% decline. JCP's second quarter sales results indicated an acceleration in the pace of decline to a -21.7% comparable store sales decline compared to -18.9% in the first quarter. In addition, EBIT also declined significantly in the second quarter to $(183) million compared to $81 million last year. The Ba3 rating reflects JCP's continued very good liquidity from its $888 million in cash at July 28, 2012 and a $1.5 billion undrawn asset based revolving credit facility expiring April 2016. It also reflects that JCP's nearest debt maturity is not until 2015 when its $200 million 6.875% medium term notes mature. JCP's very good liquidity and lack of near dated debt maturities provide it with the flexibility to weather the sizable traffic declines as a result of the pricing strategy change. It also provides time to work through the disruption in the stores of the construction of the shops and to develop a catalyst to bring back customer traffic. Although Moody's believes that the new shops are compelling, Moody's does not expect the launch of these shops nor the changes to JCP's media strategy will do much to abate the sizable sales declines in the short term particularly as the stores face the disruption of additional shop construction into September. Moody's believes the sales declines primarily reflect the loss of a customer who was only in JCP as a result of its former heavily promotional strategy. In Moody's opinion, it is currently unclear as to how JCP will stimulate customer traffic going forward and how long it will take to bring the customer back. The Ba3 rating balances the near term weakness in JCP's profitability and credit metrics against a longer term view that ultimately its shops concept and revitalized merchandise will drive higher gross margins increasing profitability such that credit metrics will improve back to levels supportive of a Ba3 level. Moody's notes that JCP debt to EBITDA at July 28, 2012 was 5.6 times, a level more indicative of a B rating and EBITA to interest expense was 1.0 time, a level more indicative of a Caa rating. Moody's anticipates that credit metrics will erode further from these levels but that the erosion will be temporary. The stable outlook acknowledges Moody's belief that in 2013 JCP's gross margins should begin to increase driving an improvement in credit metrics back to levels indicative of a Ba3 level. The stable outlook also reflects JCP's financial flexibility to weather the disruption of the strategic changes given its very good liquidity and lack of a near dated debt maturities. Moody's will continue to monitor JCP's performance closely. Moody's will focus on the performance of JCP's recently launched Arizona, Levi's, and Buffalo shops, particularly how the shop launches impact store traffic and overall sales. Moody's will also focus on the execution of the launch of the Liz Claiborne, JCP, and Izod shops later this fall along with their performance and impact of store traffic and sales. Finally Moody's will continue to assess the likely trajectory of JCP's credit metrics over the next twelve to eighteen months including the timing of when they would likely recover to levels indicative of a Ba3 rating. Downward rating pressure would develop should the pace of sales decline or gross margin erosion accelerate meaningfully in the third and fourth quarters of 2012. Ratings could be downgraded should the sales declines not abate once JCP anniversaries the launch of its new pricing strategy in the first quarter of 2013 or should gross margins not begin to recover in the first quarter of 2013. Quantitatively ratings could be downgraded should it become likely that debt to EBITDA will remain sustained above 5.5 times over the longer term or EBITA to interest expense will remain sustained below 1.75 times. Given the recent downgrade, it is unlikely that ratings will be upgraded over the near term. However, ratings could be upgraded should signs emerge that strategic changes implemented by JCP are gaining traction as evidenced by a meaningful improvement in gross margins to historic levels while maintaining stable to improving sales trends. Quantitatively, an upgrade would require operating performance to improve such that debt to EBITDA is likely to remain sustained below 4.5 times or EBITA to interest expense likely to remain sustained above 2.25 times. J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. It also operates a website, www.jcp.com. Revenues are about $14 billion. The principal methodology used in rating J.C. Penney was the was the Global Retail Industry Methodology published in June 2011. JONES SODA: Had $459,000 Net Loss in Second Quarter --------------------------------------------------- Jones Soda Co. filed its quarterly report on Form 10-Q, reporting a net loss of $459,000 on $5.26 million of revenue for the three months ended June 30, 2012, compared with a net loss of $1.82 million on $4.91 million of revenue for the same period last year. The decrease in net loss was primarily due to an increase in gross profit and a decrease in operating expenses due to the changes made to align the Company's cost structure with the Company's available capital. For the six months ended June 30, 2012, the Company had a net loss of $2.13 million on $9.12 million of revenue, compared with a net loss of $3.49 million on $9.00 million of revenue for the same period in 2011. For the six months ended June 30, 2012, the decrease in net loss reflects an increase in gross profit and a decrease in operating expenses due to the changes made to align the Company's cost structure with the Company's available capital. The 2011 period included a credit of $114,000 recorded in other income and tax benefit primarily relating to interest and tax relating to the Company's 2010 Canadian tax refund. The Company's balance sheet at June 30, 2012, showed $9.27 million in total assets, $4.05 million in total liabilities, and stockholders' equity of $5.22 million. According to the regulatory filing, the uncertainties relating to the Company's ability to successfully execute its 2012 operating plan and to implement operating expense reductions that do not jeopardize the Company's operating performance, and the difficult financing environment with the Company's bid price deficiency (for continued listing of the Company's common stock on the Nasdaq Capital Market), continue to raise substantial doubt about its ability to continue as a going concern. As reported in the TCR on April 5, 2012, Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about Jones Soda's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has experienced recurring losses from operations and negative cash flows from operating activities. A copy of the Form 10-Q is available for free at: http://is.gd/pQ4DEt Seattle, Washington-based Jones Soda Co. develops, produces, markets and distributes premium beverages. K-V PHARMACEUTICAL: Receives Interim Approval to Use Cash --------------------------------------------------------- K-V Pharmaceutical Co. received interim approval from the bankruptcy court in New York to use cash representing collateral for $225 million in senior notes. "Together with the Court's prior approval of our First Day motions, this authorization of the use of cash collateral is another important step forward, further ensuring that K-V is able to continue operations and focus on the restructuring process," said Greg Divis, President and CEO of K-V Pharmaceutical. "Meanwhile, reaching agreement regarding this matter with our Senior Noteholders sets the stage for continued cooperation toward the development of a plan of restructuring under which K-V will be able to emerge from chapter 11 as a stable and competitive company," Mr. Divis concluded. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that papers filed in bankruptcy court show that cash will be depleted $17.5 million by the first week of Nov. The company and an ad hoc committee of noteholders negotiated terms for the use of so-called cash collateral, including adherence to a three- month budget. At the outset of bankruptcy, K-V had $40.1 million cash, including $8.7 million in restricted cash, according to court papers. The Bloomberg report relates the budget projects net receipts of $10.3 million through Nov. 4. Operating disbursements of $24.5 million and a predicted $3.2 million in bankruptcy costs will result in a $17.5 million negative cash flow, according to the budget. The cash balance on Nov. 4 is projected to be $22.6 million. The cash collateral agreement requires K-V to pay the professional fees and expenses of the ad hoc note holder group. The report discloses that although the noteholders will have liens on all assets in return for the use of cash, they aren't being given security interests in lawsuits. Unless modified in the process of obtaining final approval of cash use, creditors will have two months for lodging objections before the noteholders' liens will be deemed valid. The report notes the first-lien notes last traded on Aug. 8 for 31 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. There is $200 million owing on 2.5% contingent convertible subordinated notes due 2033. The notes traded on Aug. 9 for 3.563 cents on the dollar, Trade said. K-V owes $30 million on a mortgage loan. The Office of the United States Trustee will hold a meeting to form an Official Committee of Unsecured Creditors on Aug. 13, 2013. Final hearings on the First Day motions, certain other motions as well as a final hearing on the use of cash collateral are scheduled for Aug. 23, 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. KINDER MORGAN: S&P Keeps 'BB' Issuer Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB' ratings to Kinder Morgan Energy Partners L.P.'s (KMP) issuance of $1.25 billion of senior unsecured notes and its $2 billion senior unsecured six-month revolving credit facility. "In addition, we affirmed our 'BBB' corporate credit and 'A-2' short-term and commercial paper ratings on the company. The company upsized its commercial paper program to $4.2 billion from $2.2 billion. The partnership will use the proceeds from the notes to pay a portion of the $6.22 billion purchase price, which includes $2.4 billion of assumed debt, for the pending acquisition of 100% of Tennessee Gas Pipeline Co. (TGP; BB/Watch Pos/--) and a 50% interest in El Paso Natural Gas Co. (EPNG; BB/Stable/--). The outlook is stable," S&P said. "Our ratings on KMP reflects the company's 'strong' business risk profile, which partly offsets its 'significant' financial risk profile under our criteria," said Standard & Poor's credit analyst William Ferara. "The rating also is based on the link between KMP and its lower-rated parent, Kinder Morgan Inc. (KMI; BB/Stable/-- ). On May 25, 2012, KMI closed on its purchase of El Paso Corp. for $38 billion, which creates the third-largest energy company in North America. KMP owns and operates natural gas pipelines, refined products pipelines, liquids and bulk terminal facilities, carbon dioxide pipelines, and crude oil production. As of June 30, 2012, KMP had about $13 billion of total reported debt," S&P said. "The stable rating outlook reflects our expectations for a slight improvement in the near-term financial profile, a well-managed capital spending program, and stand-alone debt to EBITDA in the low-4x area. We could lower the ratings if debt to EBITDA surpassed 4.5x. We are unlikely to raise ratings unless the partnership embraces a more conservative financial policy and shows less willingness to use debt to fund growth-related capital spending. We also consider KMI's systemwide leverage in our ratings on KMP. If we downgraded KMI, our ratings on KMP would likely be affected due to the linkages between the two. We would not anticipate the ratings differential to exceed three notches. However, we would not likely raise our ratings on KMP if we raised our ratings on KMI," S&P said. KNIGHT CAPITAL: Pre-Tax Earnings Down 81.8% in Q2 2012 vs Q2 2011 ----------------------------------------------------------------- Knight Capital Group, Inc., filed its quarterly report on Form 10- Q, reporting net income of $3.29 million on $289.25 million of revenues for the three months ended June 30, 2012, compared with net income of $17.57 million on $325.98 million of revenues for the corresponding period a year earlier. For the six months ended June 30, 2012, the Company reported net income of $36.40 million on $638,279 of revenues, compared with net income of $48,064 on $665,758 of revenues for the same period of 2011. Consolidated revenues for the three months ended June 30, 2012, decreased $36.7 million, or 11.3%, from the same period a year ago, while consolidated expenses decreased $12.6 million, or 4.3%. Consolidated pre-tax earnings for the three months ended June 30, 2012, decreased $24.1 million, or 81.8%, from the same period a year ago. Consolidated revenues for the six months ended June 30, 2012, decreased $27.5 million, or 4.1%, from the same period a year ago, while consolidated expenses decreased $7.3 million, or 1.2%. Consolidated pre-tax earnings for the six months ended June 30, 2012 decreased $20.2 million, or 25.4%, from the same period a year ago. Consolidated revenues for the three and six months ended June 30, 2012, include an aggregate $35.4 million trading loss related to the Facebook IPO, which primarily impacted the Company's Market Making and Institutional Sales and Trading segments. Balance Sheet The Company's balance sheet at June 30, 2012, showed $9.19 million in total assets, $7.70 million in total liabilities, and stockholders' equity of $1.49 million. Subsequent Event/Going Concern The Company experienced a technology issue at the open of trading at the NYSE on Aug. 1, 2012. This issue was related to the installation that day of trading software and resulted in the Company sending numerous erroneous orders in NYSE-listed and NYSE Arca securities into the market. Although this software was subsequently removed from the Company's systems and clients were not negatively affected by the erroneous orders, it resulted in the Company realizing a pre-tax loss of approximately $440.0 million. This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence. As a result, there was substantial doubt about the Company's ability to continue as a going concern. Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. In light of this event, on Aug. 6, 2012 the Company, after evaluating and pursuing various strategic alternatives, sold 400,000 shares of convertible preferred stock in private placements to investors in exchange for aggregate cash consideration of $400.0 million. The preferred stock consisted of 79,600 shares of Series A-1 preferred stock and 320,400 shares of Series A-2 preferred stock. The Series A-1 preferred stock and Series A-2 preferred stock are convertible into approximately 266.7 million shares of Class A common stock, or approximately 73% of the total number of shares of Class A common stock outstanding as of Aug. 3, 2012, assuming the conversion in full of the preferred stock into Class A common stock. Although the Company's capital base was severely impacted as a result of the event, the Company's regulated broker-dealer subsidiaries remained in full compliance with their net capital requirements at all times. In addition, the Company remains in good standing with The Depository Trust & Clearing Corporation's depository and clearing subsidiaries as well as the OCC. As of the close of business on Aug. 6, 2012, Knight Capital Americas LLC, the Company's domestic broker-dealer subsidiary, had excess net capital greater than $300.0 million. A copy of the Form 10-Q is available for free at: http://is.gd/nGn0AB 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. KNIGHT CAPITAL: Files Form 10-Q, Reports $3.3MM Net Income in Q2 ---------------------------------------------------------------- Knight Capital Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $3.29 million on $289.25 million of total revenues for the three months ended June 30, 2012, compared with net income of $17.57 million on $325.98 million of total revenues for the same period during the prior year. The Company reported net income of $36.39 million on $638.27 million of total revenues for the six months ended June 30, 2012, compared with net income of $48.06 million on $665.75 million of total revenues for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/nGn0AB 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 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. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. KOPPERS INC: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Pittsburgh-based Koppers Inc. and its parent company, Koppers Holdings Inc., to stable from positive. "We also affirmed all the existing ratings on the company, including the 'BB-' corporate credit rating," S&P said. "The outlook revision reflects our expectation that Koppers is unlikely to maintain a financial profile at levels that would support a higher rating, given its growth initiatives over the next several years," said credit analyst Daniel Krauss. "Given the earnings goal and current balance sheet leverage, we believe the company likely will pursue growth through debt-funded acquisitions as a way to complement organic growth opportunities." "The outlook is stable. Koppers geographic diversity, the expectation for increased global aluminum demand, and the stability exhibited by its railroad business, should more than offset continued macroeconomic uncertainty, particularly in Europe. Our base case assumes that earnings in the second half of 2012 will be roughly flat with 2011 levels, and should show moderate improvement in subsequent years through organic and acquisition growth. We expect that the company will preserve its significant financial risk profile and strong liquidity while pursuing growth objectives," S&P said. "We would consider an upgrade if Koppers maintained financial policies consistent with a stronger financial profile as its pursues its growth objectives. Based on our scenario forecasts, we could raise the ratings modestly if volumes remain at current levels, EBITDA margins increase by 200 basis points or more from current levels, and the company pursues no more than about $150 million in debt funded acquisitions. At that level, we would expect FFO to total adjusted debt to remain in the 25% to 30% range," S&P said. "In our downside scenario, we could lower the ratings if end markets weaken unexpectedly or rising raw material costs caused EBITDA margins decrease by 300 basis points or more from current levels. If this were to happen, coupled with a 15% reduction in revenues, we would expect FFO to total adjusted debt to fall to about 15%. We could also lower the ratings if the company unexpectedly increased debt to repurchase shares or to fund a larger acquisition," S&P said. LA JOLLA: Incurs $7.7 Million Net Loss in Second Quarter -------------------------------------------------------- La Jolla Pharmaceutical Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.69 million for the three months ended June 30, 2012, compared with net income of $4.71 million for the same period during the previous year. The Company reported a net loss of $2.41 million for the six months ended June 30, 2012, compared with a net loss of $1.79 million for the same period a year ago. La Jolla reported a net loss of $11.54 million in 2011, compared with a net loss of $3.76 million in 2010. There were no revenues for the three and six months ended June 30, 2012 and 2011. The Company's balance sheet at June 30, 2012, showed $3.90 million in total assets, $14.03 million in total liabilities, $5.56 million in redeemable convertible preferred stock, and a $15.69 million total stockholders' deficit. "Our history of recurring losses from operations, our cumulative net loss as of June 30, 2012, and the absence of any current revenue sources raise substantial doubt about our ability to continue as a going concern," the Company said in its quarterly report for the period ended June 30, 2012. After auditing the 2011 results, BDO USA, LLP, in San Diego, California, 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, has an accumulated deficit of $439.6 million and a stockholders' deficit of $15.6 million as of Dec. 31, 2011, and has no current source of revenues. A copy of the Form 10-Q is available for free at: http://is.gd/vgkB4O About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. LANDMARK MEDICAL: RI Seeking Court Order for $5 Million Payment --------------------------------------------------------------- Boston.com reports that Rhode Island officials are asking a state judge to order Landmark Medical Center in Woonsocket, Rhode Island, to pay its annual $5.6 million licensing fee that's nearly a month overdue. The Providence Journal said that the hospital was supposed to pay the fee by July 16. State Tax Administrator David Sullivan says Landmark now also owes the state nearly $560,000 in interest and penalties, according to Boston.com reports. The report relates that the hospital has been in receivership since 2008, but has paid its licensing fee on time in previous years. A court hearing on the matter is set for Aug. 22. Landmark spokesman Bill Fischer said there have been broader issues with federal reimbursement for uncompensated care and the licensing fee, when asked why the fee hasn't been paid, Boston.com reports notes. LAS VEGAS RAILWAY: Posts $90,500 Net Loss in June 30 Quarter ------------------------------------------------------------ Las Vegas Railway Express, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $90,511 for the three months ended June 30, 2012, compared with a net loss of $412,161 for the three months ended June 30, 2011. For the quarter ended, June 30, 2012, there were no revenues associated with the railcar operations. The Company's balance sheet at June 30, 2012, showed $1.65 million in total assets, $1.26 million in total liabilities, and stockholders' equity of $394,005. The Company has net loss from continuing operations of $574,931 for the three months ended June 30, 2012, and an accumulative deficit of $11.71 million through June 30, 2012. The Company said in the regulatory filing: "Although a substantial portion of the Company's cumulative net loss is attributable to discontinued operations, management believes that it will need additional equity or debt financing to implement the business plan. These matters raise substantial doubt about the Company's ability to continue as a going concern." Hamilton, PC's report on Las Vegas Railway's financial statements for the fiscal year ended March 31, 2012, contained an explanatory paragraph stating that the Company's recurring losses from operations raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/QJ0fyC Las Vegas, Nev.-based Las Vegas Railway Express, Inc., is a Delaware corporation whose business plan is to establish a rail passenger train service between Las Vegas and Los Angeles using existing railroad lines currently utilized by two Class I railroads, Burlington Northern and Union Pacific. The development concept is to provide a Las Vegas style experience on the train (which the Company plans to call the "X" Train), which would traverse the planned route in approximately 5 hours. LEHMAN BROTHERS: WL Ross to Take Majority Stake in Navigator ------------------------------------------------------------ WL Ross & Co. disclosed that it had agreed to purchase 4.4 million common shares of Navigator Holdings Ltd. owned by Lehman Brothers Inc. (LBI) for $110 million. James W. Giddens, Trustee for the Securities Investor Protection Act liquidation of LBI, also disclosed submitted a motion to the United States Bankruptcy Court of the Southern District of New York for approval of the Purchase Agreement, subject to conditions. WL Ross had previously acquired 3.5 million Navigator shares. If approved by the Court, the new agreement will bring its total stake in Navigator to over 50%. As part of the transaction, WL Ross agreed with Navigator that a majority of the Navigator Board of Directors will continue to be independent directors, and certain additional transactions relating to Navigator that may be proposed by WL Ross will require their approval. "We see substantial opportunities in the global transportation industry, particularly rail and marine transport," said Wilbur Ross, Jr., Chairman of WL Ross & Co. "Navigator is a leader in the handy-sized shipping segment, which has excellent fundamentals and a positive long-term outlook as global shifts in demand for liquified petroleum gas and other petrochemicals increase opportunities for efficient, flexible marine transportation providers," Ross said. About WL Ross & Co. Founded by legendary investor Wilbur Ross, Jr., WL Ross & Co http://--www.wlross.com--. is an investment management company which has sponsored private equity funds, co-investment vehicles and hedge funds that have invested in the railcar, marine transportation, steel, textile, coal, automotive, financial and other industries in the U.S., Ireland, U.K., France, Germany, China, Japan, Korea, Vietnam, India, Brazil and Bermuda. WL Ross currently has approximately $10 billion under management for a "Who's Who" of institutional investors who share a long-term investment horizon. About Navigator Holdings Ltd.: Navigator Holdings Ltd. provides international seaborne transportation services to producers, traders and consumers of liquified petroleum gas ("LPG"), petrochemical gases and ammonia. The company is the leading participant in the handy-sized LPG sector, operating a versatile fleet of 14 high quality, semi- refrigerated gas carriers, representing approximately 16% of the fleet capacity in its chosen sector. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEVEL 3: Borrowings Under Existing Credit Pact Hiked By $1.4BB -------------------------------------------------------------- Level 3 Financing, Inc., a wholly owned subsidiary of Level 3 Communications, Inc., entered into a fourth amendment agreement to the Existing Credit Agreement to increase by $1.415 billion the aggregate borrowings under the Existing Credit Agreement through the incurrence of two additional Tranches, a $600 million Tranche B 2016 Term Loan and an $815 million Tranche B 2019 Term Loan. The Tranche B 2016 Term Loans mature on Feb. 1, 2016, and the Tranche B 2019 Term Loans mature on Aug. 1, 2019. The Additional Tranches have an interest rate of, in the case of any ABR Borrowing equal (a) to the greater of (i) the Prime Rate in effect on that day, (ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (iii) the sum of (A) the higher of (x) the LIBO Rate for a one month interest period on such day and (y) 1.50%, plus (B) 1.00%, plus (b) 2.25% per annum in respect of the Tranche B 2016 Term Loans, or 2.75% per annum in respect of the Tranche B 2019 Term Loans. In the case of any Eurodollar Borrowing, the Additional Tranches bear interest at the LIBO Rate for the interest period for such borrowing plus (a) 3.25% per annum in respect of the Tranche B 2016 Term Loans, or (b) 3.75% per annum in respect of the Tranche B 2019 Term Loans. The Company, as guarantor, Level 3 Financing, as borrower, Merrill Lynch Capital Corporation, as Administrative Agent and Collateral Agent, and certain other agents and certain lenders are party to that certain Credit Agreement, dated as of March 13, 2007, as amended and restated by that certain Amendment Agreement, dated as of April 16, 2009, as amended by that certain First Amendment, dated as of May 15, 2009, as amended and restated by that certain Second Amendment Agreement, dated as of Oct. 4, 2011, as amended and restated by that certain Third Amendment Agreement, dated as of Nov. 10, 2011, pursuant to which the lenders have extended to Level 3 Financing Tranche B Term Loans in the aggregate principal amount of $280 million, $650 million of Tranche B II Term Loans, $550 million of Tranche B III Term Loans and a $1.4 billion Tranche A Term Loan. A portion of the net proceeds of the Additional Tranches were used, along with cash on hand, to pre-pay the Tranche A Term Loan, and the remainder will be used to repay an existing vendor financing obligation. As a result of the incurrence of the Additional Tranches and the pre-payment of the Tranche A Term Loan, the total aggregate principal amount of the loans under the Restated Credit Agreement is $2.615 billion. In addition to the Fourth Amendment Agreement, in connection with incurrence of the Additional Tranches, Level 3 Financing and Level 3 LLC entered into an Amended and Restated Loan Proceeds Note with initial principal amount of $4.015 billion. In connection with the pre-payment of the Tranche A Term Loan, Level 3 Financing and Level 3 LLC entered into a subsequent Amended and Restated Loan Proceeds Note with initial principal amount of $2.615 billion. A copy of the Form 8-K is available for free at: http://is.gd/2ytyaH 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. LSP ENERGY: Court OKs PA Consulting as Energy Expert Advisor ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware, according to LSP Energy, Inc., et al.'s case docket, granted on on July 24, 2012, the Debtors' amended motion to employ PA Consulting Group, Inc., as energy expert advisor nunc pro tunc to March 1, 2012. About LSP Energy LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville Holding, LLC, and LSP Batesville Funding Corporation filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-10460) on Feb. 10, 2012. LSP owns and operates an electric generation facility located in Batesville, Mississippi. The Facility consists of three gas-fired combined cycle electric generators with a total generating capacity of roughly 837 megawatts and is electrically interconnected into the Entergy and Tennessee Valley Authority transmission systems. LSP's principal assets are the Facility and the 58-acre parcel of real property on which it is located, as well as its rights under a tolling agreements. LSP filed bankruptcy to complete an orderly sale of its assets or the ownership interests of LSP Holding in LSP, LSP Energy and LSP Funding for the benefit of all stakeholders. The remaining three Debtors filed bankruptcy due to their relationship as affiliates of LSP and their ultimate obligations on a significant portion of LSP's secured bond debt. The Debtors also suffered losses due to a mechanical failure of a combustion turbine at their facility and resultant business interruption. LSP Energy is the general partner of LSP. LSP Holding is the limited partner of LSP and the 100% equity holder of LSP Energy and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond debt, and each of LSP Energy and LSP Holding has pledged their equity interests in LSP and LSP Funding as collateral for the bond debt. No statutorily authorized creditors' committee has yet been appointed in the Debtors' cases by the United States Trustee. Judge Mary F. Walrath oversees the case. Lawyers at Whiteford Taylor & Preston LLC serve as the Debtors' counsel. MERRIMACK PHARMACEUTICALS: Incurs $20.1 Million Net Loss in Q2 -------------------------------------------------------------- Merrimack Pharmaceuticals, Inc., reported a net loss of $20.13 million on $12.06 million of collaboration revenues for the three months ended June 30, 2012, compared with a net loss of $29.19 million on $6.59 million of collaboration revenues for the same period during the prior year. "We are pleased with Merrimack's accomplishments in our first four months as a public company and we are happy with the opportunities that it has opened up for us," said Robert Mulroy, President and CEO of Merrimack. "With the novel candidates and diagnostics we have in development and the number of projects we expect to enter the clinic over the next few years, this is a very exciting period of growth for Merrimack on both the business and scientific fronts." Merrimack expects its existing cash and cash equivalents and investments on hand as of June 30, 2012, of $106.7 million to be sufficient to fund operations into the second half of 2013. A copy of the press release is available for free at: http://is.gd/WEm1W3 About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. The Company's balance sheet at March 31, 2012, showed $64.45 million in total assets, $108.05 million in total liabilities, $268.23 million in convertible preferred stock, $456,000 in non-controlling interest, and a shareholders' deficit of $312.29 million. As reported in the TCR on April 9, 2012, PricewaterhouseCoopers LLP, in Boston, Massachusetts, expressed substantial doubt about Merrimack Pharmaceuticals' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has insufficient capital resources available as of Dec. 31, 2011, to fund planned operations through 2012. MF GLOBAL: Judge Approves Deal Between CME Group & Trustee ---------------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that a judge on Aug. 10, 2012 approved a deal between CME Group Inc. and the trustee unwinding the brokerage of MF Global Holdings Ltd. that calls for former MF Global brokerage customers to get $130 million from the futures exchange operator. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MGM RESORTS: Files Form 10-Q, Incurs $145.4MM Net Loss in Q2 ------------------------------------------------------------ MGM Resorts International filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $145.45 million on $2.32 billion of revenue for the three months ended June 30, 2012, compared with net income attributable to the Company of $3.44 billion on $1.80 billion of revenue for the same period during the prior year. The Company reported a net loss attributable to the Company of $362.70 million on $4.61 billion of revenue for the six months ended June 30, 2012, compared with net income attributable to the Company of $3.35 billion on $3.31 billion of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $27.26 billion in total assets, $17.85 billion in total liabilities and $9.41 billion in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/ku6Ihl About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.23 billion in 2011 and a net loss of $1.43 billion in 2010. Bankruptcy Warning In the Form 10-K for the year ended Dec. 31, 2011, the Company said that any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. MICHIGAN FINANCE: Moody's Retains Review on 'Caa1' Debt Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the A3 rating and stable outlook to the Michigan Finance Authority's (MFA) $123 million Local Government Loan Program Revenue Bonds, Series 2012C (City of Detroit Limited Tax General Obligation Local Project Bonds -- Third Lien). This sale was originally scheduled for May 31, 2012, but was postponed. The sale has been rescheduled and is expected to price August 15, 2012. Summary Ratings Rationale The Series 2012C bonds are limited obligations of the MFA and are secured and payable from loan repayments from the city of Detroit (GO rated B3/ratings under review for possible downgrade). The loan repayments for the Series 2012C bonds are secured by a third lien on the Distributable State Aid (DSA) the city expects to receive from the State of Michigan (GO rated Aa2/stable outlook). The pledge of the DSA on the 2012C bonds is subordinate to that of the outstanding Series 2010 and 2010E bonds. The city's pledge of DSA for repayment on the loans will be secured under the Trust Indenture while all series of debt are outstanding. The current bonds are also secured by the city's general obligation limited tax pledge. The underlying rating on the city's outstanding general obligation limited tax debt is Caa1 and the ratings remain under review for possible downgrade. Additionally, the city's General Obligation and Certificates of Participation ratings of B3 also remain on review for possible downgrade. The current issuance is rated based on the broad security of pledged Distributable State Aid, which is currently derived from statewide sales tax revenues, the legal structure for the issuance and protections provided to bondholders, and debt service coverage ratios. Proceeds of the Series 2012C bonds will refinance an interim financing completed earlier in 2012. The interim financing was also through the MFA, and consisted of $80.0 million of short term borrowing to restructure $37 million in Limited Tax General Obligation debt service payments coming due in April 2012 and May 2012 and to fund $43 million in self-insurance needs for fiscal 2012. Additionally, the bonds will fund approximately $43 million deposit to the city's Risk Management Fund for self-insurance needs in fiscal 2013. The A3 rating on the Series 2012C bonds reflects the third lien pledge of DSA payments of the city; a strong legal structure that requires the direct flow of pledged revenues from the state to the bond trustee and strong additional bonds test (ABT); with weaker debt service coverage that is more exposed to potential fluctuations in state aid, including further reductions to constitutional aid based on population declines and annual appropriation risks associated with statutory aid. The stable outlook reflects Moody's expectation that the pledged revenue stream and legal structure will provide satisfactory bondholder security even in times of moderate economic decline at the state level over the life of the bonds. Strengths - Strong legal structure that provides satisfactory bondholder protection, insulating bondholders from the city's fiscal stress - Stable revenue source that is collected across the state of Michigan Challenges - Possible reduction of statutory DSA payments if the city fails to comply with Economic Vitality Incentive Program, or the state chooses to reduce budgeted distributions to local governments - Further reduction of constitutional DSA payments should the city's population base continue to decline Outlook The rating outlook on the Local Government Loan Program Bonds and Distributable State Aid General Obligation Bonds is stable which reflects Moody's expectation that the pledged revenue stream and legal structure will provide satisfactory bondholder security even in times of moderate economic decline at the state level. The pledged DSA payments provide satisfactory debt service coverage and legal structure currently insulates the revenue stream from the city's fiscal stress. What could change the rating - UP - Significant improvement in coverage levels and more rapid repayment schedule - Stabilization of the city's population base - Lack of annual appropriation and EVIP compliance approval for statutory DSA component What could change the rating - DOWN - Declines in pledged revenues, leading to decreases in debt service coverage - Additional leveraging of pledged revenues - Need to rely on the city of Detroit's general obligation limited tax pledge to satisfy debt service requirements Principal Methodologies Used The methodologies used in this rating were US Public Finance Special Tax Methodology published in March 2012 and State Aid Intercept Programs and Financings published in February 2008. MILESTONE SCIENTIFIC: Incurs $164,000 Net Loss in Second Quarter ---------------------------------------------------------------- Milestone Scientific Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss applicable to common stockholders of $164,541 on $2.32 million of net product sales for the three months ended June 30, 2012, compared with a net loss applicable to common stockholders of $298,066 on $2.46 million of net product sales for the same period a year ago. The Company reported a net loss applicable to common stockholders of $519,722 on $4.24 million of net product sales for the six months ended June 30, 2012, compared with a net loss applicable to common stockholders of $439,711 on $4.89 million of net product sales for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $6.26 million in total assets, $4.37 million in total liabilities and $1.89 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/2xSndw About Milestone Scientific Piscataway, N.J.-based Milestone Scientific Inc. (OTC BB: MLSS) -- http://www.milestonescientific.com/-- is engaged in pioneering proprietary, highly innovative technological solutions for the medical and dental markets. Central to the Company's IP platform and product development strategy is its patented CompuFlo(R) technology for the improved and painless delivery of local anesthetic. In its report on the Company's 2011 financial results, Holtz Rubenstein Reminick LLP, in New York, 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 since inception. The Company reported a net loss of $1.48 million in 2011, compared with a net loss of $614,508 in 2010. MORGAN INDUSTRIES: Boatmaker Sells Most Assets for $2.5 Million --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Morgan Industries Inc. was authorized in July to sell the Hunter sailboat business and most of the other assets to three buyers for a total of about $2.5 million. According to the report the sale was the result of a July 9 auction. The purchased assets include those once used to manufacture power boats under the names Silverton, Mainship, and Luhrs. Morgan has a buyer to pay $850,000 for 30 undeveloped acres on the Wicomico River in Salisbury, Maryland, unless a better offer turns up, the report relates. About Morgan Industries Morgan Industries Corporation, along with affiliates, sought Chapter 11 protection (Bankr. D. N.J. Lead Case No. 12-21156) in Trenton, New Jersey, on April 30, 2012. Affiliates that filed separate bankruptcy petitions are Hunter Composite Technologies Corporation; Hunter Marine Corporation; Luhrs Corporation; Mainship Corporation; Ovation Yachts Corporation; Salisbury 10 Acres, L.L.C.; Salisbury 20 Acres, L.L.C.; and Silverton Marine Corporation. The Debtors, through their trade name the Luhrs Marine Group, produce and sell recreational powerboats and sailboats under the iconic brand names of Silverton, Ovation, Luhrs, Mainship, and Hunter Marine. In 2010, Silverton, Mainship and Luhrs, collectively, held roughly 5.3% of the U.S. market for fiberglass, in-board engine powerboats greater than 27 feet in length. Additionally, Hunter Marine was the largest manufacturer of sailboats in the U.S., accounting for an estimated 32% of new sailboat registrations in 2010, making it the sixth consecutive year Hunter Marine represented roughly 30% of all new sailboat registrations in the U.S. The Debtors have a network of 90 dealers in the U.S. and 80 dealers in 40 other countries. Judge Michael B. Kaplan oversees the case. Robert Hirsh, Esq., and George Angelich, Esq., at Arent Fox LLP serve as bankruptcy general counsel to the Debtors; Capstone Advisory Group, LLC, acts as financial advisors; Katz, Kane & Co. as investment bankers; and Donlin Recano & Company, Inc. as claims agent. The Debtors disclosed $53 million in total assets and $80 million in total liabilities as of the Chapter 11 filing. Stuart M. Brown, Esq., at DLA Piper LLP (US), represents primary lender Bank of America N.A. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. MOUNTAIN PROVINCE: Incurs C$4 Million Net Loss in Second Quarter ---------------------------------------------------------------- Mountain Province Diamonds Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 6-K disclosing a net loss of C$4.04 million for the three months ended June 30, 2012, compared with a net loss of C$2.38 million for the same period during the prior year. The Company reported a net loss of C$8.44 million for the six months ended June 30, 2012, compared with a net loss of C$3.99 million for the same period during the prior year. The Company reported a net loss of C$11.53 million for the year ended Dec. 31, 2011, compared with a net loss of C$14.53 million during the prior year. The Company's balance sheet at June 30, 2012, showed C$62.54 million in total assets, C$12.79 million in total liabilities and C$49.74 million total shareholders' equity. As at June 30, 2012, the Company has not achieved profitable operations and continues to be dependent upon its ability to obtain external financing to meet the Company's liabilities as they become payable. The Company's ability to continue operations beyond the next twelve months is dependent on the discovery of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to fund its operations, and the future production or proceeds from developed properties. The Company's mineral assets are in the exploration and evaluation stage and, as a result, the Company has no source of revenues. The Company is currently investigating various sources of additional liquidity to increase the cash balances required for ongoing operations over the foreseeable future. These additional sources include, but are not limited to, share offerings, private placements, credit facilities, and debt, as well as exercises of outstanding options. However, there is no certainty that the Company will be able to obtain financing from any of those sources. These conditions indicate the existence of a material uncertainty that results in substantial doubt as to the Company's ability to continue as a going concern. After auditing the financial statements for the year ended Dec. 31, 2011, KPMG LLP, in Toronto, Canada, noted that the Company has incurred a net loss in 2011 and expects to require additional capital resources to meet planned expenditures in 2012 that raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 6-K is available for free at: http://is.gd/nctHy9 About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit known as the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. MPG OFFICE: Files Form 10-Q; Posts $80.2MM Net Income in 2nd Qtr. ----------------------------------------------------------------- MPG Office Trust, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $80.17 million on $70.31 million of total revenue for the three months ended June 30, 2012, compared with net income of $138.67 million on $77.31 million of total revenue for the same period during the prior year. For the six months ended June 30, 2012, the Company reported net income of $90.63 million on $154.96 million of total revenue, compared to net income of $98.68 million on $152.92 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $2.06 billion in total assets, $2.88 billion in total liabilities, and a $827.88 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/AcKWnh About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. The Company reported net income of $98.22 million in 2011, compared with a net loss of $197.93 million in 2010. NAVISTAR INT'L: Moody's Rates $1-Bil. Sr. Secured Term Loan 'Ba2' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Navistar International Inc' $1 billion senior secured term loan. At the same time, Moody's affirmed Navistar International Corporation's (Navistar) B2 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), and the B2 rating of the company's senior unsecured debt. Navistar's Speculative Grade Liquidity rating of SGL-3 is unchanged. Navistar is the parent company of Navistar International Inc. Ratings Rationale Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, and the newly-adopted strategy of transitioning to the EPA-certified SCR aftertreatment technology of Cummins Inc. Navistar's performance will also be pressured by significant reductions in military revenues and substantially higher engine warranty reserves. These challenges have resulted in sizable losses and negative cash flow during the first half of fiscal 2012 that could continue if not addressed. It is critical that Navistar remain firmly on track with its plan to transition to the Cummins SCR emission control platform, and at the same time rebuild the market share position and profit margins of its truck operations. In the absence of consistent success in these areas during 2013, the company could face a prolonged period of negative cash flow and weak credit metrics. Proceeds from the $1 billion term loan should help the company maintain adequate liquidity during this period. Navistar plans to introduce a Cummins 15 liter engine into its vehicle lineup beginning in January 2013. The company will also begin the process of deploying Cummins' SCR aftertreatment technology on its 13 liter engines beginning in early 2013. During this transition phase Navistar will face a number of challenges. These include ensuring adequate operating performance of its engines, achieving sufficient pricing for its product, and rebuilding market share that was lost as a result of market uncertainty over its strategy. Moody's expects that this transition period will last well into 2013 and that a significant rebound in truck profitability will not occur until the latter half of this transition. The negative outlook recognizes the execution risks that Navistar will face in transitioning from EGR to SCR emissions technology, reducing engine warranty expenditures, and rebuilding share that has been lost due to the uncertainty surrounding its emissions strategy. If the company is not able to make clear progress in these areas during 2013, the rating would be subject to further downgrade. Moody's expects that proceeds from the $1 billion term loan will help afford Navistar adequate liquidity during the coming twelve months as it implements the transition to SCR and attempts to reverse near term operating losses and negative cash flow. The company's principal source of liquidity is $1.4 billion in manufacturing company cash as of April 30, 2012 (pro forma for the term loan) and availability under a to-be-amended $175 million ABL facility. These sources should provide adequate coverage of $230 million in maturing manufacturing debt and negative operating cash flow that could amount to several hundred million dollars during the transition period. Navistar's captive finance operation, Navistar Financial Corporation (NFC), continues to fund the company's dealer floor plan requirements. The alliance with GE Capital continues to fund a significant portion of Navistar's retail sales. NFC has approximately $1.3 billion in debt and ABS obligations coming due during the next twelve months as of April 30. Moody's anticipates that these liquidity requirements can be covered by drawings under a $500 million revolving credit facility, and continued access to the ABS market, as evidenced by the company's June 2012 issuance of $500 million in term ABS securities. The assignment of the Ba2 rating to Navistar's secured term loan and the affirmation of the B2 rating of the unsecured debt, reflect the relative priority of claim of these securities as reflected in Moody's Loss Given Default Methodology. Navistar's rating could come under pressure if the company is not able to smoothly execute three key initiatives into 2013: integrating Cummins' SCR technology into its lineup of medium and heavy duty engines; reducing engine warranty expenditures; and rebuilding truck market share. To avoid rating pressure Navistar would need to remain on track for generating EBITA margin approaching 2.0% for fiscal 2013. This compares with a margin of 5.0% during 2011 and 0.8% during the last twelve months ending April 30, 2012. In addition EBIT/interest would need to be above 1.25x for 2013 compared with 2.2x in 2011 and 0.3x for LTM through April 2012. (all figures reflect Moody's standard adjustments) The rating outlook could be stabilized if Navistar can implement these initiatives and maintain a trajectory toward the following metrics for 2013: EBITA margin of 2.5%; EBIT/interest of 2.0x; and manufacturing company free cash flow exceeding $200 million. This compares with manufacturing company free cash flow of about $366 million for 2011 and $26 million for the LTM through April 2012. The principal methodology used in rating Navistar was the Global Heavy Manufacturing Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NET ELEMENT: Incurs $2.1 Million Net Loss in Second Quarter ----------------------------------------------------------- Net Element, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.14 million on $37,818 of net revenues for the three months ended June 30, 2012, compared with a net loss of $1.72 million on $26,058 of net revenues for the same period during the prior year. The Company reported a net loss of $4.53 million on $112,628 of net revenues for the six months ended June 30, 2012, compared with a net loss of $22.04 million on $104,204 of net revenues for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $3.22 million in total assets, $7.69 million in total liabilities, and a $4.46 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/08C493 About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. Following the 2011 results, Daszkal Bolton LLP, in Fort Lauderdale, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2011. The Company reported a net loss of $24.85 million in 2011, compared with a net loss of $3.10 million in 2010. NEW WESTERN ENERGY: Has $110,400 Net Loss in Second Quarter ----------------------------------------------------------- New Western Energy Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $110,418 on $15,166 of revenues for the three months ended June 30, 2012, compared with a net loss of $82,710 on $nil revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $216,310 on $51,645 of revenues, compared with a net loss of $160,466 on $nil revenues for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $1.22 million in total assets, $238,050 in total liabilities, and stockholders' equity of $984,873. According to the regulatory filing, at June 30, 2012, the Company had a working capital deficit of $107,125, incurred a net loss of $216,310 during the six months ended June 30, 2012, and used cash in operating activities of $131,909. "These factors raise substantial doubt regarding the Company's ability to continue as a going concern." Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about New Western Energy's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has a net loss and net cash used in operating activities in 2011 of $378,453 and $328,965, respectively, and has working capital deficit and an accumulated deficit of $109,669 and $1.41 million, respectively at Dec. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/koz3W8 Irvine, Calif.-based New Western Energy Corporation is an oil and gas and mineral exploration and production company with current projects located in Kansas, Oklahoma and Texas. The Company's principal business is in the acquisition, exploration and development of, and production from oil, gas and mineral properties. NEXTWAVE WIRELESS: Polygon Management Holds 12.4% Equity Stake -------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Polygon Management Ltd. disclosed that, as of Aug. 1, 2012, they beneficially own 3,180,052 shares of common stock of NextWave Wireless Inc. representing 12.4% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/9itMHt 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's balance sheet at March 31, 2012, showed $457.13 million in total assets, $1.16 billion in total liabilities, and a $705.92 million total stockholders' deficit. 