/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120910.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, September 10, 2012, Vol. 16, No. 252 Headlines 116 PROSPECT: Case Summary & 4 Largest Unsecured Creditors 1717 MARKET: Examiner Report Due Sept. 10 68 SANDY: Voluntary Chapter 11 Case Summary 9737 FOREST: Case Summary & 20 Largest Unsecured Creditors 4KIDS ENTERTAINMENT: Fires Brian Lacey as EVP of International 4KIDS ENTERTAINMENT: EisnerAmper OK'd to Conduct 401(k) Audit 4KIDS ENTERTAINMENT: Plan Filing Exclusivity Expires Sept. 10 AHMAC PROPERTIES: Voluntary Chapter 11 Case Summary AMERICAN AIRLINES: US Trustee Faults Payments to Flight Attendants AMERICAN PATRIOT: Two Directors Elected at Annual Meeting AMSCAN HOLDINGS: S&P Cuts Corp. Credit Rating to 'B'; Off Watch ASP UNITED: S&P Assigns 'B-' Corporate Credit Rating ATP OIL: Tel Aviv Court Seizes Israeli Gas Licenses ATP OIL: Enters Into $617.6 Million DIP Credit Facility AZURE DYNAMICS: Monitor Seeks U.S. Nod of Employee Retention Plan BATAA/KIERLAND: JPMCC to Pay Fees for Failure to Join Mediation BCAS LLC: Case Summary & 20 Largest Unsecured Creditors BEAZER HOMES: Fitch Raises Issuer Default Rating to 'B-' BENADA ALUMINUM: Hires Latham Shuker as Counsel BIOFUEL ENERGY: David Einhorn Discloses 36.2% Equity Stake BLAST ENERGY: Extends Maturity of Centurion Notes Until Nov. 30 BLUE SKY CAPITAL: Tenn. Court Issues Permanent Trading Ban BON-TON STORES: Files Form 10-Q, Incurs $45MM Net Loss in Q2 CAESARS ENTERTAINMENT: Fitch Publishes Comprehensive Credit Update CANYONS AT DEBEQUE: Wins Court OK to Hire Kutner Miller as Counsel CANYONS AT DEBEQUE: Has Go Signal to Hire Rosenberg as Accountant CANYONS AT DEBEQUE: Can Hire EquiReal as Appraiser CANYONS AT DEBEQUE: Files Schedules of Assets and Liabilities CIP INVESTMENT: Sept. 27 Final Hearing Set on Cash Collateral Use CAPITAL CENTRE: Files for Chapter 11 Bankruptcy Protection CARLTON HOTEL: Case Summary & 20 Largest Unsecured Creditors CDC CORP: Confirmed Plan to Pay Up to $6.10 a Share to Equity CELL THERAPEUTICS: Amends Rights Agreement with Computershare CENTRAL FALLS, RI: On the Verge of Exiting Bankruptcy CIRCLE ENTERTAINMENT: Borrows $200,000 from Directors & Officers CIRCLE STAR: Executes Debt Conversion Agreement with Note Holder CITY NATIONAL: Delays Form 10-Q for Second Quarter CLAIRE'S STORES: Offering Additional 9% Senior Secured Notes CLEAN BURN: Reorganization Goes to Chapter 7 COMPOSITE TECHNOLOGY: Court OKs Squar Milner as Tax Professionals CONTOURGLOBAL POWER: S&P Assigns Prelim 'B+' Corp. Credit Rating CPI CORP: Enters Into $500,000 Settlement Pact with Westfield CYBERDEFENDER CORP: Xroads Approved as Solicitation Agent DAIS ANALYTIC: Scott Ehrenberg Quits as CTO and Secretary DCB FINANCIAL: Files Amendment No. 3 to Form S-1 Prospectus DCP LLC: S&P Puts 'B' Corporate Credit Rating on Watch Negative DRINKS AMERICAS: Has License to Sell WBI Products in U.S. DYNEGY HOLDINGS: Impending Train Wreck Becomes Approved Plan ELPIDA MEMORY: Bondholders Want to Keep Right for Involuntary EMMIS COMMUNICATIONS: Modifies Terms of Preferred Stock ESPERANZA AVIATION: Case Summary & 7 Largest Unsecured Creditors FENTURA FINANCIAL: Three Directors Elected at Annual Meeting FLINTKOTE COMPANY: Has Until Jan. 31 to Propose Chapter 11 Plan FNB UNITED: David Lavoie to Resign as CRO Effective Dec. 31 FOXCO ACQUISITION: S&P Rates Proposed Extended Sr. Credit 'B+' FREEDOM ENVIRONMENTAL: Fires CFO After Sending Firm to Bankruptcy FULTON CAPITAL: Fitch Affirms 'BB+' Preferred Stock Rating GAMETECH INT'L: Court Sets Sept. 25 Auction of Assets GLOBAL GREEN: Had C4381,317 Net Loss in Second Quarter GOLDEN TEMPLE: Myers Asks to be Appointed as Receiver GOLDEN TEMPLE: Proposed Receiver Hires Sussman Shank as Counsel GULF COLORADO: Can Employ Frances Smith as Counsel GULF COLORADO: Can Employ Jeremy Fortin as Financial Advisor GULF COLORADO: Hornberger Taps JR Bentley as Railroad Consultant HALIFAX GROUP: Converted to Chapter 7 in Less Than One Month HARMAN INT'L: S&P Raises Corporate Credit Rating From 'BB+' HARPER BRUSH: Court OKs Michael Pellegrino as IP Expert HARPER BRUSH: Court OKs MorrisAnderson as Financial Advisor HAWKER BEECHCRAFT: IAM Opposes Key Employee Incentive Plan HEALTHSOUTH CORP: S&P Rates New $250MM Sr. Unsecured Notes 'BB-' HEALTHWAREHOUSE.COM INC: Had $1.6-Mil. Net Loss in First Quarter HEALTHWAREHOUSE.COM INC: Incurs $1.5 Million Net Loss in Q1 HOVNANIAN ENTERPRISES: Reports $34.7 Million Net Income in Q3 HMC/CAH CONSOLIDATED: CAH 2 Taps Olsen as Special Legal Counsel HUDBAY MINERALS: S&P Rates New $400MM Senior Unsecured Notes 'B' IHS HOTELS: Case Summary & 4 Unsecured Creditors IMAGEWARE SYSTEMS: Bruce Toll Discloses 9.6% Equity Stake INTERNATIONAL HOME: Wants Until Sept. 28 to File Ch. 11 Plan IRVINE SENSORS: To Acquire Assets of Bivio Networks for $10.5MM JEFFERSON COUNTY, AL: Citizens Sue to Void Lien on Sewer Revenue K-V PHARMACEUTICAL: Loses Suit That Controls Outcome of Ch. 11 KB HOME: Fitch Affirms 'B+' Senior Unsecured Rating KNIGHT CAPITAL: Royce Associates Owns 4.9% of Class A Shares KNIGHT-CELOTEX: Equitable Estoppel Can't Be Used to Cause Inequity LDK SOLAR: To Release Second Quarter Results Sept. 17 LEAGUE NOW: Sells $27,500 Convertible Note to Asher Enterprises LIGHTSQUARED INC: Has No Ongoing Business, Lenders Point Out LIVE OAK DEVELOPMENT: Taps J. Craig Cowgill as Lead Counsel LON MORRIS: Capstone Approved as Financial Advisor LON MORRIS: McKool Smith Approved as Bankruptcy Counsel LON MORRIS: Webb & Associates Approved as Estate's Counsel MB2 INC: Case Summary & 17 Largest Unsecured Creditors MF GLOBAL: Lawsuit Agreement to Be Approved By Judge MIDSTATES PETROLEUM: S&P Rates New $550MM Sr. Unsecured Notes 'B-' MOSDOS CHOFETZ CHAIM: Jewish Campus Files for Chapter 11 NAVISTAR INTERNATIONAL: Reports $96 Million Net Income in Q3 NET ELEMENT: Receives $9.5-Mil. Credit Facility from Alfa-Bank NEW SALEM