/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120817.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, August 17, 2012, Vol. 16, No. 228 Headlines 1 TENNESSEE: Case Summary & 6 Largest Unsecured Creditors 1ST FINANCIAL: Reports $347,000 Net Income in Second Quarter 3PEA INTERNATIONAL: Reports $1.5-Mil. Net Income in 2nd Quarter 79TH & LANGLEY: Case Summary & 2 Largest Unsecured Creditors AES EASTERN: Granted Short Plan Extension, In Talks With Buyer AFFINITY GROUP: Reports $7.2 Million Net Income in 2nd Quarter AGY HOLDING: Incurs $4.8 Million Net Loss in Second Quarter ALION SCIENCE: $71.3 Million Consolidated EBITDA in Fiscal 2012 AMBIENT CORP: Expects NASDAQ Standard Filing Delinquency Letter AMERICAN APPAREL: Incurs $15.3 Million Net Loss in 2nd Quarter AMERICAN GILSONITE: Moody's Assigns 'B3' CFR/PDR; Outlook Stable AMERICAN GILSONITE: S&P Assigns 'B' Corporate Credit Rating AMERICAN PACIFIC: Moody's Raises CFR/PDR to 'B1'; Outlook Stable AMREP CORP: Has Tolling and Forbearance Agreement with PBGC ARKANOVA ENERGY: Amends Note Purchase Agreement with Aton ARRAY BIOPHARMA: Incurs $23.5 Million Net Loss in Fiscal 2012 ARCTIC GLACIER: No June 30 Interim Report; Sale to HIG Closed BANK OF THE CAROLINAS: Files Form 10-Q, Incurs $170K Loss in Q2 BEHRINGER HARVARD: Reports $5.6-Mil. Net Income in 2nd Quarter BILLMYPARENTS INC: Incurs $3.5 Million Loss in June 30 Quarter BIOZONE PHARMACEUTICALS: To Restate March 31 Form 10-Q BLUE RAVEN: Moved to Chapter 7 After Insufficient Sale BMB MUNAI: Incurs $750,000 Net Loss in Fiscal First Quarter BORDERS GROUP: Gift Card Holders Aren't 'Known' Creditors BROADCAST INTERNATIONAL: Posts $442,000 Net Profit in Q2 BROADVIEW NETWORKS: Incurs $8.4 Million Net Loss in 2nd Quarter BURGER KING: S&P Raises Corp. Credit Rating to 'B+' CAESERS ENTERTAINMENT: Fitch Rates New $750MM Add-On Notes 'B-' CAESARS ENTERTAINMENT: Moody's Says $750MM Notes Credit Positive CAESARS ENTERTAINMENT: S&P Affirms 'B-' Corporate Credit Rating CANYON PORT: Bankruptcy Holds Up Sale of Naval Station CAPITAL ONE: Moody's Assigns 'Ba1 (hyb)' Rating to Pref. Stock CASCADE BANCORP: Posts $1.7 Million Net Income in Second Quarter CENTRAL EUROPEAN: Receives Non-Compliance Notice from NASDAQ CHARLESTON ASSOCIATES: Taps Sperling & Slater for Nev. Litigation CHRIST HOSPITAL: Wants Until Dec. 4 to File Chapter 11 Plan CIRCLE STAR: Incurs $11.1 Million Net Loss in Fiscal 2012 CKE RESTAURANTS: S&P Says 'B-' CCR Off Watch After IPO Suspension CLARE OAKS: Wants to Hire Jones Day as Special Bond Counsel COATES INTERNATIONAL: Incurs $1.5MM Net Loss in Second Quarter COLONIAL BANC: FDIC Looks to Slow Funding of Litigation COMMUNITY FIRST: Posts $351,000 Net Income in Second Quarter CONFORCE INTERNATIONAL: Incurs $492,000 Loss in June 30 Qtr. CONVERTED ORGANICS: Has 320.9 Million Outstanding Common Shares CPM HOLDINGS: Moody's Affirms 'B2' CFR/PDR; Outlook Stable DALLAS ROADSTER: Texas Capital Objects to Cash Collateral Budget DAWSON INTERNATIONAL: Falls Into Administration in the UK DCB FINANCIAL: Files Form 10-Q; Posts $283,000 Net Income in Q2 DELTATHREE INC: Incurs $353,000 Net Loss in Second Quarter DEWEY & LEBOEUF: Former Partners Agree to Pay $50 Million DEWEY & LEBOEUF: Ex-Partners Committee Supports Examiner DEWEY & LEBOEUF: Hearing on Examiner Moved to September DEWEY & LEBOEUF: Committee of Former Partners Adds One Member DEWEY & LEBOEUF: To Have Net Recoveries of $2 Million a Week DIALOGIC INC: Files Form 10-Q, Incurs $18 Million Net Loss in Q2 DIALOGIC INC: Tennenbaum Capital Hikes Equity Stake to 61.7% DR TATTOFF: Andrew Heller 2009 GRAT Discloses 13.7% Equity Stake EASTMAN KODAK: Inks Film Agreements with Four Hollywood Studios EASTMAN KODAK: Apple, Google Said to be Joining Forces FIRST DATA: Files Form 10-Q, Incurs $157.4MM Net Loss in Q2 FIRST MARINER: Files Form 10-Q, Posts $5.6MM Net Income in Q2 GARLOCK SEALING: Asbestos Claimants Taps Saccullo as Del. Counsel GMX RESOURCES: Makes New Distressed Exchange Offer GREENSHIFT CORP: Reports $4.6 Million Net Income in 2nd Quarter GUITAR CENTER: Files Form 10-Q, Incurs $28.7MM Net Loss in Q2 HEALTHCARE OF FLORENCE: E&M Taps TeamLogicIT as System Specialist HEALTHCARE OF FLORENCE: U.S. Trustee Appoints 3-Member Committee HEALTHCARE OF FLORENCE: Taps Eide Bailly to Make 2011 Tax Returns HIGHLANDS BANKSHARES: Reports $654,000 Net Income in 2nd Quarter HOLLIFIELD RANCHES: Files Sixth Amended Plan of Reorganization HOLLIFIELD RANCHES: Has $260,000 Loan for Fertilizers, Supplies HOLLIFIELD RANCHES: To Hire U.S. Auction to Sell Livestock HORNE INTERNATIONAL: Estimates $506,000 Net Loss in 2nd Quarter HUSSEY COPPER: Highland Capital OK'd as Life Settlement Broker INNER CITY MEDIA: Parent Company Sues to Recoup Missing Artwork INTEGRITY LIFE: CEO Defaults on Guarantee, Says Rival KINETIC CONCEPTS: Moody's Says Bed Biz Sale Modestly Positive KLUKWAN INC: Alaska Native Village Corp. Files for Chapter 11 LAPORTE FAMILY: Voluntary Chapter 11 Case Summary LEAGUE NOW: Incurs $170,000 Net Loss in Second Quarter LEHMAN BROTHERS: Spends & Makes Money on Remaining Real Estate LIFECARE HOLDINGS: Incurs $5.3 Million Net Loss in 2nd Quarter LINWOOD FURNITURE: Bankruptcy Administrator Seeks Case Conversion LIVE NATION: Moody's Rates $100MM Senior Secured Term Loan 'Ba2' LIVE NATION: S&P Retains 'BB-' Loan Rating After $100MM Add-on LPATH INC: Incurs $646,600 Net Loss in Second Quarter LSP ENERGY: SMEPA's $285.8MM Bid Wins Auction for Power Plant MACROSOLVE INC: Incurs $779,000 Net Loss in Second Quarter MARCO POLO: Reorganization Approved Without Objection MATTESON, IL: Moody's Cuts $27MM G.O Debt Rating to Ba1 MATRIX REAL ESTATE: Co-Owner Seeks to Liquidate Firm MF GLOBAL: Class Plaintiffs to Sue Jointly MOTORS LIQUIDATION: Has $1 Billion Net Assets in Liquidation NEW LEAF: Delays Form 10-Q for Second Quarter NEWPAGE CORP: Bankruptcy Judge Orders Mediation for Creditors NEXTWAVE WIRELESS: Incurs $47.8-Mil. Net Loss in Second Quarter NORTH GEORGIA LINEN: Case Summary & 20 Largest Unsec. Creditors NORTH SCOTTSDALE: Case Summary & 3 Largest Unsecured Creditors OCTAVIAR ADMINISTRATION: Chapter 15 Case Summary OMEGA NAVIGATION: Hearing on Cash Access Continued Until Sept. 17 OMEGA NAVIGATION: Has Plan Filing Exclusivity Until Oct. 18 PATRIOT COAL: Moody's Rates $375 Million DIP Term Loan 'B3' PEGASUS RURAL: Has Until Oct. 4 to Propose Chapter 11 Plan PGI INCORPORATED: Incurs $1.6-Mil. Net Loss in Second Quarter PITTSBURGH CORNING: Directed to File Amended Plan by Aug. 20 PREMIER BANK: To Sell Banks to BancShares via Chapter 11 PREMIER BANK: Case Summary & 3 Unsecured Creditors PROTEONOMIX INC: To Restate First Quarter Form 10-Q QUANTUM FUEL: G. Samuelsen and J. Lundy Elected to Board QUIGLEY CO: Court OKs Plan Outline, Delays Rule on Vote Rigging REAL ESTATE ASSOCIATES: Reports $5.7MM Net Income in 2nd Quarter REFLECT SCIENTIFIC: Incurs $213,000 Net Loss in Second Quarter REGENCY CENTERS: Fitch Rates $75MM Preferred Stock 'BB+' RESIDENTIAL CAPITAL: Examiner Wants to Issue Subpoenas RESIDENTIAL CAPITAL: Wants Until Dec. 10 to Remove Actions RESIDENTIAL CAPITAL: Proposes Sale Protocol for De Minimis Assets RESIDENTIAL CAPITAL: Examiner Proposes Mesirow as Advisor RESIDENTIAL CAPITAL: Examiner Wins OK for Chadbourne as Counsel RIVER OASIS: Case Summary & 6 Largest Unsecured Creditors RITZ CAMERA: Sept. 6 Auction for Non-Core IP Assets RITZ CAMERA: Carve-Out in DIP Agreement Increased RITZ CAMERA: Winthrop Couchot Approved as California Counsel SCIENTIFIC GAMES: Moody's Affirms Ba3 CFR; Rates Sub. Notes B1 SCIENTIFIC GAMES: S&P Rates New $250MM Sr. Subordinated Notes BB- SEJWAD HOTELS: Disclosure Statement Hearing Scheduled for Oct. 18 SELECT TREE: Exclusive Plan Filing Period Extended to Nov. 2 SIMON WORLDWIDE: Incurs $378,000 Net Loss in Second Quarter SP NEWSPRINT: Administrative Expense Claims Due Aug. 20 SWIFT AIR: Parting Ways With Pro Hockey Team SWIFT AIR: Executives Face $50-Mil. Fraud Lawsuit T SORRENTO: Court Denies Plan Exclusivity Extension T SORRENTO: Taps Quilling Selander as General Counsel T SORRENTO: Section 341(a) Meeting Continued Until Aug. 20 TALON THERAPEUTICS: Incurs $60.7 Million Net Loss in 2nd Quarter TALON THERAPEUTICS: Reports $671,000 Net Income in 2nd Quarter TAVERN ON THE GREEN: Emerald Wins 20-Year License to Operate TAYLOR MORRISON: Moody's Rates New US$100MM Add-On Notes 'B2' THOMPSON CREEK: Completes Sale of 12.25% of Gold Production TITAN ENERGY: Incurs $70,000 Net Loss in Second Quarter TMM HOLDINGS: S&P Affirms 'B+' Corporate Credit Rating TRIAD GROUP: Alcohol Wipes Recall, Plant Closure Cue Chapter 11 TRI-VALLEY: Proposes Quick Auction Without Lead Bidder TRIAD GUARANTY: Incurs $31.3 Million Net Loss in Second Quarter TRIDENT MICROSYSTEMS: Withdraws Motion for Expansion of PwC Task TRONOX FINANCE: S&P Keeps 'BB-' Rating on $900M Sr. Note Offering TRONOX LTD: Note Upsize Plan No Impact on Moody's 'Ba3' CFR UNIVERSAL SOLAR: Incurs $351,000 Net Loss in Second Quarter UNIVISION COMMUNICATIONS: Moody's Rates New $500MM Sec. Notes 'B2' UNIVISION COMMUNICATIONS: S&P Rates $500MM Sr. Secured Notes 'B+' USEC INC: S&P Cuts Corporate Credit Rating to 'CCC'; Outlook Neg VALENCE TECHNOLOGY: Asks Court to OK William R. Patterson as CRO VALENCE TECHNOLOGY: Taps Streusand Landon as Attorney VANN'S INC: Aug. 29 Hearing in Bankruptcy Case WINTDOTS DEVELOPMENT: US Trustee Wants Case Dismissed or Converted * Moody's Says Money Market Funds' Credit Profile Deteriorates * Sheppard Mullin Taps Cheong for Beijing Finance, Bankr. Office * Sheppard Mullin Opens Seoul Office, Its 16th Location * BOOK REVIEW: Corporate Venturing -- Creating New Businesses ********* 1 TENNESSEE: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 1 Tennessee Street, LLC 32 Canal Road Westport, CT 06880 Bankruptcy Case No.: 12-51511 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Stephen P. Wright, Esq. HARLOW, ADAMS, AND FRIEDMAN One New Haven Ave., Suite 100 Milford, CT 06460 Tel: (203) 878-0661 Fax: (203) 878-9568 E-mail: spw@quidproquo.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 six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb12-51511.pdf The petition was signed by Francis J. DiScala, member. 1ST FINANCIAL: Reports $347,000 Net Income in Second Quarter ------------------------------------------------------------ 1st Financial Services Corporation reported net income of $347,000 on $6.43 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $508,000 on $7.21 million of total interest income for the same period during the prior year. According to the quarterly report filed with the U.S. Securities and Exchange Commission, the Company had net income of $931,000 on $12.97 million of total interest income for the six months ended June 30, 2012, compared with net income of $94,000 on $14.34 million of total interest income for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $714.14 million in total assets, $694.72 million in total liabilities and $19.41 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/92Hges About 1st Financial Hendersonville, North Carolina-based 1st Financial Services Corporation is the bank holding company for Mountain 1st Bank & Trust Company. 1st Financial has essentially no other assets or liabilities other than its investment in the Bank. 1st Financial's business activity consists of directing the activities of the Bank. The Bank has a wholly owned subsidiary, Clear Focus Holdings LLC. The Bank was incorporated under the laws of the state of North Carolina on April 30, 2004, and opened for business on May 14, 2004, as a North Carolina chartered commercial bank. At Dec. 31, 2011, the Bank was engaged in general commercial banking primarily in nine western North Carolina counties: Buncombe, Catawba, Cleveland, Haywood, Henderson, McDowell, Polk, Rutherford, and Transylvania. The Bank operates under the banking laws of North Carolina and the rules and regulations of the Federal Deposit Insurance Corporation (the FDIC). As a North Carolina bank, the Bank is subject to examination and regulation by the FDIC and the North Carolina Commissioner of Banks (the Commissioner). The Bank is further subject to certain regulations of the Federal Reserve governing reserve requirements to be maintained against deposits and other matters. The business and regulation of the Bank are also subject to legislative changes from time to time. The Bank's primary market area is southwestern North Carolina. Its main office and Hendersonville South office are located in Hendersonville, North Carolina. At Dec. 31, 2011, the Bank also had full service branch offices in Asheville, Brevard, Columbus, Etowah, Forest City, Fletcher, Hickory, Marion, Shelby, and Waynesville, North Carolina. The Bank's loans and deposits are primarily generated from within its local market area. After auditing the 2011 results, Elliott Davis PLLC, in Greenville, South Carolina, expressed substantial doubt about 1st Financial Services' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses that have eroded regulatory capital ratios, and the Company's wholly owned subsidiary, Mountain First Bank & Trust Company, is under a regulatory Consent Order with the Federal Deposit Insurance Corporation and the North Carolina Commissioner of Banks that requires, among other provisions, capital ratios to be maintained at certain heightened levels. "In addition, the Company is under a Written Agreement with the Federal Reserve Bank of Richmond that requires, among other provisions, the submission and implementation of a capital plan to improve the Company and the Bank's capital levels. As of Dec. 31, 2011, both the Bank and the Company are considered "significantly undercapitalized" based on their respective regulatory capital levels." The Company reported a net loss of $20.5 million on net interest income of $20.5 million for 2011, compared with a net loss of $5.3 million on interest income of $20.4 million for 2010. 3PEA INTERNATIONAL: Reports $1.5-Mil. Net Income in 2nd Quarter --------------------------------------------------------------- 3Pea International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to the Company of $1.48 million on $2.54 million of revenue for the three months ended June 30, 2012, compared with net income attributable to the Company of $59,642 on $665,033 of revenue for the same period a year ago. The Company reported net income attributable to the Company of $1.55 million on $4.03 million of revenue for the six months ended June 30, 2012, compared with net income attributable to the Company of $66,017 on $1.60 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $8.01 million in total assets, $8.84 million in total liabilities and a $821,938 total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/HsOaoG About 3Pea International Henderson, Nev.-based 3Pea International, Inc., is a transaction- based solutions provider. 3PEA through its wholly owned subsidiary 3PEA Technologies, Inc., focuses on delivering reliable and secure payment solutions to help healthcare companies, pharmaceutical companies and payers businesses succeed in an increasingly complex marketplace. In after auditing the financial statements for year ended Dec. 31, 2011, Sarna & Company, in Thousand Oaks, California, noted that the Company has suffered recurring losses from operations, which raise substantial doubt about its ability to continue as a going concern. 79TH & LANGLEY: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 79th & Langley Building LLC 7900-08 S. Langley Ave. Chicago, IL 60619 Bankruptcy Case No.: 12-32245 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtor's Counsel: Matthew E. McClintock, Esq. GOLDSTEIN & MCCLINTOCK LLLP 208 South LaSalle Street Suite 1750 Chicago, IL 60604 Tel: (312) 337-7700 E-mail: mattm@restructuringshop.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 two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb12-32245.pdf The petition was signed by Hillel Shapiro, manager. AES EASTERN: Granted Short Plan Extension, In Talks With Buyer -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended, for the second time, AES Eastern Energy, L.P., et al.'s exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Sept. 25, 2012, and Nov. 26, respectively. The Court granted an extension that's shorter than initially requested by the Debtor. The Debtors had asked for extension until Oct. 25, 2012, and Dec. 24, for the plan proposal and solicitation periods, according to the Aug. 8 edition of the TCR. The Debtors explained in the Motion that they are in negotiations with an interested purchaser who has proposed to purchase all of their remaining assets and assume associated remediation obligations. A group of noteholders objected to the requested extension. The group said that AES has squandered its time to negotiate a plan and prepare adequate information, and that the Debtor has not made good faith progress toward reorganization. About AES Eastern Ithaca, New York-based AES Eastern Energy, L.P., either directly or indirectly, control six coal-fired electric generating plants located in New York State. Currently, the Debtors actively operate two of the six power plants and sell the electricity generated by those plants into the New York wholesale power market to utilities and other intermediaries under short-term agreements or directly in the spot market. AES Eastern Energy and 13 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., are legal counsel to AES Eastern Energy and affiliates. Barclays Capital is serving as investment banker and financial advisor. Kurtzman Carson Consultants is the claims and noticing agent. AES Eastern Energy estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petition was signed by Peter Norgeot, general manager. Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer, Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq., Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., serve as counsel to the Creditors Committee. FTI Consulting Inc. is the financial advisor. AES Eastern Energy prevailed over opposition and obtained authorization to hold a March 26 auction for the two operating power plants. Under a deal reached prepetition, the Debtor would turn the two operating facilities over to debt holders in exchange for debt, absent higher and better offers. AFFINITY GROUP: Reports $7.2 Million Net Income in 2nd Quarter -------------------------------------------------------------- Good Sam Enterprises, LLC, formerly known as Affinity Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $7.17 million on $146.33 million of revenue for the three months ended June 30, 2012, compared with net income of $5.19 million on $129.09 million of revenue for the same period a year ago. The Company reported net income of $7.18 million on $256.39 million of revenue for the six months ended June 30, 2012, compared with net income of $2.59 million on $233.65 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $241.29 million in total assets, $488.96 million in total liabilities, and a $247.66 million total members' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/HxgE2p About Affinity Group Ventura, Calif.-based Affinity Group Holding, Inc. is a holding company and the direct parent of Affinity Group, Inc. The Company is an indirect wholly-owned subsidiary of AGI Holding Corp, a privately-owned corporation. The Company is a member- based direct marketing organization targeting North American recreational vehicle owners and outdoor enthusiasts. The Company operates through three principal lines of business, consisting of (i) club memberships and related products and services, (ii) subscription magazines and other publications including directories, and (iii) specialty merchandise sold primarily through its 78 Camping World retail stores, mail order catalogs and the Internet. * * * Affinity Group Inc. carries 'B3' long term corporate family and probability of default ratings, with 'stable' outlook, from Moody's Investors Service. As reported in the Troubled Company Reporter on November 9, 2010, Standard & Poor's Ratings Services assigned Affinity Group Inc.'s proposed $325 million senior secured notes due 2016 its preliminary 'B-' issue-level rating. Following the close of the proposed transaction, S&P expects to assign a 'B-' corporate credit rating to Affinity Group Inc., and withdraw S&P's current 'D' corporate credit rating on Affinity Group Holding Inc. A portion of the proceeds of the new notes will be used, in conjunction with cash contributions from Holding's parent, to repay in full $88 million of senior notes that are currently outstanding at Holding. S&P said the expected 'B-'corporate credit rating on Affinity Group reflects S&P's expectation that, following the proposed refinancing transaction, adjusted debt leverage will be reduced by about 1x, the company will not have any meaningful near-term debt maturities, and the company will generate some discretionary cash flow (albeit minimal). Still, credit measures will remain relatively weak, as adjusted debt leverage will remain above 6.0x (S&P's operating lease adjustment adds about a turn to leverage), and S&P expects interest coverage to remain in the low- to mid- 1.0x area over the intermediate term. AGY HOLDING: Incurs $4.8 Million Net Loss in Second Quarter ----------------------------------------------------------- AGY Holding Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $4.86 million on $46.54 million of net sales for the three months ended June 30, 2012, compared with a net loss of $6.16 million on $50 million of net sales for the same period during the prior year. The Company reported a net loss of $13.27 million on $93.60 million of net sales for the six months ended June 30, 2012, compared with a net loss of $13.22 million on $94.93 million of net sales for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $233.76 million in total assets, $286.02 million in total liabilities, $4.09 million in obligation under put/call for noncontrolling interest, and a $56.35 million total shareholders' deficit. "During the second quarter, our AGY US business segment was able to maintain the EBITDA pace set during the first quarter, while we continued to execute with sound fundamentals and implement significant operational improvements," said Richard Jenkins, Interim CEO, AGY Holding Corp. "We have made a deliberate effort to improve our product mix by focusing on our more profitable product sets. We also maintained our focus on improving production performance through the implementation of better planning and processes, measures to ensure production quality and continued cost cutting." In looking to the future, Mr. Jenkins added, "Our New Business Development and Science and Technology teams are focused on further development of our high end specialty product portfolio with a focus on the market demands of our specialty material customer needs. AGY has also successfully implemented several financial measures to improve liquidity." Lastly, Mr. Jenkins added, "we have stabilized our operating performance and prepared ourselves for the second half of 2012." A copy of the Form 10-Q is available for free at: http://is.gd/aC7gpE About AGY Holding AGY Holding Corp. -- http://www.agy.com/-- produces fiberglass yarns and high-strength fiberglass reinforcements used in composites applications. AGY serves a range of markets including aerospace, defense, electronics, construction and industrial. Headquartered in Aiken, South Carolina, AGY has a European office in Lyon, France and manufacturing facilities in the U.S. in Aiken, South Carolina and Huntingdon, Pennsylvania and a controlling interest in a manufacturing facility in Shanghai, China. AGY Holding reported a net loss of $66.76 million in 2011, a net loss of $14.57 million in 2010, and a net loss of $93.51 million in 2009. * * * As reported by the TCR on Nov. 23, 2011, Moody's Investors Service lowered AGY Holding Corporation's (AGY) Corporate Family Rating (CFR) to Caa2 from B3, reflecting the decline in the company's liquidity and weak operating performance. In the Dec. 5, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Aiken, S.C.-based AGY Holding Corp. (AGY) to 'CCC-' from 'CCC+'. "Our rating action reflects our view that AGY's credit quality has deteriorated due to ongoing weakness in its operating performance, a decline in liquidity, and the potential for insufficient liquidity to meet interest payments in 2012. As of Sept. 30, 2011, the company reported total liquidity of $17 million including $16.2 million of availability under its unrated revolving credit facility. AGY reported that it expected liquidity to decline to levels of around $12.4 million in November following the payment of nearly $10 million in semiannual interest on its notes. It also expects effective availability to be lower than the reported figures, because the company is also subject to a fixed-charge coverage ratio covenant if availability under its revolving credit facility declines to below $6.25 million. We do not expect to be in compliance if the covenant becomes applicable. Current liquidity levels have declined from our expectations of a minimum liquidity of $20 million at the previous rating. Key credit risks, in our view, are liquidity insufficient to meet requirements (including approximately $20 million in future interest payments in 2012). An additional risk is potential liquidity requirements possibly arising from the put option available with the seller of AGY Hong Kong Ltd. for the remaining 30% of the company not yet purchased by AGY. The put option can be exercised through Dec. 31, 2013. AGY reports a fair value of about $0.23 million for the remaining 30% of the AGY Hong Kong Ltd. as of Sept. 30, 2011 -- a decline from an initial estimated value of about $12 million in 2009. AGY Hong Kong also has about $10.5 million of debt, which the company reports it is trying to extend, and approximately $11.5 million in annually renewable working capital facilities due in 2012 (debt at AGY Hong Kong is nonrecourse to AGY)," S&P said. ALION SCIENCE: $71.3 Million Consolidated EBITDA in Fiscal 2012 --------------------------------------------------------------- Alion Science and Technology Corporation disclosed that consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve months ended June 30, 2012, was approximately $71.3 million, and for the three months ended June 30, 2012, was approximately $18.8 million. A copy of the filing is available for free at http://is.gd/bKicd3 About Alion Science Alion Science and Technology Corporation, based in McLean, Virginia, is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include communications, wireless technology, netcentric warfare, modeling and simulation, chemical and biological warfare, program management. The Company reported a net loss of $44.38 million for the year ended Sept. 30, 2011, compared with a net loss of $15.23 million during the prior year. The Company's balance sheet at March 31, 2012, showed $632.08 million in total assets, $760.36 million in total liabilities, $114.80 million in redeemable common stock, $20.78 million in common stock warrants, and a $263.74 million accumulated deficit. * * * Alion carries 'Caa3' corporate family and probability of default Ratings, with stable outlook, from Moody's. Alion carries a 'B-' corporate credit rating, with stable outlook, from Standard & Poor's. Moody's said in March 2010, "The Caa1 corporate family rating would balance the continued high leverage against a promising business backlog that could sustain the good 2009 revenue growth rate, though credit challenges would remain pronounced." As reported by the TCR on Sept. 8, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on McLean, Va.-based Alion Science and Technology Corp. to 'CCC+' from 'B-'. The rating outlook is negative. "The downgrade of Alion is a result of the company's recent operational weakness," said Standard & Poor's credit analyst Alfred Bonfantini, "and the prospect of further pressure on revenues, which stem from the continuing resolution on the 2011 Federal government budget that wasn't settled until April 2011, the subsequent specter of a U.S. government default during the debt ceiling debate, and the ongoing uncertainty over future budget cuts and levels." AMBIENT CORP: Expects NASDAQ Standard Filing Delinquency Letter --------------------------------------------------------------- Ambient Corporation disclosed that it is completing an accounting review and restatement of certain of its previously issued financial results and financial statements, which will delay the filing of its quarterly report on Form 10-Q for the quarter ended June 30, 2012. The Company filed a Form 12b-25 Notification of Late Filing on Aug. 15, 2012, confirming that it has delayed the filing of the Form 10-Q with the Securities and Exchange Commission. Accordingly, on Aug. 15, 2012, in accordance with standard procedures related to the delayed filing of the Form 10-Q with the SEC, the Company received a letter from The NASDAQ Stock Market LLC indicating that the Company is not in compliance with the filing requirements for continued listing under NASDAQ Listing Rule 5250(c). The NASDAQ notice has no immediate effect on the listing or trading of the Company's common stock on The NASDAQ Capital Market. The NASDAQ letter notes that Ambient is required to submit a plan to regain compliance with NASDAQ's filing requirements for continued listing within 60 calendar days of the date of the NASDAQ notification letter. Upon acceptance of the Company's compliance plan, NASDAQ is permitted to grant an extension of up to 180 days from the Form 10-Q's filing date for the Company to regain compliance with NASDAQ's filing requirements for continued listing. The Company continues to work diligently to complete the accounting review and, if necessary, will submit a plan to regain compliance with NASDAQ's filing requirements within the 60 day deadline. As previously disclosed, the Company expects to file the Form 10-Q upon completion of its accounting review and the restatement of certain of its previously issued financial results and financial statements within the next 15 days. About Ambient Corporation Ambient -- http://www.ambientcorp.com-- designs, develops and sells the Ambient Smart Grid (R) communications platform. The Ambient Smart Grid products and services include communications nodes; a network management system, AmbientNMS (R); integrated applications; and maintenance and consulting services. AMERICAN APPAREL: Incurs $15.3 Million Net Loss in 2nd Quarter -------------------------------------------------------------- American Apparel, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $15.27 million on $149.46 million of net sales for the three months ended June 30, 2012, compared with a net loss of $213,000 on $132.80 million of net sales for the same period during the prior year. The Company reported a net loss of $23.16 million on $282.12 million of net sales for the six months ended June 30, 2012, compared with a net loss of $20.95 million on $248.87 million of net sales for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $326.72 million in total assets, $297.80 million in total liabilities, and $28.91 million in total stockholders' equity. Dov Charney, Chairman and CEO of American Apparel, stated, "We are pleased with our second quarter results that again show solid growth and continuing momentum in all business segments and major geographies. Though the first two quarters are historically our slowest, significant sales growth allowed us to more than double our EBITDA performance to $7.6 million in the second quarter of 2012 from $3.7 million in the second quarter of 2011. In the second quarter we saw over 30% of our stores with sales growth in excess of 20% and as we continue to scale our operations and further implement store-level improvements, we believe we can raise the overall sales performance even further." A copy of the Form 10-Q is available for free at: http://is.gd/GMBpVy About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. AMERICAN GILSONITE: Moody's Assigns 'B3' CFR/PDR; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) to American Gilsonite Holding Company (American Gilsonite) and assigned a B3 rating to its proposed $260 million senior secured notes due 2017. The notes and existing balance sheet cash will be used to refinance the firm's existing debt and fund a special dividend to shareholders and pay transaction fees. The company is also establishing a new $25 million revolving credit facility (unrated) that will be undrawn after the completion of the transactions. The rating outlook is stable. The following summarizes the ratings: American Gilsonite Holding Company Corporate Family Rating -- B3 Probability of Default Rating -- B3 American Gilsonite Company Sr Secured notes due 2017 -- B3 (LGD4, 54%) Outlook is Stable Ratings Rationale American Gilsonite Holding Company's B3 Corporate Family Rating (CFR) reflects its high leverage, narrow business profile (single product line, customer concentration, lack of operational and geographic diversity), modest size and lack of substantial operating history at the current profitability level. However, it enjoys a significant market share for its product with limited competition for uintaite because of the mineral's desirable properties and scarcity of uintaite reserves outside of Utah. The firm benefits from strong operating margins and cash flow generation. American Gilsonite's liquidity is supported by its cash balances ($19.5 million as of June 30, 2012), undrawn revolver and expectations it will generate positive free cash flow in 2012-13. (The company generated $30 million of free cash flow during the twelve months ended June 30, 2012.) After the debt refinancing and dividend are funded by the $260 million notes due 2017 and existing balance sheet cash, the company is expected to have little balance sheet cash and an undrawn $25 million revolving credit facility. The 4.75 year first lien revolving credit facility is due in 2017. Moody's expects that American Gilsonite will remain in compliance with any covenants through 2013, as they are applicable on a springing basis. The company will have no debt maturities until the notes mature in 2017 and benefits from relatively low maintenance capital expenditure requirements estimated to be less than $3 million per year, although mine development costs will require higher expenditure levels. The outlook is stable. The company currently has strong credit metrics for its rating. Before Moody's would consider an upgrade, Moody's would expect the company to develop a sustained track record of margins and pricing at or above current levels such that credit metrics continued to be supportive of a higher rating. A deterioration in sales volumes, profit margins, or generation of free cash flow to debt of less than 5% could lead to a downgrade. The principal methodology used in rating American Gilsonite Holdings Company was the Global Chemical 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. American Gilsonite Holding Company (American Gilsonite) through its operating subsidiary American Gilsonite Company is a miner, processor and seller of Gilsonite, its brand name of the mineral uintaite. Gilsonite is a hydrocarbon resin with physical and chemical properties that make it a desirable additive for oil & gas drilling (approximately 75% of American Gilsonite's revenues), asphalt, inks and paints and foundry applications. American Gilsonite is wholly owned by a fund managed by affiliates of private equity firm Palladium Equity Partners, LLC. The firm had revenues of $90 million for the twelve months ended June 30, 2012. AMERICAN GILSONITE: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Bonanza, Utah-based American Gilsonite Co. The outlook is stable. "At the same time, we assigned an issue level rating of 'B' to the company's proposed senior secured $260 million notes due in 2017. We assigned a recovery rating on the notes of '4', indicating our expectation of average (30% to 50%) recovery for bondholders in the event of a payment default under our recovery scenario. The ratings on the notes are based on preliminary terms and conditions. The notes are being sold pursuant to Rule 144a without registration rights," S&P said. "The corporate credit rating takes into account American Gilsonite's relatively small size, scope, and reliance on a single end market; though the company is the only producer of Gilsonite in the U.S. and has consistently generated positive cash flow," said Standard & poor's credit analyst Gayle Bowerman. "Our business risk profile score is 'vulnerable,' reflecting our view of the company's lack of diversity given its single product and mine complex, dependence on the volatile oil and gas industry, and the threat that a substitute option for Gilsonite in drilling fluids could be developed. Our financial risk profile score of 'aggressive' reflects American Gilsonite's small size (with 2012 anticipated revenues of around $100 million), as well as its financial policy, which incorporates our perspective that the company will likely use excess cash flow to pay dividends to its private equity ownership. These factors are balanced by American Gilsonite's history of generating positive free cash flow and our assessment of adequate liquidity, stemming primarily from availability under the revolving credit facility given that the company holds minimal cash balances. American Gilsonite mines uintaite, or Gilsonite, a naturally occurring asphalt whose resin- like properties are used as a stabilizing agent in oil and gas drilling fluids, as a binding element in inks and paints, and in a variety of asphalt and foundry-related applications," S&P said. "Our stable rating outlook reflects our view that selling prices for Gilsonite will remain at or near current levels and that demand will be relatively constant over the next 12 to 18 months, based on our expectations for flat end market growth. This should produce EBITDA levels which will support required interest payments on its higher debt burden and positive discretionary cash flows. We expect leverage to be about 4x at year end with FFO-to- debt around 15%, which we consider to be in line with our assessment of the company's aggressive financial risk profile. Moreover, our rating outlook incorporates the company's unique product and good profit margins despite its small size and scope, dependence on a single end market, and high absolute debt levels relative to its revenue base," S&P said. "We could lower the rating if we expect the company to sustain leverage above 5x or if EBITDA falls to levels at or below its required interest payment and maintenance capital spending needs, which we estimate to be in the range of $30 million to $35 million. This could occur if management or its owners adopt a more aggressive financial policy, if oil and gas rig counts fell to 2009 levels, if a substitute product forces the company to substantially lower average selling prices, or if it experiences an operating disruption at its mines or processing plant that reduces its volumes," S&P said. "An upgrade is less likely in the near term, given our assessment of American Gilsonite's vulnerable business risk. We could raise the rating over time, however, if the company is able to execute its contemplated strategy and as it gains higher levels of operating traction. Any upgrade would likely be limited to one notch, given our expectation that the company will distribute excess cash flow to its private equity ownership, dependency on a single end market, and risk that a substitute product could be developed," S&P said. AMERICAN PACIFIC: Moody's Raises CFR/PDR to 'B1'; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service upgraded American Pacific Corporation's (AMPAC) corporate family rating and probability of default rating to B1 from B2. Concurrently, the rating on the company's senior unsecured notes due 2015 was raised to B2 from B3, and its speculative grade liquidity rating was moved to SGL-2 from SGL-3. The outlook was changed to stable. Ratings Rationale AMPAC recently completed the sale of its aerospace equipment segment, also known as In-Space Propulsion business, to Moog Inc. (Ba2, Stable) for roughly $46 million. Using the divestiture proceeds, the company is in process of redeeming $40 million of its 9% senior notes due 2015, thereby reducing the outstanding amount to $65 million. The decrease in debt and operational improvements in its Fine Chemicals business which caters to the pharmaceutical industry are expected to lower AMPAC's leverage materially for 2013 fiscal year. These positive actions reflect the improvement in AMPAC's performance and reduction in debt with the proceeds from the sale of aerospace equipment segment. AMPAC's B1 CFR reflects expected improvement in credit metrics and liquidity, operational improvements and profitability in the Fine Chemicals business, better fixed cost absorption in the Specialty Chemicals business in 2012 owing to relatively even ammonium perchrolate (AP) sales volumes, and sale of a lower margin business segment. However, the CFR is constrained by the firm's modest size; narrow product line; limited operational and geographic diversity; customer concentration with Department of Defense, and a few pharmaceutical companies; limited growth in the AP business; environmental liabilities related to the AP business; and reliance on a limited number of products for the majority of its cash flow. The majority of its cash flow is generated by the AP business and sales of a limited number of active pharmaceutical ingredients. The stable outlook reflects the improved operating performance and expectations that its free cash flow will improve modestly in fiscal 2013. Despite strong credit metrics and reduction in debt, there is no upside to the ratings currently given the firm's modest size and limited product and application portfolio. The ratings could be lowered or the outlook changed to negative if AMPAC failed to maintain adequate liquidity (at least $25-30 million) or if the support from the US government agencies, specifically Department of Defense and to an extent NASA, deteriorates resulting in decreased sustainability of its AP business. Additionally, Moody's would expect the company generate sufficient earnings (EBITDA greater than $30 million) to maintain credit metrics supportive of the current B1 Corporate Family Rating. AMPAC's SGL-2 (good) speculative grade liquidity rating reflects Moody's expectations the company will produce moderate free cash flow in its 2013 fiscal year. AMPAC's liquidity is further supported by its cash balances ($39 million as of June 30, 2012) and undrawn $20 million asset based revolver, which has not been drawn since it was established in January 2011. Moody's notes that working capital requirements can result in $10-15 million swings in liquidity due to large customer purchases. The company is only required to comply with financial covenants if the revolver is used and unused availability is less than $5 million. The following summarizes AMPAC's ratings: American Pacific Corporation Ratings upgraded: Corporate Family Rating -- B1 from B2 Probability of Default Rating -- B1 from B2 Gtd senior unsecured notes due 2015 -- B2 (LGD4, 60%)* from B3 (LGD4, 58%) Speculative Grade Liquidity Rating -- SGL-2 from SGL-3 * LGD assessment assumes successful redemption of $40 million senior notes by September 2012 Rating outlook is stable. The principal methodology used in rating American Pacific Corporation was the Global Chemical 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. American Pacific Corporation manufactures chemical and aerospace products, including active pharmaceutical ingredients, perchlorate chemicals used primarily in space propulsion, Halotron, a clean fire extinguishing agent, sodium azide and water treatment equipment. AMPAC, headquartered in Las Vegas, Nevada, had revenues of $255 million (including partial year revenues from the discontinued aerospace equipment segment) for the twelve months ending June 30, 2012. AMREP CORP: Has Tolling and Forbearance Agreement with PBGC ----------------------------------------------------------- AMREP Corporation entered into a Tolling and Forbearance Agreement dated Aug. 13, 2012, with the Pension Benefit Guaranty Corporation. The PBGC is the agency of the United States government that administers the insurance program established under the Employee Retirement Income Security Act of 1974, as amended, to protect private-sector defined benefit pension plans, including the Company's Retirement Plan for Employees. The Agreement deals with the Company's $11,688,437 accelerated funding liability to the Plan that arose under Section 4062(e) of ERISA as a result of the Company's closing of certain of its facilities in connection with the consolidation of its Subscription Fulfillment Services business and the associated work force reduction. In the Agreement, the PBGC has agreed to forbear from asserting certain rights to obtain payment of the aforesaid accelerated funding liability granted to it by ERISA, and the Company has agreed: (a) to pay $3,000,000 of the liability not later than Aug. 23, 2012; and (b) if it has not paid the remaining liability or adequately secured it with collateral acceptable to the PBGC before Aug. 13, 2013, then either (i) to provide a letter of credit in an amount equal to 110% of the remaining liability or establish a cash escrow with an independent escrow agent in an amount equal to 100% of the remaining liability, to be maintained for five years or until the remaining liability is discharged, if sooner, or (ii) to provide security for the remaining liability acceptable to the PBGC and discharge the liability in quarterly installments over a five year period. As previously indicated in the Company's annual report to the Securities and Exchange Commission for the fiscal year ended April 30, 2012, on Form 10-K filed July 26, 2012, the Company is unable to offer any assurance that it will be able to discharge the remaining liability before Aug. 13, 2013, or meet the PBGC's requirements for securing and paying it, nor can it offer any assurance that, in the event of such inability, it will be able to negotiate with the PBGC to obtain further relief. A copy of the Agreement is available for free at: http://is.gd/6zi8bU About Amrep Corp. AMREP Corporation's Media Services business, conducted by its Kable Media Services, Inc., and Palm Coast Data LLC subsidiaries, distributes magazines to wholesalers and provides subscription and product fulfillment and related services to publishers and others, and its AMREP Southwest Inc. subsidiary is a major landholder and leading developer of real estate in New Mexico. Amrep Corp. reported a net loss of $1.14 million for the year ended April 30, 2012, a net loss of $7.56 million for the year ended April 30, 2011, and a net loss of $9.48 million for the fiscal year ended April 30, 2010. The Company's balance sheet at April 30, 2012, showed $203.03 million in total assets, $128.39 million in total liabilities and $74.64 million in total shareholders' equity. ARKANOVA ENERGY: Amends Note Purchase Agreement with Aton --------------------------------------------------------- Arkanova Energy Corporation's wholly owned subsidiary, Arkanova Acquisition Corporation, entered into a Loan Modification Agreement and an Amended and Restated Note Purchase Agreement with Aton Select Funds Limited which were effective as of July 1, 2012, whereby Aton agreed to increase the amount outstanding under the restated secured promissory note entered into as of Oct. 1, 2011, by $1,000,000 and consolidate the remaining balance, including accrued interest from Oct. 1, 2011, to June 30, 2012, equal to $315,000, under the 2011 Note and the Additional Loan Amount into one new amended and restated promissory note in the principal amount of $8,315,000. The 2012 Note bears interest at the rate of 6% per annum, is due and payable on June 30, 2013, is secured by a pledge of all of Acquisition's interest in its wholly-owned subsidiary, Provident Energy of Montana, LLC. Interest on the 2012 Note is payable 10 days after maturity in shares of the Company's common stock. The number of shares of the Company's common stock payable as interest on the 2012 Note will be determined by dividing $498,900 by the average stock price for the Company's common stock over the 15 business day period immediately preceding the date on which the 2012 Note matures. Acquisition's obligations under the 2012 Note are guaranteed by the Company pursuant to a Guaranty Agreement dated as of July 1, 2012. The Company expects to receive the Additional Loan Amount evidenced by the foregoing amended and restated loan documents by the end of August 2012. About Arkanova Energy The Woodlands, Tex.