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." Bankruptcy Warning As of March 31, 2012, the aggregate principal amount of the Company's secured indebtedness was $1,061.8 million. The Company's current cash reserves are not sufficient to meet the Company's payment obligations under its secured notes at their current maturity dates. Additionally, the Company may not be able to consummate sales of its wireless spectrum assets yielding sufficient proceeds to retire this indebtedness at the current scheduled maturity dates. If the Company is unable to further extend the maturity of its secured notes, or identify and successfully implement alternative financing to repay its secured notes, the holders of the Company's Notes could proceed against the assets pledged to collateralize these obligations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These conditions raise substantial doubt about our ability to continue as a going concern. Insufficient capital to repay the Company's debt at maturity would significantly restrict its ability to operate and could cause the Company to seek relief through a filing in the United States Bankruptcy Court. NEXTWAVE WIRELESS: Avenue Capital Discloses 24.9% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Avenue Capital Management II, L.P., and its affiliates disclosed that, as of Aug. 1, 2012, they beneficially own 6,899,083 shares of common stock of Nextwave Wireless Inc. representing 24.9% of the shares outstanding. A copy of the filing is available for free at http://is.gd/TlKiB8 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." NORTHAMPTON GENERATING: Cash Collateral Use Extended to Sept. 14 ---------------------------------------------------------------- Northampton Generating Company, L.P., asks the U.S. Bankruptcy Court for the Western District of North Carolina to approve a second amendment to the final order regarding use of cash collateral. On Jan. 13, 2012, the Court entered a final order regarding use of cash collateral and adequate protection. Pursuant to Section 5 of the final order, the amendment of the date appearing in Section 16(viii) of the final order may be effectuated, with the consent of the collateral agent, by filing with the Court a notice of amendment. Such amendment will be effective upon filing. On June 25, the date in Section 16(viii) was amended to Aug. 17, in the notice of amendment of final order regarding use of cash collateral and adequate protection. The second amendment filed with the written consent of the collateral agent, is amended to provide a new date of Sept. 14, 2012. A copy of the Second Amendment is available for free at http://bankrupt.com/misc/NORTHAMPTON_CC_amendment.pdf As reported in the Troubled Company Reporter on Jan 23, 2012, U.S. Bank National Association, as successor collateral agent and successor senior bond trustee for the senior bonds and Law Debenture Trust Company of New York, not individually but as successor bond trustee has consented to the Debtor's access to the cash collateral to operate its business postpetition. As of the Petition Date, the Debtor has obligations associated with certain resource recovery revenue bonds issued for Debtor's benefit in 1994. As of the Petition Date, the amounts due and owing by Debtor with respect to the Bonds and Bond Documents are: i) unpaid principal on the Senior Bonds in the amount of $71,400,000; ii) unpaid principal on the Junior Bonds in the amount of $19,100,000; iii) accrued but unpaid interest on the Senior Bonds in the amount of $2,011,496; iv) accrued but unpaid interest on the Junior Bonds in the amount of $2,688,749; and v) unliquidated, accrued and unpaid fees and expenses of the Bond Trustees and their counsel incurred through the Petition Date. As adequate protection from diminution in value of the lenders' collateral the Debtor will grant each Bond Trustee replacement lien and security interest (the Rollover Lien) in all assets of the Debtor existing on or after the Petition Date of the same type as the prepetition Bond Collateral, a superpriority administrative expense claim status, subject to carve out. Additionally, the Debtor will make adequate protection payments based on fees and expenses of (x) the Bond Trustees and their respective professionals and (y) certain specified professionals representing the holders of the Junior Bonds, incurred in connection with the Bonds, including the Prepetition Expense Claim. About Northampton Generating Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. Northampton is asking that the period of exclusivity be extended to Sept. 14 and the time to solicit support extended to Nov. 13. The Debtor disclosed $205,049,256 in assets and $121,515,045 in liabilities as of the Chapter 11 filing. No request for the appointment of a trustee or examiner has been made, and no statutory committee or trustee has been appointed in this case. ODYSSEY DIVERSIFIED: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Odyssey Diversified VI, LLC 500 S. Florida Ave. Suite 700 Lakeland, FL 33801 Bankruptcy Case No.: 12-12323 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Odyssey Diversified VII, LLC 12-bk-12324 Odyssey Diversified IX, LLC 12-bk-12325 Chapter 11 Petition Date: August 10, 2012 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Edward J. Peterson, III, Esq. STICHTER, RIEDEL, BLAIN & PROSSER, PA 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: epeterson@srbp.com Odyssey Diversified VI's Estimated Assets: $1,000,001 to $10,000,000 Odyssey Diversified VI's Estimated Debts: $10,000,001 to $50,000,000 Odyssey Diversified VII's Estimated Assets: $1,000,001 to $10,000,000 Odyssey Diversified VII's Estimated Debts: $10,000,001 to $50,000,000 A. In its list of 20 largest unsecured creditors, Odyssey Diversified VI placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peter J. Munson, as Assertion of right undetermined Indenture Trustee of indemnity c/o Jeffrey Warren, Esq. P.O. Box 3913 Tampa, FL 33601 B. In its list of 20 largest unsecured creditors, Odyssey Diversified VII placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peter J. Munson, as Assertion of right undetermined Indenture Trustee of indemnity c/o Jeffrey Warren, Esq. P.O. Box 3913 Tampa, FL 33601 The petitions were signed by Robert Madden, president. ORAGENICS INC: Had $6.93 Million Net Loss in Second Quarter ----------------------------------------------------------- Oragenics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $6.93 million on $256,407 of revenues for the three months ended June 30, 2012, compared with a net loss of $2.37 million on $347,569 of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $8.55 million on $636,934 of revenues, compared with a net loss of $3.93 million on $697,506 of revenues for the corresponding period in 2011. The Company's balance sheet at June 30, 2012, showed $1.98 million in total assets, $3.43 million in total liabilities, and a shareholders' deficit of $1.45 million. As reported in the TCR on April 19, 2012, Mayer Hoffman McCann P.C., in Clearwater, Florida, expressed substantial doubt about Oragenics' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses, negative operating cash flows and has an accumulated deficit. A copy of the Form 10-Q is available for free at: http://is.gd/EV2arI Oragenics, Inc., headquartered in Tampa, Fla., is a biopharmaceutical company focused primarily on oral health products and novel antibodies. PARADOR VISTAMAR: Case Summary & 14 Unsecured Creditors -------------------------------------------------------- Debtor: Parador Vistamar Corporation dba Hotel Parador Vistamar Vistamar Parador Vistamar Corp 6205 Carr 113 N Quebradillas, PR 00678 Bankruptcy Case No.: 12-06292 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Frederic Chardon Dubos, Esq. CHARDON DUBOS, PSC Hill Plaza 2847 Avenida Militar Isabela, PR 00662-4099 Tel: (787) 872-0700 Fax: (787) 872-0700 E-mail: chdpsc@gmail.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 14 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb12-06292.pdf The petition was signed by Carlos Rafael Fernandez Rodriguez, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Costa Dorada Apartments Corp. 11-03960 05/10/11 PASCO COUNTY: Moody's Confirms Ba3 Rating on Mortgage Rev. Bonds ---------------------------------------------------------------- Moody's Investors Service has confirmed the Ba3 rating of Pasco County (FL) Federal Assisted Housing Inc., Mortgage Revenue Bonds Series 1979. The outlook on the bonds remains negative. Rating Rationale Following Moody's review of the Project's audited financial statements for 2011, the confirmation of the Ba3 rating is supported by the project's weak financial performance, low occupancy levels, and dependence on transfers from the Pasco County Housing Authority (the "Authority") in order to cover operating expense gaps. The negative outlook reflects the possibility for further financial deterioration and potential need to tap debt service reserve and other funds to cover debt service on the bonds, in the absence of additional discretionary financial support from the Authority. The bonds are secured by revenues and trustee-held reserve funds from Hudson Hills Manor (the "Project"), a 64-unit multifamily rental property located in Hudson Hills, Pasco County, Florida. The pledged revenues also include payments from a Housing Assistance Payment (HAP) contract with the U.S. Department of Housing and Urban Development (HUD). The Project continues receiving discretionary financial support from the Authority, although the entity is not legally obligated to cover operating and/or bond debt service gaps. Strengths: -- Strong legal structure with gross revenue pledge and closed loop flow of funds -- Low loan-to-value -- Improving local housing market rents and occupancy levels -- Fully funded replacement and debt service reserve funds -- Additional funds in surplus account which can only be used to cover shortfalls in the future Challenges: -- Continuation of debt service coverage levels below 1.0x -- Low physical occupancy of 89.6% in 2011 -- Lack of competitive rent increase in 2011 -- Low HUD REAC Score -- Continued dependence on transfers from the Authority to cover budget gaps Outlook The outlook on the bonds is negative. The negative outlook reflects the possibility for further financial deterioration and potential need to tap debt service reserve and other funds to cover debt service on the bonds, in the absence of additional discretionary financial support from the County. WHAT COULD MAKE THE RATING GO UP? -- A significant and sustained improvement in financial performance above a 1.0 times debt service coverage level, driven by increased occupancy levels and competitive rent increases WHAT COULD MAKE THE RATING GO DOWN? -- Further financial deterioration due to decline in occupancy, stagnant rent levels, or disproportionate increase in operating expenses -- An instance of tapping of debt service reserve funds in order to cover debt service The principal methodology used in this rating was Global Housing Projects published in July 2010. PASSIONATE PET: Nevada Holding Company Has Not Filed Bankruptcy --------------------------------------------------------------- Passionate Pet, Inc., a Nevada Corporation, has not filed for bankruptcy as the symbol change may suggest. The Company changed control on July 31, 2012 and is now majority owned by Geo-Co Ventures, LLC, an investor and manager. Due to confusion subsequent to the closing a filing was erroneously made concerning the wholly owned subsidiary, Passionate Pet, Inc., a California corporation, with the Federal Bankruptcy Court in Central District, California. The filing attorney, Attorney Bruce Tackowiak hired by Mr. John Dunn the past president of the holding company, is now filing motions to withdraw the chapter 7 filing for the California subsidiary. "Passionate Pet management has contacted FINRA today to correct the erroneous symbol change", stated the new president Renee Galizio. "We are excited about our plans for the company and the new management and directors that we will be able to bring to the company". Separately, the company announced that it will re-engage accountants and seek SEC legal representations to assist the company in bringing all required filings up to date over the next 45 days. About Passionate Pet Passionate Pet, Inc. (PPET) also referred to as Passionate Pet and the Company, was founded in the State of Nevada on September 30, 2010. Passionate Pet, Inc. presently owns 100% of the shares of Passionate Pet, Inc., a California corporation ("PPIC"). PPIC is currently reorganizing their operations outside of bankruptcy and is currently requesting the Bankruptcy Court to expunge the above referenced erroneous filing. PPIC operated a retail pet store which offered a combination of premium pet food and supplies. Our retail operations carried products that included pet grooming, pet day care, pet food, toys, novelty items, and books. T he Company offered customers a full range of assorted pet related products at competitive prices. The Company intends to pursue and re-start its' pet store operations in the near future. PATIENT SAFETY: Incurs $656,900 Net Loss in Second Quarter ---------------------------------------------------------- Patient Safety Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss applicable to common shareholders of $656,992 on $4.40 million of revenue for the three months ended June 30, 2012, compared with a net loss applicable to common shareholders of $293,571 on $2.56 million of revenue for the same period during the prior year. The Company reported a net loss applicable to common shareholders of $2.08 million on $7.50 million of revenue for the six months ended June 30, 2012, compared with a net loss applicable to common shareholders of $1.04 million on $4.53 million of revenue for the same period a year ago. Patient Safety reported a net loss of $1.89 million in 2011, compared with net income of $2 million during the prior year. The Company's balance sheet at June 30, 2012, showed $18.77 million in total assets, $6.30 million in total liabilities and $12.46 millionin total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/PXVLjq About Patient Safety Technologies Patient Safety Technologies, Inc. (OTC: PSTX) -- http://www.surgicountmedical.com/-- through its wholly owned operating subsidiary SurgiCount Medical, Inc., provides the Safety-Sponge(TM) System, a system designed to improve the standard of patient care and reduce health care costs by preventing the occurrence of surgical sponges and other retained foreign objects from being left inside patients after surgery. RFOs are among one of the most common surgical errors. PATRIOT COAL: Incurs $354.3 Million Net Loss in Second Quarter -------------------------------------------------------------- Patriot Coal Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $354.32 million on $534.06 million of total revenues for the three months ended June 30, 2012, compared with a net loss of $49.59 million on $632.16 million of total revenues for the same period during the prior year. The Company reported a net loss of $429.61 million on $1.03 billion of total revenues for the six months ended June 30, 2012, compared with a net loss of $65.50 million on $1.21 billion of total revenues for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $3.57 billion in total assets, $3.39 billion in total liabilities and $188.38 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/P7oAPi About Patriot Coal Corp. St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PEAK RESORTS: Wants to Hire Harris Beach as Bankruptcy Counsel -------------------------------------------------------------- Peak Resorts Inc., Hope Lake Investors LLC, VRPD II LP, REDI LLC, and A.R.K. Enterprises Inc., filed papers in Court seeking formal approval to employ Harris Beach PLLC as bankruptcy counsel. The firm's hourly rates are: Lee E. Woodward $375 David M. Capriotti $375 Wendy A. Kinsella $375 Kelly Griffith $275 Kevin Tompsett $310 Paralegals $125 The firm attests that it has no connection with the Debtors, creditors, with the U.S. Trustee or any person employed in the U.S. Trustee's office or any other parties-in-interest. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. 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. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors 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. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: 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. The FDIC, as DIP Lender, is represented by: Thomas R. Califano, Esq. DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020 Tel: 212-335-4500 E-mail: Thomas.califano@dlapiper.com PEAK RESORTS: FDIC Loan Requires Plan or Sale Offer by Yearend -------------------------------------------------------------- Peak Resorts Inc., Hope Lake Investors LLC, VRPD II LP, REDI LLC, and A.R.K. Enterprises Inc., will return to the Bankruptcy Court Aug. 23 at 11:30 a.m. to seek final approval of their request to obtain postpetition secured financing. The Debtors on Aug. 2 won interim authority to borrow up to $600,000 from the Federal Deposit Insurance Corporation, in its capacity as receiver for Tennessee Commerce Bank, on a secured basis pursuant to a Stipulation and Agreement Regarding Post- Petition Debtor-In- Possession Financing. The total amount of the DIP financing package is $1.8 million. The DIP loan matures on March 31, 2013, and incurs 7% interest per annum, and 9% default rate. The Tennessee Department of Financial Institutions closed TCB and appointed the FDIC as receiver. Prior to the resort's bankruptcy, the FDIC advanced $200,000 on a secured basis to cover the Debtors' operating shortfalls. The DIP facility imposes certain milestones to the Debtors: By Aug. 8, 2012 The Debtors will have submitted an amended offering plan to the New York State Attorney General's office that will provide for a bulk sale of the Debtors' 246 units. Upon approval of the Attorney General, the Debtors will have 7 days to commence marketing efforts to bulk sell the units at a minimum cash price of $7 million pursuant to a marketing plan. By Aug. 8, 2012 The Debtors will cause Virgil resort Funding Group Inc. to immediately transfer to the DIP lender the pledged or assigned purchase money mortgages VRFG holds. By Aug. 17, 2012 The Debtors will have hired an onsite management company to monitor the management and operations of the Greek Peak Resorts, Hope Lake Lodge and Cascades Water Park. By Oct. 1, 2012 The Debtors will have entered into a contract with a professional for the sale of their assets. By Dec. 31, 2012 The Debtors will have either filed a plan of reorganization or enter into a contract with a stalking horse purchaser for the sales of assets. The DIP lender may accept or decline purchase offers. By Jan. 31, 2013 In the event the Debtors have not filed a plan or entered into a stalking horse bidder, the Debtors will have filed a motion seeking approval of bidding procedures for auction of the assets absent a stalking horse bid, with a closing of the sale to occur by March 15. The DIP loan also requires the Debtors to hire BDO Capital Advisors LLC as broker. The DIP lender has the right to make a credit bid. The Debtors also won interim authority to use cash collateral on a limited basis to finance expenses while in Chapter 11. The FDIC, as receiver for TCB, has a security interest in the cash collateral on account of the $52 million secured financing TCB extended pre-bankruptcy. The Interim Cash Collateral Order provides a $225,000 carveout for professional fees for the Debtors' attorneys. The Order also provides a carveout for fees payable to professionals hired by any official committee appointed in the case, the fees payable to the clerk of court and the U.S. Trustee. There's also a final hearing Aug. 23 on the Debtors' use of cash collateral. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. 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. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors 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. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: 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. The FDIC, as DIP Lender, is represented by: Thomas R. Califano, Esq. DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020 Tel: 212-335-4500 E-mail: Thomas.califano@dlapiper.com PEMCO WORLD: Sun Capital Authorized to Buy Assets in Debt Swap -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that secured lender Sun Capital Partners Inc. was given authorization by the bankruptcy court on Aug. 9 to buy Pemco World Air Services Inc. in exchange for pre-bankruptcy secured debt and debt financing the Chapter 11 effort. According to the report, Boca Raton, Florida-based Sun Capital stepped in when the originally approved sale to an affiliate of VT Systems Inc. fell through. Pemco is a provider of heavy maintenance and repair services for commercial jet aircraft. 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. 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 DEVELOPMENT: Oct. 4 Hearing on Plan, Conversion Bid ------------------------------------------------------------- In the Chapter 11 case of Peregrine Development LLC, there's a hearing Oct. 4 at 10:00 a.m. to consider: -- confirmation of the Chapter 11 plan for the Debtor that was proposed by Buckaroo Partners, L.P., Arthur James II, and Tom James and Arthur James III; -- a motion to convert the Chapter 11 case to Chapter 7 by Tom James and Arthur James III; -- a motion by the U.S. Trustee to have a Chapter 11 trustee replace management, and -- a motion by the Debtor for determination that modifications to the Plan won't adversely change treatment of any creditor or interest holder. The hearing was originally scheduled in July but was moved following an agreed motion for continuance that was presented by the parties. Buckaroo Partners, L.P, the co-manager of the Debtor, led the formulation of the Plan. The disclosure statement explaining the Plan, which was conditionally approved at a hearing May 29, 2012, says that all holders of allowed general unsecured claims will be paid in full with interest within 5 years of the effective date, and equity holders will retain their interests. The Debtor has already paid off creditors from the sale of property affected by the construction of a flyover connecting SH 121 to I-35E. Buckaroo has filed an objection to the proposal of Tom James and Arthur James -- the brother and son of Arthur James, II, who is the co-manager of the Debtor -- to convert the Chapter 7 case. Buckaroo claims that Tom James is attempting to exert dominion and control over his brother, Arthur James II through economic coercion. Buckaroo said that dismissal of the case would result to litigation among parties and would impact recovery by creditors. A copy of the Disclosure Statement, as amended May 31, 2012, is available for free at: http://bankrupt.com/misc/Peregrine_Devt_DS_053112.pdf A copy of the Plan as amended July 9, 2012 is available for free at: http://bankrupt.com/misc/Peregrine_Devt_Plan_070912.pdf Buckaroo is represented by: Eric J. Taube, Esq. HOHMANN, TAUBE & SUMMERS, LLP 100 Congress Avenue, 18th Floor Austin, TX 78701 Telephone: (512) 472-5997 Facsimile: (512) 472-5248 E-mail: erict@hts-law.com Arthur James, II c/o: is represented by: Jerry C. Alexander, Esq. PASSMAN & JONES, P.C. 1201 Elm Street, Suite 2500 Dallas, TX 75270-2599 Tom James and Arthur James, III, are represented by: Patrick J. Schurr, Esq. SCHEEF & STONE, L.L.P. 2601 Network Blvd., Ste. 102 Frisco, TX 75034-9092 About Peregrine Development Peregrine Development, LLC, in Lewisville, Texas, owns undeveloped real property in Denton County, Texas where retail and commercial development continues to occur. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case No. 11-41449) on May 3, 2011, represented by Michael R. Rochelle, Esq., and Eric M Van Horn, Esq., at Rochelle McCullough L.L.P. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Arthur James, II, manager. PEREGRINE FINANCIAL: Wasendorf Indicted, Faces 155 Yrs in Prison ---------------------------------------------------------------- Jacob Bunge, writing for Dow Jones Newswires, reports Russell Wasendorf Sr., the chief executive of Peregrine Financial Group Inc., was indicted Monday on 31 charges of lying to government regulators regarding the failed brokerage's operations. He faces a maximum sentence of 155 years' imprisonment and fines of about $7.75 million, according to a statement from the U.S. Attorney's Office for the Northern District of Iowa. He was arrested July 13 following a suicide attempt on July 9 that included a confession that authorities say detailed a nearly 20-year fraud against Peregrine's customers. Regulators have estimated that about $215 million in customer money is missing. No date has yet been set for Mr. Wasendorf to be arraigned on the charges, according to a statement from the U.S. Attorney's Office. 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. PETER DEHAAN: Can Access Northwest Farm Credit Cash Collateral -------------------------------------------------------------- Judge Randall Dunn of the Bankruptcy Court for the District of Oregon has authorized Peter DeHaan Holsteins, LLC, to access cash collateral of Northwest Farm Credit Services up to Sept. 30, 2012. The Debtor's authority to use Cash Collateral is limited to the amounts set forth in the Budget and sums as may be required to satisfy utility deposits. The Debtor may make expenditures in excess of the budget so long as any variance will not exceed 10% of the cumulative expenses. As adequate protection for any Cash Collateral used by the Debtor, Farm Credit is granted replacement liens to secure an amount up to the allowed amount of Farm Credit's prepetition secured claim against the Debtor, equal to the extent of any diminution in value of Farm Credit's prepetition collateral. The Replacement Liens will attach to all property and assets of the Debtor and its estate of the same kind or nature as the Prepetition Collateral. As of the Petition Date, the amount owed to Farm Credit was roughly $6.52 million. Farm Credit asserts that its claim against the Debtor is secured by one or more valid, enforceable, and properly perfected first priority security interests all of the Debtor's assets. The Debtor estimates the value of the collateral securing its obligations to Farm Credit is in excess of $16 million as shown on the Statement of Assets, Liabilities and Equity - Estimated Current Values dated Dec. 31, 2011, as prepared by Genske, Mulder & Co., LLP, CPA in March 2012. About Peter DeHaan Holsteins Peter DeHaan Holsteins, LLC, is a recognized leader in the dairy industry and well known for producing high quality milk products. Pete DeHaan Jr., the Debtor's 100% owner and Managing Member, has managed and operated dairy facilities in Oregon for over 15 years. The Debtor's principal source of income is from the production and sale of milk, which is shipped to Northwest Dairy Association, a cooperative that transports, processes and sells the resulting milk products. In 2011 the Debtor produced 56,137,722 pounds of whole milk which generated gross income of $11.19 million. Peter DeHaan Holsteins employs 36 employees and its dairy herd consists of 2,194 cows and 2,382 heifers for a total of 4,576 animals. The dairy operations are conducted at three separate farms located in Yamhill County and Washington County Oregon. The primary farm consists of milking facilities and a 230 acre farm located at 22180 Lafayette Highway Salem, Oregon. A second farm is leased from Alan and Alice Beardsley which includes dairy facilities and 280 acres of farmland located in Gaston, Oregon. A third farm consisting of 245 acres is owned by the Debtor and is located in McMinnville, Oregon. The McMinnville Farm is used primarily for raising replacement heifers and growing crops used to feed the Debtor's dairy cattle. Peter DeHaan Holsteins filed a Chapter 11 petition (Bankr. D. Ore. Case No. 12-35080) on June 29, 2012. The Debtor estimated assets of $10 million to $50 million and liabilities of up to $10 million. The Debtor is represented by Jeffrey C. Misley, Esq., at Sussman Shank LLP, in Portland. PHH CORP: Fitch to Rate $275-Mil. Sr. Unsecured Notes at 'BB' ------------------------------------------------------------- Fitch Ratings expects to assign a rating of 'BB' to PHH Corporation's (PHH) $275 million 7.375% senior unsecured notes issuance with expected maturity of 2019. Proceeds from the issuance, along with cash on hand, will be used to repay approximately $418 million of 7.125% senior notes due March 2013, by means of a tender offer. Given that the proceeds will be used to repay outstanding debt via a tender offer, Fitch does not envision there being a material impact on the company's leverage levels as a result of the issuance. PHH reported a net loss of $57 million for the three months ended June 30, 2012, primarily due to $145 million negative fair value mark on its mortgage servicing rights (MSR) portfolio and $36 million in foreclosure related expense related to the representation and warranty claims from GSEs. The loss is within Fitch's expectations. On an adjusted basis, which excludes the non-cash negative fair value charge, net income was $27 million, driven by strong margins on new mortgage originations and increased profitability in the fleet leasing segment. PHH reported $700 million in unrestricted cash as of June 30, 2012, which together with the proposed senior notes issuance offers considerable cushion to pay off the upcoming $418 million in debt. Consequently, Fitch views the near-term debt refinancing risk as manageable but believes that higher liquidity levels are appropriate in light of potential mortgage repurchase related expenses and the $250 million of convertible notes due in April 2014. Rating Drivers and Sensitivities PHH's ratings remain on Negative Outlook reflecting expected pressure on operating performance in 2012 from contemplated liquidity actions, reduced loan origination in the correspondent channel and its impact on the natural hedge ratio, MSR-related volatility inherent in the company's business model, and potential increase in losses from loan repurchases. Ratings could be lowered if losses from loan repurchases significantly exceed operating cash flows and other liquidity sources; mortgage origination decline causes the company's natural hedge ratio to materially worsen; or the company is unable to maintain adequate covenant cushion under its debt agreements, including the bank revolving credit facility. Conversely, the Outlook could be returned to Stable if the company executes on its liquidity plan without materially sacrificing operating performance. Fitch currently rates PHH as follows: -- Long-term IDR 'BB'; -- Senior unsecured debt 'BB'; -- Short-term IDR 'B'; -- Commercial paper 'B'. The Rating Outlook is Negative. PHYSICAL PROPERTY: Has HK$175,000 Net Loss in Second Quarter ------------------------------------------------------------ Physical Property Holdings Inc., filed its quarterly report on Form 10-Q, reporting a net loss of HK$175,000 on HK$145,000 of revenues for the three months ended June 30, 2012, compared with a net loss of HK$119,000 on HK$208,000 of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of HK$272,000 on HK$376,000 of revenue, compared with a net loss of HK$271,000 on HK$401,000 of revenue for the same period in 2011. The Company's balance sheet at June 30, 2012, showed HK$10.20 million in total assets, HK$11.49 million in total current liabilities, and a stockholders' deficit of HK$1.29 million. The Company had negative working capital of HK$11.40 million as of June 30, 2012. As reported in the TCR on March 30, 2012, Mazars CPA Limited, in Hongkong, noted that Physical Property had a negative working capital as of Dec. 31, 2011, and incurred loss for the year then ended, which raised substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/wPXgf5 Located in Hong Kong, Physical Property Holdings Inc., through its wholly-owned subsidiary, Good Partner Limited, owns five residential apartments located in Hong Kong. PINNACLE AIRLINES: AFA Replaces United Steelworkers in Committee ---------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 10, filed with the Bankruptcy Court for the Southern District of New York, an amended list of members of the Official Committee of Unsecured Creditors in the Chapter 11 cases of Pinnacle Airlines Corp., et al., to reflect that the Association of Flight Attendants is taking the seat of United Steelworkers in the Committee. The Committee now comprises of: 1. Association of Flight Attendants -- CWA Attn: Edward J. Gilmartin 501 Third Street, N.W. Washington, DC 20001 Tel: (202) 434-0577 Fax: (202) 434-0690 2. Airline Pilots Association 7900 International Drive Bloomington, MN 55425 Tel: (952) 853-2300 3. Goodrich Corporation Attn: Beth E. Hansen Four Coliseum Ctr., 2730 W. Tyvola Rd. Charlotte, NC 28217 Tel: (704) 423-8679 Fax: (704) 423-7017 4. Bombardier Inc. Attn: Martin J. Herman and Craig Allen 123 Garratt Blvd. N-17-27 Toronto, Ontario M3K 1Y5 Tel: (416) 375-3015 Fax: (416) 375-4282 5. Siemens Financial Services, Inc. Attn: Edward Kubilis 170 Wood Avenue South Iselin, New Jersey 08830 Tel: (732) 590-2587 Fax: (732) 590-2597 6. Continental Airlines 77 W. Wacker Drive Chicago, IL 60647 Attn: Rohit Philip Tel: (312) 997-8029 Fax: (312) 997-8028 7. The Estate of Ellyce M. Kausner, deceased Attn: John Kausner as personal representative for deceased 9105 Clarence Center Road Clarence Center, NY 14032 Tel: (716) 812-2648 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. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. PLAYPOWER HOLDINGS: S&P Cuts CCR to 'B-' on Weak Credit Measures ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Huntersville, N.C.-based PlayPower Holdings Inc. (PPH) to 'B-' from 'B'. The rating outlook is stable. "At the same time, we lowered our issue-level rating on PPH's second-lien term loan to 'B-' from 'B'. The recovery rating remains '4', indicating our expectation of average (30% to 50%) recovery for lenders in the event of a payment default," S&P said. "The rating downgrade reflects our expectation that sales and EBITDA will keep declining through 2013," said Standard & Poor's credit analyst Ariel Silverberg. "Based on our current performance expectations, EBITDA coverage of cash interest and total interest could decline to below 2.0x and to the low 1x area, while adjusted leverage could increase to 7x in 2013 (including pay-in-kind notes that are held by the company's owner, Apollo Investment Corp., leverage could increase to around 10x in 2013). These measures would be in line with a 'B-' corporate credit rating, in our view. The downgrade also reflects the potential for a violation of PPH's financial maintenance covenants under its revolver and second-lien term loan in 2013, based on our current forecast. We believe a covenant violation could potentially jeopardize PPH's access to its revolver, which is a necessary source of liquidity to meet seasonal working capital needs in 2013," S&P said. "Our ratings currently incorporate our expectation that sales will decline in the high-single-digit percentage range in 2012, and sales will decline in the mid-single-digit percentage range in 2013. This follows a high-single-digit percentage decline in the first half of 2012. It reflects our belief that the operating environment will remain highly competitive, and that demand for PPH's playground equipment will remain pressured through 2013. While our economists forecast modest growth in U.S. GDP (2% in 2012 and 2013), and growth in U.S. housing starts and residential construction in 2012 and 2013, (which may generate some incremental tax revenue), they also forecast declines in U.S. federal, state, and local government spending in 2012 and 2013. Our economists forecast only minimal GDP growth in the U.K. (0.3% in 2012 and 1% in 2013), and a decline in Eurozone GDP growth of 0.6% in 2012 and only 0.4% growth in 2013. We therefore believe municipal and school budgets will remain constrained, and that many municipalities may defer discretionary spending on playground equipment," S&P said. PLY GEM HOLDINGS: Posts $5.2 Million Net Income in Second Quarter ----------------------------------------------------------------- Ply Gem Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $5.26 million on $307.28 million of net sales for the three months ended June 30, 2012, compared with net income of $2.06 million on $294.49 million of net sales for the three months ended July 2, 2011. For the six months ended June 30, 2012, the Company reported a net loss of $20.37 million on $546.46 million of net sales, as compared to a net loss of $68.82 million on $494.59 million of net sales for the six months ended July 2, 2011. Ply Gem's balance sheet at June 30, 2012, showed $946.93 million in total assets, $1.24 billion in total liabilities, and a $296.98 million total stockholders' deficit. Gary E. Robinette, President and CEO, said "I am satisfied with the positive direction that Ply Gem's performance has demonstrated thus far in 2012. Our first half net sales growth of 10.5% demonstrates our ability to continue to take profitable market share as well as improved market demand for our products. As expected, the rate of sales growth slowed in the second quarter as compared to the first quarter which we believe was positively impacted by favorable weather conditions that existed throughout most of the United States during the winter months." "Even though the market environment was better during the first half of this year, we believe the recovery will continue to be slow and choppy for some time. As such, Ply Gem will continue to focus on maintaining a lean overall cost structure while striving to outperform the market across all of our product categories," concluded Mr. Robinette. A copy of the Form 10-Q is available for free at: http://is.gd/PsL4ET About Ply Gem Based in Cary, North Carolina, Ply Gem Holdings Inc. is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets. The Company reported a net loss of $84.50 million in 2011, compared with net income of $27.66 million in 2010. * * * In May 2010, Standard & Poor's Ratings Services raised its (unsolicited) corporate credit rating on Ply Gem to 'B-' from 'CCC+'. "The ratings upgrade reflects our expectation that the company's credit measures are likely to improve modestly over the next several quarters to levels that we would consider more in line with the 'B-' corporate credit rating," said Standard & Poor's credit analyst Tobias Crabtree. SGS International carries a 'B1' corporate family rating from Moody's Investors Service. PONCE TRUST: Amends Plan and Disclosure Statement ------------------------------------------------- Ponce Trust, LLC, on Aug. 8 filed a revised Chapter 11 plan of reorganization and explanatory disclosure statement. According to the Debtor, in the event the case is liquidated or dismissed, the liquidation value of the Debtor would be insufficient to make payments to any class of creditors other than the secured creditors, leaving no monies available for the claims of any other classes of creditors such as general unsecured creditors. According to the Disclosure Statement, 1300 Ponce Holdings, which made an election under 11 U.S.C. Sec. 1111(b) to have one secured claim in the amount of $38,174,090, will be paid a stream of payments from unit sales revenues and rental income. Infracommerce and Dayco HC LLC, which assert $7,173,659 for mezzanine loans, will be paid in accordance with the projections. Unsecured creditors will be paid in monthly installments over seven years in graduated payments through the life of the Plan. A copy of the Disclosure Statement dated Aug. 8, 2012, is available at: http://bankrupt.com/misc/Ponce_Trust_DS_080812.pdf As reported in the July 25, 2012 edition of the Troubled Company Reporter, the judge directed Ponce Trust to file an amended Disclosure Statement after denying the previous iteration of the document. The judge though gave Ponce Trust partial victory by enjoining a foreclosure sale of its assets that was scheduled early July. About Ponce Trust Ponce Trust LLC, the developer and owner of the luxury residential condominium development known as 1300 Ponce, in Coral Gables, Florida, filed for Chapter 11 bankruptcy (S.D. Fla. Case No. 12-14247) on Feb. 22, 2012. Judge Robert A. Mark presides over the case. Joel L. Tabas, Esq., and Mark S. Roher, Esq., at Tabas, Freedman, Soloff, Miller & Brown, P.A., serve as the Debtor's counsel. The petition was signed by Luis Lamar, vice president and manager. Ponce Trust sought Chapter 11 because of (a) the declining real estate market, (b) its inability to reduce condominium prices in response to changing market conditions, and (c) its inability, due to circumstances beyond the Debtor's control, to renew, repay, or refinance its secured mortgage debt owed to MUNB Loan Holdings, LLC, which matured in 2011. Prior to the Petition Date, MUNB initiated a foreclosure action against the Property in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida. On July 21, 2011, the State Court entered an Order Appointing Receiver, which inter alia appointed Jeremy S. Larkin as receiver. Mr. Larkin is the President of NAI Miami Commercial Real Estate Services, Worldwide. 1300 Ponce contains 125 residential condominium units. As of the bankruptcy filing date, the Debtor has a remaining inventory of about 83 units and rented about 40 of those units. The Debtor intends to market the remaining Condominium Units for both sale and rental. The Debtor disclosed $22,734,532 in assets and $46,999,376 in liabilities as of the Chapter 11 filing. The residential condominium unit is worth $19 million. MUNB is owed $37.3 million. 1300 Ponce Holdings LLC, assignee of MUNB, is represented by Carlton Fields, P.A. In April 2012, the U.S. Trustee said an official committee of unsecured creditors has not been appointed. PONTIAC, MI: Moody's Assigns 'Caa1' Issuer Rating ------------------------------------------------- Moody's Investors Service has assigned a Caa1 issuer rating to the City of Pontiac, MI. The long-term issuer rating is equivalent to the city's general obligation limited tax (GOLT) rating and reflects Moody's opinion of the ability of the city to honor its tax-backed financial obligations. Concurrently, Moody's has withdrawn the Caa1 rating on the previously outstanding Series 2002 General Obligation Limited Tax Building Authority Bonds as the last debt service payment has occurred on those bonds. The Caa1 issuer rating reflects the city's history of fiscal distress and narrow liquidity, recent General Fund operating surpluses, and projected deficit balance in fiscal 2012. The rating also considers the severely challenged local economy, which is heavily concentrated in the automotive industry that continues to contend with high unemployment and significant tax appeals. The developing outlook reflects uncertainty surrounding several pending events that could impact the city's overall credit profile. These pending developments include the successful closing of the bonds issued by Oakland County on behalf of Pontiac and the release of bond proceeds to provide immediate cash flow relief and eliminate the projected deficit balance; the suspension of Michigan Public Act 4, eliminating key tools to alleviate fiscal stress and potential legal challenges to any prior actions taken under the authority of PA 4; and uncertainty with respect to the city's ability to continue to pay obligations should bond proceeds from Oakland County be delayed or cancelled. WHAT COULD CHANGE THE RATING UP (OR REVISE OUTLOOK TO STABLE) - Successful closing of Oakland County's bond sale, with proceeds providing immediate cash flow relief - Significant improvement in financial operations and ongoing stability - Dramatic improvement in regional economy and employment levels; taxbase diversification WHAT COULD CHANGE THE RATING DOWN - Repeal of budgetary measures implemented under Public Act 4 - Continued operating deficits further straining narrow liquidity - Further increase of the city's leveraged debt position - Prolonged economic deterioration and tax base erosion - Inability to make timely debt service payments Principal Methodology The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. POWERWAVE TECHNOLOGIES: Has $42.5-Mil. Net Loss in Second Quarter ----------------------------------------------------------------- Powerwave Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $42.47 million on $42.37 million of net sales for the three months ended July 1, 2012, compared with net income of $7.02 million on $170.64 million of net sales for the three months ended July 3, 2011. For the six months ended July 1, 2012, the Company had a net loss of $100.37 million on $85.64 million of net sales, compared with net income of $46,000 on $307.27 million of net sales for the six months ended July 3, 2011. The net loss in the second quarter and first half of fiscal 2012 was largely due to the Company's decreased revenues during the second quarter and first half of fiscal 2012. The Company's balance sheet at July 1, 2012, showed $232.55 million in total assets, $363.67 million in total liabilities, and a shareholders' deficit of $131.12 million. According to the regulatory filing, the Company has experienced significant recurring net losses and operating cash flow deficits for the past four quarters. The Company's ability to continue as a going concern is dependent on many factors, including among others, its ability to raise additional funding, and its ability to successfully restructure operations to lower manufacturing costs and reduce operating expenses. As of July 1, 2012, the Company had $11.6 million in unrestricted cash and cash equivalents available to support ongoing operations. During the six months ended July 1, 2012, the Company used approximately $63 million in operating activities, and its unrestricted cash balances declined by approximately $53 million during this period. In addition, in July 2012, the Company entered into a payoff letter that terminated its credit agreement. "These conditions raise substantial doubt about the Company's ability to continue as a going concern, and its success is dependent upon the successful outcome of its efforts to raise additional financing, restructure its operations, lower manufacturing costs and reduce operating expenses." The Company is in the process of pursuing a new senior secured credit facility as well as other financing options. A copy of the Form 10-Q is available for free at: http://is.gd/dskxPz Powerwave Technologies, Inc., headquartered in Santa Ana, Calif., is a global supplier of end-to-end wireless solutions for wireless communications networks. The Company has historically sold the majority of its product solutions to the commercial wireless infrastructure industry. PROTEONOMIX INC: Thomas Monahan Succeeds Michael Cohen as CFO ------------------------------------------------------------- Michael Cohen, Chairman of the Board of Directors of Proteonomix, Inc., who also serves as the Company's Chief Executive Officer resigned as the Company's Chief Financial Officer and Treasurer. On the same day the Board of Directors appointed Thomas P. Monahan as the Company's Chief Financial Officer and Roger L. Fidler, a member of the Board of Directors and General Counsel as Treasurer. Mr. Fidler has served as a director since Jan. 2, 2010. He also was the sole director, President, Chief Executive and Financial Officer of Global Agri-Med Technologies, Inc., a corporation that is publicly traded in the pink sheets, since inception in Oct. 28, 1999. Mr. Fidler has been engaged in the private practice of law since 1983, specializing in corporate and securities law. Mr. Fidler has previously served on the Boards of Directors and as an officer of several other publicly held corporations, including Alfacell Corp., Diehl Graphsoft, Inc., D-Lanz Development Group, Inc., the Leonard Swindbourne Acquisition Corp., and numerous private companies. Mr. Fidler received a B.S. degree in Physics from Dickinson College, Carlisle, Pennsylvania in 1972; a Masters of Science degree from the University of Illinois at Champaign- Urbana, Illinois in 1974; and a Juris Doctor from the University of South Carolina in 1977 where he was a member of the Law Review. He is a member of the bars of New Jersey, New York and the District of Columbia and has practiced before the federal and state courts in New York and New Jersey as well as pro hac vice in cases before Federal District Courts in Kentucky and Florida. In addition he is a patent attorney authorized to practice before the United States Patent and Trademark Office. Mr. Fidler also performs legal services for the Company and entered in a contract with the Company to act as General Counsel for a period of three years commencing March 2, 2012. Upon appointment as Treasurer the Board agreed to modify Mr. Fidler's consulting agreement to increase the compensation to $20,000 per month. Mr. Monahan has been President of the The Virtual Learning Company, Inc., from its inception in January 2009 to present. Mr. Monahan is a retired Certified Public Accountant who was in public practice as a sole practitioner from 1986 through December 2005. Before working as a Certified Public Accountant, Mr. Monahan served as Comptroller for Superior Steakhouse Systems, Inc. Mineola, New York. From 1983 to 1984, Mr. Monahan was Assistant Comptroller for CoverTemp, Inc. in White Plains, New York. Mr. Monahan received his B.A. degree from Rutgers University in 1970, his M.A. in Distributive and General Business Education from Montclair State College in Montclair, New Jersey in 1975 and was certified as a teacher for the State of New Jersey K-12 and Distributive and Marketing education. Mr. Monahan's teaching license has lapsed. He served as a student teacher at Orange High School in Orange, New Jersey for 16 weeks specializing in Urban Education and taught at John F. Kennedy High School in Paterson, New Jersey. The Board of Directors of the Company approved compensation for Mr. Monahan amounting to $1,500 per month and a 20,000 share stock grant valued at $8,200. Mr. Monahan also controls Ding Dong School, Inc., which provides XBRL conversion and other computer services to the Company averaging approximately $2,500 per month. About Proteonomix Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/-- is a biotechnology company focused on developing therapeutics based upon the use of human cells and their derivatives. The Company reported a net loss applicable to common shares of $1.38 million in 2011, compared with a net loss applicable to common shares of $3.47 million in 2010. After auditing the financial statements for the year ended Dec. 31, 2011, KBL, LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained significant operating losses and is currently in default of its debt instrument and needs to obtain additional financing or restructure its current obligations. The Company's balance sheet at March 31, 2012, showed $6.99 million in total assets, $6.64 million in total liabilities and $356,650 in total stockholders' equity. PROVIDIAN REALTY: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: Providian Realty Corp 340 Evelyn Street Paramus, NJ 07652 Bankruptcy Case No.: 12-29807 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: John W. King, Esq. LAW OFFICES OF JOHN W. KING 17 Academy Street, Suite 1110 Newark, NJ 07102 Tel: (973) 862-1949 Fax: (973) 453-8070 E-mail: kingjohnw@hotmail.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 with the petition is available for free at: http://bankrupt.com/misc/njb12-29807.pdf The petition was signed by Zhanna Allergant, secretary and officer/shareholder of Corporation. QUALITY DISTRIBUTION: Files Form 10-Q; Posts $28.8MM Income in Q2 ----------------------------------------------------------------- Quality Distribution, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $28.80 million on $212.73 million of total operating revenues for the three months ended June 30, 2012, compared with net income of $9.04 million on $189.99 million of total operating revenues for the same period during the prior year. The Company reported net income of $35.50 million on $404.64 million of total operating revenues for the six months ended June 30, 2012, compared with net income of $11.76 million on $367.90 million of total operating revenues for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $454.49 million in total assets, $484.24 million in total liabilities and a $29.75 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Am8Byr About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company reported net income of $23.43 million in 2011, compared with a net loss of $7.40 million in 2010. Bankruptcy Warning In its Form 10-K for 2011, the Company noted that it had consolidated indebtedness and capital lease obligations, including current maturities, of $307.1 million as of Dec. 31, 2011. The Company must make regular payments under the New ABL Facility and its capital leases and semi-annual interest payments under its 2018 Notes. The New ABL Facility matures August 2016. However, the maturity date of the New ABL Facility may be accelerated if the Company defaults on its obligations. If the maturity of the New ABL Facility or such other debt is accelerated, the Company does not believe that it will have sufficient cash on hand to repay the New ABL Facility or such other debt or, unless conditions in the credit markets improve significantly, that the Company will be able to refinance the New ABL Facility or such other debt on acceptable terms, or at all. The failure to repay or refinance the New ABL Facility or such other debt at maturity will have a material adverse effect on the Company's business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of the Company or its subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm the Company's relationships with its customers, suppliers and independent affiliates. QUANTUM CORP: Files Form 10-Q; Incurs $17.5MM Loss in Fiscal Q1 --------------------------------------------------------------- Quantum Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $17.49 million on $140.87 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $5.22 million on $153.53 million of total revenue for the same period during the prior year. Quantum Corporation's balance sheet at June 30, 2012, showed $364.52 million in total assets, $425.08 million in total liabilities and a $60.55 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/NWgYbd About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. The Company reported a net loss of $8.81 million for the fiscal year ended March 31, 2012, compared with net income of $4.54 million during the prior year. QUANTUM FUEL: Incurs $7.1 Million Net Loss in Second Quarter ------------------------------------------------------------ Quantum Fuel Systems Technologies Worldwide, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to stockholders of $7.06 million on $5.60 million of total revenue for the three months ended June 30, 2012, compared with a net loss attributable to stockholders of $4.30 million on $7.27 million of total revenue for the same period a year ago. The Company reported a net loss attributable to stockholders of $14.88 million on $11.60 million of total revenue for the six months ended June 30, 2012, compared with a net loss attributable to stockholders of $9.56 million on $14.02 million of total revenue for the same period during the prior year. Quantum Fuel's balance sheet at June 30, 2012, showed $73.42 million in total assets, $45.46 million in total liabilities and $27.95 million in ttoal stockholders' equity. "Based on current projections and estimates, we do not believe our principal sources of liquidity will be sufficient to fund our planned growth initiatives, operating activities and obligations as they become due over the next twelve months," the Company said in its quarterly report for the period ended June 30, 2012. "In order for us to have sufficient capital to execute our business plan, fund our operations and meet our debt obligations over this twelve month period, we will need to raise additional capital. Although we have been successful in the past in raising debt and equity capital, we cannot provide any assurance that we will be successful in doing so in the future to the extent necessary to be able to fund all of our growth initiatives, operating activities and obligations through June 30, 2013, which raises substantial doubt about our ability to continue as a going concern." Brian Olson, chief executive officer, stated, "We are pleased with the substantial growth in CNG storage system revenues during the quarter and the first half of calendar 2012. We are experiencing strong demand for our advanced storage technologies and believe CNG systems will be the main growth driver in our business over the foreseeable future." Olson continued, "We have tripled our tank production capacity over the past several months and have plans to continue the expansion in order to meet the growing demand within the alternative fuel system industry." Olson further stated, "On the cost side, we have made significant reductions in our cost structure and expect the cost savings to begin materializing during the second half of this calendar year with the full effect being realized in 2013." A copy of the Form 10-Q is available for free at: http://is.gd/mM8qAS About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel reported a net loss attributable to stockholders of $38.49 million on $24.47 million of total revenue for the eight months ended Dec. 31, 2011, compared with a net loss attributable to stockholders of $6.52 million on $10.51 million of total revenue for the same period a year ago. The Company reported a net loss of $11.03 million for the year ended April 30, 2011, following a net loss of $46.29 million during the prior year. Haskell & White LLP, the Company's independent registered public accounting firm for the Transition Period ended Dec. 31, 2011, has included an explanatory paragraph in their opinion that accompanies the Company's audited consolidated financial statements as of and for the eight months ended Dec. 31, 2011, indicating that the Company's current liquidity position raises substantial doubt about its ability to continue as a going concern. If the Company is unable to further improve its liquidity position, the Company may not be able to continue as a going concern. R.W.S. ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: R.W.S. Enterprises, Inc. 2880 Vogler Lane North Port, FL 34286 Bankruptcy Case No.: 12-10848 Chapter 11 Petition Date: August 10, 2012 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC 118 West Adams Street, Ste. 900 Jacksonville, FL 32202 Tel: (904) 354-5065 E-mail: jason@jasonaburgess.com Scheduled Assets: $1,805,081 Scheduled Liabilities: $1,396,993 A copy of the list of three largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb12-10848.pdf The petition was signed by Robert W. Sipkema, president. RESIDENTIAL CAPITAL: Aurora Bank Fails in Bid to Lift Stay ---------------------------------------------------------- "[T]he [automatic] stay is a shield, not a sword," the Ninth Circuit Court of Appeals in Sternberg v. Johnston, 582 F.3d 1114, 1124 (9th Cir. 2009), ruled. Judge Martin Glenn, staying true to this passage, denied Aurora Bank, FSB's motion to lift the automatic stay to proceed with prepetition claims for damages against Debtors GMAC Mortgage, LLC, and Executive Trustee Services, in two separate actions pending in California state courts. Judge Glenn also did not permit the Debtors from proceeding with their claim for declaratory relief against Aurora while the stay remains in effect. The automatic stay is not meant to be used by a debtor to pursue its creditors, as more litigation is hardly consistent with the concept of a "breathing spell" for the debtor, Judge Glenn said, citing Sternberg. 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: Gilberts Fail to Dismiss ResCap Case --------------------------------------------------------- Bankruptcy Judge Glenn Martin denied Rex T. Gilbert, Jr. and Daniela L. Gilbert's motion to dismiss Residential Capital LLC and its affiliates' Chapter 11 cases, or, alternatively, to lift the automatic stay to allow them to proceed with their case pending in the U.S. Court of Appeals for the Fourth Circuit. Judge Glenn concluded that the Chapter 11 cases were filed in good faith and that cause does not exist to lift the automatic stay to permit the Gilbert Litigation to continue against the Debtor Defendants. And, while the automatic stay applied to bar the Debtor Defendants from filing a rehearing petition in the Fourth Circuit after these Chapter 11 cases were commenced, the Gilberts may not recover damages for violation of the automatic stay, Judge Glenn held. 