MISSIONARY: Bankruptcy Filing Blocks Bank Foreclosure NEWLEAD HOLDINGS: Fails to Comply with NASDAQ Market Value Rule NORTHCORE TECHNOLOGIES: Launches New Customer Application OCALA FUNDING: Taps Gamba & Lombana as Deloitte Litigation Counsel OCEAN BREEZE PARK: Sec. 341 Creditors' Meeting Set for Sept. 12 OCEAN BREEZE PARK: Taps Proctor Crook as Accountants OCONEE REGIONAL: S&P Lowers Rating on Revenue Debt to 'B+' ODYSSEY PICTURES: Palmstierna Moberg Holds 5.1% Equity Stake OLYMPIC HOLDINGS: Wants to Employ M. Jonathan Hayes as Counsel OLYMPIC HOLDINGS: JPMorgan Says Case Filed in Bad Faith OTOLOGICS LLC: Court OKs Sale to Cochlear for $14 Million OVERLAND STORAGE: Incurs $2.7 Million Net Loss in Fourth Quarter PACIFIC GOLD: Investor Converts Debt Into 52.9MM Common Shares PACIFIC THOMAS: Taps Matlock Law as General Insolvency Counsel PACTIV CORP: $300-Mil. Note Rating Lowered to Caa2 PANDA SHERMAN: S&P Affirms Prelim 'B+' Rating on $350MM Credit PAR PHARMACEUTICAL: S&P Assigns 'B+' Prelim Corp. Credit Rating PARADISE HARBOR: Case Summary & 20 Largest Unsecured Creditors PEREGRINE FINANCIAL: Trustee Proposes to Distribute $123 Million PHIL'S CAKE: Files for Chapter 11 in Tampa PHIL'S CAKE: Case Summary & 20 Largest Unsecured Creditors PINNACLE AIRLINES: Wants Deal Cut With Union by Sept. 13 PROFESSIONAL ROOFING: Case Summary & 20 Largest Unsec. Creditors PROTEONOMIX INC: Restates Q1 Report to Correct Errors PROTEONOMIX INC: Amends Q1 Form 10-Q, Reports $1.3MM Net Loss PURADYN FILTER: Settles Civil Suit with Former CEO R&S ST. ROSE: Ghandi Law Offices Approved as Bankruptcy Counsel RAVENWOOD HEALTHCARE: Authorized to Pay Critical Vendors Claims RAVENWOOD HEALTHCARE: Court OKs Mitchell Day as Special Counsel RAVENWOOD HEALTHCARE: Governmental Proofs of Claim Due Nov. 21 RESIDENTIAL CAPITAL: Committee Opposes 9 Months of Exclusivity ROCK POINTE: Creditors Committee Taps Ken Gates as Attorney RTW PROPERTIES: Can Access Wells Fargo Cash Thru Dec. 31 RTW PROPERTIES: Has Access to Arvest Bank Cash Thru March 2013 SALLY HOLDINGS: To Offer Additional $150-Mil. 5.75% Senior Notes SAN BERNARDINO, CA: Council Cuts Deficit by Two-Thirds SANOHO DEVELOPMENT: Can Use FCB Cash Collateral Until Oct. 31 SEACOR HOLDINGS: S&P Cuts Corp. Credit Rating to 'BB'; Outlook Neg SEARCHMEDIA HOLDINGS: Appoints New COO for China Operations SEQUOIA PARTNERS: Reorganization Case Converted to Chapter 7 SIX3 SYSTEMS: S&P Assigns 'B+' Corporate Credit Rating SOLYNDRA LLC: Workers' WARN Settlement Initially Approved SOUTHFIELD OFFICE: Case Summary & 20 Largest Unsecured Creditors SUNVALLEY SOLAR: Issues 950,000 Convertible Preferred Stock T BANCSHARES: OCC Terminates Regulatory Agreement with Bank TDCS LLC: Voluntary Chapter 11 Case Summary TELL TALE: Case Summary & 4 Unsecured Creditors THREE ON TWO: Case Summary & 6 Largest Unsecured Creditors TRAFFIC CONTROL: Wants Until Nov. 16 to Propose Chapter 11 Plan TRANS ENERGY: Opportune Partner Named to Board of Directors TRI-VALLEY CORP: To Auction Oil and Gas Assets by December TRIDENT MICROSYSTEMS: Commissioner Named to Lead Deposition TRILLIUM CIRCLE: Combined Plan/Disclosure Statement Due Sept. 26 TROCK, L.P.: Case Summary & Largest Unsecured Creditor UNIVERSITY GENERAL: Picked as Rice Athletics Official Caterer UTSTARCOM HOLDINGS: Closes Divestiture of IPTV Business VALENCE TECHNOLOGY: Amends List of Largest Unsecured Creditors VISUALANT INC: Extends Expiration of Conv. Debentures to 2013 VYCOR MEDICAL: Extends 93.6-Mil. Shares Offering Until June 2013 WARNER MUSIC: Units Enter Into Letter Agreements with Cinram WARNER SPRINGS: Case Conversion Hearing Set for Sept. 13 WARNER SPRINGS: UDI Owners Want to Sit on Official Committee WOLFGANG CANDY: To Work Out Details on Asset Sale WPCS INTERNATIONAL: Inks 2nd Amendment to Sovereign Credit Pact * Bankruptcies Decline 14% in August, Commercial Cases Off More * BOND PRICING -- For Week From Aug. 27 to 31, 2012 ********* 116 PROSPECT: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 116 Prospect Realty, Inc 372 North Main Street Lodi, NJ 07644 Bankruptcy Case No.: 12-31897 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Richard J. Kwasny, Esq. KWASNY & REILLY 53 South Main St. Yardley, PA 19067 Tel: (215) 321-0300 Fax: (215) 321-9336 E-mail: kwasnylaw@aol.com Scheduled Assets: $3,663,144 Scheduled Liabilities: $4,139,486 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- 180 Prospect Realty, Inc 12-31898 Assets: $3,505,667 Debts: $3,708,075 Fairview Apartments, Inc. 12-31899 State Properties 2005, LLC 12-31900 The petition was signed by Wilfredo Alvarez, president and shareholder. A. A copy of the 116 Prospect Realty, Inc.'s list of its four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-31897.pdf B. A copy of 180 Prospect Realty, Inc.'s list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-31898.pdf 1717 MARKET: Examiner Report Due Sept. 10 ----------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri, directed the U.S. Trustee for Region 13 to appoint an examiner in the Chapter 11 cases of 1717 Market Place, LLC. The Debtor consented to Regions Bank's request for an examiner. The Bank and the Debtor have agreed to the appointment of an examiner for limited purposes. They agreed to these terms: a) The examiner's term would expire upon filing a report with the Bankruptcy Court. b) The examiner will investigate and report on all aspects of the tax increment financing and transportation development district projects of Debtor. The investigation will include but not be limited to: (i) the creation of, operation of, and a report of all of Debtor's rights to payments, reimbursements or any other amounts under the TIF/TDD programs from its inception to date and into the future; (ii) all TIF payments and all TDD payments with respect to each of the occupants in the district, as well as all distributions and payments made by the City of Joplin and the State of Missouri