-based Arkanova Energy Corporation is currently participating in oil and gas exploration activities in Arkansas, Colorado and Montana. All of Arkanova's oil and gas properties are located in the United States. In the auditors' 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 has incurred losses since inception, which raises substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $2.06 million on $1.32 million of total revenue for the year ended Sept. 30, 2011, compared with a net loss of $13.87 million on $1.03 million of total revenue during the prior year. The Company's balance sheet at March 31, 2012, showed $2.83 million in total assets, $8.66 million in total liabilities, and a $5.83 million total stockholders' deficit. ARRAY BIOPHARMA: Incurs $23.5 Million Net Loss in Fiscal 2012 ------------------------------------------------------------- Array BioPharma Inc. reported a net loss of $8.02 million on $20.66 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $21.75 million on $19.04 million of total revenue for the same period during the prior year. The Company reported a net loss of $23.58 million on $85.13 million of total revenue for the 12 months ended June 30, 2012, compared with a net loss of $56.32 million on $71.90 million of total revenue during the prior year. Ron Squarer, chief executive officer of Array, noted, "We made great progress from a financial standpoint in fiscal 2012. We recorded a double-digit increase in annual revenue while managing our spending and strengthening our cash position. Looking ahead, we are evolving into a late-stage development company, moving towards multiple pivotal trials by the end of calendar year 2013." Mr. Squarer added, "We are excited about the recently announced Phase 2 clinical trial results for ARRY-797 which showed statistically significant pain reduction on top of NSAIDS compared to placebo plus NSAIDs in osteoarthritis patients suffering from moderate to severe knee pain. Remarkably, for patients who completed the trial, the level of pain relief demonstrated by ARRY-797, a non-opioid drug, was comparable with oxycodone ER, a proven, powerful opioid with significant tolerability and safety issues. The drop-out rate for oxycodone ER was more than five times greater than for ARRY-797. In addition, we remain confident that AstraZeneca and Novartis will continue development of selumetinib and MEK162, respectively, based on the potential these products hold for patients as demonstrated in their Phase 2 trials shared at ASCO." A copy of the press release is available for free at: http://is.gd/uldlGH About Array Biopharma Boulder, Colo.-based Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Array has four core proprietary clinical programs: ARRY-614 for myelodysplastic syndromes, ARRY-520 for multiple myeloma, ARRY-797 for pain and ARRY-502 for asthma. In addition, Array has 10 partner-funded clinical programs including two MEK inhibitors in Phase 2: selumetinib with AstraZeneca and MEK162 with Novartis. The Company's balance sheet at March 31, 2012, showed $120.04 million in total assets, $198.81 million in total liabilities, and a stockholders' deficit of $78.77 million. The Company said in its quarterly report for the period ended March 31, 2012, that "If we are unable to obtain additional funding from these or other sources when needed, or to the extent needed, it may be necessary to significantly reduce the current rate of spending through further reductions in staff and delaying, scaling back, or stopping certain research and development programs, including more costly Phase 2 and Phase 3 clinical trials on our wholly-owned programs as these programs progress into later stage development. Insufficient liquidity may also require us to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to us and our stockholders than we would otherwise choose in order to obtain upfront license fees needed to fund operations. These events could prevent us from successfully executing our operating plan and in the future could raise substantial doubt about our ability to continue as a going concern." ARCTIC GLACIER: No June 30 Interim Report; Sale to HIG Closed ------------------------------------------------------------- Arctic Glacier Income Fund disclosed that it will not be able to file an interim financial report and interim management's discussion and analysis for the period ended June 30, 2012, together with the related certification of filings under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings by Aug. 29, 2012, the deadline prescribed by securities legislation. In its CCAA proceedings, Arctic Glacier continued its business under the protection of a stay of creditor claims and Arctic Glacier conducted a court supervised recapitalization of its business through the initiation of a sale and investment solicitation process. Since the CCAA proceedings commenced, in compliance with the CCAA and the orders of the Court in the CCAA proceedings, Arctic Glacier has provided the Monitor with full access to its accounting records. The Monitor has filed with the Court periodic reports which have included Arctic Glacier's cash flow projections and other financial information concerning Arctic Glacier. Arctic Glacier anticipates that the Monitor will continue to file reports with the Court updating relevant financial information concerning Arctic Glacier. As previously disclosed, with the approval of the Court and the US Court, on July 27, 2012, Arctic Glacier sold substantially all of its business and assets to affiliates of H.I.G. Capital for cash consideration and the assumption of certain current liabilities. On closing the Sale, the Purchaser hired substantially all of Arctic Glacier's employees and is continuing the business formerly carried on by Arctic Glacier. The remaining cash proceeds of the Sale are being held by the Monitor pending further order of the Court, the satisfaction of tax liabilities, if any, the determination and payment of creditor claims, including outstanding litigation claims, and such other matters considered relevant by the Trustees of the Fund. As a consequence of the Sale, Arctic Glacier has not had the requisite time or resources to prepare and file the Continuous Disclosure Documents reflecting its financial position as of June 30, 2012. Arctic Glacier intends to file the Continuous Disclosure Documents as soon as is commercially reasonable, or as required by the Court. Arctic Glacier intends to satisfy the provisions of the alternative information guidelines set out in National Policy 12- 203 Cease Trade Orders for Continuous Disclosure Defaults so long as it remains in default of the Specified Requirement. It also intends to file with the applicable securities regulatory authorities throughout the period in which it is in default of the Specified Requirement, the same information it or its subsidiaries provide to their creditors when the information is provided to their creditors and in the same manner as it would file a material change report under part 7 of National Instrument 51-102 Continuous Disclosure Requirements. About Arctic Glacier Winnipeg, Canada-based Arctic Glacier Inc., et al., manufacture packaged ice for distribution in Canada and the United States. On Feb. 22, 2012 Arctic Glacier Income Fund, together with its subsidiaries, initiated proceedings in the Manitoba Court of Queens Bench seeking a court supervised recapitalization under the Companies' Creditors Arrangement Act. Under the CCAA, Alvarez & Marsal Canada Inc. was appointed by the Court as Monitor. Concurrently, Philip J. Reynolds of Alvarez & Marsal Canada Inc., as monitor and foreign representative, filed Chapter 15 petitions for Arctic Glacier, et al. (Bankr. D. Del. Lead Case No. 12-10603) on Feb. 22, 2012. Bankruptcy Judge Kevin Gross presides over the case. Mr. Reynolds is represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP. The Debtors is estimated to have assets and debts at $100 million to $500 million. BANK OF THE CAROLINAS: Files Form 10-Q, Incurs $170K Loss in Q2 --------------------------------------------------------------- Bank of the Carolinas Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss available to common stockholders of $170,000 on $4.16 million of total interest income for the three months ended June 30, 2012, compared with a net loss available to common stockholders of $9.85 million on $5.34 million of total interest income for the same period a year ago. The Company reported a net loss available to common stockholders of $2.88 million on $8.70 million of total interest income for the six months ended June 30, 2012, compared with a net loss available to common stockholders of $13.30 million on $10.76 million of total interest income for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $473.60 million in total assets, $463.57 million in total liabilities, and $10.03 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/UbNZHn About Bank of the Carolinas Mocksville, North Carolina-based Bank of the Carolinas Corporation was formed in 2006 to serve as a holding company for Bank of the Carolinas. The Bank's primary market area is in the Piedmont region of North Carolina. As reported in the TCR on April 9, 2012, Turlington and Company, LLP, in Lexington, North Carolina, expressed substantial doubt about Bank of the Carolinas' 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 credit losses that have eroded certain regulatory capital ratios. "As of Dec. 31, 2011, the Company is considered undercapitalized based on their regulatory capital level." BEHRINGER HARVARD: Reports $5.6-Mil. Net Income in 2nd Quarter -------------------------------------------------------------- Behringer Harvard Short-Term Opportunity Fund I LP filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $5.62 million on $4.32 million of total revenues for the three months ended June 30, 2012, compared with a net loss of $14.80 million on $4.39 million of total revenues for the same period during the prior year. The Company reported net income of $3.07 million on $8.67 million of total revenues for the six months ended June 30, 2012, compared with a net loss of $20.06 million on $9.18 million of total revenues for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $66.71 million in total assets, $84.46 million in total liabilities, and a $17.75 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/RN650T About Behringer Harvard Addison, Tex.-based Behringer Harvard is a limited partnership formed in Texas on July 30, 2002. The Company's general partners are Behringer Harvard Advisors II LP and Robert M. Behringer. As of Sept. 30, 2011, seven of the twelve properties the Company acquired remain in the Company's portfolio. The Company's Agreement of Limited Partnership, as amended, provides that the Company will continue in existence until the earlier of Dec. 31, 2017, or termination of the Partnership pursuant to the dissolution and termination provisions of the Partnership Agreement. For the year ended Dec. 31 2011, Deloitte & Touche LLP, in Dallas, Texas, noted that the uncertainty surrounding the ultimate outcome of settling unpaid debt and its effect on the Partnership, as well as the Partnership's operating losses at its subsidiaries, raise substantial doubt about its ability to continue as a going concern. The Partnership is facing a significant amount of debt maturities in the near future and debt which has matured but remains unpaid, which is recourse to the Partnership. Behringer reported a net loss of $50.15 million in 2011, a net loss of $18.71 million in 2010, and a net loss of $15.47 million in 2009. Bankruptcy Warning Of Behringer's $122.8 million in notes payable at March 31, 2012, $51.3 million has matured and is subsequently in default and an additional $50.8 million is scheduled to mature in the next twelve months. As of March 31, 2012, of the Company's $122.8 million in notes payable, $110.4 million was secured by properties and $99.9 million was recourse to the Company. The Company continues to have negotiations and discussions with lenders to modify or restructure loans, outcomes of which may include a sale to a third party or returning the property to the lender. The Company may also consider putting certain of its subsidiaries into bankruptcy in order to protect the Company's interest in the property. BILLMYPARENTS INC: Incurs $3.5 Million Loss in June 30 Quarter -------------------------------------------------------------- BillMyParents, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a loss from operations of $3.55 million on $259,290 of revenue for the three months ended June 30, 2012, compared with a loss from operations of $4.21 million on $16,046 of revenue for the same period a year ago. The Company reported a loss from operations of $11.14 million on $776,805 of revenue for the nine months ended June 30, 2012, compared with a loss from operation of $8.20 million on $22,800 of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $7.83 million in total assets, $1.47 million in total liabilities, all current, and $6.36 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/zEn1Tj About BillMyParents San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards with special features aimed at young people and their parents. BMP is designed to enable parents and young people to collaborate toward the goal of responsible spending. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, BDO USA, LLP, expressed substantial doubt about the Company's ability to continue as a going concern. BDO noted that the Company has incurred net losses since inception and has an accumulated deficit, and stockholders' deficiency at Sept. 30, 2011. The Company reported a net loss of $14.2 million for the fiscal year ended Sept. 30, 2011, compared with a net loss of $6.9 million for the fiscal year ended Sept. 30, 2010. BIOZONE PHARMACEUTICALS: To Restate March 31 Form 10-Q ------------------------------------------------------ The Chief Financial Officer of BioZone Pharmaceuticals, Inc., Elliot Maza, concluded that the previously issued financial statements contained in the Company's quarterly report on Form 10-Q for the period ended March 31, 2011, should no longer be relied upon because of an error in the quarterly report and that those financial statements would be restated to make the necessary accounting adjustments. During the Company's review of the interim financial statements for the three and six months ended June 30, 2012, the Company determined that the financial statements filed for the three month period end March 31, 2012, contained a misstatement pertaining to the expenses incurred by the Company, determining that certain expenses should be recharacterized and shown in a new line item for selling expenses to be added to the Financial Statements and that the Financial Statements contained a misstatement pertaining to the accounting for issuances of certain convertible promissory notes of the Company. The Company will restate the Financial Statements to correct the errors and file an amendment to the Quarterly Report with the Securities and Exchange Commission. About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the Web site isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company does not have sufficient cash balances to meet working capital and capital expenditure needs for the next twelve months. In addition, as of Dec. 31, 2011, the Company has a shareholder deficiency and negative working capital of $4.37 million. The continuation of the Company as a going concern is dependent on, among other things, the Company's ability to obtain necessary financing to repay debt that is in default and to meet future operating and capital requirements. Biozone reported a net loss of $5.45 million in 2011, compared with a net loss of $319,813 in 2010. The Company's balance sheet at March 31, 2012, showed $8 million in total assets, $13.76 million in total liabilities and a $5.76 million total shareholders' deficiency. BLUE RAVEN: Moved to Chapter 7 After Insufficient Sale ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the Chapter 11 reorganization of Blue Raven Technology Inc. was converted this week to a liquidation in Chapter 7 where a trustee is appointed. A sale of the business produced insufficient net proceeds to cover payment of expenses run up during the Chapter 11 effort. According to the report, the Debtor sold its business in July, producing what the U.S. Trustee said were less proceeds than expected. When the Justice Department's bankruptcy watchdog sought conversion of the case to a Chapter 7 liquidation, the company didn't object, according to court records. The report relates that the bankruptcy court approved what was intended to be a $1.4 million sale to private-equity investor Leading Ridge Capital Partners LLC from Rockville, Maryland. 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. BMB MUNAI: Incurs $750,000 Net Loss in Fiscal First Quarter ----------------------------------------------------------- BMB Munai, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $750,314 on $0 of revenue for the three months ended June 30, 2012, compared with net income of $4.32 million on $0 of revenue for the same period during the prior year. The Company did not generate any revenue during the three months ended June 30, 2012, and 2011, except from oil and gas sales through Emir Oil, LLP. The Company's balance sheet at June 30, 2012, showed $38.95 million in total assets, $18.32 million in total liabilities, all current, and $20.62 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/Yoc71j About BMB Munai Based in Almaty, Kazakhstan, BMB Munai, Inc., is a Nevada corporation that originally incorporated in the State of Utah in 1981. Since 2003, its business activities have focused on oil and natural gas exploration and production in the Republic of Kazakhstan through its wholly-owned operating subsidiary Emir Oil LLP. Emir Oil holds an exploration contract that allows the Company to conduct exploration drilling and oil production in the Mangistau Province in the southwestern region of Kazakhstan until January 2013. The exploration territory of its contract area is approximately 850 square kilometers and is comprised of three areas, referred to herein as the ADE Block, the Southeast Block and the Northwest Block. BMB Munai reported a net loss of $139.21 million for the year ended March 31, 2012, compared with net income of $4.88 million for the year ended March 31, 2011. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that the Company will have no continuing operations that result in positive cash flow, which raises substantial doubt about its ability to continue as a going concern. BORDERS GROUP: Gift Card Holders Aren't 'Known' Creditors --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Martin Glenn in New York in a 22-page opinion Aug. 15 ruled that creditors of Borders Group Inc. won't have their recoveries diluted by claims on unredeemed gift cards. According to the report, Borders sold off the merchandise in going-out-of-business sales, won approval of a liquidating Chapter 11 plan in Dec., and implemented the plan the next month. June 1, 2011, was the last date for filing claims. In January, a handful of gift card holders filed papers seeking permission to file late claims for themselves and for a class representing all gift card holders. They contended it was "excusable neglect" on their part not to have filed timely claims because they weren't sent individual notices of the last day for filing claims. Gift card holders argued that publication of the filing deadline in a newspaper wasn't sufficient notice. Judge Glenn disagreed, ruling that gift card holders weren't entitled to individualized notice because Borders maintained no databases with their contact information. Consequently, notice by publication was sufficient notice, the judge ruled, according to the report. The report notes the judge said he couldn't bend the notion of excusable neglect by allowing late claims because it would have a "disastrous effect" on other creditors, given that there is $210.5 million in unredeemed gift cards. If gift card holders had valid claims, payments to other creditors would be "severely impacted," he said, because there is only $90 million cash for distribution on unsecured claims that total as much as $850 million. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as counsel to the Debtors. Jefferies & Company's Inc. served as the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC served as the interim management and restructuring services provider. The Garden City Group, Inc., acted as the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, served as counsel to the DIP Agents. Lowenstein Sandler represented the official unsecured creditors committee for Borders Group. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. In January 2012, Borders' First Amended Joint Chapter 11 Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan filed by the Debtors and the Official Committee of Unsecured Creditors at a Dec. 20, 2011 hearing. Borders' disclosure statement projected that unsecured creditors with $812 million to $850 million in claims should see a recovery between 4% and 10%. The Debtors have been renamed BGI Inc. BROADCAST INTERNATIONAL: Posts $442,000 Net Profit in Q2 -------------------------------------------------------- Broadcast International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net profit of $442,324 on $2.35 million of net sales for the three months ended June 30, 2012, compared with net profit of $847,192 on $1.99 million of net sales for the same period during the prior year. The Company reported a net loss of $304,641 on $4.04 million of net sales for the six months ended June 30, 2012, compared with net profit of $661,715 on $3.74 million of net sales for the same period a year ago. The Company reported net income of $1.30 million in 2011, compared with a net loss of $18.66 million in 2010. The Company's balance sheet at June 30, 2012, showed $3.39 million in total assets, $9.08 million in total liabilities, and a $5.68 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/2Rk24e About Broadcast International Based in Salt Lake City, Broadcast International, Inc., installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. BROADVIEW NETWORKS: Incurs $8.4 Million Net Loss in 2nd Quarter --------------------------------------------------------------- Broadview Networks Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $8.43 million on $86.89 million of revenue for the three months ended June 30, 2012, compared with a net loss of $2.02 million on $95.53 million of revenue for the same period during the prior year. The Company reported a net loss of $13.78 million on $175.44 million of revenue for the six months ended June 30, 2012, compared with a net loss of $4.06 million on $193.95 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $255.25 million in total assets, $378.96 million in total liabilities, and a $123.71 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/J5xh5C 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. * * * 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. BURGER KING: S&P Raises Corp. Credit Rating to 'B+' --------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on the Miami-based Burger King Corp. to 'B+' from 'B'. The outlook is stable. "At the same time, we raised the issue-level rating on the company's senior secured credit facility to 'BB' from 'BB-'. We rate the facility two notches above the corporate credit rating, and the recovery rating on the facility remains '1' indicating our expectation of very high (90%-100%) recovery of principal in the event of payment default," S&P said. "We also raised the issue-level rating on the company's senior unsecured notes to 'B' from 'B-'. We rate the notes one notch below the corporate credit rating and the recovery rating remains '5', indicating our expectation of modest (10%-30%) recovery of principal in the event of default," S&P said. "In addition, we raised the rating on the company's discount notes to 'B-' from 'CCC+'. We rate these notes two notches below the corporate credit rating, and the recovery rating remains '6', which indicates our expectation of negligible (0%-10%) recovery of principal in the event of default," S&P said. "The rating action comes after Burger King's positive operating trends in 2012," said Standard & Poor's credit analyst Charles Pinson-Rose. "Year-to-date EBITDA is up close to 20%, reflecting comparable-store sales growth of 4.5%, international restaurant expansion, and administrative cost management." "While we expect sales trends may moderate for the remainder of 2012, we are still forecasting meaningful profit growth," added Mr. Pinson-Rose. "Moreover, the company has generated significant free cash flow and reduced debt, and we foresee this continuing." "The rating on Burger King reflects our view of the company's financial risk profile as 'highly leveraged,' based on forecasted credit ratios. We also assess its business risk as 'fair,' which incorporates the highly competitive nature of the industry and its susceptibility to economic conditions that somewhat offsets Burger King's global presence, domestic market share, and recent operational improvements," S&P said. "Our outlook on Burger King is stable, incorporating our expectation that operating trends will continue to improve in the second half of 2012 and that Burger King will use free cash flows to reduce debt, leading to leverage in the low-5x area by the end of 2012," S&P said. "We would consider a higher rating if we believed Burger King could further improve credit ratios such that adjusted leverage would be around 4.5x and coverage was near 2.8x. We do not foresee that occurring in 2012. However, if Burger King improved EBITDA to the range of $720 million-$730 million and the company reduced debt by an additional $350 million from current levels, we estimate the company could reach those thresholds," S&P said. "We could consider a lower rating if operating trends worsened and the company ceased to repay debt with excess cash flow. For example, if leverage was in the mid-5x area and coverage in the low-2x area, we would likely lower the rating. This could occur if the company meets our expectations for 2012, but in 2013, EBITDA declined by about 16%-18% and the company did not repay any debt with excess cash flow," S&P said. CAESERS ENTERTAINMENT: Fitch Rates New $750MM Add-On Notes 'B-' --------------------------------------------------------------- Fitch Ratings rates Caesars Entertainment Operating Company, Inc.'s (OpCo; CEOC) $750 million proposed add-on issuance to the 8.5% senior secured notes due 2020 'B-/RR2'. Fitch has also affirmed the Issuer Default Ratings (IDRs) of CEOC and related issuers and has revised certain issue specific ratings per the agency's updated rating definitions. Proceeds from the add-on issuance will be used to repay a portion of the B1-B3 term loans outstanding. In conjunction with the issuance CEOC will solicit extensions on its B1-B3 term loans maturing in 2015 and its revolver commitments maturing 2014. Extended term loans and revolver commitments will be due 2018 and 2017, respectively. CEOC will repay 50% of the principal outstanding on the extending term loans and reduce commitments by the same percentage on the extending revolver commitments. CEOC will also offer the 2014 revolver lenders to convert commitments into the extended term loans. Following the conversion CEOC will offer to repay 50% of the amounts converted. The transactions are an incremental credit positive as CEOC continues to chip away at its 2015 maturity wall. Prior to these transactions taking effect, CEOC's 2015 maturities include $2 billion of B1-B3 term loans, $215 million of second-lien notes, and $792 million of unsecured notes ($427 million held by the parent). It remains to be seen how much of the extension is agreed to by the B1-B3 lenders. Earlier this year, CEOC pushed out nearly $3 billion of B1-B3 loans using a similar strategy of issuing first-lien notes to partially repay lenders agreeing to extend (40% repayment vs. 50% currently being offered). Overall, Fitch is now more negative on CEOC's operating and free cash flow prospects as compared to earlier in this year. Caesars Entertainment Corp.'s (Caesars; parent) reported second-quarter results were disappointing with weakness shown in most of its reporting segments. This is consistent with the lackluster growth seen in the recent months across the regional markets and on the Las Vegas Strip. Fitch believes that these trends are driven by the weakening consumer sentiment and does not see these trends reversing in 2012. Looking ahead into 2013, property openings impacting Caesars' Chicago-area and Atlantic City properties will anniversary, which should make for easier comparisons. That said, Fitch's base case now assumes flat-to-low-single digit growth for Caesars properties' top-line which may not be enough to offset CEOC's increasingly onerous interest expense burden and the need to reinvest more meaningfully into its existing properties. In Fitch's base case, CEOC burns through roughly $450 million- $500 million annually in FCF in 2012 and 2013. The Rating Outlook on Caesars' Issuer Default Rating (IDR) is Stable, which continues to reflect the company's available liquidity and considerable time until the 2015 maturities. Assuming that the recent negative trends do not reverse themselves by late this year or early next year Fitch may revise Caesars' Outlook to Negative as prospects of Caesars successfully refinancing the remaining 2015 and later maturities would become increasingly doubtful without a visible path to a sustainable FCF model. When considering an Outlook revision Fitch will also contemplate the parent's ability and willingness to support CEOC. The parent generates meaningful income outside of CEOC including interest income on $1.1 billion of CEOC's senior unsecured notes held by the parent and management fees from the FCF-positive PropCo. Fitch also thinks that the parent will maintain its majority stake in Caesars Interactive following the announced sale of shares in the division to Rock Gaming. While near-term legalization of online poker remains questionable Fitch suspects that Playtika (acquired in 2011) is beginning to generate meaningful EBITDA (judging by the increase in the Other segment of the consolidated financials), which can be used to support CEOC. Security specific rating revisions: Effective Aug. 10, 2012 Fitch updated its Ratings Definitions, expanding the application of '+/-' to corporate issue ratings at the 'CCC' level. These designations are limited to instrument ratings and will not be used for IDRs, leaving 'CCC' as the sole issuer rating within the 'CCC' category. The rating revisions do not indicate any change of Fitch's opinion regarding credit quality; rather they reflect the update to the Rating Definitions noted above and the resulting impact of issue- specific notching relative to the IDR according to Fitch's Recovery Rating criteria. Fitch has taken the following rating actions: Caesars Entertainment Corp. -- Long-term IDR affirmed at 'CCC'. Caesars Entertainment Operating Co. -- Long-term IDR affirmed at 'CCC'; -- Senior secured first-lien revolving credit facility and term loans revised to 'B-/RR2' from 'B/RR2'; -- Senior secured first-lien notes revised to 'B-/RR2' from 'B/RR2'; -- Senior secured second-lien notes revised to 'CC/RR6' from 'C/ RR6'; -- Senior unsecured notes with subsidiary guarantees revised to 'CC/RR6' from 'C/RR6'; -- Senior unsecured notes without subsidiary guarantees affirmed at 'C/RR6'. Chester Downs and Marina LLC (and Chester Downs Finance Corp as co-issuer) -- Long-term IDR affirmed at 'B-'; -- Senior secured notes affirmed at 'BB-/RR1'. Caesars Linq, LLC & Caesars Octavius, LLC -- Long-term IDR affirmed at 'CCC'; -- Senior secured credit facility revised to 'CCC+/RR3' from 'B-/RR3'. CAESARS ENTERTAINMENT: Moody's Says $750MM Notes Credit Positive ---------------------------------------------------------------- Moody's Investors Service commented that Caesars Entertainment Corporation's announcement regarding a proposed add-on of $750 million to its $1.250 billion 8.5% senior secured notes due 2020 is considered a credit positive. This proposed offering, along with a Caesars' concurrent announcement that it is plans to amend and extend a portion of its $1.987 billion outstanding term loans, will contribute favorably to the company's liquidity profile which Moody's already views as very good. Caesars has an SGL-1 Speculative Grade Liquidity rating. These proposed actions, however, do not have an impact on Caesars' Caa1 Corporate Family Rating or stable rating outlook given that they do not solve what Moody's characterizes as longer-term capital structure issues related to very high leverage and lack of full interest coverage. The principal methodology used in rating Caesars Entertainment Corporation 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. As reported by the Troubled Company Reporter on March 28, 2012, Moody's upgraded Caesars Entertainment's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. Moody's also upgraded Caesars Entertainment Operating Company, Inc.'s (CEOC) first lien debt to B2, its second lien debt to Caa2, and its unsecured guaranteed notes, and unsecured notes both to Caa3. Moody's said the rating outlook is stable. Caesars Entertainment Corporation, through its wholly-owned subsidiary, CEOC, owns or manages approximately 50 casinos. The company generates consolidated revenues of about $9 billion. CAESARS ENTERTAINMENT: S&P Affirms 'B-' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiary Caesars Entertainment Operating Co. Inc. (CEOC) to negative from stable. "We affirmed all other ratings on the companies, including our 'B-' corporate credit rating," S&P said. "We assigned issue-level and recovery ratings to the proposed $750 million first-lien senior secured notes offering, to be issued jointly by Caesars Operating Escrow LLC and Caesars Escrow Corp. (the escrow issuers). We assigned our 'B' issue-level rating (one notch higher than our 'B-' corporate credit rating on the company) and our recovery rating of '2' indicating our expectation for substantial (70%-90%) recovery for lenders in the event of a payment default," S&P said. "While our first lien issue-level rating remains one notch higher than our corporate credit rating, the issuance of incremental first-lien notes continues to pressure the recovery prospects for first-lien creditors and we believe recovery prospects are currently at the very low end of the 70% to 90% range for a '2' recovery rating," said Standard & Poor's credit analyst Melissa Long. "Any subsequent meaningful first lien debt issuance beyond these notes that is not fully utilized to repay existing first- lien debt would likely result in a revision of our first lien senior secured debt recovery rating to '3' from '2' and a downgrade of the issue-level rating to 'B-' from 'B' (at the same level as the corporate credit rating)." "Our outlook revision to negative reflects weaker than expected operating performance in the second quarter, particularly at Caesars' Las Vegas region properties, where property level EBITDA declines of 8% largely offset the growth in the first quarter. We believe operating performance in Las Vegas reflected a broader weakening in the macroeconomic environment, as gaming revenues on the Las Vegas Strip declined 6.4% in the second quarter. Although gaming revenue on the Las Vegas Strip overall is down only 0.6% through the first six months of 2012, gaming revenue is underperforming our 2012 expectation for modest, single-digit growth in 2012 and we are cautious about the prospects for improvement in the second half of the year. We now incorporate an expectation for flat to modestly down net revenue and EBITDA for Caesars' Las Vegas region," S&P said. CANYON PORT: Bankruptcy Holds Up Sale of Naval Station ------------------------------------------------------ Mike D. Smith at Corpus Christi Caller Times reports that an amendment to the bankruptcy filing of Canyon Port Holdings, a previous suitor for the former Naval Station Ingleside, has delayed Occidental Petroleum Corp.'s closing to purchase the property from the Port of Corpus Christi. The report notes port commissioners have called a special meeting to consider extending the closing period, which was scheduled to end Aug. 13, 2012. According to the report, counsel for Houston-based Canyon Supply and Logistics said the company still has a legal right to close on the property because the port didn't meet certain conditions under state law. The port on May 8 entered a sales contract with Oxy to purchase 815 acres -- the former naval station and 435 adjacent acres of port property -- for $82.1 million. The report says, before Oxy, Canyon sought to buy the property to build an offshore drilling service facility. The port granted Canyon an exclusive contract for a 187-acre section of the base. Canyon put down a $1 million deposit but could not secure financing for the rest of the required $20 million down payment. Port commissioners canceled Canyon's exclusive contract in January, based on commissioners' doubts about the company's financing after granting payment extensions and extending payment deadlines -- which Canyon missed, the report adds. The report says, when the port tried to close the deal with Oxy, it was discovered Canyon had listed the sales contract it had with the port as an asset. The report relates Craig Sico, a litigation attorney representing Canyon, said the company didn't think the property appraisal the port did to determine the property's value was appropriate under state law. Mr. Sico said that, with conditions not met, Canyon did not default on its contract and the contract represents an asset in the company's bankruptcy. The report says the bankruptcy amendment has not changed the port and Oxy's intent to close the purchase. Oxy also placed the only bid of $7 million for the 101-acre campus portion of the former base. Port commissioners formally accepted that bid July 31, setting up a similar due diligence and closure timeline as with the larger property, according to the report. The report also says Canyon's bankruptcy amendment does not affect the sale of the campus portion, which was not included in Canyon's purchase deal. About Canyon Port Canyon Port Holdings, fka as Canyon Supply and Logistics, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 12-20314) on June 10, 2012. U.S. Bankruptcy Judge Richard S. Schmidt presides over the case. Richard L. Fuqua II, Esq., at Fuqua & Associates PC, represents the Debtor. CAPITAL ONE: Moody's Assigns 'Ba1 (hyb)' Rating to Pref. Stock -------------------------------------------------------------- Moody's Investors Service has assigned a rating of Ba1 (hyb) to non-cumulative perpetual preferred stock issued by Capital One Financial Corporation (COF). The rating outlook is stable. Ratings Rationale The Ba1 (hyb) rating reflects Moody's normal notching practices, under which non-cumulative preferred stock is typically rated three notches below an issuer's senior debt rating. COF is rated Baa1 for senior debt. Regarding the stable outlook, it matches Moody's rating outlook on all of COF's rated obligations. Moody's also assigned prospective ratings to COF's most recent shelf registration. The shelf was rated (P)Baa1 for senior obligations, (P)Baa2 for subordinated obligations, (P)Baa3 for cumulative preferred stock and (P)Ba1 for non-cumulative preferred stock. The methodology used in this rating was Moody's Consolidated Global Bank Rating Methodology published in June 2012. CASCADE BANCORP: Posts $1.7 Million Net Income in Second Quarter ---------------------------------------------------------------- Cascade Bancorp filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $1.75 million on $13.79 million of total interest income for the three months ended June 30, 2012, compared with net income of $2.01 million on $17.70 million of total interest income for the same period during the prior year. The Company reported net income of $2.81 million on $28.39 million of total interest income for the six months ended June 30, 2012, compared with net income of $33.05 million on $36.01 million of total interest income for the same period a year ago. Cascade reported a net loss of $47.27 million in 2011, a net loss of $13.65 million in 2010, and a net loss of $114.83 million in 2009. The Company's balance sheet at June 30, 2012, showed $1.27 billion in total assets, $1.14 billion in total liabilities and $136.65 million in total stockholders' equity. Terry Zink, President and CEO of Cascade Bancorp commented, "I view our second quarter profit as evidence that prior actions to build capital and maintain strong loan loss reserves are taking hold. We continue to see improving core operating performance as we navigate through the credit environment. Our top priority is putting local deposits to work by making loans to our local business, mortgage, and consumer customers to help to revitalize the economies of the communities we serve." Ryan Patrick Named Chairman Cascade Bancorp President and Chief Executive Officer Terry Zink announced that Ryan R. Patrick has been named Chairman of the Board. Mr. Patrick has served as a director of the Company since 1998. During this time, he has served as chair of the Audit and Enterprise Risk Management and Trust Committees, and as Trustee of the Company's 401(k) Profit Sharing Plan. Mr. Patrick, a certified public accountant, is a partner in the firm of Patrick Casey & Co., LLP. Mr. Patrick and his wife Glenna reside in Bend, Oregon. Terry Zink commented, "On behalf of the Board of Directors, we are very pleased to welcome Ryan as Board Chair. Throughout his tenure on the Board he has combined unyielding commitment with exceptional financial understanding to embrace strategies focused on enhancing shareholder value. He was a valued advocate in the Bank's successful capital raise, and has now shifted his focus to strategic growth of the company." Zink continued, "In addition to his business and financial expertise, Ryan also has a deep rooted commitment to community banking and the Northwest communities served by Bank of the Cascades. We welcome his leadership and proven ability to serve in the best interests of our company and its shareholders." Mr. Patrick follows retiring Chairman Dr. Gary Hoffman. Dr. Hoffman served on the Bank's Board for 28 years, the past seven as Chairman. Dr. Hoffman served on the Audit and Enterprise Risk Management Committee and the Nominating and Governance Committee. Dr. Hoffman is a retired surgeon with Bend Memorial Clinic. Mr. Patrick commented, "It is an honor to follow in Dr. Hoffman's footsteps. His contribution to Bank of the Cascades is significant. Over the years and through several economic cycles, Dr. Hoffman maintained a steadfast focus on serving the shareholders of the company while also serving the customers, employees and communities of the Bank." Patrick continued, "I speak for the entire Board as I acknowledge and sincerely thank Dr. Hoffman for his service and ongoing legacy to Bank of the Cascades." Reeves Appointed Chief Banking Officer Zink has also announced that Charles "Chip" Reeves has been appointed to serve as Executive Vice President and Chief Banking Officer of Bank of the Cascades. In this role, Reeves will spearhead the Bank's lending, deposit, and branch banking teams toward increased commercial and consumer banking business across our footprint. "Chip is an outstanding banker and community leader" said Zink. "I look forward to his leadership and impact as we build a strong community bank for our customers and shareholders." Mr. Reeves brings over 20 years of banking and financial expertise to the position. He most recently served as Executive Vice President at Fifth Third Bank, a $115 billion bank in the Midwest. Mr. Reeves holds a Bachelor of Arts from Miami University in Oxford, Ohio. Throughout his career Reeves has been actively involved with community and industry leadership programs, including serving on the Board of Directors for several organizations. He is relocating to Bend with his wife Michelle and their four children. Corrections to Previously Reported Financial Information Subsequent to the filing of the Company's Form 10-Q for the quarter ended March 31, 2012, but prior to filing the Company's Form 10-Q for the quarter ended June 30, 2012, management discovered an error in the computation of the Bank's regulatory capital for purposes of the Bank's FDIC Call Reports. This Call Report error affected the Bank's regulatory capital disclosures in certain of the Company's prior filings with the Securities and Exchange Commission because those disclosures were taken from the Call Reports. The error affected disclosures in the Company's Form 10-K for the fiscal year ended Dec. 31, 2011, and the Forms 10-Q for the fiscal quarters ended March 31, 2011, June 30, 2011, Sept. 30, 2011, and March 31, 2012, including disclosures about the Bank's compliance with a regulatory order applicable to the Bank. The correction of the error had no effect on the Company's consolidated balance sheet, statements of operations, stockholders' equity, or the amounts or disclosure of the regulatory capital or regulatory capital ratios of Bancorp as included in the Prior Reports. The correction does decrease the regulatory capital and regulatory capital ratios of the Bank when compared with the previously reported regulatory capital and regulatory capital ratios included in the Prior Reports. The Company believes the error will not affect the Bank status with respect to its outstanding regulatory agreements with the Federal Deposit Insurance Corporation or the Oregon Department of Consumer and Business Services, Division of Finance & Corporate Securities. A copy of the Form 10-Q is available for free at: http://is.gd/D6YcRs About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." CENTRAL EUROPEAN: Receives Non-Compliance Notice from NASDAQ ------------------------------------------------------------ Central European Distribution Corporation received a notification letter from a representative of the Listing Qualifications Department of The NASDAQ OMX Group stating that due to CEDC's inability to timely file its Form 10-Q for the period ended June 30, 2012, CEDC was not in compliance with NASDAQ Listing Rule 5250(c)(1). This notification was issued in accordance with standard NASDAQ procedures, in connection with CEDC's announcement on Aug. 10, 2012, on Form 12b-25 that CEDC would not be able to timely file its 2nd Quarter Form 10-Q. The NASDAQ notification letter noted that CEDC has until Oct. 9, 2012, to submit a plan to regain compliance with the applicable listing rule to NASDAQ. Upon acceptance of CEDC's compliance plan, NASDAQ may grant CEDC an exception of up to 180 calendar days from the 2nd Quarter Form 10-Q's initial due date, or until Feb. 5, 2013, for CEDC to regain compliance with NASDAQ's filing requirements for continued listing. The NASDAQ notice has no immediate effect on the listing or trading of CEDC's common stock on the NASDAQ Global Select Market. CEDC intends to file its 2nd Quarter Form 10-Q as soon as practicable and to fully regain compliance with the NASDAQ continued listing requirements upon that filing of its 2nd Quarter Form 10-Q. If necessary, CEDC will submit a plan to regain compliance with NASDAQ's filing requirements within the 60 day deadline. 