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: RBS Wants Stay Relief to Foreclose on Asset ---------------------------------------------------------------- RBS Citizens N.A. asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow the foreclosure of a real property in Ohio. RBS Citizens is the holder of a mortgage on the property located in Cleveland, Ohio. A foreclosure title search, however, showed that there is a second mortgage on the property being foreclosed by GMAC Mortgage Corp., an affiliate of Residential Capital LLC which is in bankruptcy protection. Shari Barak, Esq., at Shapiro DiCaro & Baral LLC, in Melville, New York, said GMAC "has little to no equity" in the property since RBS Citizens' claim exceeds the value of the property. A court hearing is scheduled for September 11. Objections are due by September 4. 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: U.S. Bank Seeks Stay Relief to Foreclose ------------------------------------------------------------- U.S. Bank National Association asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay so that it could foreclose on a New York property. The bank holds a mortgage on the property located in Miller Place, New York. A foreclosure title search, however, indicated that Homecomings Financial Network LLC, which is in Chapter 11 protection, holds a second mortgage on the property. The bank commenced a foreclosure action in 2009 but it was automatically halted by Homecomings Financial's bankruptcy filing. A court hearing to consider approval of U.S. Bank's request is scheduled for September 11. Objections are due by September 4. 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). RESPONSE BIOMEDICAL: Had C$2.4 Million Net Loss in Second Quarter ----------------------------------------------------------------- Response Biomedical Corporation filed its quarterly report on Form 10-Q, reporting net income of C$2.39 million on C$3.04 million of revenue for the three months ended June 30, 2012, compared with a net loss of C$797,129 on C$2.69 million of revenue for the same period of 2011. The income for the three month period ended June 30, 2012, is primarily attributed to the C$3.99 million unrealized gain on the revaluation of the warrant liability. For the six months ended June 30, 2012, the Company had a net loss of C$3.31 million on C$6.02 million of revenue, compared with a net loss of C$2.32 million on C$4.71 million of revenue for the same period in 2011. The increase in the loss for the six month period ended June 30, 2012, is primarily attributed to the C$1.01 million unrealized loss on the revaluation of the warrant liability. In addition, there was a C$1.18 million increase in operating expenses offset by a combination of increased product sales and a higher gross margin earned. The Company's balance sheet at June 30, 2012, showed C$16.99 million in total assets, C$14.91 million in total liabilities, and stockholders' equity of C$2.08 million. As reported in the TCR on April 4, 2012, Ernst & Young LLP, in Vancouver, Canada, expressed substantial doubt about Response Biomedical'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 of the Company's recurring losses from operations. A copy of the Form 10-Q is available for free at: http://is.gd/6iMt0M Based in Vancouver, Canada, Response Biomedical Corporation develops, manufactures and markets rapid on-site diagnostic tests for use with the Company's RAMP(R) platform for clinical and environmental applications. RG STEEL: Authorized to Sell Two Plans for $22 Million ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that RG Steel LLC received approval from the bankruptcy court on Aug. 10 to sell the Martins Ferry and Mingo Junction plants for a combined $22 million. There will be a hearing on Aug. 15 for approval to sell the Yorkville, Ohio; Wheeling, West Virginia; Warren, Ohio, and Sparrows Point, Maryland, facilities. According to the report, The Martins Ferry and Mingo Junction plants were auctioned on July 31. There were five bidders for the Mingo facility and four for Martins Ferry. Frontier Industrial Corp. was approved to buy the Mingo Junction plant for $20 million. Individuals named Mull and Gompers received court approval to purchase the Martins Ferry assets for $2 million. The report relates the auctions for the plants in Sparrows Point, Maryland, and Warren, Ohio, were rescheduled and took place Aug. 7. The company hasn't announced as yet who won the auctions and whether they were sold to operators or liquidators. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. RG STEEL: Sells Sparrows Point Mill to Hilco for $72-Mil. --------------------------------------------------------- Reuters reports RG Steel LLC sold the Sparrows Point steel mill to liquidator Hilco Industrial on Aug. 7 for about $72 million, according to a person familiar with the results of the auction. According to the report, the 120-year-old Baltimore mill, where steel for the Golden Gate Bridge was forged, was one of three steelmaking assets put up for sale by RG Steel. The report says RG Steel's mill in Warren, Ohio, was purchased by C.J. Betters. C.J. Betters said it would keep mill in working condition for a period of time in the hope an operator can be found, according to the source. A hearing is scheduled for Aug. 15 in Bankruptcy Court in Wilmington, Delaware, to approve the sales. Gary Epstein is the chief marketing officer of Hilco Trading Co LLC. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. RITZ CAMERA: Wins OK for KCC to Provide Administrative Services --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Ritz Camera & Image, L.L.C., et al., to employ Kurtzman Carson Consultants LLC to provide administrative services. As reported in the Troubled Company Reporter on July 31, 2012, KCC is expected to, among other things: -- assist the Debtors in analyzing claims filed against their estates; -- assist the Debtor with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs; and -- tabulate votes and perform subscription services as may be requested or required in connection with any and all chapter 11 plans that may be filed by the Debtors and provide ballot reports and related balloting and tabulation services to the Debtors and their professionals. Prior to the Petition Date, the Debtors paid KCC a retainer of $15,000. To the best of the Debtors' knowledge, KCC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. RITZ CAMERA: Cole Schotz Approved as Bankruptcy Counsel ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Ritz Camera & Image, L.L.C., et al., to employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as bankruptcy counsel. Cole Schotz is expected to, among other things, advise and assist the Debtors in the negotiation and documentation of financing agreements, cash collateral arrangements, sale agreements, and related transactions for these hourly rates: Irving E. Walker, Member $545 Gary H. Leibowitz, Member $450 Patrick J. Reilley, Member $410 G. David Dean, Member $380 Sanjay K. Bhatnagar, Associate $325 Therese Scheuer, Associate $285 Amanda Bassen, Associate $230 Yvonne Dalton, Paralegal $190 Irving E. Walker, a member at Cole Schotz, attests to the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. RITZ CAMERA: Committee Taps Cooley LLP as Lead Bankruptcy Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Ritz Camera & Image, L.L.C., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Cooley LLP as its lead bankruptcy counsel. Cooley will represent the Committee in coordination with Richards Layton, the Committee's proposed Delaware counsel. To the best of the Committee's knowledge, Cooley represents no interest adverse to the Committee, the Debtors, their estates, or any other party-in-interest in the matters upon which it is to be engaged. An Aug. 28, 2012, hearing at 11 a.m. has been set. Objections, if any, are due Aug. 14, at 4 p.m. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. RITZ CAMERA: Committee Taps Richards Layton as Delaware Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Ritz Camera & Image, L.L.C., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Richards, Layton & Finger, P.A. as its Delaware counsel. By separate application, the Committee is seeking to retain Cooley as counsel. The Committee submits that it is also essential for it to employ RL&F as local counsel. Moreover, pursuant to Local Rule 9010-1(c), the Committee is required to retain Delaware counsel. Cooley and RL&F have discussed a division of responsibilities and will make every effort to avoid and minimize duplication of services in the Chapter 11 cases. To the best of the Committee's knowledge, RL&F does not hold any interest adverse to the Committee or the Debtors' estates. An Aug. 28, 2012, hearing at 11 a.m. has been set. Objections, if any, are due Aug. 14, at 4 p.m. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. ROBLEX AVIATION: Case Summary & 11 Unsecured Creditors ------------------------------------------------------ Debtor: Roblex Aviation Inc. P.O. Box 6386 Bayamon, PR 00960 Bankruptcy Case No.: 12-06341 Chapter 11 Petition Date: August 10, 2012 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Enrique S. Lamoutte Inclan Debtor's Counsel: Maria Soledad Lozada Figueroa, Esq. MS LOZADA LAW OFFICE 254 San Jose St., Suite 3 San Juan, PR 00901 Tel: (787) 520-6002 Fax: (787) 520-6003 E-mail: lcdamslozada@gmail.com Scheduled Assets: $5,418,527 Scheduled Liabilities: $1,460,383 A copy of the Company's list of its 11 unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb12-06341.pdf The petition was signed by Roberto E. Rodriguez Amadeo, president. ROC FINANCE: Moody's Affirms 'B3' CFR; Outlook Stable ----------------------------------------------------- Moody's Investors Service affirmed ROC Finance LLC's B3 Corporate Family and Probability of Default ratings following the company's announcement that it plans on raising a proposed $150 million add- on to its existing $150 million senior secured term loan due 2017, and increasing its senior secured revolver commitment expiring in 2016 to $35 million from $25 million. At the same time, Moody's lowered ROC's senior secured credit facility rating to B1 from Ba3 and its second lien notes rating to Caa2 from Caa1 to reflect the increased amount of senior secured first lien debt in ROC's capital structure as a result of the add- on. Pursuant to Moody's Loss Given Default methodology, the increase in the percentage of senior secured first lien debt relative to ROC's total debt -- from about 50% of total debt to 60% -- reduces the recovery prospects of each class of debt. Proceeds from the add-on will primarily be used to construct a temporary gaming facility at the Thistledown racetrack near Cleveland and finance the necessary gaming license. The rating outlook is stable. Ratings downgraded and LGD assessments revised: $25 million (proposed increase to $35 million) senior secured revolver expiring 2016 to B1 (LGD 2, 28%) from Ba3 (LGD 2, 23%) $150 million senior secured term loan (proposed increase to $300 million) due 2017 to B1 (LGD 2, 28%) from Ba3 (LGD 2, 23%) $125 million senior secured delayed draw term loan due 2017 to B1 (LGD 2, 28%) from Ba3 (LGD 2, 23%) $380 million 12.125% second lien notes due 2018 to Caa2 (LGD 5, 83%) from Caa1 (LGD 5, 78%) Ratings affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3 Ratings Rationale ROC's B3 Corporate Family Rating primarily reflects the development and ramp-up risk associated with the company's two Ohio casino development projects -- Thistledown and Horseshoe Cincinnati -- along with the continued ramp-up risk associated with Horseshoe Cleveland, the company's Cleveland, Ohio casino which opened in May 2012. Horseshoe Cincinnati and Thistledown are both scheduled to open in the first half of 2013. However, while the Thistledown project will be fully funded, Horseshoe Cincinnati's project budget contemplates that the cash flow from Horseshoe Cleveland will help fund approximately $70 million of its development costs which adds to the risk profile of this project. Additionally, while Moody's currently believes that ROC's Cincinnati project will be completed on time and on budget, the project, like other ground up casino developments, remains exposed to cost-over runs and possible delays. ROC also faces increased ramp-up risk at Horseshoe Cleveland as additional supply is expected to enter the market -- Thistledown in the first half of 2013 and Northfield Park (no opening date announced as of yet). Positive rating consideration is given to Horseshoe Cleveland's preliminary gross gaming revenue results reported by the Ohio Casino Control Commission -- approximately $67 million from the casino's mid-May opening through end of July. These results are in line with Moody's initial expectations, despite weaker than expected slot win per unit per day ("WPU"). Horseshoe Cleveland's WPU of $290 since its opening is lower than management's initial expectations of $388 WPU, but it was partially offset by higher than expected table game WPU of approximately $3,200 compared to management's initial plan of $2,955 (excluding poker). Also supporting ROC's B3 Corporate Family Rating is Moody's expectation that despite the additional debt for Thistledown, pro forma debt/EBITDA is still expected to be within Moody's original expectations of between 5.0 times and 5.5 times. In addition, the ratings reflect Moody's view that the operating experience of the project manager, Caesars Entertainment Corporation (Caa1/stable), its established database of potential gaming customers that are members of Caesars' Total Rewards gaming loyalty program, and the market profile of both Cleveland and Cincinnati will enable each casino to reach the projected level of profitability. The stable rating outlook reflects Moody's expectations that ROC will have sufficient funds to complete construction and ramp-up of Horseshoe Cincinnati and the Thistledown project, and that ROC's three casinos combined will earn a return on investment such that at year-end 2013 debt/EBITDA will range between 5.0 times to 5.5 times. Ratings could be lowered if the Cincinnati or Thistledown projects experience cost over-runs or construction delays. Ratings could also be downgraded if Horseshoe Cleveland is unable to achieve EBITDA in 2012 of between $60 million to $70 million. Ratings improvement is limited at this time given the need to complete construction of two projects and ramp-up the operations at the recently opened Horseshoe Cleveland. However, if it appears that the Cleveland facility can generate EBITDA above $75 million in 2012 and the Cincinnati and Thistledown facilities are on time and on budget, the ratings could be considered for an upgrade. The principal methodology used in rating ROC Finance LLC was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ROC is indirectly owned by Rock Ohio Caesars LLC. Rock Ohio Caesars LLC is a joint venture between Caesars Entertainment Corporation and Rock Ohio Ventures LLC. The principal investor in Rock Ohio Ventures LLC is Dan Gilbert, chairman and founder of Quicken Loans and majority owner of the Cleveland Cavaliers NBA franchise. Through various subsidiaries, ROC owns/operates Horseshoe Cleveland which opened in May 2012 and is developing two projects: Horseshoe Cincinnati, a full casino located in Cincinnati and Thistledown, a slot-only racino just outside of Cleveland. Horseshoe Cincinnati is to be located in downtown Cincinnati and will feature 100,000 square feet of gaming space, 2,300 slots, 73 table games, a 31 table World Series of Poker room and various dining options. Thistledown racetrack is located about 15 miles southeast of Cleveland and will feature 57,000 square feet of gaming space and approximate 1,150 video lottery terminals. ROCKWOOD SPECIALTIES: Moody's Raises CFR to Ba1; Outlook Stable --------------------------------------------------------------- Moody's Investors Service upgraded Rockwood Specialties Group, Inc.'s Corporate Family Rating (CFR) to Ba1 from Ba2. Rockwood's demonstrated performance including an improved leverage profile and favorable cash generation supports the upgrade. Moody's affirmed Rockwood's existing Ba1 debt ratings and assigned a SGL-1 Speculative Grade Liquidity Rating reflecting the very good liquidity position of Rockwood. Rockwood is a wholly owned subsidiary of Rockwood Holdings, Inc. (Holdings). The outlook for the ratings is stable. The following summarizes the ratings: Issuer: Rockwood Specialties Group, Inc, Upgrades: Corporate Family Rating, Upgraded to Ba1 from Ba2 Probability of Default Rating, Upgraded to Ba1 from Ba2 Ratings Affirmed: Senior Secured Term Loan A due 2017, Ba1 (LGD3, 45%) from Ba1 (LGD3, 37%) Senior Secured Term Loan B due 2018, Ba1 (LGD3, 45%) from Ba1 (LGD3, 37%) Senior Secured Revolving Credit Facility due 2016, Ba1 (LGD3, 45%) from Ba1 (LGD3, 37%) Rating Assigned: Spreculative Grade Liquidity Rating - SGL-1 Outlook, Stable Ratings Rationale Rockwood's Ba1 Corporate Family Rating (CFR) is supported by its business profile, size ($3.6 billion in revenues), relatively stable earnings, attractive margins, and positive free cash flow through the business cycle. The company has a diverse set of inorganic chemical businesses that provide diversification of revenues and have relatively little exposure to volatile petrochemical feedstock prices. Rockwood has significant debt balances ($1.77 billion as of June 30, 2012) as well as elevated cash balances ($343 million as of June 30, 2012 at Holdings). Leverage and net leverage metrics including Moody's standard analytical adjustments are strong for a Ba1 chemical company (2.8x Debt/EBITDA and 2.4x Net Debt/EBITDA, respectively), but Moody's would expect this given the peak of the industry cycle conditions being experienced by its titanium dioxide (TiO2) business. This includes $507 million of debt at its 61% owned titanium dioxide joint venture that is fully consolidated on Rockwood's balance sheet. The rating outlook is stable. Further positive rating action (to an investment grade rating) will depend on management's financial strategy, if they publicly support a goal of achieving investment grade ratings and moving the capital structure to have all unsecured debt. Moody's would consider downgrading the ratings if the free cash flow ratio drops below 4% or if debt levels rise significantly. Moody's recognizes that Rockwood has a history of bolt-on acquisitions, but a large debt financed acquisition without a commensurate increase in EBITDA could also lead to a downgrade. Moody's most recent announcement concerning the ratings for Rockwood was on February 3, 2012, when Moody's assigned ratings to the new $350 million Term Loan due 2017. The principal methodology used in this rating was Moody's Global Chemical Industry rating methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Rockwood Specialties Group, Inc., headquartered in Princeton, New Jersey, is a wholly owned subsidiary of Rockwood Holdings, Inc. (Holdings). Rockwood produces of a variety of specialty chemicals and advanced materials, including pigments, additives, specialty compounds, ceramics, and lithium for use in businesses ranging from life sciences to automotive manufacturing. Rockwood operates through four business segments: Performance Additives, Specialty Chemicals, Titanium Dioxide Pigments and Advanced Ceramics. Kohlberg Kravis Roberts & Co. L.P., its former equity sponsor, owns approximately 9% of Holdings' shares (the remainder are publicly held), and occupies two of the seven seats on the board of directors. Revenues were $3.6 billion for the twelve months ended June 30, 2012. ROTECH HEALTHCARE: Incurs $13.6-Mil. Net Loss in Second Quarter --------------------------------------------------------------- Rotech Healthcare Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $13.61 million on $116.54 million of net revenues for the three months ended June 30, 2012, compared with a net loss of $2.47 million on $121.93 million of net revenues for the same period a year ago. The Company reported a net loss of $30.87 million on $233.50 million of net revenues for the six months ended June 30, 2012, compared with a net loss of $5.66 million on $242.94 million of net revenues for the same period during the prior year. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at June 30, 2012, showed $256 million in total assets, $589.54 million in total liabilities and a $333.54 million total stockholders' deficiency. "We are pleased with continued patient growth and the ongoing effort to reduce adjustments for contractuals and bad debt," said Philip Carter, president and chief executive officer. "Our adjustments were lower in the second quarter of 2012 compared to the first quarter of 2012 and this trend is expected to continue for the balance of the year," Mr. Carter added. A copy of the Form 10-Q is available for free at: http://is.gd/kv5amy About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. * * * As reported by the TCR on May 25, 2012, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and related issue-level ratings on the company. "The ratings reflect Rotech's 'highly leveraged' financial risk profile, including its negative cash flow and overall sensitivity of credit metrics to the uncertain reimbursement environment. Rotech's 'weak' business risk profile primarily reflects its narrow operating focus and exposure to continued Medicare reimbursement reductions for its products and services, particularly for its nebulizer medication," S&P said. In the Jan. 13, 2012, edition of the TCR, Moody's Investors Service lowered Rotech Healthcare Inc.'s Corporate Family rating ("CFR") to B3 from B2 as a consequence of weakening liquidity and worse than expected operating performance in 2011 alongside only modest expectations for improvement in 2012. The downgrade to B3 incorporates Moody's concerns regarding the decline in Rotech's cash balance due to significant working capital usage during 2011 and lower than expected growth in EBITDA. ROTECH HEALTHCARE: David Meador Named Chief Financial Officer ------------------------------------------------------------- Rotech Healthcare Inc. appointed David J. Meador, age 40, as its new Chief Financial Officer on Aug. 6, 2012. Mr. Meador has a combination of public company, private industry and public accounting experience. From 2007 to 2010, Mr. Meador was the Chief Financial Officer of AFD, Inc., an international company specializing in luxury consumer products. From 2005 to 2007, Mr. Meador served as the Chief Financial Officer of Stinger Systems, Inc., a publicly traded company. From 1993 to 2005, Mr. Meador served in various public accounting firms including Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP. Mr. Meador is a Certified Public Accountant. He received his BS in Business Administration from Samford University in Birmingham, Alabama, an MBA from the University of Alabama and a Master of Science in Accounting from the University of Central Florida. There were no arrangements or understandings between Mr. Meador and any other persons pursuant to which Mr. Meador was selected or nominated as an officer of the Company. Mr. Meador does not have a family relationship with any director or executive officer of the Company. There are no transactions or currently proposed transaction in which the Company is to be a participant and the amount involved exceeds $120,000, and in which Mr. Meador will have a direct or indirect material interest. In connection with his appointment, the Company entered into an Agreement with Respect to Rights Upon Termination of Employment, dated as of Aug. 6, 2012, with Mr. Meador that provides as follows: * Mr. Meador will receive an annual base salary of $260,000; * Mr. Meador's annual target performance bonus will be 75% of his base salary, pro rated for 2012; and * If Mr. Meador's employment is terminated by the Company without cause or by Mr. Meador for good reason, including any such termination following a change in control of the Company, subject to his executing and delivering to the Company a general release of claims, the Company will (i) pay Mr. Meador a lump sum equal to the sum of 100% of his then base salary and (ii) pay the monthly premiums for Mr. Meador's COBRA continuation coverage under the Company's medical plan for a period of 12 months from the date of his termination; except that he will not be entitled to such severance payment and benefit if the Company terminates his employment or he resigns, for any reason, upon 30 days written notice to the other party on or prior to Nov. 3, 2012. In addition, under the Agreement, Mr. Meador has agreed that (a) while employed and thereafter, he will keep confidential all of the Company's non-public information, matters and materials and (b) that while employed and for a period of 12 months following the termination of his employment, he will not directly or indirectly compete with the Company, solicit any of its employees or knowingly do anything that would be adverse in any material way to the Company's interests, except that the covenant not to compete with the Company will not apply following a No Fault Termination. On Aug. 9, 2012, Mr. Meador was awarded 70,000 stock options under the Company's Common Stock Option Plan. This option grant will vest in sixteen equal quarterly amounts over four years commencing on the date of appointment, Aug. 6, 2012. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at March 31, 2012, showed $267.15 million in total assets, $584.24 million in total liabilities, $3.08 million in series A convertible redeemable preferred stock, and a $320.17 million total stockholders' deficiency. * * * As reported by the TCR on May 25, 2012, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and related issue-level ratings on the company. "The ratings reflect Rotech's 'highly leveraged' financial risk profile, including its negative cash flow and overall sensitivity of credit metrics to the uncertain reimbursement environment. Rotech's 'weak' business risk profile primarily reflects its narrow operating focus and exposure to continued Medicare reimbursement reductions for its products and services, particularly for its nebulizer medication," S&P said. In the Jan. 13, 2012, edition of the TCR, Moody's Investors Service lowered Rotech Healthcare Inc.'s Corporate Family rating ("CFR") to B3 from B2 as a consequence of weakening liquidity and worse than expected operating performance in 2011 alongside only modest expectations for improvement in 2012. The downgrade to B3 incorporates Moody's concerns regarding the decline in Rotech's cash balance due to significant working capital usage during 2011 and lower than expected growth in EBITDA. RT MIDWEST: Ruby Tuesday Moves to Bid on Franchisee Locations ------------------------------------------------------------- Katy Stech at Dow Jones' DBR Small Cap reports that Ruby Tuesday Inc. wants the power to bid on the 10 restaurant buildings that franchisee RT Midwest Holdings LLC has put up for auction an event that will give the company's restaurants in Minnesota and Illinois the money to get out of bankruptcy. About RT Midwest RT Midwest Holdings, LLC and three affiliates sought Chapter 11 protection (Bankr. D. Minn. Case No. 12-43626 to 12-43629) in Minneapolis on June 20, 2012. RT Midwest disclosed in its schedules $835,600 in assets and $28.8 million in liabilities, of which $2.434 million is secured. Affiliate RT Chicago Franchise, LLC, disclosed $3.936 million in assets and $23.72 million in liabilities, including $23.54 million of secured debt to General Electric Capital Corp. and related entities. RT Midwest Real Estate LLC reported that it has debt in excess of $60 million. RT Northern Illinois Franchise LLC disclosed less than $30 million in debt. The Debtors own or lease 13 properties from which they operate Ruby Tuesday's franchise restaurants. RYLAND GROUP: Invesco Ltd. Lowers Equity Stake to 4.9% ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Invesco Ltd. disclosed that, as of July 31, 2012, it beneficially owns 2,196,908 shares of common stock of The Ryland Group, Inc., representing 4.9% of the shares outstanding. Invesco previously reported beneficial ownership of 5,020,071 common shares or a 11.3% equity stake as of Jan. 31, 2012. A copy of the amended filing is available for free at: http://is.gd/wQugFg About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." The Company reported a net loss of $50.75 million in 2011, a net loss of $85.14 million in 2010, and a net loss of $162.47 million in 2009. The Company's balance sheet at June 30, 2012, showed $1.80 billion in total assets, $1.32 billion in total liabilities and $485.67 million in total equity. * * * Ryland Group carries 'B1' corporate family and probability of default ratings, with stable outlook, from Moody's. It has 'BB-' issuer credit ratings, with stable outlook, from Standard & Poor's. SABRE INDUSTRIES: S&P Assigns 'B+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Alvarado, Texas-based Sabre Industries Inc. The outlook is stable. "At the same time, we assigned our 'B+' issue-level rating to the company's proposed $190 million senior secured credit facilities, consisting of a $60 million revolving credit facility and a $130 million term loan. The recovery rating is '3', indicating our expectation that lenders would receive meaningful (50% to 70%) recovery in the event of payment default," S&P said. "We expect proceeds to partly fund Sabre's pending acquisition by an affiliate of private equity firm Kohlberg & Co. and to bolster Sabre's liquidity," S&P said. "Our corporate credit rating on Sabre reflects our view of the company's business risk as 'weak' and its financial risk as 'aggressive'," said Standard & Poor's credit analyst James E. Fielding. "Weaknesses include the company's small size, limited product diversity, and competitive end markets that we believe constrain EBITDA margins in the near term. We also view the uncertain long-term financial policies relating to the company's private equity owners to be a constraint on the rating. Still, we expect the company to maintain adequate liquidity and for demand from key electric transmission and distribution and wireless communications customers to remain favorable over the next several years. Sabre does not publicly disclose its financials." "Sabre is a relatively small firm (based on revenues) that produces engineered structures for electric transmission and distribution and wireless end markets. Demand for its products is currently favorable as evidenced by a robust contractual backlog that we view to support our baseline revenue assumptions through fiscal 2014. Although its operating environment is currently favorable, we view Sabre to have a weak business risk profile because its end markets are competitive, it has limited product diversity, as well as some customer concentration." "Our stable rating outlook reflects our expectation that Sabre's operating performance will improve based on an expansion in production capacity this year and its full contractual backlog of orders. We expect debt to EBITDA to hold in the 4x to 5x range and for FFO to debt to hold near the lower end of the 12% to 20% range, as these contracts are fulfilled over the next 12 months. These ratios are consistent with our 'aggressive' financial risk Assessment," S&P said. "We could lower our rating if leverage were to increase and remain above 5x. This could occur if EBITDA margins (not publicly disclosed) dropped because steel prices increased sharply and if Sabre was unable to fully pass the higher costs along to its customers," S&P said. "An upgrade is unlikely in the next 12 months given the company's private equity ownership and uncertainty surrounding ultimate operating strategy and financial policy," S&P said. SEALED AIR: S&P Cuts Corp. Credit Rating to 'BB-'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Sealed Air Corp. to 'BB-' from 'BB'. The outlook is stable. "At the same time, we lowered the issue rating on the company's senior secured credit facilities to 'BB' from 'BB+' and lowered the issue ratings on the unsecured notes to 'BB-' from 'BB'. The recovery rating on the secured debt remains '2', indicating our expectation of substantial (70%-90%) recovery of principal in the event of payment default. The recovery rating on the unsecured debt remains '4', indicating our expectation of an average (30%- 50%) recovery of principal in the event of payment default," S&P said. "The downgrade reflects our expectation that earnings will not improve materially over the next few years," said credit analyst Liley Mehta. "We base this assumption on current sales volume pressures in the Diversey and food segments, particularly given the company's sizable exposure to Europe. In our view, this will result in credit measures remaining more consistent with a 'BB-' rating." "The outlook is stable. During the next few years, we expect Sealed Air to use discretionary cash flow primarily for debt reduction until credit measures strengthen to appropriate levels. While the headroom under its financial covenant is limited, we would expect the company to take timely steps to obtain an amendment, if needed. We believe Sealed Air should be adequately positioned to make the asbestos-related settlement payment if Grace exits bankruptcy in 2012 or 2013. Given the uncertainties related to timing and resolution of the asbestos settlement payment, we have not factored in a potential tax refund (the amount and timing of which are uncertain and subject to IRS review) and resultant debt reduction in our scenario," S&P said. "We could lower the ratings if earnings deteriorate materially from current levels--owing to a deeper recession in Europe, or integration challenges with the Diversey business-- causing adjusted leverage to remain at or above 5x on a sustained basis and FFO to total debt to remain below 10% without prospects for recovery. This could occur if revenues declined by 5% or more, and operating margins declined by 100 bps or more from current levels," S&P said. "The potential upside to the rating is limited in the next 12 months. We may raise the rating if Sealed Air further improves its sales growth and profitability, and boosts its financial profile and financial flexibility, including headroom under its financial covenant. We could raise the ratings if credit measures strengthen more than we expect, with Sealed Air achieving and maintaining FFO to total adjusted debt in the 15% to 20% after paying the asbestos related settlement," S&P said. SHANNON TERRACE: Case Summary & 3 Unsecured Creditors ----------------------------------------------------- Debtor: Shannon Terrace LLC 3639 Grandview Road Ferndale, WA 98248 Bankruptcy Case No.: 12-18257 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Timothy W. Dore Debtor's Counsel: Steven C. Hathaway, Esq. 3811 Consolidation Avenue P.O. Box 2147 Bellingham, WA 98227 Tel: (360) 676-0529 E-mail: s.hathaway@comcast.net Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wawb12-18257.pdf The petition was signed by William J. Goldstone, CEO and manager. SHERIDAN GROUP: Incurs $15,338 Net Loss in Second Quarter --------------------------------------------------------- The Sheridan Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $15,338 on $65 million of net sales for the three months ended June 30, 2012, compared with a net loss of $3.88 million on $64.99 million of net sales for the same period a year ago. For the six months ended June 30, 2012, the Company reported a net loss of $181,018 on $134.95 million of net sales, compared to a net loss of $6.24 million on $133.18 million of net sales for the same period during the prior year. Sheridan Group's balance sheet at June 30, 2012, showed $205.57 million in total assets, $176.58 million in total liabilities and $28.99 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/Fox8YC About The Sheridan Group Hunt Valley, Maryland-based The Sheridan Group, Inc. -- http://www.sheridan.com/-- is a specialty printer offering a full range of printing and value-added support services for the journal, catalog, magazine and book markets. The Company reported a net loss of $8.96 million in 2011, compared with a net loss of $5.94 million in 2010. * * * As reported by the TCR on Sept. 16, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Hunt Valley, Md.-based printing company The Sheridan Group Inc. to 'CCC+' from 'B-'. "The 'CCC+' corporate credit rating reflects Sheridan's ongoing thin margin of compliance with its minimum EBITDA covenant," said Standard & Poor's credit analyst Tulip Lim. "It also reflects our expectation of continued difficult operating conditions across the company's niche printing segments, its vulnerability to prevailing economic pressures, its high debt leverage, and the secular shift away from print media." In the April 2, 2011, edition of the TCR, Moody's Investors Service lowered the corporate family and probability of default ratings for The Sheridan Group, Inc., to B3 from B2 and to Caa1 from B3, respectively. Moody's believes that Sheridan will be able to service its debt, but the proposed capital structure affords the company with minimal ability to reduce leverage given expectations for modest free cash flow available for debt reduction and weak growth prospects. SKINNY NUTRITIONAL: Withdraws Series A Certificate of Designation ------------------------------------------------------------------ Skinny Nutritional Corp. filed a Certificate of Withdrawal of Certificate of Designation with the Secretary of State of the State of Nevada to withdraw the Certificate of Designation, Preferences and Limitations of the Series A Convertible Preferred Stock that was originally filed with the Secretary of State of the State of Nevada on April 28, 2009, and which had created the Series A Convertible Preferred Stock. The Series A Preferred Stock was mandatorily converted, by its terms, on July 6, 2009 into shares of Common Stock. In accordance with the Certificate of Designation of Series A Preferred Stock, from and after the mandatory conversion date, each certificate representing shares of Series A Preferred Stock solely represents the right to receive the number of shares of Common Stock into which such Series A Preferred Stock is convertible. On Aug. 3, 2012, the Company restated, without amending, its Articles of Incorporation. Because the Company's Articles of Incorporation were not amended in connection with their restatement, the restatement of the Company's Articles of Incorporation was authorized by action of the Board of Directors on Aug. 3, 2012, without stockholder approval in accordance with Section 78.403 of the Nevada Revised Statutes. In accordance with Section 78.403 of the Nevada Revised Statutes, the Company has omitted the following provisions from its restated Articles of Incorporation: (i) the names, addresses, signatures and acknowledgements of the incorporators, (ii) the names and addresses of the members of the past and present board of directors, and (iii) the name and address of the resident agent of the Company. About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. The Company reported a net loss of $7.66 million in 2011, compared with a net loss of $6.91 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.15 million in total assets, $4.62 million in total liabilities, all current, and a $2.47 million stockholders' deficit. In its audit report for the 2011 financial statements, Marcum LLP, in Bala Cynwyd, Pennsylvania, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a working capital deficiency of $3.17 million, an accumulated deficit of $45,492,945, stockholders' deficit of $1.74 million and no cash on hand. The Company had net losses of $7.67 million and $6.91 million for the years ended Dec. 31, 2011, and 2010, respectively. Additionally, the Company is currently in arrears under its obligation for the purchase of trademarks. Under the agreement, the seller of the trademarks may choose to exercise their legal rights against the Company's assets, which includes the trademarks. SOLUTIA INC: S&P Wthdraws 'BB' CCR on Eastman Chemical Acquisition ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on Solutia Inc., including its corporate credit rating. "We have withdrawn our issue ratings and our corporate credit rating on Solutia Inc. upon the completion of Eastman Chemical Co.'s (BBB/Stable/A-2) acquisition of the company," said credit analyst Paul Kurias. "Solutia has paid down all of its rated debt." SOMAXON PHARMA: Posts $2.2 Million Net Loss in Second Quarter ------------------------------------------------------------- Somaxon Pharmaceuticals, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.20 million on $3.35 million of revenue for the three months ended June 30, 2012, compared with a net loss of $14.95 million on $6.24 million of revenue for the same period a year ago. For the six months ended June 30, 2012, the Company reported a net loss of $4.32 million on $6.09 million of revenue, compared with a net loss of $31.99 million on $8.56 million of revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $11.94 million in total assets, $8.24 million in total liabilities, and stockholders' equity of $3.70 million. PricewaterhouseCoopers LLP, in San Diego, California, expressed substantial doubt about Somaxon's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and negative cash flows. A copy of the Form 10-Q is available for free at: http://is.gd/y2Jy2k San Diego-Calif.-based Somaxon Pharmaceuticals, Inc., is a specialty pharmaceutical company focused on the in-licensing, development and commercialization of proprietary branded products and product candidates to treat important medical conditions where there is an unmet medical need and/or high-level of patient dissatisfaction, currently in the central nervous system therapeutic area. SOUTHERN OAKS: Exclusive Plan Filing Period Extended to Aug. 28 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Oklahoma has granted Southern Oaks of Oklahoma, LLC's motion to extend its exclusive periods to file and solicit acceptances for a proposed chapter 11 plan until Aug. 28, 2012, and Oct. 28, respectively. The Debtor relates that it needs additional time to negotiate with creditors for a consensual plan; and formulate a viable, feasible and confirmable Chapter 11 plan. The Debtor has had discussions with certain secured creditors regarding workout terms and has taken steps to reach agreeable terms including the hiring of a real estate broker and entering into forbearance terms pending liquidation of collateral. About Southern Oaks Southern Oaks of Oklahoma, LLC, owns a 126 unit apartment complex in south Oklahoma City, 115 single family residences, 10 residential duplexes and 4 commercial properties in the Oklahoma City Metro area and a 100 unit apartment complex in Pryor, Oklahoma. The Company operates the non-apartment properties by and through an affiliate property management company, Houses For Rent of OKC, LLC, who advertises, leases, collects rents, pays expenses, provides equipment, labor and materials for maintenance, repairs and makeready services. The Company filed for Chapter 11 bankruptcy (Bankr. W.D. Okla. Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson presides over the case. Ruston C. Welch, Esq., at Welch Law Firm P.C., serves as the Debtor's counsel. It scheduled $14,788,414 in assets and $15,352,022 in liabilities. The petition was signed by Stacy Murry, manager of MBR. Affiliates that filed separate Chapter 11 petitions are Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382) on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case No. 11-10717) on Feb. 23, 2011. Southern Oaks owns a 126-unit apartment complex in south Oklahoma City, 115 single family residences, 10 residential duplexes and 4 commercial properties in the Oklahoma City Metro area and a 100 unit apartment complex in Pryor, Oklahoma. Southern Oaks operates the non-apartment Properties by and through an affiliate property management company, Houses For Rent of OKC LLC, who advertises, leases, collects rents, pays expenses, provides equipment, labor and materials for maintenance, repairs and make ready services. On Jan. 12 and 27, 2012, the Debtor's ownership and operation of the Properties was consolidated by the merger of various affiliate entities with the Debtor being the surviving entity. Those entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail 13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th, LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC; QCB 08, LLC; and Prairie Village of Oklahoma, LLC. SPEEDEMISSIONS INC: Had $75,967 Net Loss in Second Quarter ---------------------------------------------------------- Speedemissions, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $75,967 on $1.99 million of revenue for the three months ended June 30, 2012, compared with a net loss of $92,468 on $2.15 million of revenue for the same period last year. For the six months ended June 30, 2011, the Company had a net loss of $192,749 on $3.91 million of revenue, compared with a net loss of $236,419 on $4.26 million of revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $2.25 million in total assets, $985,146 in total liabilities, $4.58 million of Series A convertible redeemable preferred stock, and a shareholders' deficit of $3.31 million. The Company had an accumulated deficit of $19.27 million as of June 30, 2012. The Company had a working capital deficit of $475,488 at June 30, 2012, compared to a working capital deficit of $376,593 at Dec. 31, 2011. As reported in the TCR on April 5, 2012, Habif, Arogeti & Wynne, LLP, in Atlanta, Ga., expressed substantial doubt about Speedemissions' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has a capital deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/ab33D3 Tyrone, Georgia-based Speedemissions, Inc., is a test-only emissions testing and safety inspection company. SPRINT NEXTEL: Offering $1.5 Billion of 7.000% Notes ---------------------------------------------------- Sprint Nextel Corporation filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to its offering of $1,500,000,000 aggregate principal amount of 7.000% Notes due 2020. Joint Book-Running Managers are: J.P. Morgan Securities LLC Deutsche Bank Securities Inc. Barclays Capital Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated Citigroup Global Markets Inc. Goldman, Sachs & Co. Credit Suisse Securities (USA) LLC, Scotia Capital (USA) Inc., and Wells Fargo Securities, LLC, serve as senior co-managers. The Williams Capital Group, L.P., is the co-manager. A copy of the FWP is available for free at http://is.gd/pq0o1Z About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's balance sheet at June 30, 2012, showed $49.02 billion in total assets, $39.79 billion in total liabilities and $9.22 billion in total shareholders' equity. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms, among other things, the Issuer default rating (IDR) of Sprint Nextel and its subsidiaries at 'B+'. The ratings for Sprint reflect the ongoing execution risk both operationally and financially regarding several key initiatives that the company expects will improve cash generation, network performance and longer-term profitability. STEREOTAXIS INC: Files Form 10-Q; Posts $2.8MM Net Income in Q2 --------------------------------------------------------------- Stereotaxis, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing 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. A copy of the Form 10-Q is available for free at: http://is.gd/Fadqw2 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. T3 MOTION: Rod Keller Appointed to Board of Directors ----------------------------------------------------- T3 Motion, Inc.'s Board of Directors appointed Rod Keller Jr. as a member of the Company's Board of Directors. Mr. Keller is currently the Chief Executive Officer of the Company and the appointment was a condition of his employment as described in his employment agreement, which included a clause that Mr. Keller be appointed as a Director within 120 days of his April 9, 2012, start date. Mr. Keller has not been appointed to any committees of the Board of Directors and he is not expected to be appointed to any committee of the Board of Directors. Mr. Keller will receive no compensation for his service as a Director of the Company other than his compensation as Chief Executive Officer as described in his employment letter. On Aug. 6, 2012, the Company amended its bylaws to expand the Company's Board of Directors from five Directors to seven Directors. Section 3.02 of Article III of the Bylaws was amended in its entirety to read as follows: "Section 3.02 NUMBER AND TERM. The authorized number of directors of the Corporation shall be established from time to time by the Board. Until changed by an amendment to this Section 3.02, the authorized number of directors of the Corporation shall be seven (7). Directors need not be stockholders of the Corporation. Each director shall hold office until a successor is elected and qualified or until the director resigns or is removed. JMJ Note Due Date Extended to Aug. 10 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. Pursuant to the terms of the Security Agreement, the Loan is secured by all assets of the Company. JMJ delivered net proceeds to the Company in the amount of $250,000. The Note was originally due 21 days following receipt of the net proceeds, or July 31, 2012, but the parties amended the due date of the Note to Aug. 7, 2012. On Aug. 7, 2012, the Company and JMJ entered into an amendment which extended the due date of the Note until Aug. 10, 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. TELECONNECT INC: Kees Lenselink Resigns from Board of Directors --------------------------------------------------------------- Mr. Kees Lenselink has resigned from his position on the Board of Directors of Teleconnect Inc. as well as from his position on the Audit Committee effective Aug. 8, 2012. Mr. Lenselink had been appointed to these positions effective Oct. 8, 2010. As Mr. Lenslink indicates in his letter of resignation, his duties on other Boards of Directors are requesting more of his time than expected and as such has resigned from his duties with Teleconnect, though he will continue to be a supportive shareholder. About Teleconnect Inc. Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB: TLCO) Teleconnect Inc. (initially named Technology Systems International Inc.) was incorporated under the laws of the State of Florida on November 23, 1998. Serving as a telecommunications service provider in Spain for almost 9 years, the Company never fully reached expectations and decided late in 2008 to change its course of business. In November 2009, 90% of the Company's telecommunication business was sold to a Spanish group of investors, and on October 15, 2010, the Company completed the acquisition of Hollandsche Exploitatie Maatschappij BV (HEM), a Dutch entity established in 2007. HEM's core business involves the age validation of consumers when purchasing products which cannot be sold to minors, such as alcohol or tobacco. The Company regards this age validation business as its new strategic direction. The Dutch companies acquired in 2007 (Giga Matrix, The Netherlands, 49% and Photowizz, The Netherlands, 100%) are considered to function complementary to this new service offering. Through the purchase of HEM and its ownership in Photowizz and Giga Matrix the Company now controls all four pillars under its business model: the manufacturing and leasing of electronic age validation equipment, the performance of age validation transactions remotely, the performance of market surveys and the broadcasting of in-store commercial messages using the age validation equipment in between age checks. Coulter & Justus, P.C., in Knoxville, Tenn., expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency in addition to a working capital deficiency. The Company reported a net loss of $3.26 million on $112,722 of sales for the fiscal year ended Sept. 30, 2011, compared with net income of $1.97 million on $254,446 of sales during the prior year. The Company's balance sheet at March 31, 2012, showed $7.21 million in total assets, $11.08 million in total liabilities, all current, and a $3.87 million total stockholders' deficit. TELIK INC: Had $2.05 Million Net Loss in Second Quarter ------------------------------------------------------- Telik, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.05 million for the three months ended June 30, 2012, compared with a net loss of $3.00 million for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $4.33 million, compared with a net loss of $6.67 million for the same period in 2011. The Company did not record any revenues for the three and six months ended June 30, 2012, or in 2011. According to the regulatory filing, future non-product revenues, if any, will depend upon the extent to which it enters into new collaborative research agreements and the amounts of payments relating to such agreements. As of June 30, 2012, Telik had an accumulated deficit of $544.66 million. The Company's balance sheet at June 30, 2012, showed $8.75 million in total assets, $3.20 million in total liabilities, and stockholders' equity of $5.55 million. In its report on Telik's financial statements for the year ended Dec. 31, 2011, Ernst & Young LLP, in San Jose, California said the Company's recurring losses from operations, available cash, cash equivalents and investments and accumulated deficit raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/pc9v0u Telik, Inc., headquartered in Palo Alto, Calif., was incorporated in the state of Delaware in October 1988. The Company is engaged in the discovery and development of small molecule therapeutics. THOMPSON CREEK: S&P Lowers CCR to 'CCC+' on Weak Performance ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Denver-based molybdenum miner Thompson Creek Metals Co. to 'CCC+' from 'B-'. Standard & Poor's also lowered its issue-level rating on the company's senior secured credit facility to 'B' from 'B+'. The recovery rating on the senior secured credit facility is unchanged at '1'. In addition, Standard & Poor's lowered its issue-level rating on the company's senior unsecured debt to 'CCC' from 'CCC+'. The '5' recovery rating on the senior unsecured notes is unchanged. Finally, Standard & Poor's removed all its ratings on the company from CreditWatch, where they had been placed with negative implications July 11, 2012. The outlook is negative. "These rating actions follow Thompson Creek's announcement of weaker production and higher cost expectations through next year," said Standard & Poor's credit analyst Donald Marleau. "The ratings on Thompson Creek reflect what Standard & Poor's views as the company's highly leveraged financial risk profile, characterized by a heavy debt burden and less-than-adequate liquidity. We view the company's business risk profile as vulnerable due to its reliance on volatile molybdenum prices, which are weakening during a phase of large capital expenditures; limited operating diversity; and the capital intensity of its operations. Partially offsetting these factors, in Standard & Poor's opinion, are the company's better-than-average, long-term cost profile and long reserve lives at its two operating mines," S&P said. "The negative outlook reflects our view that Thompson Creek's weak operating margins could drain previously arranged funding sources set up to support the large capital requirements at Mt. Milligan. We assume that, with a US$13.00 per pound molybdenum price in the next 12 months, funds from operations could decline to essentially breakeven levels with a debt-to-EBITDA leverage ratio greater than 10x," S&p said. "We could lower the ratings further should Thompson's financial flexibility continue to tighten in the next several quarters due to a combination of contracting margins and additional capital spending increases at Mt. Milligan," S&P said. "A revision to stable is unlikely in the near term, given Thompson Creek's rising debt burden, exposure to volatile molybdenum prices, and large capital expenditures in the next 12-18 months. However, one could occur if molybdenum prices increase sustainably above US$17.00 per pound thereby pushing EBITDA to about US$200 million, likely supporting adequate liquidity and a debt-to-EBITDA leverage ratio below 5x," S&P said. TITAN PHARMACEUTICALS: Incurs $1.7MM Net Loss in Second Quarter --------------------------------------------------------------- Titan Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss and comprehensive loss of $1.72 million on $1.36 million of total revenue for the three months ended June 30, 2012, compared with a net loss and comprehensive loss of $6.98 million on $695,000 of total revenue for the same period during the prior year. The Company reported a net loss and comprehensive loss of $6.88 million on $2.63 million of total revenue for the six months ended June 30, 2012, compared with a net loss and comprehensive loss of $11.50 million on $1.64 million of total revenue for the same period a year ago. Titan Pharmaceuticals' balance sheet at June 30, 2012, showed $10.05 million in total assets, $33.04 million in total liabilities and a $22.99 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Iw59X5 About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals, Inc., is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. Following the 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan Pharmaceuticals' ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. TOLLAND PARTNERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Tolland Partners, LLC (a Tennessee LLC) 306 CR 1094 Oxford, MS 38655 Bankruptcy Case No.: 12-13311 Chapter 11 Petition Date: August 10, 2012 Court: United States Bankruptcy Court Northern District of Mississippi (Aberdeen) Debtor's Counsel: Joyce Freeland, Esq. FREELAND & FREELAND P.O. Box 269 Oxford, MS 38655 Tel: (678) 428-7849 E-mail: joyce@freelandlawfirm.com Estimated Assets: $500,001 to $1,000,000 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 Roger