to the Debtor or any third party from its inception to date and into the future; (iii) all TIF and TDD cost certifications delivered to the City and the State since the inception of the TIF and the TDD; and (iv) the status of current amounts available for reimbursement under the TIF and TDD (including all reimbursement payments made to date by the City and the State). c) The examiner will prepare a report, which report will be delivered to Bank and Debtor by Sept. 10, 2012. As of June 1, 2012, the Debtor is indebted to Bank under the Notes $10,017,875. The U.S. Trustee, in its objection to the consensual motion to appoint examiner, requested that the examiner's mandate not restrict the examiner's ability to investigate or report on any matters identified by the examiner that would materially affect the bankruptcy estate, as fraud or gross mismanagement. About 1717 Market Place 1717 Market Place LLC, a grocery-store business, filed for Chapter 11 protection (Bankr. W.D. Mo. Case No. 12-bk-00984) on July 17, 2012, in Springfield, Missouri. The Debtor estimated assets and liabilities of at least $10 million. G&S Holdings LLC owns 98% of the company and the remaining 2% is owned by J. Scott Schaefer and Richard T. Gregg, according to court papers. 1717 Market Place said it is a defendant in a lawsuit brought by Regions Bank in Joplin, Missouri, relating to a promissory note. The bank is seeking the appointment of a receiver. David Schroeder Law Offices, P.C., serves as the Debtor's counsel. 68 SANDY: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 68 Sandy Hollow Rd Corp. 196 Butler Avenue Staten Island, NY 10307 Bankruptcy Case No.: 12-46432 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Fredrick P. Stern, Esq. FREDRICK P STERN & ASSOCIATES PC 2163 Sunrise Highway Islip, NY 11751 Tel: (631) 650-9260 Fax: (631) 650-9259 E-mail: FredPStern@netscape.net Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Richard J. Bivona, president. 9737 FOREST: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 9737 Forest Lane LLC c/o Main street Partners & Assoc., Inc. 105 West Walnut Street Gardena, CA 90248 Bankruptcy Case No.: 12-35720 Chapter 11 Petition Date: September 3, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txnb12-35720.pdf The petition was signed by Michael Aulert, president of managing member. 4KIDS ENTERTAINMENT: Fires Brian Lacey as EVP of International -------------------------------------------------------------- The employment of Brian Lacey, executive vice president of International of 4Kids Entertainment, Inc., was terminated on Aug. 31, 2012. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. Hahn & Hessen LLP serves as counsel to the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions LLC serves as its information agent for the Committee. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by Kyle C. Bisceglie, Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. In January 2012, the bankruptcy judge ruled in favor of 4Kids, deciding that the Yu-Gi-Oh! property license agreement between the Debtor and the licensor was not effectively terminated prior to the bankruptcy filing. Following the ruling, 4Kids entered into a settlement where it would receive $8 million to end the dispute over its valuable Yu-Gi-Oh! Property. 4KIDS ENTERTAINMENT: EisnerAmper OK'd to Conduct 401(k) Audit ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized 4Kids Entertainment, Inc., et al., to expand the scope of employment of EisnerAmper LLP, to conduct an audit of the financial statements and supplemental schedules of the Debtors' 401(k) Plan as of Dec. 31, 2011, nunc pro tunc to May 14, 2012. The Debtors are authorized to make payments to EisnerAmper for compensation and reimbursement of expenses as set forth in the Engagement Letter. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. Hahn & Hessen LLP serves as counsel to the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions LLC is the information agent for the Committee. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by Kyle C. Bisceglie, Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. In January 2012, the bankruptcy judge ruled in favor of 4Kids, deciding that the Yu-Gi-Oh! property license agreement between the Debtor and the licensor was not effectively terminated prior to the bankruptcy filing. Following the ruling, 4Kids entered into a settlement where it would receive $8 million to end the dispute over its valuable Yu-Gi-Oh! Property. 4Kids Entertainment, Inc., and its subsidiaries, completed the sale of certain of its assets pursuant to the Asset Purchase Agreement, entered into on June 24, 2012, among the Company, Kidsco Media Ventures LLC, an affiliate of Saban Capital Group, and 4K Acquisition Corp., an affiliate of Konami Corporation. In connection with the consummation of those transactions, the Konami Purchaser paid the Seller an aggregate amount equal to $14,996,950, 4KIDS ENTERTAINMENT: Plan Filing Exclusivity Expires Sept. 10 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, in a fifth order, extended 4Kids Entertainment, Inc., et al.'s exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Sept. 10, 2012, and Nov. 9, respectively. In June, the Debtors filed a motion seeking to control over its case for another two months as it awaits the outcome of sale negotiations between two rival bidders for its assets. In June 4Kids Entertainment received approval from the bankruptcy court in New York to sell the business for $15 million to two buyers. The price will pay creditors in full, with a "substantial" amount left over for owners, the company said in a court filing. According to the report, an affiliate of Tokyo-based Konami Corp. is purchasing the licenses for the Yu-Gi-Oh! animated television programs. Kidsco Media Venture LLC, affiliated with Saban Capital Group Inc., is buying the programming agreement with the CW Network LLC. The eventual sale represented a $3.2 million improvement over the $11.8 million bid Saban made for all the assets at auction. After the auction, 4Kids worked out a joint offer that improved the effective net sale price. In July, the Company announced that the sale has been completed. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. Hahn & Hessen LLP serves as counsel to the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions LLC is the information agent for the Committee. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by Kyle C. Bisceglie, Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. In January 2012, the bankruptcy judge ruled in favor of 4Kids, deciding that the Yu-Gi-Oh! property license agreement between the Debtor and the licensor was not effectively terminated prior to the bankruptcy filing. Following the ruling, 4Kids entered into a settlement where it would receive $8 million to end the dispute over its valuable Yu-Gi-Oh! Property. 4Kids Entertainment, Inc., and its subsidiaries, completed the sale of certain of its assets pursuant to the Asset Purchase Agreement, entered into on June 24, 2012, among the Company, Kidsco Media Ventures LLC, an affiliate of Saban Capital Group, and 4K Acquisition Corp., an affiliate of Konami Corporation. In connection with the consummation of those transactions, the Konami Purchaser paid the Seller an aggregate amount equal to $14,996,950, AHMAC PROPERTIES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: AHMAC Properties, LLC 1854 SW 142 Pl Miami, FL 33175 Bankruptcy Case No.: 12-31229 Chapter 11 Petition Date: September 3, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Michael S. Hoffman, Esq. HOFFMAN, LARIN & AGNETTI, P.A. 909 North Miami Beach Boulevard, #201 Miami, FL 33162 Tel: (305) 653-5555 E-mail: Mshoffman@hlalaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Hada Cruz, manager. AMERICAN AIRLINES: US Trustee Faults Payments to Flight Attendants ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that just when AMR Corp. thought it had new contracts sewed up voluntarily or involuntarily with all nine unions, the parent of American Airlines Inc. was confronted with an objection from the U.S. Trustee to approval of contracts ratified by the flight attendants' union and employees represented by the Transport Workers Union. According to the report, the contracts call for American to pay both unions $7 million in reimbursement of expenses incurred in connection with the new contracts. In papers filed in bankruptcy court on Sept. 5, the U.S. Trustee contends that the cash payments violate bankruptcy law. The U.S. Trustee, an arm of the U.S. Justice Department, cites authority for the proposition that creditors are entitled to reimbursement of expenses following bankruptcy only in return for making a "substantial contribution" to the case, not for contributing to their own wellbeing. The bankruptcy judge in New York will decide at a Sept. 12 hearing whether there is basis for AMR to make the payments. Among the nine AMR unions, only the pilots voted down their contract. At a hearing last week, the bankruptcy judge imposed 20% in concessions on the pilots. For agreeing to new contracts voluntarily, AMR only received 17% in concessions from the other unions. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN PATRIOT: Two Directors Elected at Annual Meeting --------------------------------------------------------- The 2012 annual meeting of shareholders of American Patriot Financial Group, Inc., was held on Aug. 31, 2012. At the annual meeting, Wendy C. Warner and James Randal Hall were elected as directors. In addition, the shareholders ratified the appointment of Hazlett, Lewis & Bieter, PLLC, as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2012. About American Patriot Based in Greenville, Tenn., American Patriot Financial Group, Inc. is a one-bank holding company formed as a Tennessee corporation to own the shares of American Patriot Bank. The Bank is the only subsidiary of the Corporation. American Patriot Bank commenced operations as a state chartered bank on July 9, 2001. The Bank had total assets of roughly $118 million at Dec. 31, 2009. The Bank is not a member of the Federal Reserve System. The Bank's customer base consists primarily of small to medium- sized business retailers, manufacturers, distributors, land developers, contractors, professionals, service businesses and local residents. On Aug. 18, 2010, the Company received from the Federal Deposit Insurance Corporation, a Supervisory Prompt Corrective Action Directive, dated August 17, 2010, due to American Patriot Bank's "significantly undercapitalized" status. The Directive requires that the Bank submit an acceptable capital restoration plan on or before August 31, 2010, providing that, among other things, at a minimum, the Bank will restore and maintain its capital to the level of "adequately capitalized." In its audit report for the 2011 results, Hazlett, Lewis & Bieter, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses for the past five years resulting in a retained deficit of $7.15 million at Dec. 31, 2011. At Dec. 31, 2011 and 2010, the Company and its subsidiary were significantly undercapitalized based on regulatory standards and has consented to an Order to Cease and Desist with its primary federal regulator that requires, among other provisions, that it achieve regulatory capital thresholds that are significantly in excess of its current actual capital levels. The Company's nonperforming assets have increased significantly during 2011 and 2010 related primarily to deterioration in the credit quality of its loans collateralized by real estate. The Company, at the holding company level, has a note payable that was due Feb. 28, 2011, which is now in default. This note is securitized by 100 percent of the stock of the subsidiary. The Company reported a net loss of $1.18 million in 