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. CHARLESTON ASSOCIATES: Taps Sperling & Slater for Nev. Litigation ----------------------------------------------------------------- Charleston Associates, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Sperling & Slater as special litigation counsel, effective as of Feb. 6, 2012. On Nov. 24, 2010, the Debtor filed an adversary proceeding in the Court against RA Southeast Land Company, LLC, and City National Bank. Defendants in the Nevada Adversary sought a change of venue to the U.S. Bankruptcy Court for the District of Nevada, which the Court subsequently granted. On July 25, 2011, the Nevada Bankruptcy Court denied summary judgment motions of RAS and CNB, and granted partial summary judgment in favor of the Debtor against RAS and CNB. On Dec. 1, 2011, the Nevada Bankruptcy Court entered a supplemental order on Summary Judgment Motions. The Nevada Adversary remains pending before the Nevada Bankruptcy Court. Subsequently, CNB and RAS filed separate appeals of the Summary Judgment Order, and both appeals were consolidated into Case No. 11-2023 before the District Court of Nevada, pursuant to an order dated Jan. 31, 2012. CNB and RAS have filed opening briefs and replies in the Nevada Appeal. The briefing was extensive. Pursuant to a briefing schedule established by a stipulated order entered in the Nevada Appeal, the Debtor's responsive brief was filed on March 30, 2012. The Debtor also contemplates filing a sur-reply brief. The Debtor seeks to employ S&S to, among other things: (a) advise the Debtor with respect to matters pertaining to the Nevada Appeal; (b) attend meetings, conference calls and negotiations with representatives of RAS, CNB and other parties in interest, as applicable; (c) take all necessary actions in the Nevada Appeal to protect the Debtor's estate; (d) prepare motions, applications, answers, orders, briefs, reports and other papers necessary to assist in responding to the Nevada Appeal; (e) appear before any court in connection with the Nevada Appeal; and S&S will be compensated at these hourly rates: Paul E. Slater, Partner & Founder $800 Daniel A. Shmikler, Partner $445 Matthew Slater, Associate $315 Lisa Fridgeirsson, Paralegal $235 To the best of the Debtor's knowledge, S&S is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Charleston Associates Based in Las Vegas, Nevada, Charleston Associates, LLC, is the successor by merger to Boca Fashion Village Syndications Group, LLC. The Debtor initially owned a 96-acre parcel of real estate in Las Vegas, Nevada and began developing a large community shopping center thereon. Situated at the northeast corner of the intersection of Charleston Boulevard and Rampart Boulevard, the entire shopping center was to be known as "The Shops at Boca Park." The Debtor developed Phases I and II (approximately 54 acres) into an operating shopping center whose tenants currently include Target, Petland, Vons, Famous Footwear, Ross, OfficeMax, and a number of other major national retailers and local retailers. The Debtor transferred developed portions of Phases I and II to affiliates, but retained and continues to own nearly nine acres of land in Phases I and II. Phase III encompassed approximately 41.72 acres. The Debtor divided Phase III into two parcels consisting of the approximately 18.28-acre parcel that is the Boca Fashion Village property, and an approximately 23.44-acre parcel of undeveloped land adjacent thereto. The Undeveloped Land, which remains largely unimproved, was subsequently the subject of a "friendly foreclosure" by City National Bank. The Debtor developed Boca Fashion Village into an operating shopping center whose tenants currently include The Cheesecake Factory, Gordon Biersch, Total Wine and More, Grimaldi's Pizzeria, Kona Grill, REI, Pink the Boutique, and many other national and local retailers. Boca Fashion Village consists of three in-line buildings containing 138,869 square feet of rentable area and an additional 3.74 acre site. The 3.74 acre site was formerly subject to a ground lease, but is currently owned by Quality Real Estate Management ("QREM"), and is being renovated to accommodate the opening of a Fry's Electronics, Inc. store, a "big-box" retail electronics store. Approximately 118,258 square feet, or 85.2% of the rentable area in Boca Fashion Village, is currently leased. In addition, there is a cellular tower located on the property that is currently leased to Nextel. Charleston Associates filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11970) on June 17, 2010. Judge Kevin J. Carey presides over the case. Neal L. Wolf, Esq., Dean Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Ill., represent the Debtor as counsel. Bradford J. Sandler, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Del., represent the Debtor as Delaware counsel. In its schedules, the Debtor disclosed $92,348,446 in assets and $65,064,894 in liabilities. Attorneys at Brinkman Portillo Ronk, PC, represent the Official Committee of Unsecured Creditors as counsel. Thomas M. Horan, Esq., Steven K. Kortanek, Esq., and Ryan Cicoski, Esq., at Womble Carlyle Sandridge & Rice, LLP, in Wilmington, Del., represent the Committee as Delaware counsel. CHRIST HOSPITAL: Wants Until Dec. 4 to File Chapter 11 Plan ----------------------------------------------------------- Christ Hospital asks the U.S. Bankruptcy Court for the District of New Jersey to extend its exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Dec. 4, 2012, and Feb. 2, 2013, respectively. The Debtor is asking for a second exclusivity extension. The Court previously extended the Debtor's exclusive periods until Aug. 6, and Oct. 3. About Christ Hospital Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in 1872 by an Episcopalian priest, is a 367-bed acute care hospital located in Jersey City, New Jersey at 176 Palisade Avenue, serving the community of Hudson County. The Debtor is well-known for its broad range of services from primary angioplasty for cardiac patients to intensity modulated radiation therapy for those battling cancer. Christ Hospital is the only facility in Hudson County to offer IMRT therapy, which is the most significant breakthrough in cancer treatment in recent years. Christ Hospital filed for Chapter 11 after an attempt to sell the assets fell through. Judge Morris Stern presides over the case. Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's counsel. Alvarez & Marsal North America LLC serves as financial advisor. Logan & Company Inc. serves as the Debtor's claim and noticing agent. The Debtor disclosed $37,575,746 in assets and $96,433,231 in liabilities. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq., at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq., at Wollmuth Maher & Deutsch LLP. Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as counsel to the Official Committee of Unsecured Creditors. J.H. Cohn LLP serves as financial advisor to the committee. Suzanne Koenig of SAK Management Services, LLC, has been appointed as patient care ombudsman. She is represented by Greenberg Traurig as counsel. Hudson Hospital Holdco is represented in the case by McElroy, Deutsch, Mulvaney & Carpenter, LLP. Community Healthcare Associates is represented in the case by Lowenstein Sandler PC. Liberty Healthcare System, Inc., d/b/a Jersey City Medical Center, which joined in CHA's bid, is represented by Duane Morris LLP. In April 2012, the Bankruptcy Court authorized Christ Hospital to sell its facility to Hudson Hospital Propco LLC and Hudson Hospital Holdco LLC after a bidding and auction process. In consideration of the sale, transfer, conveyance and assignment of the Assets, the Purchaser will assume liabilities; pay to Seller cash in the amount of $29,496,000; pay the amount of $3,500,000 to satisfy a portion of Seller's obligations to the PBGC; pay all Transfer Taxes due in connection with the closing of the transactions, currently estimated to be $300,000; pay the cost of all director and officer "tail" insurance coverage, in the amount currently estimated to be $150,000; and release all rights to the Good Faith Deposit and any right to repayment of the Good Faith Deposit. In July 2012, a state court judge approved the planned $45.3 million sale of Christ Hospital in Jersey City, N.J., to a for-profit operator of other local hospitals. CIRCLE STAR: Incurs $11.1 Million Net Loss in Fiscal 2012 --------------------------------------------------------- Circle Star Energy Corp. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $11.07 million on $942,150 of total revenues for the year ended April 30, 2012, compared with a net loss of $31,718 on $0 of total revenues during the prior fiscal year. The Company's balance sheet at April 30, 2012, showed $7.55 million in total assets, $5.79 million in total liabilities, and $1.75 million in total stockholders' equity. Hein & Associates LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficit which raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/mvwafC About Circle Star Houston, Tex.-based Circle Star Energy Corp. owns royalty, leasehold, operating, net revenue, net profit, reversionary and other mineral rights and interests in certain oil and gas properties in Texas. The Company's properties are in Crane, Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson, Fayette, and Lee Counties. CKE RESTAURANTS: S&P Says 'B-' CCR Off Watch After IPO Suspension ----------------------------------------------------------------- Standard & Poor's Ratings Services removed its ratings on Carpinteria, Calif.-based restaurant operator and franchisor CKE Restaurants Inc., including its 'B-' corporate credit rating, from CreditWatch with positive implications, where they were placed on Aug. 1, 2012. The ratings are otherwise unchanged. The outlook is stable. "We rate CKE's first-lien revolving credit facility 'B+' (two notches above the corporate credit rating), with a '1' recovery rating, indicating our expectation of very high (90% to 100%) recovery in the event of a payment default. The rating on the second-lien notes is 'B-' and the recovery rating is '4', indicating our expectation of average (30% to 50%) recovery. We rate the holdco notes 'CCC' (two notches below the corporate credit rating), with a '6' recovery rating, indicating our expectation that lenders would receive negligible (0% to 10%) recovery," S&P said. "The ratings on CKE Restaurants Inc. reflect our opinion that the company will maintain a 'highly leveraged' financial risk profile, as performance improvements on product and pricing initiatives, coupled with debt reduction, will be somewhat mitigated by the accretion of pay-in-kind (PIK) interest on holdco notes and some cost inflation. We view the company's business risk profile as 'weak,' which incorporates its participation in the intensely competitive quick-service restaurant industry and exposure to commodity cost inflation, partly offset by its dual-brand restaurant system that somewhat helps with earnings diversity," S&P said. "Operating performance was slightly better than we anticipated as the company benefited from advertising promotions and price increases," explained Standard & Poor's credit analyst Andy Sookram. "The stable outlook incorporates our expectation that the company will have adequate liquidity and maintain good cushion under financial covenants over the next 12 months. We are not anticipating any meaningful changes in credit metrics despite our anticipation for cost inflation, as we think additional debt reduction will somewhat offset profit pressures and keep credit metrics consistent with levels we consider highly leveraged," S&P said. "We could downgrade the company if operating conditions--such as higher-than-anticipated commodity cost increases--pressure profitability and lead to meaningful declines in liquidity, interest coverage at subpar levels, and thinner cushion under financial covenants. This scenario could unfold if commodity costs increase by 175 bps or more and if same-store sales are at negative levels on a sustained basis," S&P said. "An upgrade is unlikely in the next few quarters, given the company's high debt, the IPO delay, and exposure to commodity cost increases. However, one could occur if performance improves meaningfully, the company reduces debt so that it maintains leverage of under 6x, and we felt comfortable that shareholder initiatives would not hurt credit protection measures," S&P said. CLARE OAKS: Wants to Hire Jones Day as Special Bond Counsel ----------------------------------------------------------- Clare Oaks asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to employ Jones Day as special bond counsel. As special bond counsel, Jones Day will advise the Debtor with respect to certain matters regarding bonds issued by the Illinois Finance Authority in 2006 and the issuance of bonds or other similar financing instruments in connection with a chapter 11 plan, including: a) the review of due diligence materials provided to Jones Day by the Debtor and other parties necessary to enable Jones Day to render any bond counsel opinions required for the transaction, including an opinion that the interest on the Series 2012 Bonds is excludable from the gross income of the owners thereof for federal income tax purposes or that the Transaction would not adversely affect any exemption from federal income taxes to which the Series 2006 Bonds would otherwise be entitled; b) the preparation of authority proceedings authorizing the issuance of the Series 2012 Bonds and the execution of related documents by the authority, including any amendments to the Series 2006 Bond documents; and c) the drafting or review of certain bond documentation, including, as applicable, bond trust indentures, the loan agreements, the master trust indentures, mortgage and related amendments to the existing bond documents for the Series 2006 Bonds. John F. Bibby, Jr., a partner atJones Day, tells the Court that his and Robert Capizzi's hourly rates are $650. Other lawyers and paralegals may be assigned to work on the matter as needed. Their hourly rates range from $475 to $825. Mr. Bibby, assures the Court that Jones Day does not represent or hold any interest adverse to the Debtor or its estate with respect to the matters for which the Debtor proposes to retain Jones Day. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. The Debtor intends to sell its Clare Oaks Campus to ER Propco Co, LLC aka Evergreen for $16,000,000, subject to higher and better offers. COATES INTERNATIONAL: Incurs $1.5MM Net Loss in Second Quarter -------------------------------------------------------------- Coates International, Ltd., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.48 million on $0 of sales for the three months ended June 30, 2012, compared with a net loss of $536,179 on $125,000 of sales for the same period during the prior year. The Company reported a net loss of $2.88 million on $0 of sales for the six months ended June 30, 2012, compared with a net loss of $1.07 million on $125,000 of sales for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $2.81 million in total assets, $4.39 million in total liabilities, and a $1.57 million total stockholders' deficiency. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Meyler & Company, LLC, in Middletown, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company continues to have negative cash flows from operations, recurring losses from operations, and a stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/JGvECY About Coates International Based in Wall Township, N.J., Coates International, Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated on August 31, 1988, for the purpose of researching, patenting and manufacturing technology associated with a spherical rotary valve system for internal combustion engines. This technology was developed over a period of 15 years by Mr. George J. Coates, who is the President and Chairman of the Board of the Company. The Coates Spherical Rotary Valve System (CSRV) represents a revolutionary departure from the conventional poppet valve. It changes the means of delivering the air and fuel mixture to the firing chamber of an internal combustion engine and of expelling the exhaust produced when the mixture ignites. COLONIAL BANC: FDIC Looks to Slow Funding of Litigation ------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that the Federal Deposit Insurance Corp. is putting the brakes on the plan by a group of hedge funds to fund several lawsuits by Colonial Bank's former parent against the banking regulator. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the Debtor. The Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. In September 2009, an Official Committee of Unsecured Creditors was formed consisting of three members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S. Bank National Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve as co-counsel for the Committee. Colonial Brokerage, a wholly owned subsidiary of Colonial BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy Court in the Middle District of Alabama in June 2010. Susan S. DePaola serves as Chapter 7 trustee. COMMUNITY FIRST: Posts $351,000 Net Income in Second Quarter ------------------------------------------------------------ Community First, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $351,000 on $5.93 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $4.39 million on $7.30 million of total interest income for the same period during the prior year. The Company reported net income of $2.11 million on $12.21 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $4.86 million on $15.05 million of total interest income for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $573.69 million in total assets, $563.03 million in total liabilities and $10.65 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/iQSoHc About Community First Columbia, Tennessee-based Community First, Inc., is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and became so upon the acquisition of all the voting shares of Community First Bank & Trust on Aug. 30, 2002. An application for the bank holding company was approved by the Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The Company was incorporated under the laws of the State of Tennessee as a Tennessee corporation on April 9, 2002. After auditing the Company's 2011 results, Crowe Horwath LLP, in Brentwood, Tennessee, expressed substantial doubt about Community First's ability to continue as a going concern. The independent auditors noted that the Company's bank subsidiary, Community First Bank & Trust, is not in compliance with a regulatory enforcement action issued by its primary federal regulator requiring, among other things, a minimum Tier 1 Leverage capital ratio at the Bank of not less than 8.5%, a minimum Tier 1 capital to risk-weighted assets ratio of not less than 10.0% and a minimum Total capital to risk-weighted assets ratio of not less than 12.0%. "The Bank's Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to risk-weighted assets ratio was 7.22% and its Total-capital to risk weighted assets ratio was 8.51% at Dec. 31, 2011. Continued failure to comply with the regulatory enforcement action may result in additional adverse regulatory action." The Company reported a net loss of $15.0 million on $19.6 million of net interest income (before provision for loan losses) in 2011, compared with a net loss of $18.2 million on $21.0 million of net interest income (before provision for loan losses) in 2010. Total non-interest income was $3.4 million for 2011, compared with $4.7 million for 2010. CONFORCE INTERNATIONAL: Incurs $492,000 Loss in June 30 Qtr. ------------------------------------------------------------ Conforce International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of US$492,421 for the three months ended June 30, 2012, compared with a net loss of US$661,547 for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed US$4.35 million in total assets, US$1.97 million in total liabilities, and US$2.38 million in shareholders' equity. The Company did not generate revenues during the three month periods ended June 30, 2012, or June 30, 2011. For the three months ended June 30, 2012, management has focused its efforts on retooling the Peru Indiana facility for improved processing, panel performance, and to satisfy customer requirements. A copy of the Form 10-Q is available for free at: http://is.gd/n7QJwK About Coates International Based in Wall Township, N.J., Coates International, Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated on August 31, 1988, for the purpose of researching, patenting and manufacturing technology associated with a spherical rotary valve system for internal combustion engines. This technology was developed over a period of 15 years by Mr. George J. Coates, who is the President and Chairman of the Board of the Company. The Coates Spherical Rotary Valve System (CSRV) represents a revolutionary departure from the conventional poppet valve. It changes the means of delivering the air and fuel mixture to the firing chamber of an internal combustion engine and of expelling the exhaust produced when the mixture ignites. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Meyler & Company, LLC, in Middletown, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independed auditors noted that the Company continues to have negative cash flows from operations, recurring losses from operations, and a stockholders' deficiency. CONVERTED ORGANICS: Has 320.9 Million Outstanding Common Shares --------------------------------------------------------------- On Jan. 3, 2012, Converted Organics entered into an agreement with an institutional investor whereby the Company agreed to sell to the investor twelve senior secured convertible notes. The initial January Note was issued on Jan. 3, 2012, in an original principal amount of $247,500. The remaining eleven January Notes will each have an original principal amount of up to $237,600. Each January Note matures eight months after issuance. The total face value of the twelve notes under this agreement will be $2,861,100, assuming each note is sold for the full face value, to the investor, of which there is no assurance. The January Notes are convertible into shares of the Company's common stock at a conversion price equal to 80% of lowest bid price of the Company's common stock on the date of conversion. Also, the Company entered into an agreement with two investors, pursuant to which the Company agreed to effect an additional closing under the Jan. 12, 2012, convertible note in which the Company issued the buyers new notes having an aggregate original principal amount of $550,000. As of Aug. 3, 2012, the total principal outstanding on these notes was $1,760,160. As of Aug. 10, 2012, the principal amount of the Notes has declined to $1,636,360. From Aug. 3, 2012, until Aug. 10, 2012, a total of $123,800 in principal had been converted into 62,100,148 shares of common stock. Since the issuance of the Original Note and the addtional closing, a total of $366,300 in principal has been converted into 140,449,823 shares of common stock. The Note holders are accredited investors and the shares of common stock were issued in reliance on Section 3(a)(9) under the Securities Act of 1933, as amended. As of Aug. 10, 2012, the Company had 320,980,295 shares of common stock outstanding. About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. After auditing the 2011 results, Moody, Famiglietti & Andronico, LLP, noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. Converted Organics reported a net loss of $17.98 million in 2011, compared with a net loss of $47.81 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.05 million in total assets, $6.91 million in total liabilities and $140,006 in total stockholders' equity. CPM HOLDINGS: Moody's Affirms 'B2' CFR/PDR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service affirmed CPM Holdings, Inc.'s B2 Corporate Family Rating ("CFR") and revised the ratings on its proposed credit facilities in response to a change in the proposed deal structure. These ratings are subject to Moody's review of final terms and conditions of the transaction and related credit documentation. The B2 rating on the existing senior secured notes is unchanged and will be withdrawn following the completion of the proposed transaction. The rating outlook is stable. Actions: Issuer: CPM Holdings, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2 $20 million First Lien Senior Secured Revolver due 2017, Revised to B1 (LGD3 38%) from Ba3 $285 million First Lien Senior Secured Term Loan B due 2017, Revised to B1 (LGD3 38%) from Ba3 $100 million Second Lien Senior Secured Term Loan due 2018, Affirmed Caa1 (LGD5 87%) Outlook, Stable CPM reduced the size of its proposed second lien senior secured term loan to $100 million from $185 million, increased the size of its proposed first lien senior secured term loan to $285 million from $275 million, and reduced the size of its proposed dividend by $75 million. The revised transaction would still result in a substantive increase in debt (to $385 million from $162 million on Aug. 15) and debt service costs (to nearly $30 million from less than $20 million). Moody's estimates pro forma financial leverage in the low 4 times Debt/EBITDA and interest coverage in the high 2 times EBIT/Interest for the twelve months ended March 31, 2012. These metrics are adequate for the rating category and are expected to improve in the near-term. CPM's order backlog provides good near-term revenue visibility and likely will support strong free cash flow generation through 2013. Given the cyclicality of the business, the rating assumes that CPM will use its flow to reduce debt in advance of any evident weakness in its end markets to maintain credit metrics consistent with the rating category. The B2 CFR is constrained by modest size, exposure to cyclical end markets, a business mix weighted towards new equipment sales, and financial risk posed by significant absolute debt relative to the cash flow generated by the relatively stable spare parts business. Moody's believes demand for new agricultural and food processing machinery can be influenced significantly by changes in global macroeconomic conditions and credit conditions. The rating incorporates tolerance for significant peak-to-trough declines in EBITDA during downturns of moderate intensity, but, in part due to low capital spending requirements, assumes the company will generate positive free cash flow on a rolling twelve month basis. The rating assumes that in a downturn of moderate intensity financial leverage will not exceed 6 times and interest coverage will not fall below 1.5 times. The B2 rating assumes that in the event of a downturn CPM will proactively reduce debt, taking advantage of the cash flows from its long-dated order backlog and meaningful spare parts business. Strong competitive positions and an outsourced manufacturing model help maintain profit margins and reduce cash outflows during such periods of weakness. The stable rating outlook reflects expectations for solid operating performance over the next 12-18 months and continued good liquidity. Moody's could downgrade the ratings with expectations for financial leverage above 6 times, interest coverage below 1.5 times, negative free cash flow on a rolling twelve month basis, or a deterioration in liquidity. A rating upgrade is unlikely in the near-term due to the magnitude of sustained improvement necessary to warrant a higher rating. An upgrade likely would require sufficient financial cushion such that CPM could withstand a moderate economic downturn without financial leverage exceeding 4.5 times or interest coverage falling below 2 times. The principal methodology used in rating CPM Holdings Inc. was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CPM Holdings, Inc. is a leading provider of process machinery and technology for the oilseed, animal feed, breakfast cereal and snack food, and bio-fuels processing industries. CPM has been owned by Gilbert Global Equity since 2003 and generated approximately $500 million of revenue for the twelve months ended March 31, 2012. DALLAS ROADSTER: Texas Capital Objects to Cash Collateral Budget ---------------------------------------------------------------- Texas Capital Bank, N.A., objects to the cash collateral budget for August/September 2012 filed by Dallas Roadster Ltd. The Final Cash Collateral Order requires the Debtors to submit various reports and certifications to Texas Capital Bank. The bank, however, said the Debtors are not in compliance with the reporting requirements in the Final Cash Collateral Order in that they have failed to submit certain of the reports and certifications. The Debtors are required to submit all reports and certifications on a timely basis and with correct and accurate information. In addition, the bank said, the reports and certifications submitted to TCB are at variance with the monthly operating reports filed by the Debtors. TCB is concerned regarding the accuracy of the financial reporting submitted by the Debtors and its inability to explain or reconcile these numbers. Texas Capital Bank is represented by: Kenneth Stohner, Jr., Esq. Heather M. Forrest, Esq. JACKSON WALKER, LLP Dallas, TX 75202 Tel: (214) 953-6000 Fax: (214) 953-5822 E-mail: kstohner@jw.com As reported in the Troubled Company Reporter on Dec. 16, 2011, Dallas Roadster and IEDA Enterprises Inc. sought Bankruptcy Court authority to use proceeds of assets on which Texas Capital Bank asserts a first priority lien and security interest. As of Nov. 16, 2011, the Debtors owe TCB $2.9 million on a revolving line of credit note and $1.6 million on a real property note. The Debtors said they were current on all financial obligations due and owing TCB. The bank lender is also oversecured by collateral totaling $10,163,727. TCB asserts a first priority liens on and security interests in substantially all Roadster's personal property, including, without limitation all vehicles, accounts, and car notes. TCB further asserts that it has a valid and perfected first mortgage recorded against all of Roadster's real property holdings. The Debtors proposed to provide adequate protection to TCB as regards any diminution in value of the Secured Lender's interest in the Collateral as existing on the Petition Date. The Debtors assert that TCB is adequately protected as a result of the continued business operations. Moreover, there is an equity cushion in excess of 50% in the Prepetition Collateral. The Debtors also anticipate making interest only payments to the Secured Lender by way of adequate protection under the terms of a final cash collateral order. About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. Michael S. Mitchell, Esq., and Robert T. DeMarco, Esq., at DeMarco-Mitchell, PLLC, serve as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DAWSON INTERNATIONAL: Falls Into Administration in the UK --------------------------------------------------------- Dawson International has fallen into administration after the group failed to address its pension liabilities. The Telegraph reports that the company, , which employs about 180 people in the UK and a further 20 in the US, has appointed KPMG as administrators after it was asked to pay GBP129 million in pension debt, according to The Telegraph. SCOTSMAN.COM relates that the company has made 200 jobs redundant in the administration. Company Chairman David Bolton said that the company's "proposal, which was all we could possibly afford, would have delivered significantly more to the PPF than it is likely to receive from administration and relied on further financial support from shareholders and other stakeholders." The Scotsman relates that the textile company's shares were suspended from trading last week. The Telegraph relates that the group decided in May to try and move its pension plans into the PPF. The firm revealed to shareholders last month that those attempts at a negotiated entry had failed, after both the Pensions Regulator and the PPF rejected the company's offers, the report says. About Dawson International Dawson International is a leading cashmere business. It comprises two trading divisions, based in the UK and the USA. The UK division comprises the Barrie Knitwear business, based in Hawick Scotland. It manufactures highest quality cashmere garments at its factory in the Scottish borders and sells to some of the world's most prestigious couture houses, department stores and private label retail outlets. DCB FINANCIAL: Files Form 10-Q; Posts $283,000 Net Income in Q2 --------------------------------------------------------------- DCB Financial Corp filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $283,000 on $4.72 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $1.85 million on $5.77 million of total interest income for the same period during the prior year. The Company reported net income of $442,000 on $9.76 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $1.82 million on $11.72 million of total interest income for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $510.70 million in total assets, $475.51 million in total liabilities and $35.19 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/VRpHRN About DCB Financial DCB Financial Corp. is a financial holding company headquartered in Lewis Center, Ohio. The Corporation has one wholly-owned subsidiary bank, The Delaware County Bank and Trust Company (the "Bank"). The Corporation also has two additional wholly owned subsidiaries, DCB Title and DCB Insurance Services LLC. DCB Title provides standard real estate title services, while DCB Insurance Services LLC provides a variety of insurance products. However, neither nonbank subsidiary is material to the financial results of the Corporation. The Bank has one wholly-owned subsidiary, ORECO, which is used to process other real estate owned. The Corporation was incorporated under the laws of the State of Ohio in 1997, as a financial holding company under the Bank Holding Company Act of 1956, as amended, by acquiring all outstanding shares of the Bank. The Corporation acquired all such shares of the Bank after an interim bank merger, consummated on March 14, 1997. The Bank is a commercial bank, chartered under the laws of the State of Ohio, and was organized in 1950. The Bank provides customary retail and commercial banking services to its customers, including checking and savings accounts, time deposits, IRAs, safe deposit facilities, personal loans, commercial loans, real estate mortgage loans, installment loans, trust and other wealth management services. The Bank also provides cash management, bond registrar and paying agent services for commercial and public unit entities. Through its subsidiary Datatasx, the Bank provided data processing and other bank operational services to other financial institutions. Those services were discontinued in September 2011, and were not a significant part of operations or revenue. In October 2010, the Corporation's wholly-owned bank subsidiary entered into a Consent Agreement with the FDIC which requires that Tier-1 and Total Risk Based Capital percentages reach 9.0% and 13.0% respectively. As of March 31, 2012, the Bank's capital ratios, as previously noted, were not at these levels. The Corporation and its subsidiaries meet all published regulatory capital requirements. The ratio of total capital to risk-weighted assets was 10.3% at March 31, 2012, while the Tier 1 risk-based capital ratio was 6.7%. As reported in the TCR on April 5, 2012, Plante & Moran PLLC, in Columbus, Ohio, said DCB's bank subsidiary is not in compliance with revised minimum regulatory capital requirements under a formal regulatory agreement with the banking regulators. "Failure to comply with the regulatory agreement may result in additional regulatory enforcement actions." DELTATHREE INC: Incurs $353,000 Net Loss in Second Quarter ---------------------------------------------------------- deltathree Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $353,000 on $3.40 million of revenue for the three months ended June 30, 2012, compared with a net loss of $1.62 million on $2.20 million of revenue for the same period during the prior year. The Company reported a net loss of $895,000 on $6.25 million of revenue for the six months ended June 30, 2012, compared with a net loss of $1.59 million on $5.99 million of revenue for the same period a year ago. The Company reported a net loss of $3.05 million in 2011, a net loss of $2.49 million in 2010, and a net loss of $3.19 million in 2009. The Company's balance sheet at June 30, 2012, showed $2.27 million in total assets, $7.52 million in total liabilities, and a $5.24 million total stockholders' deficiency. Bankruptcy Warning "In view of the Company's current cash resources, nondiscretionary expenses, debt and near term debt service obligations, the Company may begin to explore all strategic alternatives available to it, including, but not limited to, a sale or merger of the Company, a sale of its assets, recapitalization, partnership, debt or equity financing, voluntary deregistration of its securities, financial reorganization, liquidation and/or ceasing operations," the Company said in its quarterly report for the period ended June 30, 2012. "In the event that the Company requires but is unable to secure additional funding, the Company may determine that it is in its best interests to voluntarily seek relief under Chapter 11 of the U.S. Bankruptcy Code." After auditing the 2011 results, Brightman Almagor Zohar & Co., noted that Company's recurring losses from operations and deficiency in stockholders' equity 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/ImSdoV About deltathree Based in New York, deltathree, Inc. (OTC QB: DDDC) -- http://www.deltathree.com/-- is a global provider of video and voice over Internet Protocol (VoIP) telephony services, products, hosted solutions and infrastructures for service providers, resellers and direct consumers. DEWEY & LEBOEUF: Former Partners Agree to Pay $50 Million --------------------------------------------------------- Reuters' Casey Sullivan and Nate Raymond report that former Dewey & LeBoeuf partners agreed on Thursday to pay at least $50 million toward a settlement agreement, the minimum amount the firm's advisers had been seeking in order to submit the proposal to bankruptcy court. The settlement, if approved, could mark the first major recovery for Dewey's creditors, who are owed at least $315 million. Under the final settlement offer, former Dewey partners had to contribute a minimum of $50 million by 5 p.m., August 16, a condition that was met by 2:45 p.m. Thursday, according to an e-mail sent to former Dewey partners and obtained by Reuters. The report says the e-mail did not specify how much money had been raised collectively. At least 300 partners out of a possible 672 signed the accord, according to a person close to the matter, Reuters reports. According to Reuters, the Dewey estate may still go after an additional estimated $60 million from former Dewey partners in so-called unfinished business claims, in which the trustee seeks to recover profits on legal business former partners took with them to other firms. Partners who did not sign the deal also could be vulnerable to claw-back litigation unless they accept the deal after the August 16 deadline and agree to pay a 25 percent penalty. Reuters says some former partners indicated they accepted the settlement simply to put the matter in the past. "I'm holding my nose but I'm doing this," said one. Another former partner said he was "optimistic" about Thursday's announcement, despite having to pay a significant amount of money. "I would have been extraordinarily depressed if this threshold hadn't been reached," he said. The Wall Street Journal's Jennifer Smith reports that Tracy Klestadt, Esq., a bankruptcy lawyer who represents more than a dozen former Dewey partners, most of whom he said had signed on to the plan, said "It's unusual that they attempted to do [the settlement] in the first two months of a case." "I debated with myself until the last minute," said one former partner, who said the terms were unfair to those lawyers who bore no responsibility for Dewey's failure, according to WSJ. But that partner and another former Dewey lawyer both said it was time to move past the biggest U.S. law firm failure to date. "While I think I'm paying too much, and several very highly compensated people are paying too little, no one held a gun to my head," the second former partner said, according to WSJ. "I just want to put this sorry episode behind me and move on with my career." Banks, bondholders and hundreds of trade creditors have potential claims against Dewey that total $560 million, according to ex- partners who were briefed last week by the firm's estate, WSJ says. 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 lawyers at Kasowitz, Benson, Torres & Friedman LLP, as counsel. The Official Committee of Unsecured Creditors tapped Deloitte Financial Advisory Services LLP as its financial advisor. DEWEY & LEBOEUF: Ex-Partners Committee Supports Examiner -------------------------------------------------------- The Official Committee of Former Partners appointed in the Chapter 11 case of Dewey & LeBoeuf supports the request of the Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & MacRae for appointment of an examiner. The Former Partners Committee, however, finds the request for appointment of a Chapter 11 Trustee premature and should be continued until after an examiner has completed his or her work. According to the Former Partners Committee, from the beginning of the bankruptcy case, Dewey has hyped its intentions to go where no other law firm has gone before and resolve partner liability issues quickly and without the need for a trustee. While the Former Partners Committee applauds the Debtor's desire for speed, it takes issue with the Debtor's admitted failure to obtain fiduciary oversight. The Committee pointed out there are reasons why nearly every prior law firm bankruptcy of any consequence entailed the appointment of a trustee or an examiner, citing In re Howrey LLP, Case No. 11-31376 (DM) (Bankr. N.D. Cal. Sept. 22, 2011) (chapter 11 trustee appointed); In re Brobeck, Phleger & Harrison, LLP, 408 B.R. 318 (Bankr. N.D. Cal. 2009) (involuntary chapter 7 case); In re Coudert Brothers, LLP, Case No. 06-12226 (RDD) (Bank. S.D.N.Y. Feb. 15, 2007) (examiner appointed); In re Thelen Reid LLP, Case No. 09-15631 (ALG) (Bankr. S.D.N.Y. 2009) (voluntary chapter 7 case); In re Gaston & Snow, Case No. 91 B 14594 (JMP) (Bankr. S.D.N.Y. 1991) (chapter 11 trustee appointed); In re Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey, 85 B.R. 13, 14 (Bankr. S.D.N.Y. 1988) (chapter 11 trustee appointed). "The reason is not that those cases lacked the Debtor's esprit de corps. It is that in any law firm bankruptcy the primary assets are claims against partners and those claims simply cannot be maximized by the partners themselves," said David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, which is representing the Former Partners. Mr. Friedman added, "[T]he central issue is whether the most critical decisions by the Debtor with respect to maximizing the value of the estate can be made without independent fiduciary oversight or appropriate investigation. Not surprisingly, the answer is that they cannot." "Even if acting in good faith, the Debtor simply lacks the necessary fiduciary credentials to decide how much each partner should be permitted to pay. The Debtor is managed solely by individuals who remain partners and who were actively engaged in many of the Debtor's most controversial pre-petition actions. They cannot help but bring to their post-petition roles their personal relationships with former colleagues, their personal biases regarding pre-petition transactions and the cause of the Debtor's demise and, of course, their concerns with regard to their own personal exposure," Mr. Friedman continued. On July 11, 2012, the Debtor, through its Wind-Down Committee, presented the former partners and others with an initial proposed settlement between the Debtor and former partners. The initial partner contribution plan received much criticism, including that the Firm's former leaders, such as members of the executive committee who presumably were in a position to halt the Firm's collapse, were not being asked to pay more on the basis of their greater exposure to liability. Faced with underwhelming support, the Debtor extended its original July 24 deadline to accept to Aug. 7 then to Aug. 14 and then again to Aug. 16. The latest iteration of the PCP asks former partners, including retirees and widows of retirees, to pay anywhere from $5,000 to $3.5 million in exchange for a release. The revised PCP discounts the payment amount by up to 5% of receivables collected by the estate if various partners successfully assist the Debtor in collecting the receivables, even though the partners are already obligated to help collect their bills and were not supposed to have permitted their clients' accounts to become delinquent in the first place. The PCP also contains a release of potential liability under the unfinished business doctrine for certain partners. Retirees and partners who departed well before the Debtor began to fail -- including many who were never partners of the Debtor, having retired from predecessor firms long before the September 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP -- are asked to contribute roughly 12.5% of the total PCP amount. The Former Partners Committee said the Debtor has sought the contributions on no basis other than the veiled threat that a "release is valuable." According to the Committee, whether or not this threat is legally justified, the Debtor's attempt to cause retirees and "of counsel" to subsidize the settlements of active partners cries out, at a minimum, for vetting by an entirely disinterested estate fiduciary. "When it comes to the settlement and release of the Debtor's claims against its most highly compensated partners, it cannot be overstated how essential is the role of an independent fiduciary. These partners have assumed influential roles at many of the largest and most prestigious law firms in the nation. They are well positioned to provide the Debtor's remaining partners and other staff members with gainful employment after the Debtor's liquidation is complete. They are equally well positioned to reward the three members of the Official Creditors Committee with lucrative business opportunities. And they appear willing -- unabashedly so -- to manipulate their clients' intentions to pay their bills to the defunct firm. The estate cannot be permitted to sacrifice its claims against the top partners upon the altar of cronyism and expediency. An examiner can avoid that result," the Former Partners Committee said. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of 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 lawyers at Kasowitz, Benson, Torres & Friedman LLP, as counsel. The Official Committee of Unsecured Creditors tapped Deloitte Financial Advisory Services LLP as its financial advisor. DEWEY & LEBOEUF: Hearing on Examiner Moved to September ------------------------------------------------------- Bankruptcy Judge Martin Glenn signed off on a stipulation and scheduling order entered into by Dewey & LeBoeuf and the Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & MaCrae over the group's request for appointment of a trustee or an examiner in the case. The Ad Hoc Committee noticed the Motion to be considered during the Aug. 23, 2012 omnibus hearing in the case. As a result of consultation among the parties, they agreed that the hearing to consider the request is adjourned to the earlier of: (a) the omnibus hearing scheduled for Sept. 20, 2012; and (b) any hearing that may be scheduled to consider approval of the Debtor's partner contribution plan. The Debtor, the Creditors' Committee, the Debtor's secured lenders and their agents, and the U.S. Trustee have until Aug. 29 to file objections. The parties will request a status conference with the Court in September prior to the Hearing, if the parties believe that the Hearing will go forward as an evidentiary hearing. Counsel to the Ad Hoc Committee is: Eric Lopez Schnabel, Esq. DORSEY & WHITNEY LLP 51 West 52nd Street New York, NY 10019 Tel: (212) 415-9200 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 lawyers at Kasowitz, Benson, Torres & Friedman LLP, as counsel. The Official Committee of Unsecured Creditors tapped Deloitte Financial Advisory Services LLP as its financial advisor. DEWEY & LEBOEUF: Committee of Former Partners Adds One Member ------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, filed an amended list of members of the Official Committee of Former Partners in the Chapter 11 case of Dewey & LeBoeuf LLP, to reflect the addition of Stuart Hirshfield as member. The Committee of Former Partners now comprises of: 1. David Bicks c/o Duane Morris 1540 Broadway New York, NY 10036 2. Cameron F. MacRae c/o Duane Morris 1540 Broadway New York, NY 10036 3. John S. Kinzey 3314 West End Ave, Unit 601 Nashville, TN 37203 4. John P. Campo c/o Troutman Sanders LLP 405 Lexington Avenue New York, NY 10174 5. Stuart Hirshfield 6 Meadow Road P.O. Box 127 Stockbridge, MA 01262 The Partners Committee previously consisted of four members, namely (i) David Bicks; (ii) Cameron F. MacRae; (iii) John S. Kinzey; and (iv) John P. Campo. 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: To Have Net Recoveries of $2 Million a Week ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Dewey & LeBoeuf LLP was given an extension until Sept. 30 of the right to use cash representing collateral for secured lenders' claims. According to the report, the renewed right to use cash collateral, granted on Aug. 15 by the U.S. Bankruptcy Court in New York, contains a projection showing that Dewey expects to bring in $21.7 million between Aug. 16 and Sept. 30. Over the same period, expenses are projected to total $10.6 million, allowing the lenders to be paid about $11 million, because cash-use procedures allow the lenders to draw down the excess when cash rises above $10 million. 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. DIALOGIC INC: Files Form 10-Q, Incurs $18 Million Net Loss in Q2 ---------------------------------------------------------------- Dialogic Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing 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 a year ago. The Company had 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 during the prior year. 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. A copy of the Form 10-Q is available for free at: http://is.gd/m7Gkix 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. 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. DIALOGIC INC: Tennenbaum Capital Hikes Equity Stake to 61.7% ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Tennenbaum Capital Partners, LLC, disclosed that, as of Aug. 8, 2012, it beneficially owns 55,499,950 shares of common stock of Dialogic Inc. representing 61.7% of the shares outstanding. Tennenbaum previously reported beneficial ownership of 7,331,398 common shares or a 19.99% equity stake as of April 11, 2012. A copy of the filing is available for free at: http://is.gd/8F6JAf 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. DR TATTOFF: Andrew Heller 2009 GRAT Discloses 13.7% Equity Stake ---------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, The Andrew M. Heller 2009 GRAT disclosed that, as of July 31, 2012, it beneficially owns 2,145,919 shares of common stock of Dr. Tattoff, Inc., representing 13.7% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/YjMUIN About Dr. Tattoff Beverly Hills, Calif.-based Dr. Tattoff, Inc., currently operates or provides management services to five laser tattoo and hair removal clinics located in Texas and California, all of which operate under the Company's registered trademark "Dr. Tattoff." The Company's balance sheet at March 31, 2012, showed $1.49 million in total assets, $1.90 million in total liabilities, and a stockholders' deficit of $409,334. As reported in the TCR on April 9, 2012, SingerLewak LLP, in Los Angeles, Calif., expressed substantial doubt about Dr. Tattoff'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 and negative cash flows from operations, and has an accumulated deficit of approximately $4,568,000 at Dec. 31, 2011. EASTMAN KODAK: Inks Film Agreements with Four Hollywood Studios --------------------------------------------------------------- Eastman Kodak Co. signed new deals with movie-studio partners that should ensure movie cameras stay loaded with Kodak film until at least 2015 Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the studios are affiliated with Walt Disney Co., Warner Brothers Entertainment Inc., NBC Universal International Ltd., and Paramount Pictures Corp. According to the report, Kodak was scheduled to complete auctions this week for patents and intellectual property. The deadline for completion of the auction was pushed back in consultation with the creditors' committee. The report relates that the market took the delay as an indication that offered prices are disappointing, following press reports based on unidentified sources saying that prices were a fraction of what Kodak hoped. Kodak's $400 million in 7% convertible notes due 2017, which sold for 21.055 cents on the dollar on Aug. 9, went for as little as 10 cents on Aug. 14, a decline of 54%, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The report relates before the drop, the bonds had risen more than 25% in price since July. The bonds sold at 3:57 p.m. on Aug. 15 for 13.5 cents, Trace reported. The new movie film contracts, whose terms are confidential, will come up for approval at a Sept. 19 hearing in U.S. Bankruptcy Court in Manhattan. The report notes Kodak said the new agreements are similar to those being replaced, except that termination dates are being extended to 2014 or 2015. There is higher pricing, however. The new agreements give Kodak the right to quit the movie film business by giving the studios six months' notice. The lawsuit in bankruptcy court with Apple is Eastman Kodak Co. v. Apple Inc., 12-01720, U.S. Bankruptcy Court, Southern District of New York (Manhattan). Apple's motion to remove the suit from bankruptcy court is Eastman Kodak Co. v. Apple Inc., 12-04881, U.S. District Court, Southern District New York (Manhattan). About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASTMAN KODAK: Apple, Google Said to be Joining Forces ------------------------------------------------------ According to The Wall Street Journal's Mike Spector, Ashby Jones, and Dana Mattioli, people with knowledge of negotiations said rival technology giants and patent-hoarding firms that had mounted competing bids for Eastman Kodak's portfolio have joined forces in recent days -- a move that could take the patents off the market at a price below what Kodak had hoped to raise in a competitive auction. WSJ says the bidding group brings together a raft of strange bedfellows. It includes Apple Inc. and Google Inc., rivals in the global smartphone market; and Intellectual Ventures Management LLC, which buys up patents to seek licensing revenue and increasingly sue other companies for infringement, and RPX Corp., which buys patents to keep them from being used against its members in suits. The sources told WSJ the negotiations and the bidding group's composition are fluid. If the consortium reaches a deal to buy some or all of Kodak's patents, they would essentially be kept out of any one company's hands and could prevent consortium members from using them in litigation against each other. A deal, however, could also attract attention from federal antitrust regulators. According to WSJ, people familiar with the process said a deal for the entire portfolio -- one of many options under discussion -- could fetch more than $500 million based on recent negotiations. That is well above opening bids when the auction started last week, but far below the $2.2 billion to $2.6 billion Kodak at one point said the patents could be worth. Kodak in a statement Thursday said discussions with buyers are active and that it isn't ready to announce a result. The company added that it might decline to sell some or all of the patents, depending on how the auction progresses. 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. FIRST DATA: Files Form 10-Q, Incurs $157.4MM Net Loss in Q2 ----------------------------------------------------------- First Data Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $157.4 million on $2.68 billion of revenue for the three months ended June 30, 2012, compared with a net loss attributable to the Company of $175.8 million on $2.74 billion of revenue for the same period during the prior year. The Company reported a net loss attributable to the Company of $309.9 million on $5.24 billion of revenue for the six months ended June 30, 2012, compared with a net loss attributable to the Company of $392.9 million on $5.29 billion of revenue for the same period a year ago. The Company reported a net loss of $336.10 million in 2011, a net loss of $846.90 million in 2010, and a net loss of $1.01 billion on $9.31 million in 2009. The Company's balance sheet at June 30, 2012, showed $40.65 billion in total assets, $37.62 billion in total liabilities, $67 million in redeemable non-controlling interest and $2.96 billion in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/WWDTlZ About First Data Based in Atlanta, Georgia, First Data Corporation, with over $10 billion of revenue for the 12 months ended June 30, 2010, provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FIRST MARINER: Files Form 10-Q, Posts $5.6MM Net Income in Q2 ------------------------------------------------------------- First Mariner Bancorp filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $5.67 million on $11.17 million of total interest income for the three months ended June 30, 2012, compared with a net loss of $11 million on $11.65 million of total interest income for the same period during the prior year. The Company reported net income of $7.49 million on $22.78 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $18.31 million on $23.84 million of total interest income for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $1.22 billion in total assets, $1.23 billion in total liabilities, and a $17.12 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/uR69xA About First Mariner Headquartered in Baltimore, Maryland, First Mariner Bancorp -- http://www.1stmarinerbancorp.com/-- is a bank holding company whose business is conducted primarily through its wholly owned operating subsidiary, First Mariner Bank, which is engaged in the general general commercial banking business. First Mariner was established in 1995 and has total assets in excess of $1.3 billion as of Dec. 31, 2010. "Quantitative measures established by regulation to ensure capital adequacy require the [First Mariner] Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average quarterly assets," the Company said in the filing. "As of March 31, 2011, the Bank was "under-capitalized" under the regulatory framework for prompt corrective action." For the year ended Dec. 31, 2011, Stegman & Company, in Baltimore, Maryland, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company continued to incur significant net losses in 2011, primarily from loan losses and costs associated with real estate acquired through foreclosure. The Company has insufficient capital per regulatory guidelines and has failed to reach capital levels required in the Cease and Desist Order issued by the Federal Deposit Insurance Corporation in September 2009. Bankruptcy Warning As of Dec. 31, 2011, the Bank's and the Company's capital levels were not sufficient to achieve compliance with the higher capital requirements the Company was required to have met by June 30, 2010. The failure to meet and maintain these capital requirements could result in further action by the Company's regulators. In the September Order, the FDIC and the Commissioner directed the Bank to raise its leverage and total risk-based capital ratios to 6.5% and 10%, respectively, by March 31, 2010 and to 7.5% and 11%, respectively, by June 30, 2010. The Company did not meet these requirements. The Company has been in regular communication with the staffs of the FDIC and the Commissioner regarding efforts to satisfy the higher capital requirements. First Mariner currently does not have any material amounts of capital available to invest in the Bank and any further increases to the Company's allowance for loan losses and operating losses would negatively impact the Company's capital levels and make it more difficult to achieve the capital levels directed by the FDIC and the Commissioner. Because the Company has not met all of the capital requirements set forth in the September Order within the prescribed timeframes, the FDIC and the Commissioner could take additional enforcement action against the Company, including the imposition of monetary penalties, as well as further operating restrictions. The FDIC or the Commissioner could direct us to seek a merger partner or possibly place the Bank in receivership. If the Bank is placed into receivership, the Company would cease operations and liquidate or seek bankruptcy protection. If the Company were to liquidate or seek bankruptcy protection, First Mariner does not believe that there would be assets available to holders of the capital stock of the Company. GARLOCK SEALING: Asbestos Claimants Taps Saccullo as Del. Counsel ----------------------------------------------------------------- The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases of Garlock Sealing Technologies LLC, et al., asks the U.S. Bankruptcy Court for the Western District of North Carolina for permission to retain A. M. Saccullo Legal, LLC as its Delaware counsel. Saccullo Legal will, among other things: a) represent the ACC in any further activity in the District Court for the District of Delaware in the Delaware Action and any future actions involving the Debtors or their estates or other parties-in-interest in this case that may be initiated in that court or any other court within the State of Delaware, and communicating with the ACC regarding the matters heard and issues raised well as the decisions and considerations of those courts; b) review and analyze all legal pleadings and proposed orders filed and to be filed in the Delaware Action and any future actions involving the Debtors or their estates or other parties-in-interest in this case that may be initiated in that court or any other court within the State of Delaware; advise the ACC as to the necessity and propriety of the foregoing and their impact upon the rights of asbestos- related claimants, and upon the case generally; and after consultation with and approval of the ACC or its designee(s), consent to appropriate orders on its behalf or otherwise objecting thereto; c) assist the ACC in preparing appropriate legal pleadings and proposed orders in the Delaware Action and any future actions involving the Debtors or their estates or other parties-in-interest in the case that may be initiated in that court or any other court within the State of Delaware, as may be required in support of positions taken by the ACC and preparing witnesses and reviewing documents relevant thereto; and d) assist the ACC generally by providing other services in the Delaware Action and any future actions involving the Debtors or their estates or other parties in interest in this case that may be initiated in that court or any other court within the State of Delaware, as may be in the best interest of the creditors represented by the ACC. The hourly rates of Saccullo Legal's personnel are: Anthony M. Saccullo, member $300 Thomas H. Kovach, special counsel $300 To the best of the ACC's knowledge, Saccullo Legal does not represent any entity having an interest adverse to the Committee or to the asbestos creditors of the Debtors' estates in connection with the matters for which the Committee proposes to retain them. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. About 124,000 asbestos claims are pending against Garlock in stateand federal courts across the country. The Company says majority of pending asbestos actions against it is stale and dormant -- almost 110,000 or 88% were filed more than four years ago and more than 44,000 or 35% were filed more than 10 years ago. Garlock said in the Disclosure Statement that all asbestos claims must be paid in full. Full payment enables the plan to allow continued ownership by parent EnPro Industries Inc. The Plan will create a trust to fund payment to present and future asbestos claimants. For currently existing claims, the trust will have insurance proceeds plus cash from Garlock together with a promise from EnPro to provide up to $30 million over time. For future claims, the trust will receive $60 million from Garlock plus a secured promise by Garlock to supply an additional $140 million. The promise will be secured by 51% of Garlock's stock. GMX RESOURCES: Makes New Distressed Exchange Offer -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that GMX Resources Inc. announced a distressed exchange offer late last week. As reported by the Troubled Company Reporter, GMX Resources 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 According to Bloomberg, late last year GMX successfully tendered for $200 million in 11.375% senior notes due 2019. Bloomberg relates the notes last traded Aug. 14 for 73 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds due 2015 last traded Aug. 14 for 41 cents on the dollar, Trace said. The three year high for the stock was $18.50 on Oct. 15, 2009. The low in the period was 72 cents on June 26. 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. 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. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. * * * As reported by the Troubled Company Reporter on Aug. 16, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources to 'CC' from 'CCC+'. The 'CCC+' rating on the company's $283.5 million senior secured notes, remains unchanged. The outlook is negative. "The downgrade to 'CC' reflects the potential for a selective default on GMX's 4.5% senior convertible notes due 2015 -- $86.3 million outstanding as of June 30, 2012 -- due to certain aspects of GMX's exchange offer that would constitute a distressed exchange under our criteria," said Standard & poor's credit analyst Paul B. Harvey. "As part of the exchange offer for its 2013 and 2015 convertible notes, holders of the 2015 notes have the right to exchange $1,000 principle of existing notes for $700 principle of new senior secured second-priority notes due 2018. We view this as a distressed exchange." Holders of the existing 2015 notes, regardless of when purchased, would receive significantly less than the original face value that was promised, S&P said. GREENSHIFT CORP: Reports $4.6 Million Net Income in 2nd Quarter --------------------------------------------------------------- Greenshift Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $4.64 million on $4.24 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $327,205 on $3.14 million of revenue for the same period during the prior year. The Company reported net income of $3.94 million on $7.15 million of revenue for the six months ended June 30, 2012, compared with net income of $9.80 million on $10.86 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $7.32 million in total assets, $46.70 million in total liabilities and a $39.37 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/1Jif0X About Greenshift Corporation Headquartered in New York, GreenShift Corporation develops and commercializes clean technologies designed to integrate into and leverage established production and distribution infrastructure to address the financial and environmental needs of its clients by decreasing raw material needs, facilitating co-product reuse, and reducing waste and emissions. In its audit report on the consolidated financial statements for the year ended Dec. 31, 2011, Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficiency as of Dec. 31, 2011. GUITAR CENTER: Files Form 10-Q, Incurs $28.7MM Net Loss in Q2 ------------------------------------------------------------- Guitar Center Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $28.76 million on $486.59 million of net sales for the three months ended June 30, 2012, compared with a net loss of $25.95 million on $479.05 million of net sales for the same period during the prior year. The Company reported a net loss of $44.97 million on $1.01 billion of net sales for the six months ended June 30, 2012, compared with a net loss of $37.40 million on $981.85 million of net sales for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $1.82 billion in total assets, $1.94 billion in total liabilities, and a $122.39 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/EIbgnB About Guitar Center Guitar Center, Inc., headquartered in Westlake Village, Calif., is the largest musical instrument retailer with 312 stores and a direct response segment, which operates its websites. It operates three distinct musical retail business - Guitar Center (about 70% of revenue), Music & Arts (about 7% of revenue), and Musician's Friend (its direct response subsidiary with 24% of revenue). Total revenue is about $2 billion. The Company reported a net loss of $236.94 million in 2011, a net loss of $56.37 million in 2010, and a net loss of $189.85 million in 2009. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that its ability to make scheduled payments or to refinance its debt obligations depends on the Company and Holdings' financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond its control. The Company cannot provide any assurance that it will maintain a level of cash flows from operating activities sufficient to permit it to pay the principal, premium, if any, and interest on its indebtedness. If the Company cannot make scheduled payments on its debt, the Company will be in default and, as a result: * its debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under the Company's senior secured credit facilities could terminate their commitments to lend the Company money and foreclose against the assets securing their borrowings; and * the Company could be forced into bankruptcy or liquidation. * * * As reported in the Troubled Company Reporter on Feb. 28, 2011, Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2 Corporate Family Rating and the $622 million existing term loan rating of Caa1 due October 2014. The Probability of Default Rating was revised to Caa2/LD from Caa2 while the Speculative Grade Liquidity assessment was changed to SGL-2 from SGL-3. The rating outlook remains stable. The Caa2/LD Probability of Default rating reflects Moody's view that the extended deferral of interest on the Holdco notes constitutes a distressed exchange under Moody's definition and also anticipates that additional exchanges of this nature are possible over the near term. The Limited Default designation was prompted by the company's executed amendment of the HoldCo notes, which allows for a deferral of 50% of the interest payments for 18 months. Moody's views this as a distressed exchange that provides default avoidance. This LD designation applies to the proposed follow-on amendment to defer the HoldCo note interest payments by another six months. Subsequent to the actions, Moody's will remove the LD designation and the PDR will be Caa2 going forward. HEALTHCARE OF FLORENCE: E&M Taps TeamLogicIT as System Specialist ----------------------------------------------------------------- E&M Hospital Investments, LLC, secured creditor of Healthcare of Florence, LLC, et al., asks the U.S. Bankruptcy Court for the District of Arizona for permission to retain TeamLogicIT as computer technology specialist to preserve and protect the computer system and the electronic data of the Debtors. E&M also requests the Court order the Debtors to provide full access to TeamLogicIT as necessary to permit full preservation, access and use of all electronic data. According to E&M, the Debtors maintain their patient files, their accounting files, tax data, and substantially all of their business records on a computer system. Currently, the Debtors employ one person, Tom Harberts, to maintain and preserve their computer system. E&M notes that the utility companies serving the Debtors' businesses have threatened to cut off service due to lack of postpetition payment which will adversely affect the storage of business information. E&M proposes to pay the expenses of the employment as a cost advance against its claim, and for other relief as is just in the circumstances. TeamLogicIT proposes to charge the Debtors $345 per month with the additional charge of $100 per hour for any needed onsite support. The proposal sets out the services of TeamLogicIT which include help desk support 24/7, remote system monitoring, proactive system alerts, hardware repair, network services (including troubleshooting), security services and other onsite support and troubleshooting. About Healthcare of Florence Healthcare of Florence, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-08547) in Tucson, Arizona, on April 23, 2012. Healthcare of Florence, LLC -- http://www.florencecommunityhealthcare.com-- owns and operates a full-service community hospital in Florence, Arizona. Judge James M. Marlar presides over the case. James F. Kahn P.C. serves as the Debtor's counsel. The Debtor disclosed $42,244,804 in assets and $39,007,338 in liabilities as of the Chapter 11 filing. The petition was signed by Edward McEachern, CEO of Initiatives Healthcare, LLC, manager of debtor. The U.S. Trustee appointed a three-member creditors committee. HEALTHCARE OF FLORENCE: U.S. Trustee Appoints 3-Member Committee ---------------------------------------------------------------- Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed three persons to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Healthcare of Florence, LLC, et al. The Committee members are: 1. Well Done Construction, LLC Attn: Teresa Mosher 9038 E. Florian Ave. Mesa, AZ 85028 Tel: (602) 703-0327 Fax: (480) 986-4022 E-mail: welldonecontruct@yahoo.com 2. Border States Industries, Inc. Attn: Christopher LaMotte 5519 E. Washington Phoenix, AZ 85034 Tel: (602) 497-4717 Fax: (602) 231-8535 E-mail: clamotte@border-states.com 3. County Carpets Attn: Stewart cathemen P.O. Box 148 VA Valley Farms, AZ 85191 Tel: (502) 560-1117 Fax: (520) 868-3511 E-mail: sixcathemers@msm.com About Healthcare of Florence Healthcare of Florence, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-08547) in Tucson, Arizona, on April 23, 2012. Healthcare of Florence, LLC -- http://www.florencecommunityhealthcare.com-- owns and operates a full-service community hospital in Florence, Arizona. Judge James M. Marlar presides over the case. James F. Kahn P.C. serves as the Debtor's counsel. The Debtor disclosed $42,244,804 in assets and $39,007,338 in liabilities as of the Chapter 11 filing. The petition was signed by Edward McEachern, CEO of Initiatives Healthcare, LLC, manager of debtor. HEALTHCARE OF FLORENCE: Taps Eide Bailly to Make 2011 Tax Returns ----------------------------------------------------------------- Healthcare of Florence, LLC, et al., ask the U.S. Bankruptcy Court for the District of Arizona for permission to employ Eide Bailly LLP to prepare the 2011 tax returns. Debtors also seek authority to pay Eide Bailly LLP $5,102 for the preparation and filing of Debtors' 2011 tax returns; the amount is included in Debtor's budget, which has been approved by E&M Hospital Investments, LLC. Eide Bailly LLP has a prepetition claim in the amount of $42,000 against Debtors for preparation of the 2010 tax returns, but Eide Bailly LLP will await payment from the Bankruptcy Estate for the prepetition balance due. The Debtors submit that Eide Bailly LLP's prepetition claim does not represent an inherent conflict, because Eide Bailly is being retained only for tax preparation, not general consultation services regarding reorganization. To the best of Debtors' knowledge, Eide Bailly does not hold or represent any other interest adverse to the Debtor or the estate in the matters in which it is to be engaged. About Healthcare of Florence, LLC Healthcare of Florence, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-08547) in Tucson, Arizona, on April 23, 2012. Healthcare of Florence, LLC -- http://www.florencecommunityhealthcare.com-- owns and operates a full-service community hospital in Florence, Arizona. Judge James M. Marlar presides over the case. James F. Kahn P.C. serves as the Debtor's counsel. The Debtor disclosed $42,244,804 in assets and $39,007,338 in liabilities as of the Chapter 11 filing. The petition was signed by Edward McEachern, CEO of Initiatives Healthcare, LLC, manager of debtor. The U.S. Trustee appointed a three-member creditors committee. HIGHLANDS BANKSHARES: Reports $654,000 Net Income in 2nd Quarter ---------------------------------------------------------------- Highlands Bankshares, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $654,000 on $6.52 million of total interest income for the three months ended June 30, 2012, compared with net income of $22,000 on $6.91 million of total interest income for the same period during the prior year. The Company reported net income of $1.06 million on $12.95 million of total interest income for the six months ended June 30, 2012, compared with a net loss of $2.10 million on $13.90 million of total interest income for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $599.47 million in total assets, $569.65 million in total liabilities, and $29.81 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/IMFLxx About Highlands Bankshares Abingdon, Va.-based Highlands Bankshares, Inc., is a one-bank holding company organized under the laws of Virginia in 1995 and registered under the Federal Bank Holding Company Act of 1956. The Company conducts the majority of its business operations through its wholly-owned bank subsidiary, Highlands Union Bank. The Company has two direct subsidiaries as of Dec. 31, 2011: the Bank, which was formed in 1985, and Highlands Capital Trust I, a statutory business trust (the "Trust") which was formed in 1998. The Bank is a Virginia state chartered bank that was incorporated in 1985. The Bank operates a commercial banking business from its headquarters in Abingdon, Virginia, and its thirteen area full service branch offices. "During the first quarter of 2011, the Bank's total risk based capital ratio fell below the required minimum to be "well - capitalized," the Company said in its quarterly report for the period ended March 31, 2012. "The Bank's Tier 1 Capital to Risk Weighted assets ratio and Tier 1 capital to Adjusted Total Assets remained above the "well-capitalized" thresholds. Because the Bank's total risk- based capital ratio was below 10% as of Dec. 31, 2011, and March 31, 2012, the Bank is considered to be "adequately-capitalized" under the regulatory framework for prompt corrective action. As a result of our status as "adequately- capitalized" for regulatory capital purposes, we cannot renew or accept brokered deposits without prior regulatory approval and we may not offer interest rates on our deposit accounts that are significantly higher than the average rates in our market area. The Bank has increased its total risk based capital ratio from 8.77% at March 31, 2011, to 9.44% at March 31, 2012. The Bank's total risk based capital ratio was 9.08% at Dec. 31, 2011." HOLLIFIELD RANCHES: Files Sixth Amended Plan of Reorganization -------------------------------------------------------------- Hollifield Ranches Inc. filed a sixth amended plan of reorganization dated July 18, 2012. The classification and treatment of claims under the plan are: A. Class 1 (Administrative Fees and Costs) will be paid in cash on the date of distribution of this Plan. B. Class 2 (Section 507 Priority Claims) ? None C. Class 3 (Bank of the West) will be paid the sum of $18,325.56 together with 4.25% interest per annum in two equal annual payments of $9,162.78 each. The first annual payment will be made on or before the April 15, 2013, with the subsequent final payment to be made on or before April 15, 2014. D. Class 4 (Davidson & Co.) will be allowed the sum of $18,020.25, which is secured by a seed lien against the 2010 malt barley crop for goods sold. The sum of $18,020.25 together with interest at the rate of 4.25% per annum will be paid in seven equal annual payments of $3,030.14 each. E. Class 5 (KeyBank) has a fully secured $14.1 million claim which is secured by livestock, milk proceeds, cash collateral, equipment, personal property real property, and related collateral. F. Class 6 (McCall Livestock) has been paid in full. G. Class 7 (Metropolitan Life Insurance Co. and MLIC Asset Holdings LLC) will be considered to equal $6,790,005.92. H. Class 8 (Northwest Farm Credit Service) will be paid by the partnership. I. Class 9 (Twin Falls Livestock) has been paid in full. J. Class 10 (Wells Fargo Bank) in the sum of $23,800.66 which is secured by a lien against a Case 721 B loader. The claim together with interest at the rate of 4.25% per annum will be paid in 72 equal monthly payments of $375 each. K. Class 11 (Buhl Implement Co.) in the sum of $8,030.24, which is secured by a lien against a Case IH Model MX240 tractor, Serial No. JJA0110571, for repairs. The sum of $8,030.24 together with interest at the rate of 4.25% per annum will be paid in 36 equal monthly payments of $238 each. L. Class 12 (Agri-Stor Co., Inc./Chemical Supply Co., Inc.) is allowed in the sum of $12,562.19, which is secured by a lien against crops. The sum of $12,562.19 together with interest at the rate of 4.25% per annum will be paid in 7 equal annual payments of $2,112.36 each. M. Class 13 (Western Seeds) has been paid in full. N. Class 14 (Valley Agronomics, LLC) is considered to be unsecured and will be included in the Unsecured Creditors Class. O. Class 15 (Simplot Soilbuilders) is allowed in the sum of $321,420.43, which is secured by a residence and five acres owned by Terry Hollifield and Carol Hollifield personally. The claim, together with interest at the rate of 4.50%, will be paid in five equal annual payments of $73,216.89 each. P. Class 16 (CNH Capital) is allowed in the sum of $39,051.13, which is secured by a New Holland harvester. The claim, together with interest thereon at the rate of 4.25%, will be paid in 72 equal monthly payments of $615.42 each. Q. Class 17 (Tyson Fresh Meats, Inc.) There is a dispute that exists wherein Tyson Fresh Meats, Inc., has filed a Motion for Allowance of Administrative Claim and Complaint for Determination of Administrative Expense Claim, seeking an administrative claim totaling $958,511.47. The Debtor disputes that claim and has filed an Answer and counterclaim seeking a judgment totaling approximately $1.4 million against Tyson Fresh Meats, Inc. The Debtor reserves all rights with respect to resolving this matter and that the confirmation order will provide not only reserving the rights of debtor but by Tyson Fresh Meats. R. Class 18 (Administrative Expenses Under Section 503(b)(9)) will be paid within 10 days after the order of confirmation is entered. S. Class 19 (Unsecured Claims) totaling $2,807,677.08, will receive 100% of the face amount of the claim with interest at 2% from April 15, 2012, which will be amortized over a period of 15 years. A copy of the sixth amended reorganization plan is available for free at http://bankrupt.com/misc/HOLLIFIELD_plan6a.pdf About Hollifield Ranches Hansen, Idaho-based Hollifield Ranches Inc. filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 10-41613) on Sept. 9, 2010. Hollifield Ranches owns a farming, cattle and dairy operation, and allegedly is owed money for potatoes it sent to Cummins Family Produce, Inc., for processing. Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. The Debtor, which is run by Terry Hollifield, was forced to seek bankruptcy after its dairy business encountered cash flow problems in 2008 when the cost of feed was very high, and its cattle business had problems with the falling price for livestock. J. Justin May, Esq., at May, Browning & May, represents the Official Committee of Unsecured Creditors. HOLLIFIELD RANCHES: Has $260,000 Loan for Fertilizers, Supplies --------------------------------------------------------------- The Hon. Jim D. Pappas of the U.S. Bankruptcy Court for the District of Idaho authorized Hollifield Ranches Inc. to enter into a secured loan with J.R. Simplot Company, in an amount not to exceed $260,000 for the purpose of obtaining fertilizer, chemicals and fuel to spray crops. The interest due on the secured loan is at the rate of 4%, with amount to be due and payable upon demand, but not later than Dec. 31, 2012. Simplot will have a first and paramount lien against the Debtor's 2012 crops, including products and proceeds thereof and will be deemed in compliance with I.C. Section 28-9-502. The $260,000 secured loan is in addition to prior orders authorizing the Debtor to incur $1.6 million in secured debt from Simplot for the 2012 crop year. KeyBank National Association's lien will be subordinate to this secured lien and the secured liens of Simplot, plus accruing interest from the dates of the respective purchases/advances as to the Debtor's 2012 crops and crop proceeds, to the extent that Simplot provides value/credit to the Debtor. About Hollifield Ranches Hansen, Idaho-based Hollifield Ranches Inc. filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 10-41613) on Sept. 9, 2010. Hollifield Ranches owns a farming, cattle and dairy operation, and allegedly is owed money for potatoes it sent to Cummins Family Produce, Inc., for processing. Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. The Debtor, which is run by Terry Hollifield, was forced to seek bankruptcy after its dairy business encountered cash flow problems in 2008 when the cost of feed was very high, and its cattle business had problems with the falling price for livestock. J. Justin May, Esq., at May, Browning & May, represents the Official Committee of Unsecured Creditors. HOLLIFIELD RANCHES: To Hire U.S. Auction to Sell Livestock ---------------------------------------------------------- Hollifield Ranches Inc. asks the U.S. Bankruptcy Court for the District of Idaho for authority to employ U.S. Auction to liquidate equipment and livestock at regularly conducted auctions. The Debtor, as successor to White Gold Dairy, owned 1,903 Cows and 1,360 Heifers, except those who have been culled who had a high somatic cell count, staff infection or did not produce as much as other milking cows. The Debtor desires to retain the services of U.S. Auction as a professional to liquidate the livestock at regularly conducted livestock auctions. U.S. Auction may decide to transport to a different location for the reason that the location is more conducive to an auction sale and the Auctioneer will have greater control over the equipment and livestock. It is expected that the sale of the equipment and livestock will be in connection with other equipment to be sold owned by other parties on the date specified. The Debtor has selected U.S. Auction as a professional based on its experience in conducting auctions, its list and network with potential buyers, its reputation in the community and its familiarity with equipment and livestock. U.S. Auction has agreed to auction the equipment for a commission of 7% of the gross sales and the livestock for a commission of 4% of the gross sales. U.S. Auction will not bid on or purchase any of the equipment and livestock. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Hollifield Ranches Hansen, Idaho-based Hollifield Ranches Inc. filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 10-41613) on Sept. 9, 2010. Hollifield Ranches owns a farming, cattle and dairy operation, and allegedly is owed money for potatoes it sent to Cummins Family Produce, Inc., for processing. Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. The Debtor, which is run by Terry Hollifield, was forced to seek bankruptcy after its dairy business encountered cash flow problems in 2008 when the cost of feed was very high, and its cattle business had problems with the falling price for livestock. J. Justin May, Esq., at May, Browning & May, represents the Official Committee of Unsecured Creditors. HORNE INTERNATIONAL: Estimates $506,000 Net Loss in 2nd Quarter --------------------------------------------------------------- Horne International, Inc., expects to report a net loss of approximately $506,000 on revenues of approximately $974,000 for the quarter ended June 24, 2012, compared to net income of approximately $739,000 on revenues of approximately $1.303 million for the quarter ended June 26, 2011. The anticipated increase in net loss is primarily due to the significant amount of low margin revenues. Due to reduced staffing levels, the Company experienced delays in closing its quarter, and consequently the Company's independent registered public accounting firm was unable to complete its review of the Company's Quarterly Report on Form 10-Q within the prescribed time period without unreasonable effort or expense. The Form 10-Q will be filed no later than the fifth calendar day following the prescribed due date. About Horne International Fairfax, Va.