Wolcott, member/manager. TRANS-LUX CORP: Phases Out Executive Vice President Position ------------------------------------------------------------ Trans-Lux Corporation eliminated the position of Executive Vice President, held by Mr. Konstantinos Ktistakis, effective Aug. 10, 2012. The Company's decision to eliminate that position was not due to any disagreement with Mr. Ktistakis. About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. The Company reported a net loss of $1.42 million in 2011, compared with a net loss of $7.03 million in 2010. The Company's balance sheet at March 31, 2012, showed $26.72 million in total assets, $24.45 million in total liabilities, $6.13 million in redeemable convertible preferred stock, and a $3.86 million total stockholders' deficit. TRANSWITCH CORPORATION: Has $6 Million Net Loss in Second Quarter ----------------------------------------------------------------- TranSwitch Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $6.00 million on $3.83 million of net revenues for the three months ended June 30, 2012, compared with a net loss of $3.00 million on $7.05 million of net revenues for the same period a year earlier. For the six months ended June 30, 2012, the Company had a net loss of $12.08 million on $7.51 million of net revenues, compared with a net loss of $6.15 million on $15.28 million of net revenues for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $19.18 million in total assets, $15.62 million in total liabilities, and stockholders' equity of $3.56 million. According to the regulatory filing, the Company has incurred significant operating losses and has used cash in its operating activities for the past several years. Operating losses have resulted from inadequate sales levels for the cost structure. As of June 30, 2012, the Company has negative working capital of approximately $4.2 million. In addition, the Company has outstanding indebtedness to Bridge Bank under its lending facility of $0.7 million. "The Company's current forecast projects that, absent an infusion of capital, it will be unable to meet its current obligations through June 30, 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/sP8KhW Shelton, Connecticut-based TranSwith Corporation designs, develops and supplies innovative integrated circuit (IC) and intellectual property (IP) solutions that provide core functionality for voice, data and video communications equipment for network, enterprise and customer premises applications. It provides integrated multi- core network processor System-on-a-Chip (SoC) solutions and software solutions for Fixed, 3G and 4G Mobile, VoIP and Multimedia Infrastructures. For the customer-premises market, it offers interoperable connectivity solutions that provide a bridge between HDMI and DisplayPort and enable the distribution and presentation of high-definition (HD) content for consumer electronics, and personal computer markets and also provide a family of communications processors that provide best-in-class performance for a range of applications. Overall, the Company has over 100 active customers, including the leading global telecom equipment providers, semiconductor and consumer product companies. TRAVELPORT HOLDINGS: Files Form 10-Q; Incurs $20MM Loss in Q2 ------------------------------------------------------------- Travelport Limited 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 $20 million on $506 million of net revenue for the three months ended June 30, 2012, compared with net income attributable to the Company of $306 million on $530 million of net revenue for the same period a year ago. The Company reported a net loss attributable to the Company of $31 million on $1.05 billion of net revenue for the six months ended June 30, 2012, compared with net income attributable to the Company of $283 million on $1.06 billion of net revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $3.33 billion in total assets, $4.32 billion in total liabilities and a $988 million in total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/q2RuZI 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. * * * 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 CORP: Meeting to Form Panel Set for Aug. 20 ------------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Aug. 20, 2012, at 10:00 a.m. in the bankruptcy case of Tri-Valley Corporation, et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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. TRIAD GROUP: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Triad Group, Inc. 700 West North Shore Drive Hartland, WI 53029 Bankruptcy Case No.: 12-31923 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Debtor's Counsel: Steven H. Silton, Esq. HINSHAW & CULBERTSON LLP 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Tel: (612) 333-3434 E-mail: ssilton@hinshawlaw.com akulbeik@hinshawlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wieb12-31923.pdf The petition was signed by Donna Petroff, chief financial officer. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- H&P Industries, Inc. 12-31924 08/09/12 UNI-PIXEL INC: Selling 3 Million Common Shares at $5.25 Apiece -------------------------------------------------------------- UniPixel, Inc., announced the pricing of its public offering of common stock at a price to the public of $5.25 per share. The size of the offering has been increased from 3,000,000 shares to 3,107,665 shares. Of the shares being offered, the Company is offering 2,070,585 shares and two of its stockholders, The Altar Rock Fund Liquidating Trust and The Raptor Global Portfolio Liquidating Trust, are offering an aggregate 1,037,080 shares. In addition, the Company has granted the underwriter a 30-day option to purchase up to an additional 450,000 shares of common stock from the Company to cover over-allotments, if any. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes. The Company will not receive any of the proceeds from the sale of shares by the selling stockholders. Craig-Hallum Capital Group LLC is the sole book-running manager for the offering. This offering is being conducted pursuant to a shelf registration statement that was declared effective by the U.S. Securities and Exchange Commission on June 8, 2012. The offering is being made only by means of a prospectus supplement and accompanying prospectus, forming an effective part of the registration statement. About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. The Company reported a net loss of $8.57 million in 2011 compared to a net loss of $3.82 million in 2010. The Company's balance sheet at June 30, 2012, showed $5.60 million in total assets, $154,626 in total liabilities and $5.45 million in total shareholders' equity. UNIGENE LABORATORIES: Incurs $5.4 Million Net Loss in 2nd Quarter ----------------------------------------------------------------- Unigene Laboratories, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $5.47 million on $2.73 million of revenue for the three months ended June 30, 2012, compared with a net loss of $8.43 million on $2.46 million of revenue for the same period during the prior year. The Company reported a net loss of $11.49 million on $4.48 million of revenue for the six months ended June 30, 2012, compared with a net loss of $15.08 million on $4.59 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $11.69 million in total assets, $77.56 million in total liabilities and a $65.87 million total stockholders' deficit. The European Medicine's Agency Committee for Medicinal Products for Human Use (CHMP), issued a report concluding that there was evidence of a small increased risk of cancer with long-term use of current calcitonin medications approved and commercially available in Europe since 1973 and calling for curtailment of calcitonin usage. Ashleigh Palmer, Unigene's President and CEO, commented, "The EMA's unexpected recommendation regarding calcitonin-containing products is proving to be an untimely and crucial setback for the Company and our 2012 goal of addressing our substantial inherited debt. Prior to the EMA announcement, Management had been working exhaustively to restructure the balance sheet and recapitalize the Company. Indeed, we were making excellent progress in that regard, having reached a second quarter settlement agreement with the Founders and had entered into negotiations with Victory Park Capital with the intent to restructure their debt. Regrettably, the EMA recommendation has impacted our calcitonin-related business opportunities, and as a result, our discussions with Victory Park Capital. Under these circumstances, the prospect of our being able to complete the settlement of the Founders' debt in September has become extremely unlikely." Bankruptcy Warning Under the Company's amended and restated March 2010 financing agreement with Victory Park Management, LLC, so long as the Company's outstanding note balance is at least $5,000,000, the Company must maintain a minimum cash balance equal to at least $2,500,000 and its cash flow must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. "Without additional financing, we will not be able to maintain a minimum cash balance of $2,500,000, or maintain an adequate cash flow, in order to avoid default in periods subsequent to September 30, 2012," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, we will be in default under the financing agreement, which would result in the full amount of our debt owed to Victory Park becoming immediately due and payable. Even if we are able to raise cash and maintain a minimum cash balance of at least $2,500,000 through the March 2013 maturity date, there is no assurance that the notes will be converted into common stock, in which case, we may not have sufficient cash from operations or from new financings to repay the Victory Park debt when it comes due. There can be no assurance that new financings will be available on acceptable terms, if at all. In the event that we default, Victory Park could retain control of the Company and will have the ability to force us into involuntary bankruptcy and liquidate our assets." A copy of the Form 10-Q is available for free at: http://is.gd/eY1zCt About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Unigene reported a net loss of $17.92 million in 2011, a net loss of $27.86 million in 2010, and a net loss of $13.38 million in 2009. Grant Thornton LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has incurred a net loss of $17,900,000 during the year ended Dec. 31, 2011, and, as of that date, has an accumulated deficit of approximately $189,000,000 and the Company's total liabilities exceeded total assets by $55,138,000. US FIDELIS: Judge to Confirm Committee's Liquidating Plan --------------------------------------------------------- The bankruptcy court in St. Louis, Missouri, is confirming the Chapter 11 Plan of Liquidation proposed by the Official Committee of Unsecured Creditors for US Fidelis Inc., the Committee's counsel told the Troubled Company Reporter. "The Judge announced at the conclusion of the hearing that it intended to enter an order confirming the Plan. He and his clerk are reviewing the proposed orders that were submitted at the conclusion of the hearing. I've been told to expect that an order will be entered in a week or so," David A. Warfield, Esq., at Thopmson Cobourn LLP, told the TCR. The Plan confirmation hearing was held July 16. "The biggest issue surrounding confirmation was the scope and extent of the third party releases in the Plan," Mr. Warfield said. The Creditors Committee filed a Chapter 11 Plan of Liquidation for the Debtor that is based on a global settlement with the Debtors, the unsecured creditors, and WARN litigation claimants, among other key parties. A copy of the Plan dated June 5, 2012, is available at: http://bankrupt.com/misc/US_Fidelis_Comm_Plan_060512.pdf According to a July 13 document, the institutional creditors who had actively participated in the Chapter 11 case, including Mepco Financial Corporation and Warrantech Corporation, supported the Plan, as did the majority of the states attorneys general, including the California Attorney General. No state attorney general opposed confirmation, and neither did the Office of the United States Trustee. Four individual consumer creditors conveyed objections to the Plan. The first, Robert Schulz, filed pro se an objection. The remaining three are individuals from California -- named plaintiffs in a U.S. District Court action against Mepco pending in the Northern District of California. The Creditors Committee on July 13 obtained approval from Judge Charles E. Rendlen to amend the Plan to change the treatment of the claims alleged against the estate by the objectors. Specifically, the Creditors Committee is creating a new class for the Objectors' claims and to pay in full their claims (totaling the nominal amount of $11,205) upon the Plan effective date. As a result of the changes, the judge held that the objectors are now in an unimpaired class and therefore lacked standing to object to the Plan. "None of [the individual objectors] showed up at the confirmation hearing or prosecuted their objections," Mr. Warfield said. The Creditors Committee expects the Plan to become effective within 30 days of the court entering the confirmation order. The Creditors Committee is represented by: David A. Warfield, Esq. Brian W. Hockett, Esq. THOMPSON COBURN LLP One US Bank Plaza, Suite 2600 St. Louis, MO 63101 Telephone: (314) 552-6000 Telecopier: (314-552-7000 E-mail: bhockett@thompsoncoburn.com dwarfield@thompsoncoburn.com About US Fidelis Wentzville, Missouri-based US Fidelis, Inc., was a marketer of vehicle service contracts developed by independent and unrelated companies. It stopped writing new business in December 2009. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mo. Case No. 10-41902) on March 1, 2010. Brian T. Fenimore, Esq., Crystanna V. Cox, Esq., James Moloney, Esq, at Lathrop & Gage L.C., in Kansas City, Mo.; and Laura Toledo, Esq., at Lathrop & Gage, in Clayton, Mo., advise the Debtor. GCG, Inc., is the consumer claims and noticing agent. Allison E. Graves, Esq., Brian Wade Hockett, Esq., and David A. Warfield, Esq., at Thompson Coburn LLP, in St. Louis, Mo., represent the Official Unsecured Creditors Committee. The Company scheduled assets of $74.4 million and liabilities of $25.8 million as of the petition date. USI HOLDINGS: Moody's Rates $10MM Incremental Term Loan 'B1' ------------------------------------------------------------ Moody's Investors Service has assigned a B1 rating to USI Holdings Corporation's (USI - corporate family rating B3, probability of default rating B3) proposed incremental $100 million borrowing under the accordion feature of its senior secured term loan. The company plans to use net proceeds for general corporate purposes, including potential acquisitions. The proposed borrowing does not affect USI's corporate family rating or its debt ratings, which include a B1 rating on senior secured credit facilities, a Caa1 rating on senior unsecured notes and a Caa2 rating on subordinated notes. The rating outlook for USI is stable. Ratings Rationale USI's ratings reflect its favorable market position, its good balance of property & casualty (P&C) insurance and employee benefits business, and its ability to cross-sell various products to strengthen client relationships. These strengths are offset by the company's high financial leverage, although this has improved somewhat in recent years, and by the integration risk and contingent exposures associated with its acquisition strategy. USI's ability to absorb the incremental borrowing at its current rating level reflects the firm's relatively strong operating margins and EBITDA growth over the past few years. Giving effect to the proposed incremental borrowing, Moody's estimates that USI's pro forma adjusted debt-to-EBITDA ratio for the 12 months through March 2012 was in the range of 6.5x-7x, and the firm's adjusted EBITDA coverage of interest was in the range of 2x-2.25x. The pro forma leverage ratio is weak for USI's rating category, but it is tempered by a large pro forma cash position associated with the incremental borrowing and by borrowing capacity under a revolving credit facility ($96 million available at March 31, 2012). Moody's expects that proceeds from such borrowings would be deployed over time for EBITDA-enhancing acquisitions. USI's pro forma financing arrangement as of March 31, 2012, included a $100 million senior secured revolving credit facility maturing in 2013 (rated B1 - $4 million outstanding for letters of credit), a $721 million senior secured term loan due in 2014 (rated B1 - includes the proposed incremental borrowing of $100 million), $225 million of senior unsecured notes due in 2014 (rated Caa1) and $175 million of subordinated notes due in 2015 (rated Caa2). Factors that could lead to an upgrade of USI's ratings include: (i) adjusted (EBITDA -- capex) coverage of interest consistently above 2x, (ii) adjusted free-cash-flow-to-debt ratio consistently above 5%, and (iii) adjusted debt-to-EBITDA ratio below 5.5x. Factors that could lead to a downgrade of USI's ratings include: (i) adjusted (EBITDA -- capex) coverage of interest below 1.2x, (ii) adjusted free-cash-flow-to-debt ratio below 2%, or (iii) adjusted debt-to-EBITDA ratio above 8x. Moody's has assigned the following rating (and loss given default (LGD) assessment): Incremental senior secured term loan B1 (LGD3, 30%). Giving effect to the proposed incremental borrowing, USI's ratings (and revised LGD assessments) include the following: Corporate family rating B3; Probability of default rating B3; Secured revolving credit facility due May 2013 rated B1 (to LGD3, 30% from LGD2, 28%); Senior secured term loan due May 2014 rated B1 (to LGD3, 30% from LGD2, 28%); Senior unsecured notes due November 2014 rated Caa1 (to LGD5, 78% from LGD5, 76%); Subordinated notes due May 2015 rated Caa2 (to LGD6, 93% from LGD6, 92%). Based in Briarcliff Manor, New York, USI ranks among the 10 largest US insurance brokers in terms of revenues. Through subsidiaries across the US, the company distributes P&C insurance and employee benefits products to small and mid-sized businesses. For the twelve months through March 2012, USI reported total revenues of $668 million and net income of $14 million. Stockholders' equity was $225 million as of March 31, 2012. The principal methodology used in this rating was Moody's Global Rating Methodology for Insurance Brokers & Service Companies published in February 2012. USI HOLDINGS: S&P Rates $100MM Incremental Sr. Sec. Term Loan 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' (one notch above the 'B-' counterparty credit rating) senior secured debt rating and '2' recovery rating to USI Holdings Corp.'s planned $100 million incremental senior secured term loan due in May 2014. "At the same time, we affirmed our 'B-' long-term counterparty credit rating on USI, as well as our 'B' issue-level rating and '2' recovery rating on USI's existing senior secured facilities, and our 'CCC' issue-level rating and '6' recovery on USI's unsecured facilities. The outlook is positive," S&P said. "The affirmation and positive outlook reflect our belief that the company's credit profile will remain within our previously stated expectations for 2012 despite the increased debt burden (total debt increases by approximately 10% following the new issuance). USI will issue the $100 million incremental term loan through an accordion feature on its existing senior secured credit facility, and plans ultimately to use the proceeds of the new debt issuance for general corporate purposes including acquisitions," S&P said. "The counterparty credit rating on USI reflects its limited financial flexibility because of a highly levered capital structure, a low-quality balance sheet with negative tangible net worth, and operating performance that, although improving, has historically lagged peers' and has been hurt by frequent extraordinary charges. Somewhat offsetting these weaknesses are USI's earnings diversification and encompassing product placement through its property/casualty, employee benefits, and specialized benefits divisions. Moreover, USI benefits from an enhanced competitive position through expansion of its national footprint, primarily from acquisitions. Lastly, the company's emphasis on organic growth and improving operating efficiencies has begun to bolster results," S&P said. "The outlook is positive. We believe that with its business initiatives during the past three years, USI has positioned itself to begin to display tangible organic revenue improvements and earnings growth. We expect USI's organic revenue in 2012 to be modestly positive (low single digits) as a result of favorable new business and retention trends, the company's strategic initiatives and producer investments, and a neutral to positive impact from rate and exposure trends in the company's markets. Total revenue growth will likely be in the high single digits, as the company supplements positive organic traction with acquisition-related growth. Furthermore, we expect the company's EBITDA margins (excluding earn-out payments) to continue to exceed 25% and for the company to demonstrate margin improvement as it continues to focus on synergies and expense savings. EBITDA coverage likely will be 2x or higher as earnings growth and cost savings from more favorable interest rate hedging agreements (which the company entered into in third-quarter 2011) offset the increased interest burden from the new incremental issuance. We expect continued de- levering throughout 2012 with a debt-to-adjusted trailing-12- months EBITDA ratio of approximately 6.5x or less (or less than 6x excluding earn outs). Finally, we expect USI to have positive cash flow, and we believe that it will be able to meet its restrictive covenants in the near to medium term," S&P said. "We would consider raising the rating during the next 12 months if the company continues to display favorable operating and financial performance in 2012. The company could demonstrate this by posting positive organic revenue growth as a result of favorable new business and retention trends and sound market fundamentals; and EBITDA growth through sustained margin improvements, fewer recurring charges, and selective strategic acquisitions. EBITDA coverage of more than 2x and a sustainable debt-to-adjusted EBITDA ratio (excluding expected earn-out payments) of less than 6x would also likely be needed for us to consider raising the rating. We could lower the ratings if the company's revenue and profitability fall short of our expectations because of the unsuccessful execution of recent strategic initiatives, a negative market impact, or more aggressive financial management. A covenant cushion of less than 10%, weak liquidity, or debt leverage of more than 8x would also likely precipitate a downgrade," S&P said. VALENCE TECHNOLOGY: Incurs $3.8-Mil. Net Loss in June 30 Quarter ---------------------------------------------------------------- Valence Technology, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.79 million on $10.97 million of revenue for the three months ended June 30, 2012, compared with a net loss of $3.09 million on $14.08 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $32.12 million in total assets, $86.95 million in total liabilities, $8.61 million in redeemable convertible preferred stock, and a $63.44 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/ZJ1YSp About Valence Technology Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-11580) on July 12, 2012, in its home-town in Austin. Founded in 1989, Valence develops lithium iron magnesium phosphate rechargeable batteries. Its products are used in hybrid and electric vehicles, as well as hybrid boats and Segway personal transporters. The Debtor disclosed debt of $82.6 million and assets of $31.5 million as of March 31, 2012. It owes $35 million in loans to affiliates of Chairman Carl E. Berg, about $34 million in interest on those loans, and $3 million on a third-party loan. The company also owes about $9 million on two series of convertible preferred stock held by Berg affiliates and has $11 million in trade debt and accrued expenses. Mr. Berg and related entities own 44.4% of the shares. ClearBridge Advisors, LLC owns 5.5%. Valence expects to complete its restructuring during 2012. Judge Craig A. Gargotta presides over the case. The Company is being advised by Streusand, Landon & Ozburn, LLP with respect to bankruptcy matters. The petition was signed by Robert Kanode, CEO. VERENIUM CORP: BlackRock Discloses 4.9% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of July 31, 2012, it beneficially owns 628,755 shares of common stock of Verenium Corp. representing 4.99% of the shares outstanding. BlackRock previously disclosed beneficial ownership of 639,102 common shares or a 5.07% equity stake as of Dec. 30, 2011. A copy of the amended filing is available for free at: http://is.gd/aQmsJD About Verenium Corp San Diego, Calif.