2011, compared with a net loss of $2.29 million in 2010. The Company's balance sheet at June 30, 2012, showed $86.78 million in total assets, $85.92 million in total liabilities and $864,634 in total stockholders' equity. AMSCAN HOLDINGS: S&P Cuts Corp. Credit Rating to 'B'; Off Watch --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Amscan Holdings Inc. to 'B' from 'B+'. "We also removed the rating from CreditWatch, where we had placed it with negative implications on June 18, 2012. The outlook is stable," S&P said. "We subsequently withdrew all the ratings on the company," S&P said. "The downgrade and withdrawal of the ratings follows the completion of Thomas H. Lee Partners' acquisition of Amscan on July 27, 2012 and subsequent debt repayment. All of Amscan's first-lien credit facilities were repaid and terminated, and the senior subordinated notes were redeemed in full. Following the closing of this leveraged buyout, Amscan was merged into its existing parent company, Party City Holdings Inc. (B/Stable/--)," S&P said. "We had previously indicated we would lower and withdraw our ratings on Amscan once the acquisition closed and all of the senior credit facilities were repaid and the senior subordinated notes at Amscan were redeemed," said Standard & Poor's credit analyst Stephanie Harter. ASP UNITED: S&P Assigns 'B-' Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' preliminary corporate credit rating to Bristol, Tenn.-based ASP United Holding Co. "At the same time, we assigned a 'B-' preliminary issue-level rating to ASP's proposed $335 million first-lien credit facilities, consisting of a $50 million revolving credit facility and a $285 million senior secured first-lien term loan. The recovery rating on the credit facility is '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of payment default. We also assigned a 'CCC' preliminary issue-level rating to ASP's proposed $100 million second-lien term loan. The recovery rating on the term loan is '6', indicating our expectation for negligible (0% to 10%) recovery in the event of payment default," S&P said. "The preliminary 'B-' corporate credit rating on ASP reflects our view of the company's 'vulnerable' business risk profile and its 'highly leveraged' financial risk profile," said credit analyst Megan Johnston. "We believe key business risks include the company's relatively modest size, a dependence on the cyclical mining and energy end markets for a large portion of its revenues and earnings, and risks the mining supply company faces integrating GHX, a fluid transfer and sealing products distributor, ASP has entered into a definitive agreement to acquire for $240 million." "The rating outlook is stable, reflecting our belief that ASP's credit measures will remain in line with the preliminary 'B-' corporate credit rating. We could lower the ratings if the company's liquidity position deteriorates such that we deem it to be 'less than adequate.' We view an upgrade as unlikely over the near term; however, we would consider raising the ratings if leverage fell to below 5x and the company's liquidity position strengthened," S&P said. ATP OIL: Tel Aviv Court Seizes Israeli Gas Licenses --------------------------------------------------- Amiram Barkat at Israel McClatchy-Tribune Information Services reports that the Tel Aviv District Court has seized the rights of ATP Oil & Gas Corporation in the Shimshon and Daniel offshore licenses. According to the report, the unexpected seizure could delay by up to two years the development plans for the Shimshon license, where natural gas has been discovered, and exploration plans for the East and West Daniel licenses. The report relates the court seized ATP's rights to the licenses after the company filed for Chapter 11 bankruptcy protection with the Bankruptcy Court for the Southern District of Texas in mid- August. However, ATP's creditors discovered that the company's offshore exploration licenses in Israel were held by a subsidiary, ATP East Med Number BV, which was not protected from seizure under U.S. bankruptcy laws. The report adds ATP set up ATP East Med at the order of the Petroleum Supervisor at the Ministry of Energy and Water Resources. ATP East Med owns 35% of the Shimshon and East and West Daniel licenses, and ATP directly owns 5% of them. Isramco Ltd. and its affiliates own the other 60%. ATP said in its petition for bankruptcy protection that it owes 1,000 creditors $3.4 billion. The report notes the Texas court appointed a trustee for the company's assets. According to documents obtained by "Globes", the trustee wants to keep some of the company's exploration rights in Israel and sell the rest. Until the fate of the seizure and the trustee's decisions are decided, ATP's business will likely be paralyzed. Energy market sources believe that the seizure of ATP East Med's assets is a complication for the Israeli government, because the Shimshon licensees could obtain rights to the license after major signs of gas were found in a survey of it. The gas discovery prevents the state from seizing ATP's rights to the licenses for two years from the date of the discovery, the report says. The report notes Shimshon was officially declared a gas discovery in early August. The license, located 91 kilometers northwest of Ashdod, has a best estimate of 2.3 trillion cubic feet of natural gas with a 20% geological probability of success. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The company disclosed US$3,638,399,000 in assets and US$3,485,838,000 in liabilities as of March 31, 2012. Debt includes US$365 million on a first-lien loan, US$1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent, US$35 million on convertible notes and US$23.4 million owing to third parties for their shares of production revenue. The Bloomberg report disclosed that ATP reported a net loss of US$145.1 million in the first quarter on revenue of US$146.6 million. Income from operations in the quarter was US$11.8 million. For 2011, the net loss was US$210.5 million on revenue of US$687.2 million. ATP OIL: Enters Into $617.6 Million DIP Credit Facility ------------------------------------------------------- ATP Oil & Gas Corporation entered into a Senior Secured Super Priority Priming Debtor-in-Possession Credit Agreement under which Credit Suisse AG serves as the administrative agent and collateral agent, and Credit Suisse Securities (USA) LLC, acts as the sole bookrunner and sole lead arranger. The Lenders agreed, if approved by the Bankruptcy Court, to lend up to $250,000,000 in term loans, $50,000,000 of which has already been advanced to the Company, and additional term loans of up to $367,600,000 plus an amount equal to all accrued and unpaid interest on certain prepetition obligations, which additional term loans would be extended to refinance loans made prior to the date of the Bankruptcy Filing by the Lenders or their affiliates. The proceeds of the New Funding Amount, subject to the DIP Budget will be used to pay the fees, costs and expenses incurred by the Company in the administration of the Bankruptcy Case, to provide for working capital and to fund certain capital expenditures for the development of the leases related to the Company's "Clipper Project" and "Gomez #9 Project", each located in the Gulf of Mexico. The proceeds of the Refinancing Amount will be used to refinance Prepetition Loans. Pursuant to the DIP Credit Agreement, any Lender may convert Prepetition Loans held by it or its affiliates, plus the Consent Fee with respect thereto and all accrued and unpaid interest thereon, into loans under the Refinancing Amount in an aggregate principal amount equal to the product of (i) the commitment of such Lender with respect to the New Funding Amount times (ii) 1.6785379131272. The amount of accrued and unpaid interest on each such Lender's Prepetition Loans through the date of that conversion will be added to the aggregate principal amount of that Lender's loans allocable to the Refinancing Amount. Under the DIP Credit Agreement, the Company has the option of borrowing at an interest rate per annum equal to an Adjusted LIBO Rate plus 8.50%, or at an interest rate per annum equal to the Alternate Base Rate plus 7.50%. Under the DIP Credit Agreement, the Company has agreed to a floor on the Adjusted LIBO Rate of 1.50% per annum and a floor on the Alternate Base Rate of 2.50% per annum. The proceeds of the loans under the New Funding Amount are to be issued at a price of 98.00% of the principal amount thereof. The Company will pay a commitment fee at a rate equal to 4.25% per annum on the daily aggregate amount of unfunded commitments with respect to the New Funding Amount. Further, the Lenders who refinanced their Prepetition Loans as part of the Refinancing Amount will receive a consent fee equal to 2.00% of their Prepetition Loans so refinanced. Upon an event of default under the DIP Credit Agreement and for so long as such default continues, 4.00% per annum will be added to the applicable interest rate. The DIP Credit Agreement has conditions precedent to the Company's ability to obtain loans with respect to the New Funding Amount, which are tied to the Final Order being obtained, certain milestones with respect to the Clipper Project and the Company's Telemark and Gomez fields, to a capital expenditure cap for the Clipper Project as well as there being no default under the DIP Credit Agreement. The DIP Credit Agreement limits, among other things, the Company's ability to (i) incur indebtedness, (ii) incur or create liens, (iii) make loans and investments, (iv) dispose of assets, (v) pay dividends, (vi) make capital expenditures, (vii) enter into mergers, (viii) transact business with affiliates, (ix) change the Company's line of business and (ix) amend certain material agreements. In addition to standard obligations, the DIP Credit Agreement provides for (i) periodic delivery by the Company of various budgets that require the approval of a requisite number of Lenders as set forth in the DIP Credit Agreement, (ii) delivery of variance reports, and weekly and monthly updates to such budgets, (iii) engagement of a chief restructuring officer, and (iv) specific milestones that the Company must achieve by specific target dates. The DIP Credit Agreement contains certain events of default, the occurrence of which will permit the Agent and the Lenders to exercise certain remedies, including without limitation acceleration of the loans, termination of the commitments to extend credit thereunder and realization upon the collateral. The Company's obligations under the DIP Credit Agreement and the other related loan documents will be guaranteed by certain subsidiaries as required by the DIP Credit Agreement; provided, however, there were no guarantors as of Aug. 29, 2012. As security for the performance of the obligations of the Company under the DIP Credit Agreement and the related loan documents, the Agent, for the benefit of itself and the other Lenders, has been granted a first-priority senior security interest in and lien on substantially all of the Company's property, having the priority and subject to the terms and conditions set forth in the DIP Credit Agreement and the Bankruptcy Court's orders. The outstanding principal amount of loans under the DIP Credit Agreement, plus all accrued and unpaid interest thereon, will be due and payable on the earliest of: (i) 18 months after Aug. 29, 2012, (ii) 35 days after entry of the Interim Order if the Final Order has not been entered prior to the expiration of such 35-day period, (iii) the effective date of a Chapter 11 plan filed that is confirmed pursuant to an order entered by the Bankruptcy Court and (iv) the acceleration of the loans and termination of the commitments due and payable thereunder, in accordance with the terms of the DIP