-based Horne International, Inc., is an engineering services company focused on provision of integrated, systems approach based solutions to the energy and environmental sectors. The Company reported a net and total comprehensive loss of $121,000 on $5.68 million of revenue for the 12 months ended Dec. 25, 2011, compared with a net and total comprehensive loss of $1.04 million on $3.43 million of revenue for the 12 months ended Dec. 26, 2010. The Company's balance sheet at March 25, 2012, showed $1.17 million in total assets, $2.21 million in total liabilities, and a $1.03 million total stockholders' deficit. In its audit report accompanying the 2011 financial statements, Stegman & Company, in Baltimore, Maryland, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced continuing net losses for each of the last four years and as of Dec. 25, 2011, current liabilities exceeded current assets by $900,000. HUSSEY COPPER: Highland Capital OK'd as Life Settlement Broker -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Hussey Copper Corp., et al., to employ Highland capital Brokerage as life settlement broker. As reported in the Troubled Company Reporter on July 23, 2012, the Debtors disclosed that Debtor HCL Liquidation Ltd. maintained three life insurance policies withe AXA Equitable on the life of Roy Allen, chief executive officer of HCL. HCL owns the Allen POlicies and is the designated beneficiary under the policies. Highland will, among other things: a) review the purpose for selling the Allen Policies; b) obtain all application and authorization information required to assess the probability of policy sales and submit life settlement offer request(s) to life settlement providers; c) submit a request for proposal to established institutionally-funded providers; d) summarize all offers for client review and final offer selection; and e) coordinate all closing documents working with the selected provider. In addition, the Debtors have agreed to pay Highland a brokerage fee, due upon the sale of each of the Allen Policies, which brokerage fee will be paid from the gross sale proceeds of the policies in an amount equal to the lesser of $300,000 or 15% of the net sale proceeds of the policies. No Brokerage Fee will be charged to the Debtors in the event the sale of the Allen Policies does not occur, and the Debtors have no obligation under the Engagement Agreement to accept any offer to purchase any of the Allen Policies. Finally, the Engagement Agreement recognizes that the sale of the Allen Policies may not be effectuated without the entry of a Court order authorizing the sale. To the best of the Debtors' knowledge, Highland is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Hussey Copper Hussey Copper Corp., based in Leetsdale, Pennsylvania, is one of the leading manufacturers of copper products in the United States. Hussey Copper was founded in Pittsburgh in 1848. The Company and its affiliates, which operate one manufacturing facility in Leetsdale and two facilities in Eminence, Kentucky, manufacture "a wide range of value-added copper products and copper-nickel products. The Company has more than 500 full-time employees. Hussey Copper Corp. filed a Chapter 11 petition (Bankr D. Del. Case No. 11-13010) on Sept. 27, 2011, with a deal to sell substantially all assets. Five other affiliates also filed separate petitions (Case Nos. 11-13012 to 11-13016). In its amended schedules, HCL Liquidation disclosed $80,760,296 in assets and $71,453,842 in liabilities as of the Chapter 11 filing. Mark Minuti, Esq., at Saul Ewing LLP, serves as counsel to the Debtors. Donlin Recano & Company Inc. is the claims and notice agent. The Debtors tapped Winter Harbor, LLC in substitution for Huron Consulting Services LLC. An official creditors' committee has been appointed in the case. The panel selected Lowenstein Sandler PC as counsel. The panel selected FTI Consulting, Inc. as restructuring and financial advisor. Hussey filed for bankruptcy with a deal to sell the assets to stalking horse bidder, KHC Acquisitions LLC, a unit of Kataman Metals LLC. US private equity firm Patriarch Partners beat Kataman at an auction and officially acquired Hussey on Dec. 16, 2011. The buyout firm of distressed debt mogul Lynn Tilton acquired Hussey for $107.8 million after a nine-hour, 34-round auction. Kataman is represented in the case by David D. Watson, Esq., and Scott Opincar, Esq., at McDonald Hopkins LLC, in Cleveland. Counsel to PNC Bank NA, as lender, issuer and agent for the Debtors' secured lenders, are Lawrence F. Flick II, Esq., Blank Rome LLP, in New York, and, Regina Stango Kelbon, Esq., at Blank Rome LLP, in Wilmington. Following the sale, Bankruptcy Judge Brendan L. Shannon approved the name change of Hussey Copper Corp. et al., to HCL Liquidation Ltd. INNER CITY MEDIA: Parent Company Sues to Recoup Missing Artwork --------------------------------------------------------------- Rachel Feintzeig, writing for Dow Jones Newswires, reports that Inner City Broadcasting Corp. filed a lawsuit Monday with the U.S. Bankruptcy Court in Manhattan, taking aim at a wide swath of defendants, all key players in subsidiary Inner City Media Corp.?s bankruptcy case. The parent company blamed them for the removal of $1.1 million worth of "unique and valuable artwork" that once decorated the halls of its New York offices and said it's owed at least $1.1 million in damages plus $5 million in punitive damages after seeing the defendants make off with art that wasn't theirs to take. The defendants included the bankrupt company; the funds managed by billionaire Ron Burkle?s Yucaipa Cos. and by Fortress Investment Group LLC that pushed the company into bankruptcy proceedings last August; YMF Media LLC, the entity, formed by senior lenders and other buyers, that's poised to purchase Inner City Media?s radio stations; and Robert J. Maccini, the chief restructuring officer appointed to the case in October. According to the report, Mr. Maccini was not immediately available for comment Tuesday, nor were attorneys for the Yucaipa and Fortress funds or for Inner City Media. According to the report, the lawsuit alleged that "shortly after midnight: on May 17, Mr. Maccini, "acting in concert," with the senior lenders and the proposed purchaser, told Inner City Broadcasting that 15 pieces of artwork by "renowned African- American artists" were wrested from their spots in a conference room and hallway at Inner City Broadcasting and Inner City Media's Park Avenue offices. The pieces include an oil-on-canvas work by Charles Alston called "Black and White," an oil-on-paper work by Romare Bearden called "Jazz Trio" and a collage by Allen Stringfellow called "Harlem Barber Shop," according to court papers. Inner City Broadcasting acquired the art from 1996 to 1999, it added. The lawsuit said the art "was secreted to an undisclosed location without giving any advance notice to ICBC, despite having actual knowledge that ICBC claimed to be the exclusive owner of the artwork." About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INTEGRITY LIFE: CEO Defaults on Guarantee, Says Rival ----------------------------------------------------- Excite Medical noted in an announcement that its rival Integrity Life Sciences, in a July 2012 press release, acknowledged that James Gibson is, in fact, their President and CEO. "This comes as a surprise to many in the industry, as two of the previous companies that Mr. Gibson was the President and CEO of, Cluster Technologies, Corp. and Axiom Worldwide, LLC, have both gone out of business," Excite said. Mr. Gibson, Excite points out, has been ordered by two United States federal judges to pay over $2.3 Million USD to two federally insured banks. Additionally, Mr. Gibson recently defaulted on his personal guarantee of a $4.5 million USD loan with Progress Bank, which is also federally insured. When Mr. Saleem Musallam, President of Excite Medical, on his thoughts on Mr. Gibson's involvement in Integrity Life, said, "Anyone making a decision on whether to become a distributor, or invest in goods or services, now has an easy choice to make: choose Excite Medical." Excite Medical is the exclusive worldwide distributor and contract manufacturer of the DRX9000(R) and the DRX (R) Spinal Decompression line of products. Excite Medical is an ISO 13485 certified company, registered with the United States FDA, and has been accredited by the United States and Canada Better Business Bureau with an A Rating. Privately held Integrity Life Sciences -- http://www.integritylifesciences.com-- manufactures and distributes non-surgical spinal decompression equipment, including the Integrity Spinal Care System 2.0 and Lombare, in medical markets around the globe. KINETIC CONCEPTS: Moody's Says Bed Biz Sale Modestly Positive ------------------------------------------------------------- Moody's Investors Service commented on Kinetic Concepts, Inc.'s (B2 stable) announced sale of its Therapeutic Support Systems business (i.e. beds and surfaces for acute and post-acute care facilities) to Getinge Group for $275 million. Despite modestly increasing Kinetic Concept's debt to EBITDA in the near-term, Moody's views the divesture as positive because it frees up management and capital resources in order to focus on the company's bigger, more profitable Advanced Healing Solutions (AHS) and Lifecell businesses. KLUKWAN INC: Alaska Native Village Corp. Files for Chapter 11 ------------------------------------------------------------- Mike Dunham at Anchorage Daily News reports the Alaska Native village corporation Klukwan Inc. filed a voluntary petition for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Anchorage on Aug. 7, 2012 The report relates Klukwan president Ralph Strong said it was in the best interest of the corporation to seek creditor protection. According to the report, court documents listed major creditors as including Travelers Casualty & Surety, Sterling Savings Bank of Fircrest, Wash., the Internal Revenue Service and the corporation's own Klukwan Education Trust. According to the report, Mr. Strong said in an interview with Margaret Friedenauer of KHNS radio that the bankruptcy filing was necessary to protect the corporation from having Travelers place a lien on money Klukwan receives from the regional Native corporation, Sealaska, to satisfy a $7 million debt. The report notes Mr. Strong told KHNS the Travelers lien would not be allowed under the Alaska Native Claims Settlement Act. However, he added, federal courts will have to make that determination. The decision could have far-ranging implications for every ANCSA corporation. Klukwan Inc. -- http://www.klukwan.com/-- is a native corporation owning an entitlement of 23,000 acres of forested land located in the heart of southeast Alaska's rain forest. LAPORTE FAMILY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Laporte Family Properties, LLC 950 West Causeway Approach Mandeville, LA 70471 Bankruptcy Case No.: 12-12435 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Christopher T. Caplinger, Esq. LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD 601 Poydras Street, Suite 2775 New Orleans, LA 70130 Tel: (504) 568-1990 Fax: (504) 529-7418 E-mail: ccaplinger@lawla.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 Leroy J. Laporte, Jr., authorized member. LEAGUE NOW: Incurs $170,000 Net Loss in Second Quarter ------------------------------------------------------ League Now Holdings Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $169,909 on $960,381 of revenue for the three months ended June 30, 2012, compared with a net loss of $12,500 on $0 of revenue for the same period a year ago. The Company reported a net loss of $209,797 on $1.90 million of revenue for the six months ended June 30, 2012, compared with a net loss of $12,500 on $0 of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.53 million in total assets, $1.69 million in total liabilities, and a $155,222 total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/oSH5ey About League Now Brecksville, Ohio-based League Now Holdings Corporation, through its subsidiary, Infiniti Systems Group, Inc., provides technology integration services to businesses in the midwestern United States. As reported in the TCR on April 23, 2012, Harris F. Rattray CPA, in Pembroke Pines, Florida, expressed substantial doubt about League Now's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditor noted that the Company has incurred accumulated net losses of $207,200 and needs to raise additional funds to meet its obligations and sustain its operations. LEHMAN BROTHERS: Spends & Makes Money on Remaining Real Estate -------------------------------------------------------------- Oshrat Carmiel at Bloomberg News reported that four years after filing the largest bankruptcy in U.S. history, Lehman Brothers Holdings Inc. is still in the property business, wagering it can recover about $12.9 billion from mortgages and assets around the globe. Its $3 billion purchase this year of the remaining 53% of apartment owner Archstone Inc. made it the biggest buyer of U.S. commercial property by value in the last 12 months, according to research firm Real Capital Analytics Inc., the report relates. According to the report, Lehman has invested $5 billion in real estate since its demise, acquiring loans and buying out joint venture partners. Instead of selling to vulture investors, it's waiting for opportune times to unload properties as the commercial and residential markets recover. The company last week moved to take Archstone public to capitalize on soaring demand for rentals. "The entire strategy was 'don't put yourself in a position of having to sell,'" said Jeffrey Fitts, Lehman's New York- based head of real estate and a managing director at Alvarez & Marsal, the advisory firm managing the liquidation. "If you're selling with a gun to your head and people know it, you're dead and you will leave hundreds of millions of dollars on the table." According to the report, Lehman aims to raise $53 billion through 2016, to pay creditors an average of 18 cents on the dollar on about $300 billion of claims. The company made its first payment of $22.5 billion in April, about 53% more than it previously estimated was possible, after exiting court protection. 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. LIFECARE HOLDINGS: Incurs $5.3 Million Net Loss in 2nd Quarter -------------------------------------------------------------- Lifecare Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $5.31 million on $120.98 million of net patient service revenue for the three months ended June 30, 2012, compared with a net loss of $4.63 million on $95.99 million of net patient service revenue for the same period during the prior year. The Company reported a net loss of $9.90 million on $247.39 million of net patient service revenue for the six months ended June 30, 2012, compared with a net loss of $8.23 million on $190.91 million of net patient service revenue for the same period a year ago. The Company reported a net loss of $34.83 million in 2011, compared with net income of $2.63 million on $358.25 million in 2010. The Company's balance sheet at June 30, 2012, showed $510.03 million in total assets, $566.26 million in total liabilities, and a $56.22 million total stockholders' deficit. Bankruptcy Warning "We are continuing to work with our financial advisor and lenders under our senior secured credit facility and senior subordinated notes to develop a comprehensive strategy that will allow us to refinance or restructure our existing capital structure prior to the acceleration of any indebtedness," the Company said in its quarterly report for the period ended June 30, 2012. "There can be no assurance, however, that any of these efforts will prove successful or be on economically reasonable terms. In the event of a failure to obtain necessary waivers or forbearance agreements or otherwise achieve a restructuring of our financial obligations, we may be forced to seek reorganization under Chapter 11 of the United States Bankruptcy Code." A copy of the Form 10-Q is available for free at: http://is.gd/lpgjXQ About LifeCare Holdings Plano, Tex.-based LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 hospitals located in nine states, consisting of eight "hospital within a hospital" facilities (27% of beds) and 11 freestanding facilities (73% of beds). Through these 19 long-term acute care hospitals, the Company operates a total of 1,057 licensed beds and employ approximately 3,200 people, the majority of whom are registered or licensed nurses and respiratory therapists. Additionally, the Company holds a 50% investment in a joint venture for a 51-bed LTAC hospital located in Muskegon, Michigan. * * * LifeCare Holdings carries "Caa1" corporate family and probability of default ratings, with negative outlook, from Moody's Investors Service and a 'CCC-' corporate credit rating, with negative outlook from Standard & Poor's Ratings Services. In November 2010, Standard & Poor's Ratings lowered its corporate credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The downgrade reflects the imminent difficulty the company may have in meeting its bank covenant requirements and the risk of it successfully refinancing significant debt maturing in 2011 and 2012," said Standard & Poor's credit analyst David Peknay. The likelihood of a debt covenant violation is heightened by the company's lack of appreciable operating improvement coupled with a large upcoming tightening of is debt covenant in the first quarter of 2011. Additional equity by the company's financial sponsor may be necessary to avoid a covenant violation. Accordingly, S&P believes the chances of bankruptcy have increased. As reported by the TCR on May 26, 2011, Standard & Poor's Rating Services affirmed its 'CCC-' corporate credit rating and its senior subordinated debt rating on Plano, Texas-based LifeCare Holdings Inc. "The low-speculative-grade rating on LifeCare reflects its narrow focus in a competitive business heavily reliant on uncertain Medicare reimbursement," said Standard & Poor's credit analyst David Peknay, "and its highly leveraged financial risk profile highlighted by very weak cash flow protection measures, slim liquidity, and very high debt level." In the June 6, 2012, edition of the TCR, Moody's downgraded LifeCare Holdings, Inc.'s corporate family rating to Caa3 and probability of default rating to Ca. The downgrade of the corporate family rating to Caa3 reflects heightened refinancing risk, an untenable capital structure, and interest burden that is not covered by cash flows generated from the company's ongoing operations. Moody's believes LifeCare will need to address its entire capital structure in the next twelve months which is reflected in the Ca probability of default rating. LINWOOD FURNITURE: Bankruptcy Administrator Seeks Case Conversion ----------------------------------------------------------------- A U.S. Bankruptcy Court administrator has filed a motion seeking conversion of Linwood Furniture LLC's Chapter 11 case into a Chapter 7 liquidation. Richard Craver at the Winston-Salem Journal reports that Judge Catharine Aron has set a hearing for 2 p.m. Sept. 5 at the court in Winston-Salem. In court documents, Furniture Today relates, the bankruptcy court administrator said it is seeking to convert the case due to continuing losses to the estate, failure to file monthly reports and failure to pay second quarter Chapter 11 fees. According to the Winston-Salem Journal, Michael West said Linwood "is not in a position to continue operations and is not conducting any ongoing business. The conversion of this case is in the best interests of creditors and the estate." Mr. West said it's not in the best interest of creditors or the bankruptcy estate to allow Linwood to continue to lose money. He also cited the company's "failure to provide financial information to the bankruptcy administrator and failure to pay the Chapter 11 fees for the second quarter." The Winston-Salem Journal reports that Linwood said it expects to run out of operational money this month and could be forced to shut down without a new owner and additional capital. Its struggles have been compounded by delays in receiving materials, which have led to delays in completing a large backlog of orders. The report notes a bankruptcy auction, with a minimum qualifying bid of $2.57 million, had been scheduled for Aug. 9. However, the auction did not take place because the company did not receive any qualifying bids for its assets by the Aug. 6 deadline. According to Furniture Today, Linwood officials reported last month that it had interest from several prospective buyers. But on August 9, the company withdrew the motion to sell its assets and said that no bids were received by the deadline. Based in Linwood, North Carolina, Linwood Furniture LLC manufactures furniture for Bob Timberlake collections and others. The Company filed for Chapter 11 protection (Bankr. M.D.N.C. Case No. 12-50319) on March 5, 2012. Judge Catharine R. Aron presides over the case. John Paul H. Cournoyer, Esq., and John A. Northen, Esq., at Northen Blue LLP, represent the Debtor. The Debtor disclosed assets of $3,655,896, and liabilities of $6,894,292. LIVE NATION: Moody's Rates $100MM Senior Secured Term Loan 'Ba2' ---------------------------------------------------------------- Moody's Investors Service rated Live Nation Entertainment, Inc.'s (Live Nation) new $100 million senior secured term loan Ba2 and its new $225 million senior unsecured notes B3. At the same time, the company's B1 corporate family and probability of default ratings (CFR and PDR respectively) were affirmed along with ratings for individual instruments (see listing below). As well, the company's speculative grade liquidity rating remains unchanged at SGL-2 (good liquidity) and the ratings outlook remains stable. Since the $325 million aggregate of new debt instruments will be used to repay the company's approximately $300 million 10.75% due 2016 (issued in the name of TicketMaster; presuming their repayment, applicable ratings will be withdrawn in due course), total debt is substantially unchanged and the transaction is neutral to Live Nation's credit profile. As well, while the transaction increases the relative proportion of senior secured to senior unsecured debt, the ratio is within the tolerance of Moody's loss given default methodology and all instrument ratings remain unchanged. It is noted, however, that Live Nation has no additional flexibility to increase the relative proportion of senior secured debt (or, equivalently, to decrease the proportion of senior unsecured debt) without causing an instrument rating downgrade. The following summarizes the actions and Live Nation's ratings: Issuer: Live Nation Entertainment, Inc.: Assignments: Guaranteed Senior Secured Credit Facility: Rated Ba2 (LGD2, 29%) Guaranteed Senior Unsecured Notes: Rated B3 (LGD5, 79%) Affirmations: Corporate Family Rating: Affirmed at B1 Probability of Default Rating: Affirmed at B1 Speculative Grade Liquidity Rating: Affirmed at SGL-2 Outlook: Affirmed at Stable Guaranteed Senior Secured Credit Facility: Affirmed at Ba2 (LGD2, 29%) Guaranteed Senior Unsecured Notes: Affirmed at B3 with the LGD assessment revised to (LGD5, 79%) from (LGD5, 78%) RATINGS RATIONALE Live Nation's B1 corporate family and probability of default ratings (CFR and PDR respectively) are influenced primarily by limited free cash flow generation and poor coverage metrics. As well, with organic growth constrained by the maturity of core ticketing and concert promotion activities, ongoing credit metrics are unlikely to improve. In addition, management has a track record of using acquisitions to manufacture growth and of also using debt (or, equivalently, eschewing debt reduction) to provide acquisition funding. This adds to ongoing pressure on credit metrics, many of which are weak for a B1-rated services company. The ratings are supported by Live Nation's leading position in the live entertainment industry with a multi-faceted revenue stream derived from ticketing, concert promotion (based on a significant roster of well-recognized performing artists), venue operation, and artist management (through its ownership of Front Line Management Group, Inc.). Rating Outlook While Live Nation is somewhat weakly positioned at the B1 rating level, the outlook is stable. In turn, this is a consequence of the company's leading position in its relevant markets and its ability to be cash flow positive. What Could Change the Rating - Up Until Live Nation demonstrates the ability and the willingness to de-lever (via, respectively, significant free cash flow expansion and debt repayment), upwards rating migration is unlikely. Quantitatively, the ability to de-lever would be evidenced if (Retained Cash Flow - Capital Expenditures) to Debt expanded towards 10% while (EBITDA-Capital Expenditures)/Interest Expense expanded towards 3x (in both cases, on a sustainable basis and measured inclusive of Moody's standard adjustments). Favorable business conditions and a solid liquidity position would also be prerequisites of positive ratings or outlook actions. What Could Change the Rating - Down Downwards rating pressure could develop if (Retained Cash Flow - Capital Expenditures) to Debt remained at or below approximately 5% while (EBITDA-Capital Expenditures)/Interest Expense remained was less than 2x (in both cases, on a sustainable basis and measured inclusive of Moody's standard adjustments). Adverse developments in the business environment or with liquidity arrangements could also prompt negative ratings activity. The principal methodology used in rating Live Nation Entertainment was Global Business & Consumer Service Industry Rating Methodology published 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 (and/or) the Government-Related Issuers methodology published in July 2010. LIVE NATION: S&P Retains 'BB-' Loan Rating After $100MM Add-on -------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB-' issue-level rating and '2' recovery rating on Beverly Hills, Calif.-based Live Nation Entertainment Inc.'s existing $800 million term loan B due 2016 remain unchanged following the proposed $100 million add-on term loan. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. "In addition, we assigned our 'B' issue-level rating and '5' recovery rating to the company's proposed $225 million senior notes due 2020. The '5' recovery rating indicates our expectation for modest (10%-30%) recovery in the event for a payment default. We expect the company to use proceeds from incremental term loan and the notes to repay its $304 million of outstanding 10.75% senior notes due 2016. As a result of the proposed transaction, we estimate the company to save roughly $11 million in annual interest expense, a roughly 9% decline in total interest expense for the last 12 months ended June 30, 2012. Pro forma lease- adjusted EBITDA coverage of interest is roughly 2.8x for the 12 months ended June 30, 2012," S&P said. "The corporate credit rating on Live Nation reflects our expectation that leverage will remain relatively high, at slightly over 5x, for the intermediate term, but continue to decline modestly. We expect the company will modestly benefit from higher ticket sales and concert attendance in the full year 2012. We consider the company's business profile 'fair,' based on its strong position in the live entertainment and ticketing businesses, notwithstanding low EBITDA margins of the concert business and increasing ticketing competition," S&P said. RATINGS LIST Live Nation Entertainment Inc. Corporate Credit Rating B+/Stable/-- $900 mil term ln B due 2016 BB- Recovery Rating 2 New Ratings Live Nation Entertainment Inc. $225 mil senior nts due 2020 B Recovery Rating 5 LPATH INC: Incurs $646,600 Net Loss in Second Quarter ----------------------------------------------------- Lpath, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $646,649 on $1.32 million of total revenues for the three months ended June 30, 2012, compared with net income of $1.37 million on $1.54 million of total revenues for the same period during the prior year. The Company reported a net loss of $720 on $4.08 million of total revenues for the six months ended June 30, 2012, compared with a net loss of $275,776 on $4.31 million of total revenues for the same period a year ago. The Company reported a net loss of $3.11 million in 2011, compared with a net loss of $4.60 million in 2010. The Company's balance sheet at June 30, 2012, showed $21.03 million in total assets, $14.31 million in total liabilities and $6.71 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/baUPUb About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. LSP ENERGY: SMEPA's $285.8MM Bid Wins Auction for Power Plant ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LSP Energy LP brought in a top bid of $285.876 million at an auction for its 837-megawatt combined-cycle natural gas-fired electric generating facilities. According to the report, the winning bidder was South Mississippi Electric Power Assn., which is already purchasing power from the plant in Batesville, Mississippi. There was competitive bidding at the auction on Aug. 13, according to Sara Peterson, spokeswoman for South Mississippi Electric. In an interview, Ms. Peterson said the acquisition will add to South Mississippi Electric's existing fleet of 7 plants capable of producing 2,422 megawatts. The report relates the U.S. Bankruptcy Court in Delaware will hold a hearing on Sept. 20 for approval of the sale. 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. MACROSOLVE INC: Incurs $779,000 Net Loss in Second Quarter ---------------------------------------------------------- Macrosolve, Inc, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $779,434 on $572,436 of net revenues for the quarter ended June 30, 2012, compared with a net loss of $722,717 on $219,431 of net revenues for the same period a year ago. "We've just completed our sixth consecutive quarter of revenue increases, clearly demonstrating that our growth strategy is working," stated MacroSolve Executive Chairman, Jim McGill. "With the sale of Illume Mobile assets, we are focusing on growing our intellectual property portfolio and license sales. We have confidence the next quarter will show strong results due to intellectual property and a unique investment approach that mentors budding developers in the world of mobile technology." The Company reported a net loss of $2.53 million in 2011, compared with a net loss of $1.92 million during the prior year. The Company's balance sheet at June 30, 2012, showed $2.20 million in total assets, $1.37 million in total liabilities and $833,924 in total stockholders' equity. In its report on the Company's 2011 financial results, Hood Sutton Robinson & Freeman CPAs, P.C., in Tulsa, Oklahoma, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/ICBhyy About MacroSolve, Inc. Tulsa, Okla.-based MacroSolve, Inc. (OTC BB: MCVE) -- http://www.macrosolve.com/-- is a technology and services company that develops mobile solutions for businesses and government. A mobile solution is typically the combination of mobile handheld devices, wireless connectivity, and software that streamlines business operations resulting in improved efficiencies and cost savings. MARCO POLO: Reorganization Approved Without Objection ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Seaarland Shipping Management won the signature of a New York bankruptcy judge on an Aug. 14 confirmation order approving the liquidating Chapter 11 plan. According to the report, there were no objections to plan approval. The plan calls for Seaarland to turn the vessels over to secured lenders who agreed they won't be paid on unsecured deficiency claims until unsecured creditors have received 5%. The primary secured lenders are Royal Bank of Scotland and Credit Agricole Corporate & Investment Bank. The report relates it was agreed that the Credit Agricole claim arising from three vessels wouldn't exceed $93.5 million and that the RBS claim related to the other three is $124.8 million. The disclosure statement contains a projection that unsecured creditors will recover nothing to 5% on their claims. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. The company started a lawsuit against the two creditors in January 2012. The cases are before Judge James M. Peck. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, in New York, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debts are both more than US$100 million and less than US$500 million. Tracy Hope Davis, the United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Creditor Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, represents secured creditor and post-petition lender The Royal bank of Scotland plc. MATTESON, IL: Moody's Cuts $27MM G.O Debt Rating to Ba1 ------------------------------------------------------- Moody's Investors Service has downgraded the Village of Matteson's (IL) outstanding rated general obligation debt to Ba1 from A2, affecting $28.2 million. Concurrently, Moody's has downgraded the village's $27.4 million in General Obligation Capital Appreciation Debt Certificates (Limited Tax) to Ba2 from A3. The outlook has been revised to negative. The rating distinction between the village's general obligation unlimited tax bonds and general obligation debt certificates reflects the weaker security of the certificates, which do not benefit from a dedicated property tax levy. Summary Ratings Rationale The downgrade reflects the village's challenged local economy and rapidly deteriorating financial position. The latter includes ongoing annual operating deficits, an over reliance on inter-fund transfers, and poorly funded pension liabilities; all of which reflect a history of weak fiscal policy. The outlook on the Village of Matteson's credit is negative, reflecting Moody's belief that the village's liquidity position will continue to remain under pressure, with extremely narrow financial operations and a continued reliance on inter-fund borrowings to fund operations in the absence of a deficit elimination plan. Improving financial operations and restoring adequate reserves will be challenging given expenditure pressures and overall weakened revenues. Strengths: - Moderately sized, albeit declining, tax base, benefitting from its close proximity to the Chicago (GO rated Aa3/negative outlook) metropolitan area - Above average wealth levels Challenges: - Limited revenue raising ability given the lack of home rule status, compounded by potential political difficulties in increasing revenues, such as property or sales taxes, and/or making necessary budgetary cuts - Ongoing inability to achieve structural balance in the General Fund - Leveraged debt position related to the use of Capital Appreciation bonds (CABSs) - Over-reliance on one-time revenue proceeds and internal advances from other funds - Weak management practices related to overall fiscal management - Persistent economic pressures , as evidenced by a recent decline in full valuation, elevated unemployment rates, and continued weakness in economically sensitive sales tax revenues, which is the village's largest revenue source Outlook The outlook on the Village of Matteson is negative, reflecting Moody's belief that the village's liquidity position will continue to remain under pressure as a result of extremely narrow financial operations and a reliance on inter-fund borrowings to fund operations. Additionally, the outlook reflects Moody's expectation that the village will be challenged to improve reserve levels given rising expenditures and weakened revenues. The negative outlook further reflects the lack of a definitive and timely recovery strategy to restore the village's financial position. WHAT COULD MAKE THE RATING GO UP (Removal of the negative outlook) - Structurally balanced budgets achieved through financial solutions that can carry forward to future fiscal years - Material operating surpluses that will eliminate the deficit General fund balance position - Demonstrated commitment to make mid-year budget adjustments as necessary to achieve structurally balanced operations WHAT COULD MAKE THE RATING GO DOWN - Continued operating deficits straining an already extremely narrow liquidity position - Inability or continued unwillingness to implement a deficit elimination plan - Continued erosion of the village's operational liquidity leading to heightened cash-flow weakness The principal methodologies used in this rating were General Obligation Bonds Issued by U.S. Local Governments published in October 2009. MATRIX REAL ESTATE: Co-Owner Seeks to Liquidate Firm ---------------------------------------------------- Will Boye at Charlotte Business Journal reports that a part-owner of Matrix Real Estate Services has sued the firm and is seeking a court-ordered liquidation of the company in order to protect his interests. According to Business Journal, Brian Hoffman is seeking a temporary restraining order and an injunction to prevent Matrix from conducting further business until a receiver has been appointed to take control of the company. Business Journal relates that Mr. Hoffman said in his suit he has a 35% ownership interest in Matrix and was hired by the company's majority owner, Jim Clements, in 2005 to serve as managing principal. Matrix Real Estate Services provides construction-management services. MF GLOBAL: Class Plaintiffs to Sue Jointly ------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating MF Global Inc. won't be fighting with customers' class-action plaintiffs over who has the right to sue former Chairman Jon Corzine, the auditors, and other officers and directors. According to the report, MF Global trustee James W. Giddens filed an agreement on Aug. 15 with the bankruptcy court in Manhattan where he assigned his claims to plaintiffs in the purported class action suits pending in U.S. District Court in Manhattan on behalf of customer whose supposedly segregated funds were among the $1.6 billion that was missing when bankruptcy began. The report relates that in return, the class plaintiffs agreed that they will turn all recoveries over to Mr. Giddens for him to distribute to customers in the bankruptcy court as provided in the Securities Investor Protection Act. The plaintiffs' legal expenses will be paid from lawsuit recoveries before the remainder goes to Mr. Giddens. The report notes the agreement allows Mr. Giddens to participate in the class lawsuits and provide MF Global documents to the plaintiffs. He is only giving the class plaintiffs his claims against Mr. Corzine, other officers and directors, and MF Global's former auditors. The agreement, scheduled for approval in bankruptcy court on Sept. 5, alleviates any dispute over whether Mr. Giddens or the class plaintiffs had the right to sue. The report relates the agreement also may prevent the directors and officers from contending that the so called in pari delicto defense bars Mr. Giddens from suing. The in pari delicto defense has been utilized by defendants in bankruptcies like Bernard L. Madoff Investment Securities LLC. The defense has sometimes been used to bar a bankruptcy trustee from suing, on the theory that the trustee steps into the shoes of the bankrupt company that committed fraud and thus is barred from suing someone else involved in the fraud. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm was also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. MOTORS LIQUIDATION: Has $1 Billion Net Assets in Liquidation ------------------------------------------------------------ Motors Liquidation Company GUC Trust filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing that as of June 30, 2012, it has $1.15 billion in total assets, $147.26 million in total liabilities and $1 billion in net assets in liquidation. A copy of the Form 10-Q is available for free at http://is.gd/BujfrO About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. NEW LEAF: Delays Form 10-Q for Second Quarter --------------------------------------------- New Leaf Brands, Inc., informed the U.S. Securities and Exchange Commission that it will be late in filing its quarterly report on Form 10-Q for the period ended June 30, 2012. The Company said it requires additional time to complete the review of its financial statements in order to complete the 10-Q prior to filing. About New Leaf Old Tappan, N.J.-based New Leaf Brands, Inc., is a diversified beverage holding company acquiring brands, distributors and manufacturers within the beverage industry. EisnerAmper LLP, in New York City, expressed substantial doubt about New Leaf's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficiency, was not in compliance with certain financial covenants related to debt agreements, and has a significant amount of debt maturing in 2012. The Company reported a net loss of $6.68 million on $2.27 million of net sales for 2011, compared with a net loss of $9.13 million on $4.26 million of net sales for 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.59 million in total assets, $5.52 million in total liabilities, and a shareholders' deficit of $3.93 million. NEWPAGE CORP: Bankruptcy Judge Orders Mediation for Creditors ------------------------------------------------------------- Jacqueline Palank at Dow Jones' Daily Bankruptcy Review reports that a New York bankruptcy judge is being called in to mediate talks among NewPage Corp. and its creditors in a bid to come up with a consensual restructuring plan. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NEXTWAVE WIRELESS: Incurs $47.8-Mil. Net Loss in Second Quarter --------------------------------------------------------------- Nextwave Wireless Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $47.79 million for the three months ended June 30, 2012, compared with a net loss of $65.38 million for the three months ended July 2, 2011. The Company reported a net loss of $76.27 million for the six months ended June 30, 2012, compared with a net loss of $126.39 million for the six months ended July 2, 2011. The Company's balance sheet at June 30, 2012, showed $451.16 million in total assets, $1.20 billion in total liabilities and a $754.57 million total stockholders' deficit. Bankruptcy Warning As of June 30, 2012, the aggregate principal amount of the Company's secured indebtedness was $1,103.1 million. This amount includes the Company's Senior Notes with an aggregate principal amount of $148.1 million, the Company's Second Lien Notes with an aggregate principal amount of $207.9 million and the Company's Third Lien Notes with an aggregate principal amount of $747.1 million. The Company's current cash reserves are not sufficient to meet its payment obligations under its secured notes at their current maturity dates. Additionally, the Company may not be able to consummate sales of the Company's 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. Insufficient capital to repay the Company's debt at maturity would significantly restrict the Company's ability to operate and could cause the Company to seek relief through a filing in the United States Bankruptcy Court. A copy of the Form 10-Q is available for free at: http://is.gd/0G4SId 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. 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." NORTH GEORGIA LINEN: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: North Georgia Linen Service, Inc. 2410 Franklin Boulevard Gainesville, GA 30504-5610 Bankruptcy Case No.: 12-22837 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Debtor's Counsel: Bradley J. Patten, Esq. SMITH, GILLIAM, WILLIAMS AND MILES, P.A. P.O. Box 1098 Gainesville, GA 30503 Tel: (770) 536-3381 E-mail: bpatten@sgwmfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-22837.pdf The petition was signed by Kimberly F. Robertson, vice president. NORTH SCOTTSDALE: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: North Scottsdale Christian 28700 N. Pima Rd Scottsdale, AZ 85266 Bankruptcy Case No.: 12-18232 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Blake D. Gunn, Esq. LAW OFFICE OF BLAKE D. GUNN P.O. Box 22146 Mesa, AZ 85277-2146 Tel: (480) 270-5073 E-mail: blake.gunn@gunnbankruptcyfirm.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 three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb12-18232.pdf The petition was signed by David Friend, president. OCTAVIAR ADMINISTRATION: Chapter 15 Case Summary ------------------------------------------------ Chapter 15 Debtor: Octaviar Administration Pty Ltd. 5-7 Hicks Street, Southport Queensland 4215, Australia Chapter 15 Case No.: 12-13443 Chapter 15 Petition Date: August 13, 2012 Court: Southern District of New York (Manhattan) Judge: Shelley C. Chapman About Octaviar: Octaviar Administration provided the treasury function for Octaviar Group. OA was placed into liquidation by the Supreme Court of Queensland in July 2009. Prior to its demise, the Octaviar Group consisted of a travel and tourism business, a corporate and investment banking business, a funds management business, and as structured finance and advisory business. At it height, the Octaviar Group consisted of more than 400 companies, employed more than 3,000 employees, and had offices in Australia, New Zealand and the United Arab Emirates. Chapter 15 Debtor's Counsel: Howard Seife, Esq. CHADBOURNE & PARKE LLP 30 Rockefeller Plaza New York, NY 10112 Tel: (212) 408-5361 Fax: (212) 541-5369 E-mail: hseife@chadbourne.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: More than $100 million The petition was signed by Katherine Elizabeth Barnet, as a joint liquidator. OMEGA NAVIGATION: Hearing on Cash Access Continued Until Sept. 17 ----------------------------------------------------------------- The Hon. Karen K. Brown of the U.S. Bankruptcy Court for the Southern District of Texas continued until Sept. 17, 2012, at 2 p.m., to consider Baytown Navigation Inc., et al.'s motion to continue access to cash collateral. The Debtor has obtained interim access to cash collateral. As adequate protection from diminution in value of the lenders' collateral, the Debtors will: -- make adequate protection payments; -- grant the lenders adequate protection liens in all of their rights, title and interest in their property, and a superpriority administrative expense claim status, subject to carve out. -- provide continued maintenance of, and insurance on, the ships and all of their other assets and property, consistent with the Debtors' prepetition practices. As reported in the Troubled Company Reporter on July 19, 2012, HSH Nordbank AG, as agent, asserts that pursuant to the senior facilities agreement and the other senior facilities documents, the Debtors are indebted to the senior facilities lenders in the principal amount of $242,720,000, plus accrued and accruing interest and all other amounts. The junior lenders assert a lien on inter alia, the ships, all cash collateral and all prepetition collateral pursuant to a $42,500,000 loan dated March 27, 2008. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. OMEGA NAVIGATION: Has Plan Filing Exclusivity Until Oct. 18 ----------------------------------------------------------- Baytown Navigation Inc., et al., entered into a sixth amended agreed scheduling order on order to show cause and agreed order extending the exclusive period. Upon the order to show cause entered by the Court on Dec. 19, 2011, and agreement of the parties: 1. HSH Nordbank, AG, as senior facilities agent, the senior lenders, White & Case LLP, the junior lenders, and the Official Committee of Unsecured Creditors will file their respective responses and briefs to the show cause order by Sept. 17, 2012. 2. The Debtors may file a response to the briefs on the responding parties by Sept. 24. 3. The responding parties may file any briefs responding to the brief of the Debtors by Oct. 1. 4. The Court will set a hearing on the order to show cause by separate order. 5. The exclusive period of the Debtors to file a plan of reorganization is extended until Oct. 18. If the debtors file plans of reorganization by Oct. 18, the Debtors' solicitation period is extended until Dec. 18. The Plan As reported in the Troubled Company Reporter on Aug. 9, 2012, Bill Rochelle, the bankruptcy columnist at Bloomberg News, reported that the Debtors filed a proposed reorganization plan where the current owner will make a new investment and share ownership with junior secured lenders, if they too make new contributions. According to the report, there will be a hearing on Sept. 4 in U.S. Bankruptcy Court in Houston for approval of the disclosure statement explaining the Chapter 11 plan. Omega is tentatively scheduling an Oct. 15 confirmation hearing for approval of the plan. The report relates the plan will be funded in part with a new investment of about $2.5 million by an entity related to George Kassiotis, the company's chief executive. In return, his company will receive all the new stock. Junior secured lenders, owed some $36.2 million, may participate in a rights offering to buy one- third of the new stock at the same cost per share as Mr. Kassiotis. The $242.7 million owed to senior secured lenders will be rolled over into new secured debt maturing in October 2017. The lenders must also agree to provide $7.5 million in a new working capital facility. General unsecured creditors will receive 10% in three installments over one year. Unsecured creditors must vote in favor of the plan as a class and individually to receive the payment. Existing stock will be extinguished. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/OMEGA_NAVIGATION_baytown_ds.pdf About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. PATRIOT COAL: Moody's Rates $375 Million DIP Term Loan 'B3' ----------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the $125 million revolving debtor-in-possession credit facility and a B3 rating to the $375 million debtor-in-possession term loan, collectively, the "DIP facilities", of Patriot Coal. The ratings primarily reflect the collateral coverage available to the DIP lenders and the structural features of the DIP facility. The facilities have first and second liens on substantially all assets of the company, a super priority claim under the Bankruptcy Code, and contain upstream guarantees from all of Patriot's material domestic subsidiaries. The bankruptcy court approved the execution of the DIP facilities in its final debtor-in-possession order on August 3, 2012. The ratings also consider the size of the DIP facilities as a percentage of pre-petition debt and the nature of the bankruptcy and reorganization. Patriot and its domestic operating subsidiaries filed for bankruptcy protection under Chapter 11 on July 9, 2012. Ratings assigned to Patriot as Debtor-in-Possession are: Assignments: Issuer: Patriot Coal Corporation (DIP) Senior Secured Revolving Bank Credit Facility, Assigned B2 Senior Secured Term Loan Bank Credit Facility, Assigned B3 Moody's withdrew all previous ratings for Patriot on July 11, 2012 following their Chapter 11 bankruptcy filing. The rating on the DIP facilities are being assigned on a "point- in-time" basis and will not be monitored going forward and therefore no outlook was assigned to the rating. Proceeds from the term loan and the revolver will be primarily used to provide for general working capital needs while Patriot is developing and implementing its plan of reorganization, as well as to refinance $52 million of letters of credit issued under pre- petition accounts receivable securitization program and $25 million of borrowings under pre-petition revolver. Patriot also obtained a roll-up DIP facility (the roll-up facility) of $302 million to refinance $302 million of letters of credit outstanding under the pre-petition revolver. The roll-up facility is unrated and is subordinated in payment priority to the DIP facilities. Ratings Rationale The B2 rating assigned to the DIP revolver reflects its first priority lien and first-out position with respect to all accounts receivables of the company, as well as second-out position with respect to the DIP term loan collateral. It also reflects structural protections, which include limiting advances to a borrowing base. The B3 rating of the DIP term loan reflects its first priority lien and first-out position with respect to all remaining collateral, which consists primarily of inventory and property, plant and equipment, including owned and leased reserves. Moody's estimates that collateral coverage in the event of liquidation will be approaching 100% on the revolver. The collateral coverage on the term loan is more uncertain and would depend on market conditions at the time of liquidation of the asset base, among other factors. Moody's estimates that collateral coverage on the term loan could range from 75% to 200%. The revolver also benefits from the largely liquid collateral, as compared to the term loan, which security protections rely primarily on fixed assets. Both facilities contain upstream guarantees from all of Patriot's material domestic subsidiaries and have a strong covenant package, which includes a minimum EBITDA test, minimum liquidity test, and limitations on capital disbursements tested at least monthly. That said, Moody's expects that the headroom under covenants will be tight. The term of the facilities is limited to fifteen months from closing, which could be extended to eighteen months under certain circumstances. Moody's assessed values of receivables based on their reported book values, discounted by 25%. Moody's considered that Patriot's receivable pool is well diversified and to a large extent consists of large industrial customers. In addition, the borrowing base provides DIP revolver lenders with adequate protections, as it is determined based on 85% of eligible billed receivables and 75% of eligible unbilled receivables, net of a carve-out and availability block of $20 million. Patriot's inventory consists predominantly of saleable and raw coal, as well as mining materials and supplies. Based on the composition of the inventory, Moody's deemed a discount of 50% of the reported book values as appropriate. Moody's assessed the value of Patriot's fixed assets, which consist primarily of approximately 1.9 billion tons of proven and probable coal reserves, based on their discounted book values, reserve valuations observed in market transactions, and EBITDA multiples. The ratings consider complexity and the length of time that it would take to convert these assets to cash, particularly considering that majority of Patriot's reserves are held under coal leases that contain explicit or implied anti-pledge clauses, which make obtaining a mortgage leasehold to protect DIP creditors impracticable. DIP facilities contain certain alternative protections designed to give the lenders rights similar to leasehold mortgages; however, the need to rely on alternative mechanisms could make monetizing these assets a more lengthy and cumbersome process in the event of default. Moody's also notes that Patriot's assets are concentrated in Central Appalachian thermal coal, which Moody's considers to be in secular decline, and that roughly 70% of reserves are attributable to properties not currently engaged in mining operations. Industry conditions, extent of capital investment, and permitting process needed to bring some of these reserves in production could all negatively affect the valuation of the assets in the event of sale. Moody's also considered that the value of Patriot's coal reserves and other fixed assets could fluctuate depending on market conditions, which Moody's currently considers as unfavorable for both metallurgical and thermal coals. A distressed sale would even further depress the value of these assets. Moody's notes that the size of DIP facilities approximates Patriot's pre-petition debt, including the revolver, senior unsecured debt and convertible debt. This is a negative factor for the ratings, as Moody's considers the burden of debt service on the company during reorganization to be high. The ratings are constrained by Patriot's large legacy liability burden, high cost structure and the structural challenges facing the US coal industry, all of which will present substantial challenges during the reorganization process. Patriot's legacy liabilities include approximately $1.8 billion of other post- retirement benefits and workers compensation liabilities, as well as $0.5 billion in asset retirement obligations. The existence of large, non-debt creditor classes can greatly delay and complicate the reorganization. The deterioration in Patriot's financial performance and subsequent Chapter 11 filing was largely driven by deterioration in market conditions and challenges facing the US thermal coal industry, particularly in Central Appalachia, where Patriot's business is concentrated. An unusually warm winter in the US and low natural gas prices in 2011-2012 led to a collapse in coal prices across most coal producing regions and production cuts across the industry, with utilities decreasing their coal-fired generation in favor of lower-priced gas. For the longer term, sustained low natural gas prices, combined with environmental regulations disadvantaging coal, will slowly erode coal's position as a raw material for electric generation. Higher-cost Central Appalachian production is most affected by these market conditions, and will continue to face secular decline as production costs continue to rise as a result of difficult geology and tightening safety standards. Patriot's reorganization efforts will focus on rejecting uneconomic contracts, closing unprofitable operations, monetizing non-strategic assets, increasing focus on metallurgical coal, and minimizing cash service burden from labor contracts and legacy liabilities. Moody's believes that the company should be able to improve their margins through these efforts. That said, structural decline in the thermal business, combined with continued softness in metallurgical markets, will present substantial challenges, while the increasing focus on met business will require substantial time and capital investment to accomplish. The principal methodology used in rating Patriot was the Debtor- In-Possession Lending Industry Methodology published in March 2009. Based in St. Louis, Missouri, Patriot Coal Corporation is one of the largest coal producers in the eastern U.S. with approximately 30 million tons of annual coal production and $2.4 billion of revenues generated in 2011. PEGASUS RURAL: Has Until Oct. 4 to Propose Chapter 11 Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended, for the third time, Pegasus Rural Broadband, LLC, et al.'s exclusive periods to file a proposed reorganization plan and and solicit acceptances for that plan until Oct. 4, 2012, and Dec. 3, 2012, respectively. About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. NHB Advisors Inc. is their financial advisors. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. The Chapter 11 filing followed the maturity in May 2011 of almost $60 million in secured notes owing to Beach Point Capital Management LP. The Court denied a motion by the secured noteholders to dismiss the Chapter 11 case and appoint a Chapter 11 trustee. The companies filed a proposed reorganization plan in February predicting sale of licenses in the 700 megahertz spectrum would pay all secured and unsecured creditors in full, with interest. In a separate filing, the companies said the assets will be turned over to secured lenders if there is neither a lender nor a buyer to finance a plan. The plan will be funded either by a new loan or by selling the business and the assets. PGI INCORPORATED: Incurs $1.6-Mil. Net Loss in Second Quarter ------------------------------------------------------------- PGI Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.60 million on $7,000 of revenue for the three months ended June 30, 2012, compared with a net loss of $1.35 million on $11,000 of revenue for the same period during the prior year. The Company reported a net loss of $3.08 million on $15,000 of revenue for the six months ended June 30, 2012, compared with a net loss of $2.65 million on $37,000 of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $1.40 million in total assets, $67.95 million in total liabilities and a $66.54 million stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/qG9YQA About PGI Incorporated St. Louis, Mo.-based PGI Incorporated, a Florida corporation, was founded in 1958, and up until the mid 1990's was in the business of building and selling homes, developing and selling home sites and selling undeveloped or partially developed tracts of land. Over approximately the last 15 years, the Company's business focus and emphasis changed substantially as it concentrated its sales and marketing efforts almost exclusively on the disposition of its remaining real estate. This change was prompted by its continuing financial difficulties due to the principal and interest owed on its debt. Presently, the most valuable remaining asset of the Company is a parcel of 366 acres located in Hernando County, Florida. The Company also owns a number of scattered sites in Charlotte County, Florida (the "Charlotte Property"), but most of these sites are subject to easements which markedly reduce their value and/or consist of wetlands of indeterminate value. As of Dec. 31, 2011, the Company also owned six single family lots, located in Citrus County, Florida. As of Dec. 31, 2011, the Company had no employees, and all services provided to the Company are through contract services. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, BKD, LLP, in St. Louis, Missouri, expressed substantial doubt about PGI Incorporated's ability to continue as a going concern. The independent auditors noted that the Company has a significant accumulated deficit, and is in default on its primary debt, certain sinking fund and interest payments on its convertible subordinated debentures and its convertible debentures. The Company reported a net loss of $5.48 million on $56,000 of revenues for 2011, compared with a net loss of $4.93 million on $46,000 of revenues for 2010. PITTSBURGH CORNING: Directed to File Amended Plan by Aug. 20 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Pennsylvania, according to Pittsburgh Corning Corporation's case docket, directed the Debtors to submit amended plan and amended plan documents by Aug. 20, 2012. The Court also ordered that objections, if any, to the plan documents are due Sept. 19. All plan proponents and supporters must meet on a date between Sept. 19, and Sept. 26, and confer with all plan objectors to attempt to resolve all objections. A stipulation will be filed on or before Sept. 28, identifying each resolved objection and any Plan or Plan Document Amendments related thereof. Responses to the unresolved objections are due by Sept. 28. No replies to responses will be filed. The Court also said that if the Amended Plan is not filed by Aug. 20, a rule to show cause hearing is scheduled for Oct. 10, at 1 p.m., to show cause why the case must not be converted or dismissed. The Court further ordered that if an Amended Plan and Amended Plan Documents are filed by Aug. 20, a hearing on Oct. 10, at 1 p.m. will be a status conference to determine whether an evidentiary hearing is needed. If objections are filed, the hearing will be an argument on the objections. The Plan As reported in the Troubled Company Reporter on April 25, 2012, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that the Debtor filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. The previous effort to confirm a plan came to naught in June 2011 when the bankruptcy judge, for a second time, refused to confirm the reorganization plan designed to shed PCC, Corning and PPG of liability for asbestos claims arising from PCC's business. The plan filed on April 20 is intended to remedy defects identified in the plan by U.S. Bankruptcy Judge Judith K. Fitzgerald in Pittsburgh. She refused to approve a prior version of the plan in 2006. Last year, she nixed the plan because it would have barred claims that were independent of PCC's business. Last year, she also said the plan didn't comply with the so-called insurance neutrality test because it was ambiguous and might be interpreted to alter insurance companies' rights to resist payment of asbestos claims. Mr. Rochelle notes that last year's plan had been accepted by 99% of asbestos claimants. Once confirmed, the plan would enable both Corning and PPG to shed some liabilities by channeling asbestos claims into a trust to be funded with contributions by the two companies and insurance policies. The newest plan, like the prior version, is supported by the asbestos claimants' committee and the representative of future claimants. It would deal with 140,000 claims arising from an asbestos pipe insulation that wasn't manufactured after 1972. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. The Hon. Judith K. Fitzgerald presides over the case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when it denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. According to the report, a hearing to consider the new plan is scheduled for June 21. PREMIER BANK: To Sell Banks to BancShares via Chapter 11 -------------------------------------------------------- Premier Bank Holding Co., the owner of a six-branch community bank in Tallahassee, Florida, filed a Chapter 11 petition (Bankr. N.D. Fla. 12-40550) in its hometown on Aug. 14. Premier holding company listed assets of $1.4 million and liabilities of $13.2 million, including $13.2 million in trust- preferred securities issued between 2004 and 2006. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the bank holding company sought Chapter 11 to sell the bank subsidiary for $1.415 million to Home BancShares Inc. based in Conway, Arkansas. According to the report, the bank subsidiary, Premier Bank, had total assets of $282 million as of June 30. It has less capital than required and is under threat of being taken over by regulators, according to a filing in bankruptcy court. According to Premier, the bank needs $15 million to $20 million in new capital that will be supplied because Home intends to merger the bank with its own bank subsidiary. The sale will be subjected to the usual court-authorized auction. PREMIER BANK: Case Summary & 3 Unsecured Creditors -------------------------------------------------- Debtor: Premier Bank Holding Company 3110 Capital Circle, NE Tallahassee, FL 32308 Bankruptcy Case No.: 12-40550 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court Northern District of Florida (Tallahassee) Judge: Karen K. Specie About the Debtor: Premier Bank Holding Co., owns a six-branch community bank in Tallahassee, Florida. The bank holding company sought Chapter 11 to sell the bank subsidiary for $1.415 million to Home BancShares Inc. based in Conway, Arkansas. The bank subsidiary, Premier Bank, had total assets of $282 million as of June 30. Debtor's Counsel: Jason B. Burnett, Esq. GRAYROBINSON, P.A. 50 North Laura Street Suite 1675 Jacksonville, FL 32202 Tel: (904) 598-9929 Fax: (904) 598-9109 E-mail: jburnett@gray-robinson.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 three largest unsecured creditors is available for free at http://bankrupt.com/misc/flnb12-40550.pdf The petition was signed by G. Matthew Brown, president and CEO. PROTEONOMIX INC: To Restate First Quarter Form 10-Q --------------------------------------------------- The board of directors of Proteonomix, Inc., determined that the Company's previously issued interim consolidated financial statement for the three months ended March 31, 2012, should no longer be relied upon due to an anticipated restatement of the derivative liability. The Company intends to amend its quarterly report on Form 10-Q for the period ended March 31, 2012, as originally filed with the Securities and Exchange Commission on June 13, 2012, to reflect the restatement. The amendment being made to the Form 10-Q for the period ended March 31, 2012, will result in a restatement of earnings due to the accounting for the Series A, B, and C warrants issued in connection with the transaction the Company closed in March 2012. The accounting treatment for these warrants require the Company to account for them as liabilities rather than equity, and to adjust this liability at each reporting date utilizing fair value accounting. 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. QUANTUM FUEL: G. Samuelsen and J. Lundy Elected to Board -------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., held its 2012 annual meeting of stockholders on Aug. 9, 2012. The Company's stockholders elected two Class II directors, Dr. G. Scott Samuelsen and Jonathan Lundy to hold office until the 2015 annual meeting of stockholders or until his respective successor is duly elected and qualified. The Company's stockholders ratified the appointment of Haskell & White LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2012. The Company's stockholders approved the compensation of the Company's named executive officers. 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. 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. QUIGLEY CO: Court OKs Plan Outline, Delays Rule on Vote Rigging --------------------------------------------------------------- Bloomberg News' Tiffany Kary reports that U.S. Bankruptcy Judge Stuart Bernstein in Manhattan on Aug. 16 approved a sixth amended version of the disclosure statement explaining Quigley Inc.'s reorganization plan, allowing Pfizer Inc.'s non-operating unit to poll creditors. The judge said the issue of whether Pfizer bought votes will be addressed later. Under the draft plan, Pfizer would contribute assets to a trust to cover claims that Quigley's past products caused asbestos-related injuries. According to the report, Judge Bernstein said an issue that keeps resurfacing -- whether Pfizer's actions are "just another attempt to buy the vote" of asbestos claimants -- will be addressed at a trial when Quigley seeks final confirmation of its plan after a vote. The report notes asbestos claims against Quigley may total $4.45 billion over 42 years, according to testimony cited by Judge Bernstein in September 2010, when he denied Quigley's request to exit bankruptcy under a prior plan. At the time, the court found Pfizer's proposed contribution of $216.2 million wasn't enough to pay asbestos claimants, who may have fared better by suing the company under civil tort law. Pfizer has since increased its contributions, and in March 2011 a committee formed by asbestos claimants settled with Pfizer and will receive $800 million under the agreement. According to the report, the U.S. Trustee, an arm of the Justice Department that oversees bankruptcies, objected to the current disclosure statement, which describes how creditors would be treated. Concerns raised by Judge Bernstein in his September 2010 ruling still haven't been resolved, Tracy Hope Davis, the acting trustee, said in court papers. In that ruling, Judge Bernstein found Pfizer "wrongly manipulated the voting process to assure confirmation of the plan, and thereby gain the benefit of the channeling injunction" by giving some asbestos claimants incentives to vote in favor of the plan, Mr. Davis said. The Trustee also pointed out the current plan still doesn't disclose whether settlements Pfizer made with asbestos victims are consistent with historic standards, and why asbestos claimants who settled their lawsuits against Pfizer before Quigley's bankruptcy have a right to vote. It would only give some asbestos claimants 7.5% of what they seek and block them from making future claims against Pfizer under tort law, where they might get an estimated 23% of what they seek, the U.S. Trustee added. Quigley filed the sixth version of its plan June 29. The report also notes Albert Togut, a representative for people who haven?t yet manifested asbestos-related illnesses but will do so in the future and bring claims against the trust, said in court papers that he was still resolving issues with Quigley and Pfizer. About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a proposed global resolution of all pending and future asbestos- related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. In April 2011, the bankruptcy judge approved a plan-support agreement with Pfizer and an ad hoc committee representing 30,000 asbestors claimants. A May 20, 2011 opinion by District Judge Richard Holwell concluded that Pfizer was directly liable for some asbestos claims arising from products sold by its now non-operating subsidiary Quigley. REAL ESTATE ASSOCIATES: Reports $5.7MM Net Income in 2nd Quarter ---------------------------------------------------------------- Real Estate Associates Limited VII filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $5.71 million on $0 of revenue for the three months ended June 30, 2012, compared with a net loss of $212,000 on $0 of revenue for the same period during the prior year. The Company reported net income of $5.50 million on $0 of revenue for the six months ended June 30, 2012, compared with a net loss of $417,000 on $0 of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $1.16 million in total assets, $15.81 million in total liabilities and a $14.64 million total partners' deficit. Going Concern The Partnership continues to generate recurring operating losses. In addition, the Partnership is in default on notes payable and related accrued interest payable that matured between December 1999 and January 2012. Four of the Partnership's five remaining investments involved purchases of partnership interests from partners who subsequently withdrew from the operating partnership. As of June 30, 2012, and Dec. 31, 2011, the Partnership is obligated for non-recourse notes payable of approximately $4,463,000 and $6,070,000, respectively, to the sellers of the partnership interests, bearing interest at 9.5 to 10 percent. Total outstanding accrued interest is approximately $11,323,000 and $15,215,000 at June 30, 2012, and Dec. 31, 2011, respectively. These obligations and the related interest are collateralized by the Partnership's investment in the local limited partnerships and are payable only out of cash distributions from the Local Limited Partnerships. Unpaid interest was due at maturity of the notes. All of the notes payable have matured and remain unpaid at June 30, 2012. No payments were made on the notes payable during the six months ended June 30, 2012 or 2011. As a result, there is substantial doubt about the Partnership's ability to continue as a going concern. After auditing the 2011 resullts, Ernst & Young LLP, in Greenville, South Carolina, expressed substantial doubt about the Partnership's ability to continue as a going concern. The independent auditors noted that the Partnership continues to generate recurring operating losses. In addition, notes payable and related accrued interest totalling $16.2 million are in default due to non-payment. A copy of the Form 10-Q is available for free at: http://is.gd/KPjr9l About Real Estate Associates Real Estate Associates Limited VII is a limited partnership which was formed under the laws of the State of California on May 24, 1983. On February 1, 1984, the Partnership offered 2,600 units consisting of 5,200 limited partnership interests and warrants to purchase a maximum of 10,400 additional limited partnership interests through a public offering managed by E.F. Hutton Inc. The Partnership received $39,000,000 in subscriptions for units of limited partnership interests (at $5,000 per unit) during the period from March 7, 1984 to June 11, 1985. The Partnership will be dissolved only upon the expiration of 50 complete calendar years -- December 31, 2033 -- from the date of the formation of the Partnership or the occurrence of various other events as specified in the Partnership agreement. The principal business of the Partnership is to invest, directly or indirectly, in other limited partnerships which own or lease and operate Federal, state and local government-assisted housing projects. The general partners of the Partnership are National Partnership Investments Corp., a California Corporation, and National Partnership Investments Associates II. The business of the Partnership is conducted primarily by NAPICO, a subsidiary of Apartment Investment and Management Company, a publicly traded real estate investment trust. The Partnership holds limited partnership interests in 11 local limited partnerships as of both March 31, 2010, and December 31, 2009. The Partnership also holds a general partner interest in Real Estate Associates IV, which, in turn, holds limited partnership interests in nine additional Local Limited Partnerships; therefore, the Partnership holds interests, either directly or indirectly through REA IV, in twenty (20) Local Limited Partnerships. The general partner of REA IV is NAPICO. The Local Limited Partnerships own residential low income rental projects consisting of 1,387 apartment units at both March 31, 2010, and December 31, 2009. The mortgage loans of these projects are payable to or insured by various governmental agencies. The Partnership reported a net loss of $861,000 on $0 of revenue in 2011, compared with net income of $171,000 on $0 of revenue in 2010. REFLECT SCIENTIFIC: Incurs $213,000 Net Loss in Second Quarter -------------------------------------------------------------- Reflect Scientific, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $213,005 on $357,697 of revenue for the three months ended June 30, 2012, compared with a net loss of $390,556 on $493,830 of revenue for the same period during the prior year. The Company reported a net loss of $472,299 on $682,714 of revenue for the six months ended June 30, 2012, compared with a net loss of $582,788 on $1.08 million of revenue for the same period a year ago. The Company reported a net loss of $1.18 million in 2011, compared with a net loss of $1.77 million in 2010. The Company's balance sheet at June 30, 2012, showed $3.89 million in total assets, $4.72 million in total liabilities and a $829,982 total stockholders' deficit. The Company is currently in default on its issued and outstanding debentures. While the Company is working diligently to secure funding to enable it to retire the debenture obligations, there can be no assurance that such funding will be available. The Company has also accumulated significant operating losses. After auditing the 2011 results, Mantyla McReynolds, LLC, in Salt Lake City, Utah, 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 from operations and negative working capital. A copy of the Form 10-Q is available for free at: http://is.gd/jhM4Wj About Reflect Scientific Orem, Utah-based Reflect Scientific, Inc., is engaged in the manufacture and distribution of innovative products targeted at the life science market. Customers include hospitals and diagnostic laboratories, pharmaceutical and biotech companies, universities, government and private sector research facilities, and chemical and industrial companies. REGENCY CENTERS: Fitch Rates $75MM Preferred Stock 'BB+' -------------------------------------------------------- Fitch Ratings has assigned a credit rating of 'BB+' to the $75 million 6.00% Series 7 cumulative redeemable preferred stock issued by Regency Centers Corporation (NYSE: REG). Net proceeds from the offering are expected to be used to redeem in full $75 million of Series 5 6.70% preferred stock. Fitch currently rates Regency Centers Corporation and its operating partnership as follows: Regency Centers Corporation -- Issuer Default Rating (IDR) 'BBB'; -- Preferred Stock 'BB+'. Regency Centers, L.P. -- IDR 'BBB'; -- Unsecured revolving facility 'BBB'; -- Senior unsecured term loan 'BBB'; -- Senior unsecured notes 'BBB'. The Rating Outlook is Stable. The 'BBB' IDR takes into account leverage and fixed charge coverage metrics that have stabilized at levels appropriate for the current rating. Absent any major deleveraging initiatives, Fitch expects Regency to maintain credit metrics within a range appropriate for the 'BBB' IDR. Pro-rata leverage was 6.4x for the trailing 12 months (TTM) ended June 30, 2012. This ratio was also 6.4x at year-end 2011, down from 6.7x in 2010. Fitch measures leverage as net debt divided by recurring operating EBITDA. In addition, REG's pro-rata fixed-charge coverage ratio was 1.8x for the TTM ended June 30, 2012, down slightly from 1.9x in both 2011 and 2010. Fitch defines fixed-charge coverage as recurring operating EBITDA less straight-line rents, leasing commissions and tenant and building improvements, divided by total interest incurred and preferred stock dividends. Fitch views REG's property portfolio profile, credit statistics, debt maturities, and liquidity position based on combining its wholly-owned properties and its pro-rata share of co-investment partnerships, to analyze the company as if each of the co- investment partnerships was dissolved via distribution in kind. Several of REG's co-investment partnerships provide for unilateral dissolution. Most of these co-investment partnerships provide for a distribution in kind in the event of a dissolution, whereby REG and its limited partner unwind the partnership by distributing the underlying properties (and related property-level debt, if any) to each partner based on each partner's respective ownership percentage in the partnership. Further, the company has supported its co-investment partnerships in the past by raising common equity to repay or refinance its share of secured debt, demonstrating its willingness to de-lever these partnerships. Fitch views REG's joint venture platform positively as it provides REG with broader market insights, incremental fee and property income as well as other acquisition opportunities that REG may not consider for wholly-owned assets. Via common equity follow-on offerings, the company has also reduced leverage in its joint ventures to levels consistent with leverage on the wholly-owned consolidated portfolio. Same-store property performance showed signs of recovery in 2011 and 2012. Overall leasing spreads were only modestly negative at 0.5% over the TTM ended June 30, 2012 driven by renewal growth of 1.8% mostly offsetting a negative 7.1% roll down on new leases. Same-store occupancy increased to 94% as of June 30, 2012, up 180bps from a year earlier. Same-store NOI for the first six months of 2012 has increased by 3.7% including termination fees and 3.8% without including termination fees. Fitch expects that same-store property NOI will grow in the low single digits in 2012, 2013 and 2014. This modest growth is the result of expected improvements in renewal and new lease rates and occupancy. REG's community and neighborhood shopping center portfolio reflects moderate geographic and anchor tenant concentrations. 60% of REG's annualized base rent is derived from properties located within the states of California, Florida, Texas, and Virginia. The company's lease expiration schedule is manageable, with no year representing more than 13% of expiring pro-rata minimum base rent. Although REG's five largest tenants by annual base rents (ABR) represent in aggregate nearly 15.9% of total ABR, this tenant concentration is offset by the fact that Fitch rates some of REG's top tenants as investment grade. The company's five largest tenants are Publix Super Markets Inc. (4.4%), The Kroger Co. (4.1%, IDR of 'BBB' by Fitch with a Stable Outlook), Safeway Inc. (3.6%, IDR of 'BBB-' by Fitch with a Stable Outlook), Supervalu Inc. (2.2%, IDR of 'CCC' by Fitch), and Whole Foods (1.6%). REG has established itself as a developer with a national platform, and the company's development activities contain certain inherent risks. However, the company has de-risked its development strategy since the downturn. REG's net cost of properties in development totaled less than 6% of its gross undepreciated assets as of June 30, 2012, which is down significantly from 11% and 23% as of year-end 2009 and 2010, respectively. Net cost to complete represented 2.8% of total undepreciated assets as of June 30, 2012 and has been low over the past two and a half years. REG has a manageable debt maturity schedule, with no year accounting for more than 23% of total maturing debt. This laddering enhances the company's liquidity profile. For the period from July 1, 2012 to Dec. 31, 2014, REG's sources of liquidity (cash, availability under its unsecured revolving credit facility and projected retained cash flows from operating activities after dividends) exceed uses of liquidity (pro-rata debt maturities and amortization and projected capital expenditures and development) by 1.2x. Under a scenario whereby 80% of REG's pro-rata secured debt is refinanced with new secured debt, liquidity coverage improves to 1.4x. The company has demonstrated strong access to the common equity, unsecured and secured debt and preferred stock markets, mitigating near-term refinance risk. In addition, the company has good contingent liquidity in the form of a sizeable unencumbered asset pool. Using an 8% capitalization rate, the implied value of unencumbered assets covered net unsecured debt by 2.3x as of Dec. 31, 2011, which is adequate for the 'BBB' rating, and the company's unsecured debt covenants do not restrict REG's financial flexibility. The two notch differential between REG's IDR and its preferred stock rating is consistent with Fitch's criteria for corporate entities with a 'BBB' IDR. Based on Fitch's criteria report, 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis' dated Dec. 15, 2011, the company's cumulative redeemable preferred stock is deeply subordinated and has loss absorption elements that would likely result in poor recoveries in the event of a corporate default. The Stable Outlook is based on mildly strengthening retail fundamentals, Fitch's expectation that leverage and coverage will remain relatively unchanged or improve modestly compared with current levels and that REG will maintain adequate liquidity. The following factors may have a positive impact on REG's ratings and/or Outlook: -- Fitch's expectation of total pro-rata leverage sustaining below 5.5x for several quarters (pro-rata leverage was 6.4x as of June 30, 2012); -- Fitch's expectation of fixed-charge coverage sustaining above 2.3x for several quarters (pro-rata coverage was 1.8x for the year ended June 30, 2012). The following factors may have a negative impact on REG's ratings and/or Outlook: -- Fitch's expectation of leverage sustaining above 7.0x for several quarters; -- Fitch's expectation of fixed-charge coverage sustaining below 1.8x for several quarters; -- A liquidity shortfall (REG had a base case liquidity coverage ratio of 1.2x as of June 30, 2012). RESIDENTIAL CAPITAL: Examiner Wants to Issue Subpoenas ------------------------------------------------------ Arthur J. Gonzalez, the Court-appointed Examiner, seeks authority from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to issue subpoenas for the production of documents and the examination of persons and entitled determined to have information relevant to the issues the Court has, and may, direct the Examiner to investigate. The Examiner also seeks Court's authority to establish procedures governing responses to those subpoenas; to establish a central document depository and procedures to govern its use. The Examiner also asks the Court to issue a uniform protective order for Examiner discovery. The Examiner says in court papers that the Document Depository has been requested by both the Debtors and the Official Committee of Unsecured Creditors. The Depository, the Examiner notes, will facilitate sharing of evidence relevant to the investigation in a cost- and time-efficient manner, expediting the investigation itself as well as potential discovery activity that may be relevant to future proceedings in the Chapter 11 cases. Under the proposed procedures, witnesses are required to produce documents, on a rolling basis, within 10 days of service of the Examiner's subpoena, or file objections to the subpoenas. If a witness withholds any documents based on a claim of privilege, the witness must provide the Examiner with a privilege log containing the information required under Rule 7026 of the Federal Rules of Bankruptcy Procedure within 10 days of the service of a subpoena. Cerberus Objects Cerberus Capital Management, L.P., tells the Court that it does not dispute the Examiner's need for access to an array of information from various parties -- including certain categories of information that may be highly sensitive, non-public and/or proprietary -- in order to conduct his Investigation. Nor does Cerberus object generally to the establishment of a document depository, or to the entry of a uniform protective order. Cerberus relates that it has previously advised the Examiner's counsel that certain provisions in the Examiner's Proposed Orders will likely lead to parties being less willing to voluntarily cooperate with the Investigation, and otherwise trigger an avalanche of time-consuming and costly litigation, as they do not (a) adequately protect large swaths of confidential information likely to be produced in connection with the Investigation, (b) appropriately tailor the proposed list of parties that will be given access to the document depository, or (c) meaningfully restrict the use of the information sought to be produced. Accordingly, Cerberus objects, on a limited basis, to the Examiner's Proposed Orders and suggests certain revisions thereto, in order to further the Examiner's stated goals of promoting voluntary cooperation with the Investigation and reasonably enhancing time and cost efficiencies in the Chapter 11 Cases. Residential Capital, LLC, which is the parent company of each of the other debtors, is a subsidiary of Ally Financial Inc., formerly known as GMAC LLC. Since late 2008 and the Troubled Asset Relief Program, Ally has been owned by the U.S. Department of the Treasury; affiliates of Cerberus Capital Management, L.P.; affiliates of General Motors Company; and other investors. Prior to that time, Ally was owned 51 % by a consortium of investors led by Cerberus and 49% by General Motors Corporation. 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: Wants Until Dec. 10 to Remove Actions ---------------------------------------------------------- Residential Capital LLC and its affiliates ask the Court for an order, pursuant to 28 U.S.C. Sec. 1452 and Fed.R.Bankr.P. 9006(b) and 9027, granting a 120-day extension of the 90-day time period promulgated by Bankruptcy Rule 9027(a)(2)(A), within which the Debtors are permitted to file notices of removal of civil actions to the later of (a) Dec. 10, 2012, or (b) should the Court enter an order terminating the automatic stay as to a particular Civil Action, for that Civil Action, 30 days after the entry of the order terminating the automatic stay, without prejudice to the Debtors to seek further extensions. The Debtors tell the Court that they had little time to analyze the merits of the civil actions and the desirability of removing them to the appropriate bankruptcy court. The Debtors are continuing to review their files and records and analyze relevant court documents to determine whether their estates would benefit from the removal of any of the civil actions. Extending the Debtors' period to file notices of removal will provide them with adequate time to conduct the review and to evaluate the pending litigation matters within the larger context of the Chapter 11 cases. 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: Proposes Sale Protocol for De Minimis Assets ----------------------------------------------------------------- Residential Capital LLC and its affiliates are charged with winding down the Chapter 11 cases to maximize the value of the estates' assets for the benefit of creditors. As part of that duty, the Debtors must sell their remaining assets, some of which will constitute de minimis asset sales, to generate the maximum recovery. The Debtors seek the Court's authority to sell the de minimis assets free and clear of all liens, claims, interests, and encumbrances. The Debtors also seek to sell the de minimis assets pursuant to certain procedures to alleviate the cost and delay of having to file a separate motion with respect to each proposed sale of de minimis assets. The proposed De Minimis Sale Procedures will apply only to asset sales in any individual transaction or series of related transactions to a single buyer or group of related buyers involving, in each case, an aggregate selling price of $15 million or less, as measured by the amount of cash and other consideration the Debtors are to receive in respect of the sale of those assets. For assets sold in any individual transaction or series of related transactions to a single buyer or group of related buyers for total consideration of less than or equal to $2.5 million, the Debtors will file a notice of the sale with the Court and notice parties, which include the U.S. Trustee, the Official Committee of Unsecured Creditors, Ally Financial, Inc., Barclays Bank, PLC, the Ad Hoc Group of Junior Secured Noteholders, the Ad Hoc Group of Junior Secured Noteholders, U.S. Bank, N.A., as Trustee for the Junior Secured Notes, and any other known parties holding or asserting liens, claims, interests and encumbrances on the assets that are the subject of the proposed Limited Noticed De Minimis Sale and, if known, their respective counsel. For assets sold any individual transaction or series of related transactions to a single buyer or group of related buyers for total consideration of more than $2.5 million but less than $15 million, the Debtors will file a notice of the sale with the Court and the notice parties. For these de minimis asset sales, interested parties will have (i) five business days from service of the Sale Notice to file and serve any objections to a Limited Notice De Minimis Sale and (ii) 10 business days from service of the Sale Notice to file and serve any objections to a Noticed De Minimis Sale. The Debtors tell the Court that they will not consummate any De Minimis Sales pursuant to the De Minimis Sale Procedures to AFI or its affiliates. The Debtors also seek Court authority to pay reasonable commissions and fees to third-party sales agents in connection with the de minimis asset sales. 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: Examiner Proposes Mesirow as Advisor --------------------------------------------------------- Arthur Gonzalez, the court-appointed examiner, seeks the Court's authority to hire Mesirow Financial Consulting LLC. Mesirow Financial will provide financial advisory services and will assist the Examiner in conducting an investigation into the transactions entered into by Residential Capital LLC prior to its bankruptcy filing. Mr. Gonzalez previously obtained approval to investigate all pre- bankruptcy transactions among Residential Capital, Ally Financial Inc. and its affiliates. He will also investigate the companies' corporate relationships in connection with Residential Capital's decisions to file for bankruptcy protection and pursue a sale of its assets. Mesirow Financial will be paid on an hourly basis for its services and will be reimbursed of its expenses. The firm's hourly rates are: Professionals Hourly Rates ------------- ------------ CEO/Sr. Managing Director/ $855-$895 Managing Director/Director Senior Vice-President $695-$755 Vice-President $595-$655 Senior Associate $495-$555 Associate $315-$425 Paraprofessional $160-$250 Mesirow Financial does not hold or represent interest adverse to the estates of Mesirow Financial and its affiliated debtors, according to a declaration by Ralph Tuliano, the firm's chief executive. A court hearing to consider the firm's employment is scheduled for August 29. Objections are due by August 22. 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: Examiner Wins OK for Chadbourne as Counsel --------------------------------------------------------------- Arthur Gonzalez, the court-appointed examiner, obtained court approval to employ Chadbourne & Parke LLP as his counsel. The firm will be paid at these hourly rates: partner at $675 to 995, counsel at $625 to $845, associate at $395 to $665 and paraprofessional at $205 to $320. Howard Seife, Esq., a member of Chadbourne & Parke LLP, in New York, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. 