-based Verenium Corporation is an industrial biotechnology company that develops and commercializes high performance enzymes for a broad array of industrial processes to enable higher productivity, lower costs, and improved environmental outcomes. The Company operates in one business segment with four main product lines: animal health and nutrition, grain processing, oilfield services and other industrial processes. The Company's balance sheet at June 30, 2012, showed $52.31 million in total assets, $13.83 million in total liabilities, and shareholders' equity of $38.48 million. Bankruptcy Warning "Based on our current cash resources and 2012 operating plan, our existing cash resources may not be sufficient to meet the cash requirements to fund our planned operating expenses, capital expenditures and working capital requirements beyond Dec. 31, 2012, without additional sources of cash. If we are unable to raise additional capital, we will need to defer, reduce or eliminate significant planned expenditures, restructure or significantly curtail our operations, sell some or all our assets, file for bankruptcy or cease operation," the Company said in its quarterly report for the period ended June 30, 2012. Going Concern Ernst & Young LLP, in San Diego, California, expressed substantial doubt about Verenium's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses, has a working capital deficit of $637,000 and has an accumulated deficit of $600.8 million at Dec. 31, 2011. VISUALANT INCORPORATED: Had $737,600 Net Loss in June 30 Quarter ---------------------------------------------------------------- Visualant, Incorporated, filed its quarterly report on Form 10-Q, reporting a net loss of $737,615 on $1.81 million of revenue for the three months ended June 30, 2012, compared with a net loss of $947,758 on $2.10 million of revenue for the three months ended June 30, 2011. For the nine months ended June 30, 2012, the Company had a net loss of $1.92 million on $5.53 million of revenue, compared with a net loss of $1.72 million on $7.04 million of revenue for the nine months ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $6.84 million in total assets, $7.03 million in total liabilities, noncontrlling interest of $28,350, and a stockholders' deficit of $220,699. Bankruptcy Warning According to the regulatory filing, if the price or the trading volume of the Company's common stock does not reach certain levels, the Company will be unable to draw down all or substantially all of its $3,000,000 equity line of credit with Ascendiant Capital Partners, LLC. "If we are not able to draw down all $3,000,000 available under the equity line of credit or if the Securities Purchase Agreement is terminated, we may need to restructure our operations, divest all or a portion of our business, or file for bankruptcy." Going Concern As reported in the TCR on Dec. 5, 2011, Madsen & Associates CPA's, Inc., Salt Lake City, Utah, expressed substantial doubt about Visualant's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors said that the Company will need additional working capital for its planned activity and to service its debt. A copy of the Form 10-Q is available for free at: http://is.gd/X2xf9k Visualant, Incorporated, headquartered in Seattle, Washington, develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection, process control applications, and diagnostics. WARNER MUSIC: Incurs $32 Million Net Loss in Fiscal Q3 ------------------------------------------------------- Warner Music Group Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $32 million on $654 million of revenue for the three months ended June 30, 2012, compared with a net loss of $46 million on $688 million of revenue for the same period during the prior year. The Company reported a net loss of $92 million on $2.06 billion of revenue for the nine months ended June 30, 2012, compared with a net loss of $103 million on $2.15 billion of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $5.16 billion in total assets, $4.20 billion in total liabilities and $961 million in total equity. "There were several bright spots in our results for the quarter," said Stephen Cooper, Warner Music Group's CEO. "In our Music Publishing business, we grew OIBDA, OIBDA margin and constant- currency revenue. In our Recorded Music business, strong growth in digital revenue more than offset the decline in physical revenue on a constant-currency basis, showing the promise of the industry's transformation. We look forward to the fourth quarter and the next fiscal year, as we work to accelerate our progress." "Our Unlevered After-Tax Cash Flow was strong," said Warner Music Group Executive Vice President and CFO Brian Roberts, adding, "The decline in total cash balance was expected, due to our semi-annual cash interest payment this quarter." A copy of the Form 10-Q is available for free at: http://is.gd/p70Ie9 About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. On July 20, 2011, the Company notified the New York Stock Exchange, Inc., of its intent to remove the Company's common stock from listing on the NYSE and requested that the NYSE file with the SEC an application on Form 25 to report the delisting of the Company's common stock from the NYSE. On July 21, 2011, in accordance with the Company's request, the NYSE filed the Form 25 with the SEC in order to provide notification of that delisting and to effect the deregistration of the Company's common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. On August 2, 2011, the Company filed a Form 15 with the SEC in order to provide notification of a suspension of its duty to file reports under Section 15(d) of the Exchange Act. The Company continues to file reports with the SEC pursuant to the Exchange Act in accordance with certain covenants contained in the instruments governing the Company's outstanding indebtedness. The Company reported a net loss of $60 million on $1.40 billion of revenue for the six months ended March 31, 2012. The Company reported a net loss of $206 million on $2.86 billion of revenue for the combined 12 months ended Sept. 30, 2011, following a net loss of $145 million on $2.98 billion of revenue for the fiscal year ended Sept. 30, 2010. WARNKE-LOMBARD: Case Summary & 24 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Warnke-Lombard, LLC P.O. Box 2557 Clackamas, OR 97015 Bankruptcy Case No.: 12-36176 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court District of Oregon Judge: Trish M. Brown Debtor's Counsel: Ted A. Troutman, Esq. Muir & Troutman, 16100 NW Cornell Road, #200 Beaverton, OR 97006 Tel: (503) 292-6788 E-mail: tedtroutman@gmail.com Scheduled Assets: $3,503,567 Scheduled Liabilities: $5,150,577 A copy of the Company's list of its 24 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/orb12-36176.pdf The petition was signed by Don & Sally Warnke, managers of Warnke Family Enterprises, LLC. WARNKE-MCDONALD: Case Summary & 24 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Warnke-McDonald, LLC P.O. Box 2557 Clackamas, OR 97015 Bankruptcy Case No.: 12-36177 Chapter 11 Petition Date: August 9, 2012 Court: U.S. Bankruptcy Court District of Oregon Judge: Randall L. Dunn Debtor's Counsel: Ted A. Troutman, Esq. Muir & Troutman, 16100 NW Cornell Road, #200 Beaverton, OR 97006 Tel: (503) 292-6788 E-mail: tedtroutman@gmail.com Scheduled Assets: $3,503,567 Scheduled Liabilities: $5,150,577 A copy of the Company's list of its 24 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/orb12-36177.pdf The petition was signed by Don & Sally Warnke, managers of Warnke Family Enterprises, LLC. WAVE SYSTEMS: Incurs $6.5 Million Net Loss in Second Quarter ------------------------------------------------------------ Wave Systems Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $6.52 million on $7.76 million of total net revenues for the three months ended June 30, 2012, compared with a net loss of $1.82 million on $8.09 million of total net revenues for the same period a year ago. The Company reported a net loss of $14.83 million on $14.74 million of total net revenues for the six months ended June 30, 2012, compared with a net loss of $4.08 million on $15.57 million of total net revenues for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $24.59 million in total assets, $19.26 million in total liabilities and $5.32 million in total stockholders' equity. "Due to our current cash position, our forecasted capital needs over the next twelve months and beyond, the fact that we will require additional financing and uncertainty as to whether we will achieve our sales forecast for our products and services, substantial doubt exists with respect to our ability to continue as a going concern," the Company said in its quarterly report for the period ended June 30, 2012. A copy of the Form 10-Q is available for free at: http://is.gd/0kYP25 About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. The Company reported a net loss of $10.79 million in 2011, a net loss of $4.12 million in 2010, and a net loss of $3.34 million in 2009. Going Concern The Company said in its annual report for the year ended Dec. 31, 2011, that it will be required to sell additional shares of common stock, preferred stock, obtain debt financing or engage in a combination of these financing alternatives, to raise additional capital to continue to fund its operations for the twelve months ending Dec. 31, 2012. If Wave is not successful in executing its business plan, it will be required to sell additional shares of common stock, preferred stock, obtain debt financing or engage in a combination of these financing alternatives or it could be forced to reduce expenses which may significantly impede its ability to meet its sales, marketing and development objectives, cease operations or merge with another company. No assurance can be provided that any of these initiatives will be successful. Due to its current cash position, capital needs over the next year and beyond, and the uncertainty as to whether it will achieve its sales forecast for its products and services, substantial doubt exists with respect to Wave's ability to continue as a going concern. WEST CORP: Moody's Affirms Ba3 Rating on Upsized Credit Facility ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 rating on West Corporation's upsized senior secured credit facility and lowered the rating on the senior unsecured notes to Caa1 from B3. Concurrently, the rating on a proposed $250 million add-on to the senior unsecured notes was withdrawn. All of West's other ratings, including the B2 Corporate Family Rating ("CFR"), were affirmed. The ratings outlook remains stable. West upsized the proposed $720 million senior secured term loan tranche to $970 million and canceled a planned $250 million senior unsecured notes add-on. Proceeds from the term loan will be used to repay a $448 million term loan maturing in 2013, fund a $500 million distribution to shareholders, and pay fees and expenses. Ratings affirmed (and Loss Given Default assessments revised): Corporate Family Rating, B2 Probability of Default Rating, B2 Speculative Grade Liquidity Rating, SGL-1 $49 million first lien revolver due 2012, Ba3 (LGD2, to 28% from 25%) $201 million first lien revolver due 2016 Ba3 (LGD2, to 28% from 25%) $450 million first lien term loan due 2013, Ba3 (LGD2, 25%) - rating to be withdrawn upon closing of refinancing $1.46 billion first lien term loans B-4 and B-5 due 2016, Ba3 (LGD2, to 28% from 25%) $970 (upsized from $720) million first lien term loan B-6 due 2018, Ba3 (LGD2, to 28% from 25%) $450 million 11% senior subordinated notes due 2016, Caa1 (LGD6, 94%) Ratings lowered (and LGD assessments revised): $500 million 8.625% senior unsecured notes due 2018, to Caa1 (LGD5, 79%) from B3 (LGD5, 76%) $650 million 7.875% senior unsecured notes due 2019, to Caa1 (LGD5, 79%) from B3 (LGD5, 76%) Rating withdrawn: Proposed $250 million 7.875% senior unsecured notes due 2019, B3 (LGD5, 76%) Ratings Rationale The B2 CFR reflects Moody's expectation that West will continue to operate with significant leverage. Moody's anticipates modest improvement in credit metrics through EBITDA growth, driven primarily by higher volumes in automated service lines. The ratings are supported by West's track record of steady revenue and earnings growth, a very good liquidity profile, large revenue size and leading market positions. The ratings remain constrained by pricing pressures, technology risks, and aggressive financial policies including debt-financed acquisitions and dividends. The downgrade in the senior unsecured notes rating to Caa1 from B3 reflects approximately $520 million of incremental senior secured debt ahead of the notes in the capital structure. As such, the senior unsecured debt is expected to bear greater loss absorption in the event of default. Moody's rates both the senior unsecured notes and the senior subordinated notes Caa1, but the higher LGD rate on the senior subordinated bonds (LGD6 - 94%, compared to LGD5 - 79% on the senior unsecured) indicates Moody's opinion that the senior subordinated bondholders would likely experience a greater loss in the event of a default. The stable outlook reflects Moody's expectation that consolidated revenue will grow in the low-to-mid single digit range over the next 12-18 months. Modest margin contraction is expected, primarily from rate declines for conferencing services, offset by solid volume growth. The ratings could be downgraded if pricing trends worsen or volumes weaken, or West makes a large debt- financed acquisition or dividend, resulting in debt / EBITDA or free cash flow to debt sustained above 6.5 times or below 2%, respectively. Given the company's current private equity sponsorship, an upgrade in the ratings is unlikely unless Moody's can become comfortable that West has shifted its financial policies to a more conservative profile. However, an IPO that results in substantial debt reduction could lead to an upgrade if Moody's anticipates that debt to EBITDA and free cash flow to debt will be sustained below 5 times and above 7%, respectively. The principal methodology used in rating West Corporation was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. West Corporation is a leading provider of technology-driven communication services and agent-based services. The company offers conferencing, unified communications, alerts and notifications, 911 emergency communications, and business process outsourcing services. Major shareholders are Thomas H. Lee Funds, Quadrangle Group Funds, Gary L. West, Mary E. West, and members of management. West reported revenues of approximately $2.6 billion in the twelve months ended June 30, 2012. WEST CORP: S&P Cuts Senior Debt Rating to 'B+' on Term Loan Upsize ------------------------------------------------------------------ Standard & Poor's Rating Services revised its recovery rating on Omaha, Neb.-based business process outsourcer West Corp.'s senior secured debt to '3', indicating its expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default, from '2' (70% to 90% recovery expectation). "We lowered our issue-level rating on this debt to 'B+' (the same as our 'B+' issuer rating on the company) from 'BB-', in accordance with our notching criteria for a '3' recovery rating. The rating revisions follow West's upsizing of its proposed incremental term loan B by $250 million, bringing the aggregate amount to $970 million. We believe the increased size of this debt class reduces recovery prospects in the event of default. West no longer plans to issue $250 million of senior notes. All other ratings, including the 'B+' corporate credit rating, remain unchanged, as does the stable outlook," S&P said. "We expect West Corp., to maintain have high leverage in the 5x-6x area over the intermediate term, as the company continues its acquisition-oriented growth strategy. This expectation underscores our assessment of West Corp.'s financial risk profile as 'highly leveraged' (based on our criteria). West has been an active acquirer of automated services companies as it seeks to expand its presence in its higher-margin areas. We believe West's business risk profile is 'fair,' based on its good EBITDA margin and revenue stability. We believe these dynamics will result in West achieving low- to mid-single-digit percentage revenue and EBITDA growth, on average, over the intermediate term, with slightly lower leverage," S&P said. RATINGS LIST West Corp. Corporate credit rating B+/Stable/-- Rating Lowered To From Senior secured debt B+ BB- Recovery rating 3 2 WESTMORELAND COAL: Files Form 10-Q; Incurs $13.6-Mil. Loss in Q2 ---------------------------------------------------------------- Westmoreland Coal Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $13.64 million on $132.84 million of revenue for the three months ended June 30, 2012, compared with a net loss of $7.91 million on $112.14 million of revenue for the same period during the prior year. For the six months ended June 30, 2012, the Company reported a net loss of $13.86 million on $280.07 million of revenue, compared to a net loss of $26.64 million on $239.90 million of revenue for the same period a year ago. Westmoreland Coal's balance sheet at June 30, 2012, showed $947.58 million in total assets, $1.20 billion in total liabilities and a $259.53 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/dSgVJ6 About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. The Company reported a net loss of $36.87 million in 2011, a net loss of $3.17 million in 2010, and a net loss of $29.16 million in 2009. * * * In March 2011, Standard & Poor's Ratings Services said that it assigned a 'CCC+' corporate credit rating to Colorado Springs, Colorado-based Westmoreland Coal Co. In January 2012, S&P revised its outlook on Westmoreland to positive from stable and affirmed its 'CCC+' credit rating. "The outlook revision reflects our expectation that the acquisition, improved reserve position, and stronger coal pricing could bring WLB's credit metrics in line with a higher rating over the next several quarters," said Standard & Poor's credit analyst Gayle Bowerman. The rating and outlook for WLB also incorporate the combination of what S&P considers to be its 'vulnerable' business risk profile and 'highly leveraged' financial risk profile. The ratings also reflect WLB's high-cost position in the Powder River Basin (PRB) and Texas, relatively short reserve life, high customer concentration, challenges posed by the inherent risks of coal mining, and liquidity that's less than adequate to meet the company's near-term obligations. WPCS INTERNATIONAL: To Transfer Trading to NASDAQ Capital --------------------------------------------------------- WPCS International Incorporated received approval from NASDAQ to transfer the listing of the Company's common stock from The NASDAQ Global Market to The NASDAQ Capital Market. The NASDAQ Capital Market is one of the three markets for NASDAQ-listed stock and operates in the same manner as The NASDAQ Global Market. Companies listed on The NASDAQ Capital Market must meet certain financial requirements and adhere to NASDAQ's corporate governance standards. The Company's common stock will begin trading on The NASDAQ Capital Market at the opening of business on Aug. 13, 2012. The Company's common stock will continue to trade under the symbol "WPCS." As previously disclosed, on June 25, 2012, NASDAQ notified the Company that it currently not in compliance with NASDAQ's minimum bid price rule, which requires the bid price of the Company's common stock to be at least $1.00 per share. The Company has until Dec. 24, 2012, to regain compliance with the minimum bid price rule, unless it is able to obtain an extension of the deadline to regain compliance. About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at April 30, 2012, showed $35.79 million in total assets, $29.91 million in total liabilities, and stockholders' equity of $5.88 million. WPCS reported a net loss attributable to the Company of $20.54 million for the year ended April 30, 2012, compared to a net loss attributable to the Company of $36.83 million during the prior fiscal year. ZALE CORP: BlackRock Discloses 3.8% Equity Stake ------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of July 31, 2012, it beneficially owns 1,247,871 shares of common stock of Zale Corporation representing 3.87% of the shares outstanding. BlackRock previously reported beneficial ownership of 2,356,309 common shares or a 7.32% equity stake as of Dec. 30, 2011. A copy of the amended filing is available for free at: http://is.gd/rPipH9 About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ The Company reported a net loss of $7.56 million on $1.45 billion of revenue for the nine months ended April 30, 2012, compared with a net loss of $79.66 million on $1.36 billion of revenue for the same period during the prior year. The Company's balance sheet at April 30, 2012, showed $1.22 billion in total assets, $1.01 billion in total liabilities and $202.13 million in stockholders' investment. ZHONE TECHNOLOGIES: Posts $2.1 Million Net Loss in Second Quarter ----------------------------------------------------------------- Zhone Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.10 million on $30.84 million of revenue for the three months ended June 30, 2012, compared with a net loss of $1.90 million on $31.29 million of revenue for the same period a year ago. For the six months ended June 30, 2012, the Company reported a net loss of $5.52 million on $57.90 million of revenue, compared with a net loss of $4.34 million on $60.87 million of revenue for the comparable period of 2011. The Company's balance sheet at June 30, 2012, showed $69.43 million in total assets, $34.89 million in total liabilities, and stockholders' equity of $34.54 million. "The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has continued to incur losses in 2011 and the six months ended June 30, 2012." "Since inception, we have incurred significant operating losses and had an accumulated deficit of $1.037 billion as of June 30, 2012, and we expect that our operating losses may continue." A copy of the Form 10-Q is available for free at: http://is.gd/kA0rMQ Zhone Technologies, Inc., designs, develops and manufactures communications network equipment for telecommunications, wireless and cable operators worldwide. The Company's products allow network service providers to deliver video and interactive entertainment services in addition to their existing voice and data service offerings. The Company was incorporated under the laws of the state of Delaware in June 1999. The Company began operations in September 1999 and is headquartered in Oakland, California. ZOGENIX INC: Files Form 10-Q; Incurs $17.2-Mil. Net Loss in Q2 -------------------------------------------------------------- Zogenix, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $17.16 million on $8.03 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $19.17 million on $10.23 million of total revenue for the same period during the prior year. The Company reported a net loss of $27.46 million on $26.37 million of total revenue for the six months ended June 30, 2012, compared with a net loss of $38.16 million on $19.27 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $64.89 million in total assets, $79.90 million in total liabilities and a $15 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/TFlazL About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. ZOGENIX INC: Federated Investors Discloses 28.4% Equity Stake ------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Federated Investors, Inc., and its affiliates disclosed that, as of July 31, 2012, they beneficially own 30,450,000 shares of common stock of Zogenix, Inc., representing 28.37% of the shares outstanding. A copy of the filing is available for free at http://is.gd/4X2IL5 About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. The Company's balance sheet at March 31, 2012, showed $82.28 million in total assets, $82 million in total liabilities, and $278,000 in total stockholders' equity. * Fitch Expands Debt Instrument Ratings to Rating Scale ------------------------------------------------------- Fitch Ratings has updated its Ratings Definitions, expanding the application of '+/-' to corporate issue ratings at the CCC level and defining a rating action 'Under Review'. Fitch Ratings added 'CCC+' and 'CCC-' debt instrument ratings to its rating scale. These designations are limited to instrument ratings and will not be used for Issuer Default Ratings, leaving 'CCC' as the sole issuer rating within the 'CCC' category. The new designations provide greater comparability to debt instruments and recovery ratings in the lower end of the speculative-grade rating scale. Fitch will update its 'Recovery Rating and Notching Criteria for Non-Financial Corporates' to reflect these changes. Fitch will conduct a review of the issues impacted by this change and will update any issue ratings, if necessary. Potentially up to 40 issue ratings may be modified. Fitch also added the rating action 'Under Review'. This action signals the potential change in a rating due to a change in the scale or definition of the scale. It is not an indication of a change resulting from a change in credit quality. The final action will be designated as a 'Rating Revision' rather than an upgrade or downgrade. The action is also considered to fulfill an annual rating review requirement. * S&P Says Corporate Default Rate to Rise 3.7% in 2013 Q2 --------------------------------------------------------- Slow growth and lackluster job creation continue to characterize the U.S. economic recovery, said an article published by Standard & Poor's Global Fixed Income Research, titled "U.S. Corporate Default Rate Forecasted To Rise To 3.7% In Second-Quarter 2013." The most recent GDP report showed growth of only 1.5% in second- quarter 2012, following growth of only 2% in the first quarter. S&P expects real GDP growth of 2% for full-year 2012 and 2013. The labor market continues to add jobs but at a slow pace. In July, 163,000 new jobs were created, compared with an average of 73,000 new jobs per month in the second quarter and 226,000 per month in the first quarter. The unemployment rate rose to 8.3% in July -- a slight increase from 8.2% in June and May and 8.1% in April. S&P expects that the unemployment rate will remain at or above 8% during the remainder of 2012 and in 2013. "Global uncertainty resulting from Europe's sovereign crisis is affecting investor confidence in the financial markets," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "Monetary policy appears to be in favor of providing the necessary assistance to certain countries, but it remains to be seen if a timely and coordinated response from the region will be implemented and if it will suffice to calm investor concerns both locally and globally." In the U.S., the Federal Reserve will likely keep interest rates low for an extended period of time and perhaps even do another round of quantitative easing in the coming quarters. S&P expects the U.S. corporate trailing 12-month speculative-grade default rate to increase to 3.7% by June 2013, from 2.7% as of June 2012. Its baseline projection is still lower than the long- term (1981-2011) average of 4.5%. A total of 57 issuers would need to default in the 12 months ending June 2013 to reach this projection. In contrast, 41 speculative-grade entities defaulted in the 12 months ended June 2012. Its baseline default forecast is based on current observations and future expectations of the likely path of the U.S. economy and financial markets. In addition to its baseline projection, S&P forecasts the default rate in our optimistic and pessimistic scenarios. "Under our optimistic default rate forecast, we would expect the default rate to decline to 2.2% by June 2013 (or 34 defaults during the next 12 months) from the current default rate of 2.7%," said Ms. Vazza. "Under the pessimistic scenario, we would expect the default rate to rise to 5.5% (or 85 defaults during the next 12 months)." * Bankruptcy Lawyer Permanently Disbarred in Alabama ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Atlanta ruled on Aug. 9 that a bankruptcy judge did not abuse his discretion in permanently barring a lawyer from practice in bankruptcy court in the Middle District of Alabama. According to the report, the unsigned, six-page opinion for the 11th Circuit in Atlanta upheld a ruling in Jan. by U.S. District Judge W. Keith Watkins in Montgomery who needed 24 pages to affirm the bankruptcy judge. The report relates the bankruptcy administrator contended that the lawyer, Darryl A. Parker, made false statements in clients' bankruptcy petitions and failed to pay filing fees the clients had already given him. The bankruptcy judge, according to the report, said Mr. Parker "knowingly filed false statements with the court" and was a "dishonest, unethical lawyer who harms his clients, and who files false pleadings and false statements in bankruptcy court." The case in the circuit court is Parker v. Jacobs (In re Parker), 12-10599, U. S. 11th Circuit Court of Appeals (Atlanta). The case in district court was Parker v. Jacobs, 11-546, U.S. District Court, Middle District Alabama (Montgomery). * Circuit Court Gives Broad Interpretation to Exemption ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in San Francisco ruled on Aug. 10 that a relative who is a beneficiary on an insurance policy or annuity need not be a dependent for the bankrupt to use an exemption under Arizona law. The case is Tober v. Lang (In re Tober), 11-60018, U .S. Court of Appeals for the Ninth Circuit (San Francisco). * Large Companies With Insolvent Balance Sheet ---------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 127.2 (3.2) 14.0 ADVANCED BIOMEDI ABMT US 0.2 (1.9) (1.5) AK STEEL HLDG AKS US 3,901.0 (360.6) 129.6 AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5 AMER AXLE & MFG AXL US 2,441.2 (394.7) 169.7 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,058.5 (28.0) 42.5 AMYLIN PHARM INC AMLN US 1,998.7 (42.4) 263.0 ARRAY BIOPHARMA ARRY US 120.0 (78.8) 28.4 ATLATSA RESOURCE ATL SJ 920.8 (233.7) 20.0 AUTOZONE INC AZO US 6,148.9 (1,416.8) (623.1) BOSTON PIZZA R-U BPF-U CN 166.1 (91.7) (1.5) CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHENIERE ENERGY CQP US 1,873.0 (442.2) 117.0 CHOICE HOTELS CHH US 857.7 (11.2) 402.1 CIENA CORP CIEN US 1,928.6 (41.1) 924.4 CINCINNATI BELL CBB US 2,702.7 (696.2) (52.8) CLOROX CO CLX US 4,355.0 (135.0) (685.0) DEAN FOODS CO DF US 5,553.1 (3.1) 185.6 DELTA AIR LI DAL US 44,720.0 (1,135.0) (6,236.0) DENNY'S CORP DENN US 328.9 (2.8) (20.3) DIRECTV-A DTV US 19,632.0 (4,045.0) 520.0 DOMINO'S PIZZA DPZ US 424.6 (1,369.1) 52.9 DUN & BRADSTREET DNB US 1,795.6 (821.9) (655.6) E2OPEN INC EOPN US 29.7 (34.5) (32.5) ELOQUA INC ELOQ US 37.5 (9.6) (14.2) FAIRPOINT COMMUN FRP US 1,877.4 (184.4) 51.6 FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7) FIFTH & PACIFIC FNP US 900.5 (175.5) 130.9 FREESCALE SEMICO FSL US 3,499.0 (4,498.0) 1,374.0 GENCORP INC GY US 874.0 (171.3) 47.3 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HCA HOLDINGS INC HCA US 27,132.0 (6,943.0) 1,690.0 HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) INCYTE CORP INCY US 312.0 (217.2) 154.4 INFINITY PHARMAC INFI US 113.0 (3.4) 70.2 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,543.0 (527.2) (481.0) JUST ENERGY GROU JE CN 1,543.0 (527.2) (481.0) LIMITED BRANDS LTD US 6,616.0 (131.0) 1,526.0 LIN TV CORP-CL A TVL US 839.2 (51.8) 52.7 LORILLARD INC LO US 2,576.0 (1,568.0) 881.0 MARRIOTT INTL-A MAR US 6,007.0 (1,124.0) (1,287.0) MERITOR INC MTOR US 2,555.0 (933.0) 279.0 MERRIMACK PHARMA MACK US 64.4 (43.6) 21.0 MONEYGRAM INTERN MGI US 5,185.1 (116.1) (35.3) MORGANS HOTEL GR MHGC US 545.9 (110.1) (7.0) MPG OFFICE TRUST MPG US 2,061.5 (827.9) - NATIONAL CINEMED NCMI US 794.2 (354.5) 95.8 NAVISTAR INTL NAV US 11,384.0 (407.0) 1,658.0 NB MANUFACTURING NBMF US - (0.0) (0.0) NEXSTAR BROADC-A NXST US 566.3 (170.6) 40.2 NPS PHARM INC NPSP US 186.9 (45.3) 130.3 NYMOX PHARMACEUT NYMX US 6.4 (5.2) 2.9 ODYSSEY MARINE OMEX US 22.4 (29.5) (26.9) OMEROS CORP OMER US 10.1 (20.5) (8.7) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 259.8 (161.1) 144.3 PEER REVIEW MEDI PRVW US 1.2 (3.8) (3.8) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 454.5 (29.8) 60.7 REGAL ENTERTAI-A RGC US 2,306.3 (542.3) 62.5 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,173.9 (665.6) 177.8 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,813.5 (202.0) 449.5 SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4) TAUBMAN CENTERS TCO US 3,096.1 (295.3) - TEMPUR-PEDIC INT TPX US 865.5 (12.1) 258.9 THERAPEUTICS MD TXMD US 1.5 (3.4) (1.3) THRESHOLD PHARMA THLD US 86.3 (51.4) 71.2 UNISYS CORP UIS US 2,397.9 (1,190.0) 463.1 VECTOR GROUP LTD VGR US 885.7 (119.5) 248.2 VERISIGN INC VRSN US 1,942.0 (59.2) 858.0 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) WEIGHT WATCHERS WTW US 1,193.6 (1,784.6) (259.9) ZAZA ENERGY CORP ZAZA US 255.8 (24.3) 3.7 ********* 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 ***