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). RIVER OASIS: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: River Oasis, Inc. dba Riverside Oasis Partners, LLC P.O. Box 982 Apalachicola, FL 32320 Franklin - FL Bankruptcy Case No.: 12-40551 Chapter 11 Petition Date: August 14, 2012 Court: United States Bankruptcy Court Northern District of Florida (Tallahassee) Debtor's Counsel: Thomas B. Woodward, Esq. P.O. Box 10058 Tallahassee, FL 32302 Tel: (850) 222-4818 Fax: (850) 561-3456 E-mail: woodylaw@embarqmail.com Scheduled Assets: $626,972 Scheduled Liabilities: $817,385 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flnb12-40551.pdf The petition was signed by D. Stan Ward, president. RITZ CAMERA: Sept. 6 Auction for Non-Core IP Assets --------------------------------------------------- Ritz Interactive and its parent Ritz Camera & Image, LLC's non- core IP Assets are being offered in connection with a sale process under Section 363 of the Bankruptcy Code. The IP Assets Available in This Sale Include: * Registered US Trademarks including well-known brands such as Boater's World Marine Centers (R), Boatersworld.com (R), Captain's Club (R), and Against the Elements (R) * More than 40 domain names including http://www.boatersworld.com, http://www.eangler.com,and http://www.ceilingfansonly.com * Over 250,000 opt-in customer names and email addresses On July 30, 2012 the Bankruptcy Court approved Bidding Procedures, which provide the following timeline: Bid Deadline: Aug. 28, 2012, 4:00 p.m. (EST) Auction Date: Sep. 6, 2012, 10:00 a.m. (EST) Sale Hearing: Sep. 10, 2012, 11:00 a.m. (EST) Interested bidders should contact Hilco Streambank at 781-444-4940 for more information. 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: Carve-Out in DIP Agreement Increased ------------------------------------------------- Ritz Camera & Image, L.L.C., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to amend the: -- senior secured superpriority debtor-in-possession credit agreement; and -- guaranty and security agreement with Crystal Financial LLC, as agent for lenders. Among other things, the DIP credit agreement will be modified by amending the definition of "carve out" by: a) deleting the amount of "$25,000" in subsection (iii) thereof and replacing it with "$50,000" in lieu thereof; and b) deleting the amount of $700,000 in subsection (iii) thereof and replacing it with "$800,000" in lieu thereof. A copy of the amendment is available for free at: http://bankrupt.com/misc/RITZ_creditagreement_amendment.pdf As reported in the Troubled Company Reporter on July 19, 2012, the Delaware bankruptcy judge gave final approval Tuesday to the Debtor's $20 million debtor-in-possession financing after the bankrupt retailer and its creditors amended the agreement to better preserve the administrative solvency of the estate while it seeks a buyer. 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: Winthrop Couchot Approved as California Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized Ritz Camera & Image, L.L.C., et al., to employ Winthrop Couchot professional Corporation as California counsel for debtor- affiliate Ritz Interactive LLC, nunc pro tunc July 9, 2012. On Feb. 14, 2012, the Court confirmed RII's plan of reorganization which became effective on Feb. 21, 2012. As part of the RII Plan, RII ceased to exist to RI was formed as a Delaware limited liability company and became a wholly-owned subsidiary of Ritz Camera & Image, L.L.C., which is RI's sole member. Winthrop's proposed engagement by RI does not involve the representation of the Debtors in conducting their Chapter 11 cases before the Delaware Court. To the best of the Debtor's knowledge, Winthrop does not hold or represent any interest adverse to the Debtor or their estate. 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. This concludes the Troubled Company Reporter's coverage of _____ until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. SCIENTIFIC GAMES: Moody's Affirms Ba3 CFR; Rates Sub. Notes B1 -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Scientific Games International's proposed $250 million senior subordinated notes due 2020. The Ba3 Corporate Family and Probability of Default ratings of SGI's parent company, Scientific Games Corporation (SGC) were affirmed. At the same time, Moody's revised SGC's rating outlook to negative from stable. Proceeds from the proposed note offering will be used to redeem all existing $200 million 7.875% senior subordinated notes due 2016, pay related redemption premiums, transaction fees and expenses and for general corporate purposes. The assigned rating is subject to Moody's review of final terms and conditions of the notes offering. "The change of outlook to negative reflects the slower-than- expected pace of deleveraging for SGC to maintain its current Ba3 rating," explained Moody's lead analyst, John Zhao. "We believe SGC's ability to grow earnings in the second half of 2012 and beyond has become less certain given the economic challenges in Europe, particularly from Italy and the U.K. -- both countries are in recession -- and are among the company's most important markets in terms of EBITDA contribution," added Zhao. Moody's believes that because of the recent earnings weakness, SGC may not be able to sustainably reduce adjusted debt to EBITDA to below 5.5 times on a Moody's adjusted basis (includes the cash distribution from joint ventures and earnings from acquisitions) - - the leverage target required for SGC to maintain its Ba3 Corporate Family Rating. Pro forma for the proposed note offering, SGC's debt/EBITDA is 5.8 times compared to 5.6 times for the latest 12-month period ended June 30, 2012. Ratings could be downgraded if the negative earnings pressure persists so that the company is not able to reduce its debt/EBITDA materially below 5.5x in the next 6-12 months. To stabilize the rating, SGC would need to show renewed momentum and steady earnings improvement on a consolidated basis, demonstrate the success of its cost savings initiatives by improving profitability, and maintain leverage well below 5.5x. While unlikely given its negative rating outlook, ratings improvement is possible if the company demonstrates it can achieve and sustain debt to EBITDA at or below 3.5 times. New rating assigned: $250-mil. senior subordinated notes due 2020 at B1 (LGD5, 74%) Ratings affirmed and LGD point of estimate adjusted: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3 $250 million senior secured revolver expiring 2015 at Ba1 (LGD 2, 19%) $563 million senior secured term loan due 2015 at Ba1 (LGD 2, 19%) $250 million 8.125% senior subordinated notes due 2018 at B1 (to LGD 5, 74% from LGD 5, 73%) $200 million 7.875% senior subordinated notes due 2016 at B1 (to LGD 5, 74% from LGD 5, 73%) $350 million 9.25% senior subordinated notes due 2019 at B1 (to LGD 5, 74% from LGD 5, 73%) Rating Rationale SGC's Ba3 Corporate Family Rating reflects the recurring nature of the company's contract-based earnings and cash flow and its substantial presence in the instant ticket segment of the lottery industry. SGC supplies instant lottery tickets to 41 of the 44 U.S. jurisdictions that sell instant lottery tickets. Positive consideration is also given to Moody's expectation that SGC will continue to extend or renew most of its lottery contracts as they come up for renewal, and the company's good long term international growth prospects. Key concerns include Moody's view that the anemic macro-economic environment may curtail spending on discretionary purchases such as lottery tickets, on-going capital investment requirements, and that pricing on new contracts, re- bids and extensions may decline due to competitive pressure. Additionally Moody's expects the company's relatively high debt levels will not decrease meaningfully absent solid earnings growth in the near term due to capital and investment spending. The principal methodology used in rating Scientific Games Corporation was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Scientific Games Corporation is an integrated supplier of instant tickets, systems, and services to lotteries worldwide. The company also supplies server based gaming terminals and systems, interactive betting terminals and systems, and wagering systems and services to licensed bookmakers. The company generates about $926 million of annual revenues. SCIENTIFIC GAMES: S&P Rates New $250MM Sr. Subordinated Notes BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Scientific Games International Inc.'s proposed $250 million senior subordinated notes due 2020. "The notes were rated 'BB-' (one notch lower than the 'BB' corporate credit rating on parent company Scientific Games Corp.) with a recovery rating of '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default. Proceeds from the notes offering will be used to redeem or repurchase the $200 million 7.875% senior subordinated notes (including accrued interest and the applicable redemption premium), and for general corporate purposes," S&P said. "All existing ratings, including the 'BB' corporate credit rating on Scientific Games Corp., are unchanged. The rating outlook is stable," S&P said. "Our 'BB' corporate credit rating on Scientific Games reflects our assessment of the company's financial risk profile as 'aggressive' and its business risk profile as 'fair,' according to our criteria," S&P said. "Our assessment of its financial risk profile as aggressive reflects our expectation that our measure of leverage will remain below 5x over the intermediate term," explained Standard & Poor's credit analyst Melissa Long. "It also reflects the company's substantial acquisition activity and investments through joint ventures, its 'adequate' liquidity profile, and our expectation for interest coverage to track around 3x over the near term." "Our rating outlook on Scientific Games is stable, reflecting our expectation that credit measures will remain at a level we believe is in line with the current rating. Furthermore, we expect the company will continue to gradually improve its leverage profile over the next two years. This should allow Scientific Games to build in some cushion relative to our 5x maximum leverage threshold, which would provide it flexibility to make additional strategic investments without meaningfully impairing its financial risk profile. For 2012, we have factored into our rating a mid- single-digit revenue and EBITDA increase. Under our performance expectations, we expect leverage to be in the high-4x area at the end of 2012 and EBITDA coverage of interest around 3x," S&P said. "We could lower our rating if the company does not demonstrate organic growth in its existing businesses or if the company embarks on larger-than-expected investments for acquisitions or other strategic growth opportunities, such that we no longer believe the company has the ability to maintain leverage below 5x. A higher rating is unlikely over the next two years, given our expectation that Scientific Games will pursue investment opportunities and that leverage will remain in the mid- to high-4x area, on average," S&P said. SEJWAD HOTELS: Disclosure Statement Hearing Scheduled for Oct. 18 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California rescheduled to Oct. 18, 2012, at 10:00 a.m. the hearing to consider approval of the disclosure statement explaining the bankruptcy liquidation plan of Sejwad Hotels & Development, LLC. The Debtor seeks to accomplish payment under the Plan by either a sale or a refinancing of debt against its real estate property. The Effective Date of the proposed Plan is Dec. 31, 2012. The Debtor -- under the direction of its current president, James R. Cunningham -- will act as disbursing agent for the purpose of making all distributions provided for under the Plan. The classification and treatment of claims against and interests in the Debtor under the plan are: A. Unclassified claims, including administrative expenses and priority tax claims, will be paid in full on the effective date or on the confirmation date. Administrative expense claims total $20,100 and priority tax claims total $2,515, is expected to recover 100%. B. Class 1 (Secured Claim of Evertrust Bank) will be paid in full, with interest at the non-default rate, upon the sale or refinancing of the Property. On or before the Effective Date of the Plan, the Debtor will pay Evertrust Bank in full on account of the Allowed Secured Claim of Evertrust Bank. The amount of secured claim of Evertrust Bank is $7,978,750. C. Class 2 (Secured Claim of the LA County Tax Collector) will be paid in full, with interest at the rate of 18% per annum, upon the sale of the Property. The amount of secured claim of the LA County Tax Collector is $134,728.92. D. Class 3 (General Unsecured Claim) will be paid in full, within 30 days of the closing on the sale or refinancing of the Property. The amount of Class 3 general unsecured claims total $494,195.30. E. Class 4 (Interest Holders) will retain their interests in the Debtor. The Disclosure Statement hearing was originally scheduled for July 26. A full text copy of the disclosure statement is available for free at http://bankrupt.com/misc/SEJWAD_HOTELS_ds.pdf Artesia, California-based Sejwad Hotels & Development LLC, owner of a retail center in Artesia Boulevard, sought Chapter 11 protection (Bankr. C. Calif. Case No. 12-14521) on Feb. 8, 2012, one day before a scheduled foreclosure sale. The Debtor's prior tenants included Hollywood Video and Borders book store, both of which have filed bankruptcy. The property is vacant. The Debtor was in the process of redeveloping the property into a hotel/retail property, but the redevelopment has been delayed. The Debtor defaulted on its loan to Evertrust Bank, which sought foreclosure. The Chapter 11 petition was signed by Ashvin Patel, managing member. Judge Julia W. Brand presides over the case. The Law Offices of Michael G. Spector serves as the Debtor's counsel. In its schedules, the Debtor disclosed $13,001,015 in total assets and $8,728,483 in total liabilities. No Creditor's Committee has been appointed. SELECT TREE: Exclusive Plan Filing Period Extended to Nov. 2 ------------------------------------------------------------ The Hon. Carl L. Bucki of the Bankruptcy Court for the Western District of New York extended for an additional 120 days, or until Nov. 2, 2012, the period within which Select Tree Farms, Inc., exclusively may file a Chapter 11 disclosure statement and plan of reorganization. The exclusive period within which the Debtors alone might solicit acceptances of such plan is also extended until Jan. 1, 2013. About Select Tree Farms Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms scheduled $11,450,989 in assets and $5,959,983 in liabilities. The petition was signed by George A. Schichtel, president. The Debtor's owner, George A. Schichtel and Debra G. Schichtel, filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y. Case No. 12-10670). Judge Carl L. Bucki presides over the case. Beth Ann Bivona, Esq., at Damon Morey LLP, serves as the Debtors' counsel. SIMON WORLDWIDE: Incurs $378,000 Net Loss in Second Quarter ----------------------------------------------------------- Simon Worldwide, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $378,000 on $0 of revenue for the three months ended June 30, 2012, compared with a net loss of $411,000 on $0 of revenue for the same period a year ago. The Company reported a net loss of $842,000 on $0 of revenue for the six months ended June 30, 2012, compared with a net loss of $901,000 on $0 of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $8.37 million in total assets, $98,000 in total liabilities, all current, and $8.27 million in total stockholders' equity. With no revenues from operations, the Company closely monitors and controls its expenditure within a reasonably predictable range. Cash used by operating activities was $1.9 million and $2.3 million in the years ended Dec. 31, 2011, and 2010, respectively. Cash used by operating activities was $.8 million for the six months ended June 30, 2012, and 2011. The Company incurred losses within its continuing operations in 2011 and continues to incur losses in 2012 for the general and administrative expenses incurred to manage the affairs of the Company. By utilizing cash available at June 30, 2012, to maintain its scaled back operations, management believes it has sufficient capital resources and liquidity to operate the Company for at least one year. A copy of the Form 10-Q is available for free at: http://is.gd/ouP9JJ About Simon Worldwide Based in Los Angeles, Simon Worldwide, Inc. (OTC: SWWI) no longer has any operating business. Prior to August 2001, the Company operated as a multi-national full-service promotional marketing company, specializing in the design and development of high-impact promotional products and sales promotions. At Dec. 31, 2009, the Company held an investment in Yucaipa AEC Associates, LLC, a limited liability company that is controlled by the Yucaipa Companies, a Los Angeles, California based investment firm. Yucaipa AEC in turn principally held an investment in the common stock of Source Interlink Companies, a direct-to-retail magazine distribution and fulfillment company in North America, and a provider of magazine information and front-end management services for retailers and a publisher of approximately 75 magazine titles. Yucaipa AEC held this investment in Source until April 28, 2009, when Source filed a pre-packaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. SP NEWSPRINT: Administrative Expense Claims Due Aug. 20 ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware established Aug. 20, 2012, at 5 p.m. (EDT), as the deadline for each person or entity to assert an administrative expense claim against SP Newsprint Holdings LLC, et al., for the period of Nov. 15, 2011, until July 31, 2012. Any holder of an administrative expense claim against any of the Debtors must file a request for payment of administrative expense claim, so that it is actually received on or before the applicable administrative claims bar date at these addresses: if by mail: GCG, Inc. Attn: SP Newsprint Holdings LLC Claims Processing P.O. Box 9840 Dublin, OH 43017-5740 if by hand delivery or overnight courier: GCG, Inc. Attn: SP Newsprint Holdings LLC Claims Processing 5151 Blazer Parkway, Suite A Dublin, OH 43017 About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $318 million in assets and $323 million in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Debtor won court approval to hold an Aug. 17 auction to sell virtually all its assets. The Debtor's lenders will act as the so-called stalking horse for the auction setting a floor for other bidders to beat. The lenders will make a credit bid, using forgiveness of its secured debt to buy the assets. General Electric Capital Corp., as both agent to lenders and a lender itself, is owed about $254 million. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. SWIFT AIR: Parting Ways With Pro Hockey Team -------------------------------------------- Duane Marsteller at The Tennessean reports a spokeswoman said the Nashville Predators hockey team is "exploring alternate travel options" in case Swift Air LLC is unable to fly players, coaches and equipment to and from away National Hockey League games starting this fall. "The status of [Swift Air's] ability to perform under the contract . . . is of dire concern," the report quotes the Predators as saying in a court filing last month. "It is critical to know well in advance of the first preseason games whether [Swift Air] will provide reliable transportation for the Predators." The report notes Swift Air has signaled in court papers that it wants out of its Predators contract. Instead, the company said it wants to keep contracts with six other teams: the Boston Bruins, Buffalo Sabres, Chicago Blackhawks and St. Louis Blues, all NHL clubs; and the Boston Celtics and Milwaukee Bucks of the NBA. The report adds a federal bankruptcy judge in Phoenix said he will decide after a hearing Aug. 7 which contracts Swift Air will keep. Swift Air, LLC, filed a Chapter 11 petition in its home-town in Phoenix (Bankr. D. Ariz. Case No. 12-14362) on June 27, 2012. Michael W. Carmel, Ltd., serves as counsel. The Debtor estimated assets of under $1 million and debts exceeding $10 million. SWIFT AIR: Executives Face $50-Mil. Fraud Lawsuit ------------------------------------------------- Duane Marsteller at The Tennessean reports an airline has filed a $50 million civil lawsuit accusing four Swift Air LLC executives of fraud. Swift Air LLC filed a Chapter 11 petition in its home-town in Phoenix (Bankr. D. Ariz. Case No. 12-14362) on June 27, 2012. Michael W. Carmel, Ltd., serves as counsel. The Debtor estimated assets of under $1 million and debts exceeding $10 million. T SORRENTO: Court Denies Plan Exclusivity Extension --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has denied T Sorrento, Inc.'s request to extend the exclusive period for the Debtor to file a plan of reorganization and to solicit acceptances of that plan. The Court ruled that the Debtor failed to meet its burden of proof. The Debtor filed for a Chapter 11 petition (Bankr. D. Nev. Case No. 12-13907) in Las Vegas on April 2, 2012. RMR Investments, Inc., asked the Nevada Bankruptcy Court to transfer the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. The case was thereafter transferred to the Northern District of Texas by a June 27, 2012 court order. The Debtor said that it did not receive a notice of case transfer to this Court with a Northern District of Texas case number until July 17, 2012, which is the same day the Debtor believes the Nevada Bankruptcy Case was first docketed with this Court. The Debtor had previously employed local general counsel in Nevada in the Nevada Bankruptcy Case. "Now that the case has been transferred, the Debtor has hired new counsel in the transferred Dallas case," the Debtor stated in a court filing dated July 25. The Debtor said that new counsel has yet to be employed in this case and that it is currently reviewing the background and specifics of the case. According to the Debtor, the exclusivity was set to expire on Aug. 2, 2012, which the Debtor wanted to extend by 30 days. The Debtor said that it conferred with the only active party in the case to date, the Debtor's largest secured creditor, and that the parties were discussing an agreement to extend exclusivity. On July 27, 2012, RMR Investments, Inc., objected to the Debtor's request for extension, saying that the case involves two tracts of unimproved property which generate no income. RMR claimed that the Debtor has no employees and no income from rents or operations, and that it is unlikely that the plan will offer anything other than a sale or refinance of the properties, either of which could have been accomplished prior to filing the Chapter 11 petition. "This case is no stranger to this Court. The properties involved here are the same properties involved in the Fenton cases previously administered by this Court," RMR stated. RMR is represented by: Cox Smith Matthews Incorporated Mark E. Andrews 1201 Elm Street, Suite 3300 Dallas, Texas 75270 Tel: (214) 698-7800 E-mail: mandrews@coxsmith.com About T Sorrento Clark, Nevada-based T Sorrento, Inc., is a wholly-owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. It disclosed assets of $17.4 million and debts of $5.4 million in its schedules. It said it owns almost 60 acres of properties in Farmers Branch, Texas. Zachariah Larson, Esq., at Marquis Aurbach Coffing, serves as the Debtor's bankruptcy counsel. T SORRENTO: Taps Quilling Selander as General Counsel ----------------------------------------------------- T Sorrento, Inc., seeks permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Quilling, Selander, Lownds, Winslett & Moser, P.C., as general counsel. Quilling Selander will, among other things, furnish legal advice to the Debtor with regard to its powers, duties and responsibilities as a debtor-in-possession and the continued management of its affairs and assets under Chapter 11 at these hourly rates: Hudson M. Jobe $290 Shareholders $275-$400 Associates $150-$275 Paralegals $50-$105 To the best of the Debtor's knowledge, Quilling Selander is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About T Sorrento Clark, Nevada-based T Sorrento, Inc., is a wholly-owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. It filed for a Chapter 11 petition (Bankr. D. Nev. Case No. 12- 13907) in Las Vegas on April 2, 2012. RMR Investments, Inc., asked the Nevada Bankruptcy Court to transfer the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. The case was thereafter transferred to the Northern District of Texas by a June 27, 2012 court order. T Sorrento disclosed assets of $17.4 million and debts of $5.4 million in its schedules. It said it owns almost 60 acres of properties in Farmers Branch, Texas. T SORRENTO: Section 341(a) Meeting Continued Until Aug. 20 ---------------------------------------------------------- The U.S. Trustee for Region 17 has continued until Aug. 22, 2012, at 9:15 a.m., the meeting of creditors in the Chapter 11 case of T Sorrento, Inc. The meeting will be held at the Office of the U.S. Trustee, 1100 Commerce St., Rm. 976, Dallas, Texas. About T Sorrento Clark, Nevada-based T Sorrento, Inc., filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-13907) in Las Vegas on April 2, 2012. T Sorrento disclosed assets of $17.4 million and debts of $5.4 million in its schedules. The Debtor said it owns almost 60 acres of properties in Farmers Branch, Texas. The Debtor is a wholly-owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. The Debtor disclosed $17,442,754 in assets and $5,446,491 in liabilities. Zachariah Larson, Esq., at Marquis Aurbach Coffing, serves as the Debtor's bankruptcy counsel. Judge Bruce A. Markell presides over the case. RMR Investments, Inc., has asked the Nevada Bankruptcy Court to transfer the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. RMR is represented by Mark E. Andrews, Esq., at Cox Smith Matthews Incorporated; and James Patrick Shea, Esq., at Shea & Carlyon, Ltd. TALON THERAPEUTICS: Incurs $60.7 Million Net Loss in 2nd Quarter ---------------------------------------------------------------- Talon Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $60.79 million for the three months ended June 30, 2012, compared with a net loss of $6.05 million for the same period a year ago. The Company reported a net loss of $91.28 million for the six months ended June 30, 2012, compared with a net loss of $16.46 million for the same period during the prior year. The Company does not expect to generate any significant revenue from product sales or royalties in 2012. The Company anticipates revenues beyond 2012 provided the Company is able to develop and commercialize its products, license its technology or enter into strategic partnerships. If the Company is unsuccessful, its ability to generate future revenues will be significantly diminished. The Company's balance sheet at June 30, 2012, showed $4.26 million in total assets, $118.51 million in total liabilities, $35.33 million in redeemable convertible preferred stock, and a $149.58 million total stockholders' deficit. As of June 30, 2012, the Company had cash and cash equivalents of $3.0 million. Cash used in operations was $3.8 million for the three months ended June 30, 2012. "The FDA's decision to approve our NDA seeking accelerated approval of Marqibo(R) (vinCRIStine sulfate LIPOSOME injection) is a seminal event for Talon," stated Steven R. Deitcher, President, chief executive officer and Board Member of Talon Therapeutics. "Our focus now turns to making Marqibo(R) available to patients in the United States. We are operating on parallel commercialization paths, including planning activities to launch Marqibo(R) ourselves, as well as consideration of strategic partnerships." A copy of the Form 10-Q is available for free at: http://is.gd/25GInN About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TALON THERAPEUTICS: Reports $671,000 Net Income in 2nd Quarter -------------------------------------------------------------- Talon Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $671,134 on $13.17 million of net sales for the three months ended June 30, 2012, compared with net income of $656,325 on $12.75 million of net sales for the same period a year ago. The Company reported net income of $465,504 on $21.92 million of net sales for the six months ended June 30, 2012, compared with net income of $255,397 on $21.98 million of net sales for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $18.38 million in total assets, $10.89 million in total liabilities, $22.22 million in series B convertible preferred stock, and $14.73 million in total stockholders' equity. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that 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/qDXfsN About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. TAVERN ON THE GREEN: Emerald Wins 20-Year License to Operate ------------------------------------------------------------ Lisa Fickenscher, writing for Crain's New York Business reports that Emerald Green Group beat out several New York City operators for the 20-year license to operate Tavern on the Green. According to Crain's, the city said Emerald Green Group also has signed a letter of agreement with the New York Hotel and Motel Trades Council, the union that represents the workers at the Central Park eatery. According to Crain's, other operators who had submitted proposals to the city included City Winery and Great Performances, which presented a plan to run Tavern on the Green as partners. Other bidders included Legends Hospitality Management, a catering venture that focuses on sports arenas, and Park Street Ventures, a New Jersey-based partnership that tapped the former chief operating officer of Tavern on the Green, Michael Desiderio. Crain's notes Emerald Green Group was established in 1998 when Jim Caiola and David Salama opened Beau Monde. In 2003, the couple launched L'Etage, a bar and lounge above the restaurant. A former actor, born in Michigan, Mr. Caiola is also an award winning filmmaker while Mr. Salama, who is from Bolivia, studied art and his work has been commissioned by the city of Philadelphia. The pair is raising two children together. Crain's says the partners have already hired a New York City restaurant public relations firm, The Hall Company. About Tavern on the Green Tavern on the Green LP was the operator of the 75-year-old restaurant in New York's Central Park. Tavern on the Green was founded in 1934 by New York Parks Commissioner Robert Moses and the license was bought by restaurateur Warner LeRoy in 1974. The Company filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-15450) on Sept. 9, 2009, estimating up to $50 million each in assets and debts. The restaurant closed New Year's Eve 2010. New York City -- the Tavern's landlord -- and the Debtor both claimed ownership of the "Tavern on the Green" trademark. In March 2010, the city of New York City won the right to the trade name. Following the trademark ruling, the bankruptcy judge converted the case to Chapter 7. Jil Mazer-Marino of Meyer Suozzi English & Klein PC, appointed Chapter 7 trustee, appealed the ruling. The parties put the appeal on ice while they negotiated settlement. In April 2011, a settlement was announced between the city of New York and the Chapter 7 Trustee for Tavern on the Green Limited Partnership LP and LeRoy Adventures, Inc. concerning the ownership of the trademark "Tavern on the Green." Under the settlement, the City will own the Tavern on the Green trademark registration for restaurant and bar services and will have the exclusive use of the name Tavern on the Green for restaurant services in New York City, including the world renowned location in Central Park. The deal authorizes the Chapter 7 Trustee to sell the estates' use rights to a third party, allowing the buyer to use the Tavern on the Green name and current logo for restaurants located outside of New York, New Jersey, Connecticut and a portion of Pennsylvania. The settlement also allows the buyer to use the name Tavern on the Green for branding of a wide variety of products including packaged foods, home furnishing and accessories. The settlement agreement allows the estates' successor to operate without payment of royalties to the City of New York. The Chapter 7 Trustee hired Streambank LLC as agent. A portion of the proceeds from the Chapter 7 Trustee's sale of the use rights -- 25% of net proceeds -- will be distributed to the City. Bankruptcy Judge Allan Gropper presides over the Chapter 11 case. TAYLOR MORRISON: Moody's Rates New US$100MM Add-On Notes 'B2' ------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Taylor Morrison's proposed $100 million add-on 7.75% senior unsecured notes due 2020, proceeds of which will be used for growth capital and general corporate purposes including land acquisition and development. At the same time, Moody's affirmed all other ratings of Taylor Morrison Communities, Inc. (a U.S. issuer) and of its Canadian co-issuer, Monarch Communities Inc. (collectively, "Taylor Morrison"), including its B1 corporate family rating, B1 probability of default rating, and B2 rating on the existing $550 million 7.75% senior unsecured notes due 2020. The rating outlook remains stable. The following rating actions were taken: Proposed $100 million 7.75% senior unsecured notes due 2020, assigned a B2, (LGD5, 73%); Corporate family rating, affirmed at B1; Probability of default rating, affirmed at B1; $550 million senior unsecured notes due 2020, affirmed at B2, (LGD5, 73%); The rating outlook is stable. Ratings Rationale The B1 corporate family rating reflects the company's track record of profitability and solid gross margin performance, moderate adjusted homebuilding debt leverage, geographic diversity including a strong presence in Canada, and a land position that appears to be realistically valued. At the same time, the rating incorporates the company's limited time as an independent, stand- alone entity, the absence of a permanent chief financial officer, the negative cash flow from operations that Moody's is projecting for at least the next two years, the lumpiness in the company's projected revenues and earnings from its high-rise exposure in Toronto, the long land position, and the still-uncertain U.S. economy together with a housing market attempting to build on its recent gains. The stable rating outlook reflects Moody's expectation that the company will continue being profitable on a net income basis, generate solid gross margins, and gradually reduce its adjusted homebuilding debt to capitalization as the U.S. market continues to improve while the Canadian market remains healthy. The outlook also assumes that the company will maintain adequate liquidity and prudently manage its land spend. Moody's notes that concurrently with this add-on note offering, the company is also amending and increasing its senior secured revolving credit facility due 2016 to $125 million from $75 million in order to enhance its liquidity position. The unsecured notes are notched below the corporate family rating because of the sizable proportion of secured debt and debt-like obligations in the capital structure. The notes are guaranteed on a senior unsecured basis by Taylor Morrison Holdings, Inc. and by TMM Holdings Limited Partnership, which are direct and indirect parents of Taylor Morrison Communities, Inc. and of Monarch Communities Inc. In addition, the notes are guaranteed by certain existing and future U.S. operating subsidiaries of Taylor Morrison Communities, Inc. The operating subsidiaries of Monarch Communities Inc. are organized under Canadian law and will not guarantee the notes. The company's liquidity is supported by its adequate pro forma unrestricted cash balance of approximately $475 million at June 30, 2012, the availability under its amended and increased $125 million secured revolving credit facility, and an extended debt maturity schedule. The expected negative cash flow generation as the company pursues land investments and the need to maintain compliance with financial covenants in the credit agreement, however, constrain its overall liquidity. The ratings could be considered for an upgrade if the company improves its scale and geographic diversity, expands its profitability, builds tangible net worth in excess of $1 billion, reduces adjusted homebuilding debt to capitalization to below 50% on a sustained basis, and maintains good liquidity. Importantly, the company would also need to resolve its ultimate ownership, as private equity-owned companies typically do not achieve Ba rating status. The ratings could be pressured if the company becomes unprofitable, its adjusted homebuilding debt to capitalization rises above 60%, homebuilding interest coverage remains below 2.0x for an extended period of time, or if liquidity deteriorates. The principal methodology used in rating Taylor Morrison was the Global Homebuilding Industry Methodology published in March 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. TMM Holdings Limited Partnership was formed in July 2011 by the private equity companies, TPG Capital, Oaktree Capital Management, and JH Investments, when they acquired the North American operations of Taylor Wimpey plc, a UK homebuilder. The North American business of Taylor Wimpey plc included Taylor Morrison Communities in the U.S. and Monarch Communities in Canada. Taylor Morrison is headquartered in Scottsdale, Arizona and builds homes and develops master planned communities in the U.S. and engages in high-rise and low-rise residential development in Canada. In the last twelve months ending June 30, 2012, the company generated approximately $1.3 billion in homebuilding revenues. THOMPSON CREEK: Completes Sale of 12.25% of Gold Production ----------------------------------------------------------- Thompson Creek Metals Company Inc. has completed its transaction with Royal Gold to amend its gold stream agreement with Royal Gold, Inc., to sell Royal Gold an additional 12.25% of the refined gold production from the Company's Mt. Milligan copper-gold mine for $200 million, plus $435 per ounce, or the prevailing market rate, if lower than $435 per ounce, when the gold is delivered. Thompson Creek intends to use the proceeds to finance the construction of the Mt. Milligan project and related costs. "Royal Gold is a valued partner in our Mt. Milligan project and we are extremely pleased with their increased investment and continued support in the advancement of the project," said Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek. "We look forward to the completion of the Mt. Milligan copper-gold mine in the third quarter of 2013 and commencement of commercial production in the fourth quarter of 2013," added Mr. Loughrey. Pursuant to this amendment, Thompson Creek has agreed to sell to Royal Gold a total of 52.25% of the refined gold production from its Mt. Milligan project, and Royal Gold's aggregate investment (including amounts previously funded and commitments for future funding) in the refined gold from Mt. Milligan has increased from $581.5 million to $781.5 million. Three business days following the consummation of the transactions contemplated by the amendment, Royal Gold will make a cash payment to Thompson Creek of $75 million. Following this payment, Royal Gold will make combined future scheduled payments to Thompson Creek in the aggregate amount of $251.9 million, which will be paid on a quarterly basis as follows: $45 million on Sept. 1, 2012; $95 million on Dec. 1, 2012; $62 million on March 1, 2012; $37 million on June 1, 2012; and $12.9 million on Sept. 1, 2013. Following the Sept. 1, 2013, payment, Royal Gold will have satisfied its obligations to make quarterly payments to Thompson Creek. Concurrently with the closing of the transaction with Royal Gold, the participating banks in the Company's revolving credit facility entered into a fifth amendment to the Company's revolving credit agreement whereby the banks consented to the Royal Gold transaction and revised and put in place new financial covenants and measurements. Specifically, under this amendment, the banks agreed to remove the senior secured leverage covenant, increase the liquidity covenant to $100 million from $75 million, add a new minimum quarterly EBITDA covenant commencing in the fourth quarter of 2012, add new liquidity thresholds for borrowings and prepayments, add a new condition precedent for borrowings, and add new reporting requirements. With these changes, the Company no longer anticipates that it will be in breach of its credit agreement as of Sept. 30, 2012, and anticipates that it will be able to access revolving credit facility funds as needed to fund the construction of Mt. Milligan, assuming that the new covenants and conditions are met and satisfied. A copy of the Fifth Amendment is available for free at: http://is.gd/xSQdWK About Thompson Creek Metals Thompson Creek Metals Company Inc. is a growing, diversified North American mining company. The Company produces molybdenum at its 100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania and its 75%-owned Endako Mine in northern British Columbia. The Company is also in the process of constructing the Mt. Milligan copper-gold mine in central British Columbia, which is expected to commence production in 2013. The Company's development projects include the Berg copper-molybdenum-silver property and the Davidson molybdenum property, both located in central British Columbia. Its principal executive office is in Denver, Colorado and its Canadian administrative office is in Vancouver, British Columbia. More information is available at http://www.thompsoncreekmetals.com * * * As reported by the TCR on Aug. 14, 2012, 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-'. "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. In the May 9, 2012, edition of the TCR, Moody's Investors Service downgraded Thompson Creek Metals Company Inc.'s Corporate Family Rating (CFR) and probability of default rating to Caa1 from B3. Thompson Creek's Caa1 CFR reflects its concentration in molybdenum, relatively small size, heavy reliance currently on two mines, and the need for favorable volume and price trends in order to meet its increasingly aggressive capital expenditure requirements over the next several years. TITAN ENERGY: Incurs $70,000 Net Loss in Second Quarter ------------------------------------------------------- Titan Energy Worldwide, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $70,137 on $5.34 million of total sales for the three months ended June 30, 2012, compared with a net loss of $900,876 on $3.54 million of total sales for the same period during the prior year. The Company reported a net loss of $687,836 on $8.61 million of total sales for the six months ended June 30, 2012, compared with a net loss of $1.93 million on $7.01 million of total sales for the same period a year ago. The Company reported a net loss of $3.43 million in 2011, compared with a net loss of $3.67 million in 2010. The Company's balance sheet at June 30, 2012, showed $6.24 million in total assets, $9.28 million in total liabilities, and a $3.04 million total stockholders' deficit. "The Company incurred a net loss for the six months ended June 30, 2012 of $687,836. At June 30, 2012, the Company had an accumulated deficit of $34,052,571. These conditions raise substantial doubt as to the Company's 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/5tc5Vj About Titan Energy New Hudson, Mich.-based Titan Energy Worldwide, Inc., is a provider of onsite power generation, energy management and energy efficiency products and services. TMM HOLDINGS: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on TMM Holdings L.P. The 'BB-' issue-level rating and '2' recovery rating on the existing 7.75% notes due 2020, coissued by operating subsidiaries Taylor Morrison Communities Inc. and Monarch Communities Inc. and guaranteed by the parent, TMM Holdings L.P. (Taylor Morrison) are unchanged by the $125 million add on. The '2' recovery rating indicates prospects for a substantial recovery (70% to 90%) of principal in the event of a payment default. The company plans to use proceeds from the notes to acquire land and for general corporate purposes. "At the same time, we affirmed our 'B+' corporate credit rating on Taylor Morrison. The outlook is stable," S&P said. "Our ratings on Scottsdale, Ariz.-based Taylor Morrison reflect the company's 'weak' business risk profile. Although Taylor Morrison is one of the larger North American homebuilders, with operations in both the U.S. and Canada, the homebuilding industry is very fragmented and highly cyclical," said credit analyst Susan Madison. "After a very severe six-year downturn in housing demand, U.S. home sales are increasing, and we expect this improvement to continue over the next 12 to 18 months. However, given the current weak economic environment, we view the housing recovery in the U.S. as fragile and vulnerable to unexpected economic shocks." "Our stable outlook on Taylor Morrison reflects our expectation that moderate improvement in U.S. home building operations will temper the impact of lower Canadian high-rise deliveries in 2012, resulting in only a modest year-over-year deterioration in revenues and EBITDA. We could raise our rating if a more robust recovery in the U.S housing market boosts revenues and profitability, such that debt-to-EBITDA declines to the low-to-mid 3x area. There would also need to be more clarity around the financial sponsors' longer-term financial policy and the company's appetite to incur more debt to boost land inventory. We could consider lowering our rating to 'B' if a sharp deterioration in U.S. homebuilding fundamentals coincides with a downturn in the Canadian market that delays or terminates the company's planned high-rise deliveries from 2013 to 2015. Under this scenario, which we view as less likely, reduced profitability and potential land impairments could pressure credit metrics, and liquidity could be constrained if the company does not act to curtail investment in land," S&P said. TRIAD GROUP: Alcohol Wipes Recall, Plant Closure Cue Chapter 11 --------------------------------------------------------------- Milwaukee Journal Sentinel reports Triad Group Inc. and sister company H&P Industries Inc. have sought Chapter 11 protection from creditors more than a year after federal regulators shut down the companies' Hartland factory over contaminated alcohol wipes. According to the report, the 277,000-square-foot building stands vacant, and has been empty since early this year. The report also says the building is up for sale. The report relates Triad and H&P have been named in at least 10 federal and state lawsuits claiming the products sickened and, in four cases. According to the report, Steven Silton, Esq., in Minneapolis, the companies' bankruptcy counsel, said potential penalties in lawsuits against the firms make up the great majority of the liabilities. Mr. Silton said that, with the bankruptcy filing, proceedings are suspended in all other litigation against Triad and H&P. The report relates, in January 2011, Triad and H&P voluntarily recalled all their alcohol wipes and swabs after the FDA found some lots were contaminated with Bacillus cereus, a bacterium responsible for killing a 2-year-old Houston boy. In April 2011, U.S. marshals seized $6 million worth of products at the Hartland plant and closed the facility. The report notes FDA had known about critical issues at the company for at least a decade but failed to take any enforcement action. According to the report, Triad and H&P indicate they dispute all but about $1.4 million of their potential liabilities. Among disputed items are claims totaling $5.3 million by two Triad customers -- Smith & Nephew plc and Cardinal Health. Disputed product-liability claims against Triad and H&P total $27.6 million. The report recounts that one week after the alcohol wipes recall in January, David Haertle registered a new company called Trivaria LLC. About Triad Group and H&P Industries Triad Group, Inc., and H&P Industries, Inc., in Hartland, Wisconsin, filed for Chapter 11 bankruptcy (Bankr. E.D. Wis. Case Nos. 12-31923 and 12-31924) on Aug. 9, 2012. H&P was the manufacturer and Triad the distributor of an array of health care products, including alcohol wipes and swabs, cough syrups, suppositories, creams and ointments. Triad Group estimated $1 million to $10 million in assets and $10 million to $50 million in debts. H&P Industries estimated under $1 million in assets and $1 million to $10 million in debts. The petition was signed by Donna Petroff, chief financial officer. Steven H. Silton, Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel. TRI-VALLEY: Proposes Quick Auction Without Lead Bidder ------------------------------------------------------ Stephanie Gleason at Dow Jones' DBR Small Cap reports that Oil and natural gas company Tri-Valley Corp. is asking the bankruptcy court to approve rules for an auction of its assets, which it would like to hold in the next 75 days. As reported in the Aug. 9 edition of the TCR, the Company has received a debtor-in-possession financing commitment of $11,048,078 by its senior secured lender George T. Gamble 1991 Trust, of which $3,850,000 represents new credit availability, to support the Debtors' business operations during the Chapter 11 cases. According to the motion filed with the bankruptcy court seeking approval of the DIP financing, the loans will mature Nov. 15, 2012 or earlier if milestones are not achieved. The Debtors are required to: * file a motion for approval of the auction procedures within 5 days following the Petition Date; * obtain approval of the auction procedures within 30 days of the Petition Date; * conduct the auction within 75 days of the Petition Date; * obtain approval of the sale within 80 days of the Petition Date; and * close the sale of the assets within 90 days of the Petition Date Tri-Valley already owes Gamble $7,198,079 for secured loans provided prepetition. The Debtors also owe $527,800 under an unsecured promissory note issued to Gary D. Borgna and related entities. The Debtors estimate that the total unsecured debt, including the note, is $9.4 million 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. Tri-Valley and three affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-12291) on Aug. 7 with funding from lenders that require a prompt sale of the business. 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 GUARANTY: Incurs $31.3 Million Net Loss in Second Quarter --------------------------------------------------------------- Triad Guaranty Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $31.30 million on $45.95 million of revenue for the three months ended June 30, 2012, compared with a net loss of $4.39 million on $46.54 million of revenue for the same period during the prior year. The Company reported a net loss of $69.02 million on $86.77 million of revenue for the six months ended June 30, 2012, compared with a net loss of $9.30 million on $91.75 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $848.02 million in total assets, $1.61 billion in total liabilities and a $771.39 million deficit in assets. Ken Jones, President and CEO, said, "During the second quarter, we continued to see a drop in the number of new defaults as well as the total risk in default. Primary risk in default declined by 8.2% during the second quarter of 2012 compared to a sequential decline of 7.4% in the first quarter of 2012 and 6.9% in the second quarter of 2011. Net losses and loss adjustment expenses for the second quarter amounted to $68.2 million compared to $67.9 million in the first quarter of 2012, and up substantially from the $41.3 million reported in the second quarter of 2011. Comparisons to the second quarter of 2011 is difficult due to the positive impact of reserve adjustments during that period. Settled claims were $108.1 million in the second quarter of 2012 compared to $97.1 million during the 2012 first quarter and $111.6 million in the second quarter of 2011. Persistency, the key driver of our earned premiums, remained at elevated levels compared to historical norms as many borrowers are finding it difficult to sell or refinance their homes." A copy of the Form 10-Q is available for free at: http://is.gd/uMUhKl About Triad Guaranty Winston-Salem, N.C-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/-- is a holding company that historically provided private mortgage insurance coverage in the United States through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation. TGIC is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business. The Company reported a net loss of $107.77 million in 2011, compared with net income of $132.09 million in 2010. Going Concern The Company has prepared its financial statements on a going concern basis under GAAP, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, there is substantial doubt as to the Company's ability to continue as a going concern. This uncertainty is based on, among other things, the possible failure of Triad to comply with the provisions of the Corrective Orders and the Company's ability to generate enough income over the term of the remaining run-off to overcome its $771.4 million deficit in assets at June 30, 2012. Bankruptcy Warning The positive impact on statutory surplus resulting from the second Corrective Order has resulted in Triad reporting a policyholders' surplus in its SAP financial statements of $230.3 million at June 30, 2012, as opposed to a deficiency in policyholders' surplus of $801.5 million on the same date had the second Corrective Order not been implemented. While the implementation of the second Corrective Order has deferred the institution of an involuntary receivership proceeding, no assurance can be given that the Department will not seek receivership of Triad in the future and there continues to be substantial doubt about the Company's ability to continue as a going concern. The Department may seek receivership of Triad based on its determination that Triad will ultimately become insolvent, if Triad fails to comply with provisions of the Corrective Orders, or for other reasons. If the Department seeks receivership of Triad, TGI could be compelled to institute a proceeding seeking relief from creditors under U.S. bankruptcy laws, or otherwise consider dissolution of the Company. The consolidated financial statements that are presented in this report do not include any accounting adjustments that reflect the financial risks of Triad entering receivership proceedings or otherwise not continuing as a going concern. TRIDENT MICROSYSTEMS: Withdraws Motion for Expansion of PwC Task ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Trident Microsystems, Inc., et al.'s withdrawal of application for an order expanding the scope of employment of PricewaterhouseCoopers LLP to include deduction analysis services nunc pro tunc June 4, 2012. As reported in the Troubled Company Reporter on June 28, 2012, the Debtors filed a motion to expand the scope of employment for PricewaterhouseCoopers to include deduction analysis services at these hourly rates: partner at $650, senior managing director at $650, director at $550, manager at $475, senior associate a $375 and associate at $275. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. Pachulski Stang Ziehl & Jones LLP represents the Official Committee of Unsecured Creditors. The Committee tapped to retain Fenwick & West LLP as its special tax and claims counsel, Imperial Capital, LLC, as its investment banker and financial advisor. Dewey & Leboeuf as represents the statutory committee of equity security holders. The statutory committee tapped to retain Campbells as Cayman Islands counsel, and Quinn Emanuel Urquhart & Sullivan, LLP as its conflicts counsel. TRONOX FINANCE: S&P Keeps 'BB-' Rating on $900M Sr. Note Offering ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB-' issue rating and '5' recovery rating on the senior notes issued by Tronox Finance LLC -- a subsidiary of Tronox Ltd. -- remain unchanged following the company's $250 million increase in the proposed senior-note offering, to $900 million. "All our other ratings on Tronox, including the 'BB' corporate credit rating, also remain unchanged. The outlook remains stable," S&P said. "Tronox will use the proceeds to fund a $400 million return of capital to shareholders and for general corporate purposes. The company could also use the proceeds for further returns of capital to shareholders from time to time," S&P said. "The '5' recovery rating on Tronox's proposed senior notes indicates our expectation of a modest (10% to 30%) recovery in the event of a payment default," S&P said. Ratings List Tronox Ltd. Corporate credit rating BB/Stable/-- Tronox Finance LLC $900 million senior unsecured notes due 2020 BB- Recovery rating 5 TRONOX LTD: Note Upsize Plan No Impact on Moody's 'Ba3' CFR ----------------------------------------------------------- Tronox Limited's plan to upsize its senior unsecured notes due 2020 to $900 million from $650 million does not change any of the firm's ratings (Ba3 Corporate Family Rating) or its stable outlook. The loss given default assessments for Tronox's debt have been updated to reflect the larger unsecured note issuance. The principal methodology used in rating Tronox was the Global Chemical Industry Methodology published in 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. Tronox Limited, headquartered in Stamford, CT, is the world's fifth largest producer of titanium dioxide and a producer of titanium ore feedstocks through the recently acquired Exxaro Mineral Sands business. It operates three plants in Hamilton, MS, Botlek, The Netherlands, and Kwinana, Australia. The company is also a producer of electrolytic chemicals (approximately 8% of revenues in 2011 -- prior to the Exxaro Mineral Sands acquisition). Tronox's revenues were $2.5 billion for the year ended June 30, 2012 (pro forma for the Exxaro Mineral Sands acquisition). UNIVERSAL SOLAR: Incurs $351,000 Net Loss in Second Quarter ----------------------------------------------------------- Universal Solar Technology, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $350,852 on $243,163 of sales for the three months ended June 30, 2012, compared with a net loss of $993,197 on $768,035 of sales for the same period during the prior year. The Company reported a net loss of $789,842 on $618,198 of sales for the six months ended June 30, 2012, compared with a net loss of $1.25 million on $1.72 million of sales for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $9.97 million in total assets, $14.26 million in total liabilities and a $4.29 million total stockholders' deficiency. After auditing the 2011 results, Paritz & Company, P.A., in Hackensack, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has not generated cash from its operation, has stockholders' deficiency of $3.50 million and has incurred net loss of $4.22 million since inception. A copy of the Form 10-Q is available for free at: http://is.gd/YZvGc2 About Universal Solar Headquartered in Zhuhai City, Guangdong Province, in the People's Republic of China, Universal Solar Technology, Inc., was incorporated in the State of Nevada on July 24, 2007. It operates through its wholly owned subsidiary, Kuong U Science & Technology (Group) Ltd., a company incorporated in Macau, the People's Republic of China on May 10, 2007, and its subsidiary, Nanyang Universal Solar Technology Co., Ltd., a wholly foreign owned enterprise registered on Sept. 8, 2008 under the wholly foreign- owned enterprises laws of the PRC. The Company primarily manufactures, markets and sells silicon wafers to manufacturers of solar cells. In addition, the Company manufactures photovoltaic modules with solar cells purchased from third parties. UNIVISION COMMUNICATIONS: Moody's Rates New $500MM Sec. Notes 'B2' ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to Univision Communications, Inc.'s proposed $500 million senior secured first lien notes due 2022. Univision plans to utilize the net proceeds from the note offering to pay down its term loans. Univision's B3 Corporate Family Rating (CFR), B3 Probability of Default Rating, other debt instrument ratings, SGL-3 speculative-grade liquidity rating and stable rating outlook are not affected. The refinancing improves Univision's maturity profile and reduces refinancing risk related to its 2014 and 2017 maturities at an approximate $10-$18 million annual increase in cash interest expense that is manageable within the company's free cash flow (roughly $104 million LTM 6/30/12). The company is launching an amendment to its credit facility to request lender permission to apply the net proceeds ratably to outstanding term loans. Univision plans to apply approximately 93% of the proceeds to the 2017 extended term loan if the amendment is received, and approximately 93% of the proceeds to the 2014 non-extended term loan if the amendment is not received. Moody's believes Univision can fund its remaining $457 million of 2014 term loans from free cash flow and drawdowns under its revolvers ($409 million expiring March 2016 and $120 million receivables facility expiring March 2016), but full repayment of the 2014 term loan would definitively extend this maturity. Univision has no meaningful maturities in 2015 and pushing out the next significant maturity hurdle to 2016/2017 provides additional time to grow earnings and reduce leverage. Assignments: Issuer: Univision Communications, Inc. Senior Secured Regular Bond/Debenture due 2022, Assigned a B2, LGD3 - 40% Ratings Rationale Univision is investing heavily for growth to reduce its very high debt-to-EBITDA leverage (approximately 13.5x LTM 6/30/12 incorporating Moody's standard adjustments and excluding non-cash advertising revenue). Investments include the scheduled 2012 launch of three new cable networks (focusing on sports, telenovelas and news) and a joint venture with ABC to develop an English-language news channel targeted to Hispanics. These investments are currently a drag on earnings. Univision has signed four retransmission consent agreements that include these three new cable networks, and is expected to gain carriage with other video operators. Moody's projects revenue growth in the 6-7% range in 2012 and 2013 as the networks are launched, assuming modest U.S. economic growth, and that the company continues to benefit from demographically-aided growth in Spanish-language media notwithstanding heightened competition from efforts by other media companies to target the Hispanic population. Univision's B3 CFR reflects its strong and leading market position in Spanish-language media within the U.S. and good intermediate- term growth prospects tempered by its very high leverage, vulnerability to cyclical advertising and refinancing risk associated with its debt maturities. Growth prospects supported by Hispanic demographic trends and the market position, as well as strong operating margins lead to good unlevered cash flow generation. The risk of a restructuring of its highly leveraged balance sheet nevertheless remains elevated, particularly if economic conditions were to weaken. Moody's believes Univision has adequate liquidity through 2013, although the covenant cushion is likely to diminish when the net senior leverage covenant steps down to 9.25x from 10.25x in December 2012 or if the economy weakens. The company is dependent on access to capital to refinance $6 billion of 2016.2017 maturities. Moody's does not believe Univision will generate sufficient free cash flow to retire the debt at maturity, and its ability to refinance will depend on three major unknowns: credit market conditions, Univision's leverage position, and level of free cash flow generation. The proposed 2022 notes are guaranteed by Univision's domestic operating subsidiaries and Broadcast Media Partners Holdings, Inc. (Univision's parent) and are secured by a first lien on substantially all of the assets of Univision and its subsidiaries that secure the company's $6.1 billion senior secured credit facility, $1.2 billion 6.875% senior notes due 2019 and $750 million 7.875% senior notes due 2020 (2020 notes). Moody's ranks the credit facility, 2022 notes, 2020 notes, and 2019 notes the same in its loss given default notching methodology based on the instruments' pari passu first lien senior secured claims. The credit facility nevertheless contains covenants that could improve recovery prospects relative to the notes. The principal methodology used in rating Univision was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Univision, headquartered in New York, is the leading Spanish- language media company in the United States. Revenue for last twelve months ended 6/30/12 was approximately $2.34 billion. UNIVISION COMMUNICATIONS: S&P Rates $500MM Sr. Secured Notes 'B+' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to the proposed $500 million senior secured notes due 2022 of New York City-based Spanish language TV and radio broadcaster Univision Communications Inc. "We assigned the proposed senior secured notes an issue-level rating of 'B+' (one notch above our 'B' corporate credit rating on the company). We also assigned this debt a recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P said. "The corporate credit rating on New York-based Univision Communications Inc., the leader in U.S. Hispanic media, reflects the company's steep debt leverage and weak interest coverage because of its 2007 LBO, advertising pricing that is not commensurate with its audience share, and weak trends in radio advertising," said Standard & Poor's credit analyst Jeanne Shoesmith. "We regard Univision's financial risk as 'highly leveraged,' (based on our criteria), because of the company's high lease-adjusted debt to EBITDA of 12.2 as of June 30, 2012. Leverage increases slightly to 12.3x pro forma for the proposed transaction. Univision's business risk is 'satisfactory,' supported by its position as the market-leading U.S.-based Spanish-language TV and radio broadcaster. We expect Univision to maintain 'adequate' liquidity, supplemented by positive discretionary cash flow, despite leverage remaining very high. The company faces meaningful refinancing hurdles, with more than half of its debt, roughly $5.6 billion, maturing in 2017. Univision's ability to refinance its 2017 maturities will likely rely on its ability to pay down debt and grow EBITDA over the next five years." "Univision's operations include TV and cable networks and TV station groups, radio stations, and online initiatives. It is the largest Spanish-language radio broadcaster in the U.S. Univision's market-leading position relies on its popular prime-time programming under a favorable low-cost, long-term contract with Grupo Televisa S.A. The Univision network reaches virtually all U.S. Hispanic households, and often generates audience ratings higher than some of the four major English-language TV networks. Univision has not narrowed the gap between Spanish language and English language advertising rates for several years, but revenue and EBITDA growth has been sustained by an increase in advertising sales volumes and higher retransmission fees from multichannel video providers," S&P said. USEC INC: S&P Cuts Corporate Credit Rating to 'CCC'; Outlook Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Bethesda, Md.-based USEC Inc., including the corporate credit rating to 'CCC' from 'CCC+'. The outlook is negative. "We also lowered our issue-level rating on the senior convertible notes due October 2014 to 'CC' from 'CCC-'. The recovery rating remains '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P said. "At the same time, we removed all of the USEC-related ratings from CreditWatch, where we placed them with negative implications on May 15, 2012, to reflect the continued uncertainty regarding whether USEC Inc. can secure the second phase of funding for a research, development, and demonstration program prior to a conditional commitment for a loan guarantee," S&P said. "The downgrade reflects our assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah Gaseous Diffusion Plant after a one-year multiparty agreement to extend operations expires in May 2013," said Standard & Poor's credit analyst Maurice S. Austin. "This reflects the near-term supply and demand imbalance related to the 2011 earthquake and tsunami that severely damaged four nuclear reactors in Fukushima, Japan. The company has also publicly stated that it may pursue discussions with certain creditors and key stakeholders regarding ways to improve its capital structure, including the potential restructuring of its balance sheet," S&P said. "In addition, USEC is working with customers to advance sales orders to accelerate the receipt of cash and enhance its liquidity position, which we consider to be 'less than adequate.' The advancement of orders effectively accelerates receipt of cash from such advanced sales, although the amount of cash and profit received from such sales may be reduced because of the terms it agreed upon with customers in connection with advancement. However, due to the increase of supply from the Japanese incident, USEC has not been able to replace many of the order advancements with additional sales. This has reduced its sales backlog, which we expect will negatively affect future sales," S&P said. "The downgrade also reflects our assessment of the delay and uncertainty surrounding the approval of the company's U.S. Department of Energy's (DOE's) loan guarantee application, which is affecting the company's ability to fund a new, more cost- effective technology (the American Centrifuge Plant {ACP}). Instead of moving forward with a conditional commitment for a loan guarantee, the DOE proposed a $350 million two-year cost share research, development, and demonstration (RD&D) program for the project to enhance the technical and financial readiness of the centrifuge technology for commercialization. The DOE has not yet authorized the remaining funding of $192.3 million and is subject to the availability of congressional appropriations. Even if funding for the RD&D program is included in fiscal 2013 appropriations legislation, USEC will need additional funding to complete the RD&D program. If USEC is unable to secure funding for the RD&D program beyond November 2012, we would expect USEC to begin demobilizing the project," S&P said. "The rating on USEC reflects the combination of what Standard & Poor's considers to be USEC's 'highly leveraged' financial risk profile and 'vulnerable' business risk profile. These assessments incorporate the challenges that the company faces from an intensely competitive market for uranium enrichment; the uncertainty regarding the success of financing the RD&D program to enhance the technical and financial readiness of the centrifuge technology for commercialization; limited operating diversity, given that half of its supply comes from its single-site uranium enrichment operating facility; and 'less-than-adequate' liquidity. Still, USEC benefits from its position as the U.S. government's executive agent for the Megatons to Megawatts program, a 20-year $8 billion commercially funded nuclear nonproliferation initiative of the U.S. and Russian governments. The rating and outlook reflect our assessment regarding the long-term viability of USEC's enrichment operations and the approval of USEC's loan guarantee application with the U.S. DOE," S&P said. "The negative outlook reflects our view that near-term industry fundamentals will continue to affect operating performance as USEC faces competitive pressures with an oversupplied market and the continued delay of the DOE loan guarantee, calling into question USEC's long-term viability as a going concern," S&P said. "We could lower the rating on the company if USEC is unsuccessful in securing the necessary capital to complete the RD&D program for the American Centrifuge technology, if the NYSE delists the stock, or if there is a significant deterioration in its credit facility availability such that availability declines below $45 million or its borrowing base collateral declines below $350 million and is maintained below this level," S&P said. "We could raise the rating if USEC is approved for the DOE loan guarantee program and the company obtains additional financial support via strategic alternatives," S&P said. VALENCE TECHNOLOGY: Asks Court to OK William R. Patterson as CRO ---------------------------------------------------------------- Valence Technology, Inc., asks for authorization from the U.S. Bankruptcy Court for the Western District of Texas to employ William R. Patterson at Bridgepoint Consulting, LLC, as chief restructuring officer, nunc pro tunc to the Petition Date. Mr. Patterson will, among other things, perform a financial review of the Debtor, including an assessment of financial information pertaining to the Debtor's assets, liabilities, cash flows, financial statements, budgets, and projections. Bridgepoint Consulting will be compensated at these hourly rates: CRO $300 Additional Personnel $60-$350 To the best of the Debtor's knowledge, Mr. Patterson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 hometown in Austin, Texas. Founded in 1989, Valence develops lithium iron magnesium phosphate rechargeable batteries. Its products are used in hybrid and electric vehicles, as well as hybrid boats and Segway personal transporters. The Debtor disclosed debt of $82.6 million and assets of $31.5 million as of March 31, 2012. It owes $35 million in loans to affiliates of Chairman Carl E. Berg, about $34 million in interest on those loans, and $3 million on a third-party loan. The company also owes about $9 million on two series of convertible preferred stock held by Berg affiliates and has $11 million in trade debt and accrued expenses. Mr. Berg and related entities own 44.4% of the shares. ClearBridge Advisors, LLC owns 5.5%. Valence expects to complete its restructuring during 2012. Judge Craig A. Gargotta presides over the case. The Company is being advised by Streusand, Landon & Ozburn, LLP with respect to bankruptcy matters. The petition was signed by Robert Kanode, CEO. VALENCE TECHNOLOGY: Taps Streusand Landon as Attorney ----------------------------------------------------- Valence Technology, Inc., asks for authorization from the U.S. Bankruptcy Court for the Western District of Texas to employ Streusand, Landon & Ozburn, LLP, as attorneys, nunc pro tunc to the Petition Date. Streusand Landon will, among other things, take necessary actions to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the Debtor's estate, for these hourly rates: Sabrina L. Streusand, Partner $440 G. James Landon, Partner $390 Christopher Ozburn, Partner $450 Seth E. Meisel, Associate $325 Richard D. Villa, Associate $280 Arlana L. Prentice, Paralegal $175 Linda Thompson, Paralegal $175 Streusand Landon received a total retainer of $105,000 from the debtor prior to the Petition Date. Of that retainer, $85,000 was used to pay fees and expenses incurred pre-petition. As of the Petition Date, Streusand Landon has a remaining credit balance held in its trust account in favor of the Debtor for future professional services to be performed, and expenses incurred, in the approximate amount of $20,000. Sabrina L. Streusand, a partner at Streusand Landon, attest to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 petition was signed by Robert Kanode, CEO. VANN'S INC: Aug. 29 Hearing in Bankruptcy Case ---------------------------------------------- Tim Trainor at Montana Standard reported that Bankruptcy Judge John Peterson issued an interim ruling on a number of temporary motions requested by representatives of Vann's Inc. so the company can continue to enter contracts with customers, pay credit card fees and borrow about $500,000 from First Interstate Bank to meet payroll and pay other short-term debts. There's a final hearing on Aug. 29 at 11 a.m. in Butte federal court. Terms of the DIP agreement were reported in the Aug. 15 edition of the Troubled Company Reporter. Pursuant to the Secured Superpriority Debtor-In-Possession Financing Term Sheet, First Interstate Bank has committed to provide up to $2 million in revolving loans. Vann's has stipulated that it owes First Interstate Bank $3,986,423 as of Aug. 4, 2012. According to Montana Standard, Vann's will return $1.5 million worth of inventory to General Electric Commercial Distributing Financing Corp., to which Vann's owes about $5 million. The report relates Jerry McConnell, Vann's chief executive officer, said customers will see little change in stores now that it is confirmed that the shelves will be stocked and deliveries will go as planned. He noted that the company continues to have good cash flow and assets that outweigh its debt obligation. As reported in the Aug. 8 edition of the TCR, Mr. McConnell, who was named Vann's CEO in mid-June, said in an e-mail message to the TCR that the remaining stores are still profitable and the company won't be closing any stores. According to Montana Standard, Mr. McConnell said a budget calls for using about $250,000 of the loan from First Interstate to make payroll and pay other debts for the company in the first few weeks. He said after bridging that shortfall, the company looks to be in good financial standing moving forward. According to Montana Standard, the report adds the bankruptcy process could take anywhere from six months to a year, Mr. McConnell previously told the Missoulian. As the process goes forward, the company will attempt to sell off back inventory and hold "spring cleaning" sales at its retail locations across the state to right the ship. About Vann's Inc. Vann's Inc. -- http://www.vanns.com/-- a retailer of appliances and consumer electronics with five stores in Montana, filed for Chapter 11 protection (Bankr. D. Mont. Case No. 12-61281) in Butte, Montana, on Aug. 5, 2012. The Debtor also owns outdoor clothing and sports products at http://www.bigskycountry.com/ Vann's is owned by an employee stock ownership plan trust. Vann's Inc. disclosed assets of $17.6 million and liabilities of $14.4 million. Assets include $12.2 million cost-value of inventory plus $1 million in current accounts receivable. The Company owes $4 million to First Interstate Bank. It also owes $4.8 million on an inventory loan from GE Commercial Distribution Finance Corp. Bankruptcy Judge John L. Peterson presides over the case. Vann's hired Perkins Coie LLP's Alan D. Smith, Esq., and Brian A. Jennings, Esq., as counsel; and Hamstreet & Associates, LLC, as turnaround and restructuring advisors. GE Commercial Distribution Finance Corporation is represented by Gary Vincent, Esq., at Husch Blackwell LLP, and the Law Offices of John P. Paul, PLLC. First Interstate Bank, the DIP Lender, is represented by Benjamin P. Hursh, Esq., at Crowley Fleck PLLP. WINTDOTS DEVELOPMENT: US Trustee Wants Case Dismissed or Converted ------------------------------------------------------------------ Donald F. Walton, the U.S. Trustee for Region 21, asks the Bankruptcy Court to convert the Chapter 11 case of Wintdots Development, LLC, to liquidation under Chapter 7 or, in the alternative, to dismiss the case. The U.S. Trustee notes the Debtor has not yet filed a plan or disclosure statement, and is delinquent in the payment of quarterly fees due to the U.S. Trustee in an amount estimated to be not less than $975. According to the U.S. Trustee, the Debtor's failure to timely file monthly operating reports, timely file a disclosure statement and plan, and pay quarterly fees is in violation of its statutory obligations and constitutes cause for dismissal or conversion of the case. The hearing on the motion is scheduled for Sept. 13, 2012, at 10:00 a.m. About Wintdots Development Wintdots Development, LLC, filed a Chapter 11 petition (Bankr. D. V.I. Case No. 12-30003) in its hometown in St. Thomas, Virgin Islands on March 11, 2011. The Debtor disclosed $56.42 million in assets and $10.79 million in liabilities in its schedules. The Debtor has three properties totaling 21 acres in St. Thomas that are valued at $56.40 million. Each of the properties secures a $9.60 million first lien debt to Kennedy Funding, Inc., and a $225,000 second lien debt to Marvin & Evelyn Freund. Delaware bankruptcy judge Mary F. Walrath oversees the case. Benjamin A. Currence P.C., represents the Debtor. * Moody's Says Money Market Funds' Credit Profile Deteriorates -------------------------------------------------------------- The credit profiles of sterling-, euro- and US dollar-denominated money market funds (MMFs) deteriorated over Q2 2012, said Moody's Investors Service in its quarterly MMF trend reports published on August 15, 2012. The reports, entitled "Sterling Prime Money Market Funds: Q2 2012 Trends", "Euro Prime Money Market Funds: Q2 2012 Trends" and "US-Dollar Prime Money Market Funds: Q2 2012 Trends" are now available on www.moodys.com. Credit pressures on financial institutions in both Europe and the U.S. significantly affected the rating distribution of euro and sterling denominated MMFs' underlying assets, with 20% and 18%, respectively, of these funds' investments migrating to A2- from A1-rated securities. US dollar MMFs were also negatively affected, though to a lesser degree, with about 8% of the investments migrating to A2 from A1 or higher rated securities, mostly due to the credit deterioration of banks and securities firms with global capital markets operations. Overall, US MMFs reduced their exposures to European financial institutions by 20% during Q2, whilst sterling funds reduced their exposures to European financial institutions by 9% during Q2. Euro MMFs continued to maintain a relatively short weighted-average maturity of 37 days on average throughout Q2 2012 and adopted very cautious strategies, investing 55% of their assets in securities with maturities below one month. * Sheppard Mullin Taps Cheong for Beijing Finance, Bankr. Office ---------------------------------------------------------------- Simon Kai-Tse Cheong has joined Sheppard, Mullin, Richter & Hampton LLP as a partner in the firm's Corporate and Finance and Bankruptcy practice groups, based in the firm's Beijing office. Cheong joins from the Chinese law firm Zhong Lun in Beijing. Cheong has more than 16 years experience advising multinational companies and financial institutions on cross-border M&A and financing matters. In addition to his private practice experience, Cheong served as senior counsel for the World Bank Group's International Finance Corporation (IFC) and was responsible for managing the IFC's legal activities in mainland China. Simon's representative clients have included major multilateral and government institutions such as the IFC, China- ASEAN Investment Cooperation Fund, the Swedish Export Credit Corporation, KfW IPEX-Bank, and the Government of Singapore Investment Corporation. "Simon's practice straddles corporate and finance matters, two areas that Sheppard Mullin has significantly developed specialties. His knowledge and experience is both complementary and supplementary to our existing practices, especially given his significant project finance and commercial finance expertise that is a great addition to our Beijing office," said Guy N. Halgren, chairman of Sheppard Mullin. "Sheppard Mullin is a top-tier full service firm that offers an excellent international platform to provide sophisticated global services to clients in Asia. I am impressed by the firm's strategic vision, and look forward to working closely with my new partners in China," Cheong commented. Cheong is one of the few lawyers in China to have worked on RMB "Dim Sum Bond" issues in Hong Kong, and specializes in advising clients on cross-border regulatory matters associated with raising RMB funds outside of China for reinvestment into mainland China. He also advised IFC on its RMB 1.13 billion "Panda Bond" issuance in China, which was the first of its kind for any foreign financial institution in China. Cheong received his Bachelor of Laws in 1995 and Bachelor of Economics in 1993 from the University of Sydney. About Sheppard, Mullin, Richter & Hampton LLP Sheppard Mullin is a full service Global 100 firm with close to 600 attorneys in 15 offices located in the United States, Europe and Asia. Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients include more than half of the Fortune 100. About Sheppard Mullin Richter & Hampton LLP Based in Los Angeles, California, Sheppard Mullin Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with more than 520 attorneys in 10 offices located throughout California and in New York, Washington, D.C. and Shanghai. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Founded in 1927 on the principle that the firm would succeed only if its attorneys delivered prompt, high quality and cost-effective legal services, Sheppard Mullin provides legal counsel to U.S. and international clients. Companies turn to Sheppard Mullin to handle a full range of corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients 7include more than half of the Fortune 100 companies. * Sheppard Mullin Opens Seoul Office, Its 16th Location -------------------------------------------------------- Sheppard, Mullin, Richter & Hampton LLP disclosed the opening of a Seoul office in the Mirae Asset CENTER. The new office, which is the firm's sixteenth location, opens following last month's Korean Bar Association registration of the firm's foreign legal consultant office in Seoul, the final regulatory step needed by the firm to open a Korean office. Sheppard Mullin is among the first three law firms in the United States and the European Union approved to open in Korea. Partner Seth (Byoung Soo) Kim, previously based in Sheppard Mullin's New York and Los Angeles offices and chair of the firm's Korea practice, is the administrative partner of the Seoul office. Partners Gary Halling and Ken Carl will be integral members of the Korea team and will anchor the U.S.-side of the firm's practice from their offices in San Francisco and Los Angeles, respectively. "Aug. 16 marks an important milestone for Sheppard Mullin. We are honored to be among the first firms approved and opening an office in Korea. Establishing a Seoul presence is a strategic step in growing and strengthening the firm's global footprint, especially in Asia. Many of our clients have Korean operations and it makes sense for us to establish a presence in Seoul to provide the support and guidance that our clients require," said Guy Halgren, chairman of Sheppard Mullin. "I am excited to be back in Korea. I look forward to leading the Seoul office and working more closely with my Korean clients. Sheppard Mullin has long-standing ties with Korean clients and we are committed to those relationships and growing the new office. Initially the office will leverage the success of our finance, corporate, antitrust, IP and entertainment practices, and help us serve current and future clients," Kim commented. Sheppard Mullin's Korea-based clients include Samsung, Hyundai Motor, Korea Development Bank, Kookmin Bank, Hana Bank, Woori Bank and Shinhan Bank. Kim is a member of Sheppard Mullin's Finance and Bankruptcy practice group. He specializes in commercial law, bankruptcy, bank regulatory matters, and bank acquisition transactions. Kim is a graduate of Seoul National University. Halling is Sheppard Mullin's Antitrust and Trade Regulation practice group leader. He specializes in international antitrust and unfair competition matters, and has extensive experience in civil and criminal antitrust proceedings involving both federal and state enforcement agencies. Halling is a former Trial Attorney at the Department of Justice, Antitrust Division in Washington, D.C. Carl is a member of the Finance and Bankruptcy practice group. He specializes in banking law and corporate finance, advising lenders and borrowers in financing transactions and bank clients in regulatory matters. Carl represents a number of major Korean and U.S. financial institutions and companies, including several S&P 500 members. About Sheppard, Mullin, Richter & Hampton LLP Sheppard Mullin is a full service Global 100 firm with close to 600 attorneys in 16 offices located in the United States, Europe and Asia. Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients include more than half of the Fortune 100. For more information, please visit www.sheppardmullin.com . About Sheppard Mullin Richter & Hampton LLP Based in Los Angeles, California, Sheppard Mullin Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with more than 520 attorneys in 10 offices located throughout California and in New York, Washington, D.C. and Shanghai. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Founded in 1927 on the principle that the firm would succeed only if its attorneys delivered prompt, high quality and cost-effective legal services, Sheppard Mullin provides legal counsel to U.S. and international clients. Companies turn to Sheppard Mullin to handle a full range of corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients 7include more than half of the Fortune 100 companies. * BOOK REVIEW: Corporate Venturing -- Creating New Businesses ------------------------------------------------------------- Authors: Zenas Block and Ian C. MacMillan Publisher: Beard Books, Washington, D.C. 2003 (reprint of 1993 book published by the President and Fellows of Harvard College). List Price: 371 pages. $34.95 trade paper, ISBN 1-58798-211-0. Creating new businesses within a firm is a way for a company to try to tap into its potential while at the same time minimizing risks. A new business within a firm is like an entreprenuerial venture in that it would have greater flexibility to opportunistically pursue profits apart from the normal corporate structure and decision-making processes. Such a business is different from a true entrepreneurial venture however in that the business has corporate resources at its disposal. Such a company business venture has to answer to the company management too. Corporate venturing--to use the authors' term--offers innovative and stimulating business opportunities. Though venturing is in a somewhat symbiotic relationship with the parent firm, the venture would never threaten to ruin the parent firm as a entrepreneur might be financially devastated by failure. Block and MacMillan contrast an entreprenuerial enterprise with their subject of corporate venturing, "When a new entrepreneurial venture is created outside an existing organization, a wide variety of environmental factors determine the fledgling business's survival. Inside an organization . . . senior management is the most critical environmental factor." This circumstance is the basis for both the strengths and limitations of a corporate venture. In their book, the authors discuss how senior management working with the leadership of a corporate venture can work in consideration of these strengths and weaknesses to give the venture the best chances for success. If the venture succeeds beyond the prospects and goals going into its formation, it can always be integrated into the parent company as a new division or subsidiary modeled after the regular parts of a company with the open-ended commitment, regular hiring practices, and reporting and coordination, etc., going with this. As covered by the authors, done properly with the right commitment, sense of realism and practicality, and preliminary research and ongoing analysis, corporate venturing offers a firm new paths of growth and a way to reach out to new markets, engage in fruitful business research, and adapt to changing market and industry conditions. The principle of corporate venturing is the familiar adage, "nothing ventured, nothing gained." While it is improbable that a corporate venture can save a dying firm, a characteristic of every dying firm is a blindness about venturing. Just thinking about corporate ventures alone can bring to a firm a vibrancy and imagination needed for business longevity. Ideas, insights, and vision are the essence of corporate venturing. But these are not enough by themselves. Corporate venturing is based as much on the right personnel, especially the top leaders. The authors advise to select current employees of a firm to lead a corporate venture whenever feasible because they already have relationships with senior management who are the ultimate overseers of a venture and they understand the corporate culture. In one of their several references to the corporate consultant and motivational speaker Peter Drucker, the authors quote him as identifying only half jokingly the most promising employees to lead the corporate venture as "the troublemakers." These are the ones who will be given the "great freedom and a high level of empowerment" required to make the venture workable and who also are most suited to "adapt rapidly to new information." Such employees for top management of a venture are not entirely on their own. The other side of this, as Brock and MacMillan go into, is for such venture management to earn and hold the trust and confidence of the firm's top management and work within the framework and follow the guidelines set for the venture. Corporate venturing is an operation which is a hybrid of the standard corporate interests and operations and an independent business with entrepreneurial flexibility mainly from focus on one product or service or at most a few interrelated ones, simplified operations, and streamlined decision-making. From identifying opportunities and getting starting through the business plan and corporate politics, Brock and MacMillan guide the readers into all of the areas of corporate venturing. Zenas Block is a former adjunct professor with the Executive MBA Program at the NYU Stern School of Business. Ian C. MacMillan is associated with Wharton as a professor and a director of a center for entrepreneurial studies. ********* 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 ***