Credit Agreement. A copy of the DIP Agreement is available for free at: http://is.gd/ApjVUE About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The company disclosed US$3,638,399,000 in assets and US$3,485,838,000 in liabilities as of March 31, 2012. Debt includes US$365 million on a first-lien loan, US$1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent, US$35 million on convertible notes and US$23.4 million owing to third parties for their shares of production revenue. The Bloomberg report disclosed that ATP reported a net loss of US$145.1 million in the first quarter on revenue of US$146.6 million. Income from operations in the quarter was US$11.8 million. For 2011, the net loss was US$210.5 million on revenue of US$687.2 million. AZURE DYNAMICS: Monitor Seeks U.S. Nod of Employee Retention Plan ----------------------------------------------------------------- Ernst & Young Inc., the court-appointed monitor and authorized foreign representative of Azure Dynamics Corporation, et al., asks the U.S. Bankruptcy Court for the Eastern District of Michigan to enter an order giving full force and effect in the United States of its employee retention plan. The Canadian Court has already approved an employee retention plan for the Azure Group. The Azure Group, in consultation with the monitor, developed the ERP in order to retain the current employees of the Azure Group and to provide incentives to senior management to implement a successful transaction as part of the sale and investment solicitation process, which process is designed to provide a framework for the Azure Group to identify and effectively negotiate with potential purchasers or investors. The ERP reflects the Azure Group's recognition that its employee base and associated human capital is a critical asset that has a direct impact on the Azure Group's going-concern value. A copy of the terms of the retention plan is available for free at http://bankrupt.com/misc/AZUREDYNAMICS_employeeretentionplan.pdf About Azure Dynamics Corp. Azure Dynamics Corporation and its affiliates filed a petition in the Supreme Court of British Columbia for an initial order under the Companies' Creditors Arrangement Act on March 26, 2012. Kevin B. Brennan at Ernst & Young, Inc., was appointed as the CCAA monitor. On the same day, the monitor commenced bankruptcy cases under Chapter 15 of the U.S. Bankruptcy Code for Azure Dynamics Incorporated aka Azure Dynamics U.S. Inc.; Azure Dynamics Corp.; Azure Dynamics Inc.; and Azure Dynamics Limited (Bankr. E.D. Mich. Case Nos. 12-47496, 12-47498, 12-47501 and 12-47502), seeking recognition of the CCAA proceedings. The cases are jointly administered. Azure -- http://www.azuredynamics.com/-- considered itself a world leader in the development and production of hybrid electric and electric components and powertrain systems for light and medium duty commercial vehicles. Azure targets the commercial delivery vehicle and shuttle bus markets and is currently working internationally with a variety of partners and customers. The Company is committed to providing customers and partners with innovative, cost-efficient, and environmentally-friendly energy management solutions. As of Dec. 31, 2011, the Azure Group had total, consolidated assets with a net book value of $42.475 million, comprising current assets of $31.18 million and non-current assets of $11.30 million. As at Dec. 31, 2011, the Azure Group had total, consolidated liabilities of $29.20 million, comprising current liabilities of $20.6 million and non-current liabilities of $8.58 million. Judge Walter Shapero oversees the cases. Lawyers at Pepper Hamilton LLP represent the Chapter 15 petitioner. BATAA/KIERLAND: JPMCC to Pay Fees for Failure to Join Mediation --------------------------------------------------------------- The Hon. Randolph J. Haines of the U.S. Bankruptcy Court for the District of Arizona ordered JPMCC 2007-CIBC 19 East Greenway, LLC JPMCC to immediately pay to: -- Bataa/Kierland, LLC's counsel, Polsinelli Shughart, PC, the amount of $15,610 in attorney's fees; and -- the Debtor the amount of $6,000 in costs. The Court said that these amounts be free and clear of JPMCC's liens against the Debtor. The Debtor has requested that the Court sanction, in the form of a recovery of attorney's fees and costs, JPMCC for its failure to participate in mediation in good faith. As reported in the Troubled Company Reporter on April 11, 2012, the Debtor related that JPMCC, Bataa/Kierland II, LCC (who has asserted certain claims against the Debtor), and Banker's Trust Company (a secured creditor of Kierland II who has also asserted claims against the Debtor) agreed to participate in the mediation with the hopes of resolving, among other things: a) the treatment of JPMCC's claims under the Debtor's Plan; and b) certain litigation among the parties concerning the Debtor's parking rights and responsibilities on Kierland II's property. According to the Debtor, the mediation was conducted by Gary Birnbaum. The parties reached a stipulated resolution at the mediation, consisting of a discounted payoff of JPMCC's claim through take-out financing which was to be provided by Banker's Trust. About Bataa/Kierland Bataa/Kierland, LLC, owns and operates a Class "A" office building known as Kierland Corporate Center located at 7047 E. Greenway Parkway, Scottsdale, Arizona. It filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-05850) on March 9, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Polsinelli Shughart PC serves as the Debtor's bankruptcy counsel. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Bataa/Kierland have expressed interest in serving on a committee. The court in Arizona on July 10 entered a memorandum decision confirming the amended Chapter 11 plan of reorganization dated Sept. 2, 2011 of Bataa/Kierland, LLC. BCAS LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: BCAS, LLC dba Tilton's Automotive Service P.O. Box 1142 Worthington, OH 43085 Bankruptcy Case No.: 12-57642 Chapter 11 Petition Date: September 3, 2012 Court: U.S. Bankruptcy Court Southern District of Ohio (Columbus) Judge: Charles M Caldwell Debtor's Counsel: Richard K. Stovall, Esq. ALLEN KUEHNLE STOVALL & NEUMAN LLP 17 South High Street, Suite 1220 Columbus, OH 43215 Tel: (614) 221-8500 Fax: (614) 221-5988 E-mail: stovall@aksnlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ohsb12-57642.pdf The petition was signed by Andrew S. Tilton, manager. BEAZER HOMES: Fitch Raises Issuer Default Rating to 'B-' -------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc. (NYSE: BZH) to 'B-' from 'CCC'. The Rating Outlook is Stable. The upgrade and the Stable Outlook reflect Beazer's operating performance so far this year, its robust cash position, and moderately better prospects for the housing sector during the remainder of this year and in 2013. The rating is also supported by the company's execution of its business model, land policies, and geographic diversity. Risk factors include the cyclical nature of the homebuilding industry, the company's high debt load and high leverage, BZH's underperformance relative to its peers in certain operational and financial categories, and its current over-exposure to the credit- challenged entry level market (approximately 60% of BZH's customers are first-time home buyers). BZH's homebuilding revenues for the third quarter year-to-date (YTD) period increased 57.6% to $628.5 million as home deliveries grew 50.6% to 2,820 homes and the average selling price improved 4.6% to $222,900. The company has also reported improved quarterly net sales in each of the last five quarters, contributing to a 31% increase in homes in backlog at June 30, 2012 compared with year ago levels. The significant increase in backlog, combined with the company's strategy to grow community count, should result in moderately higher deliveries in fiscal 2013 compared with 2012. Nevertheless, Fitch does not expect BZH to be profitable in fiscal 2013. The company has taken steps to further strengthen its balance sheet and improve its liquidity position to better participate in the housing recovery. In July 2012, BZH completed underwritten public offerings of its common stock, tangible equity units and a private placement of $300 million of 6.625% senior secured notes. Net proceeds from these transactions were roughly $466 million. Concurrently with the debt offering, BZH called for redemption of all of its $250 million 12% senior secured notes due 2017 and repaid $20 million under its outstanding cash secured term loan. These transactions are projected to lower annual interest expense by approximately $15 million. After giving effect to the debt and equity offerings, the company had unrestricted cash of $417.6 million on a pro forma basis as of June 30, 2012. BZH has also negotiated a commitment letter with four financial institutions for a proposed $150 million three-year secured revolving credit agreement, which would replace the company's existing $22 million revolving credit facility. This credit agreement is expected to close during the September quarter. The improved liquidity position provides BZH with some cushion as Fitch expects the company will continue to have operating losses and negative cash flow through fiscal 2013. Fitch currently expects BZH to end fiscal 2012 with unrestricted cash of between $400 million and $450 million. With higher land and development spending expected next year, unrestricted cash could fall below $250 million by the end of fiscal 2013. BZH increased land and development expenditures in 2011 following four years of reduced spending. The company spent approximately $221.6 million on land and development during fiscal 2011 compared with $182.7 million expended in fiscal 2010. Through the first nine months of fiscal 2012 (ending June 30, 2012), BZH spent roughly $140.6 million on land and land development compared with $177.9 million spent during the first nine months of fiscal 2011. The company expects land and development spending for all of 2012 to be similar to 2011 levels. Given the improvement in the overall housing market, BZH expects to more aggressively pursue growth in new communities going forward. Fitch is comfortable with this strategy given the company's enhanced liquidity position and the fact that BZH has no major debt maturities until 2015, when $172.5 million of senior notes become due. Furthermore, management has demonstrated in the past that it is capable of pulling back on land and development spending when necessary. At June 30, 2012, the company controlled 25,088 lots, of which 84.2% were owned and the remaining lots controlled through options. Based on the latest 12-month closings, BZH controlled six years of land and owned roughly five years of land. The company's owned-lot position includes 4,207 finished lots (or 19.9% of total owned lots), giving the company some discretion and flexibility in controlling its land and development spending. Builder and investor enthusiasm have for the most part surged so far in 2012. However, national housing metrics have not entirely kept pace. Year-over-year comparisons have been solidly positive on a consistent basis. Yet, month to month the national statistics (single-family starts, new home, and existing home sales) have been erratic and, at times, below expectations. In any case, year to date these housing metrics are well above 2011 levels. As Fitch has noted in the past, recovery will likely occur in fits and starts. Fitch's housing forecasts for 2012 have been raised since early spring, but still assume only a moderate rise off a very low bottom. In a slowly growing economy with relatively similar distressed home sales competition, less competitive rental cost alternatives, and new home inventories at historically low levels, single-family housing starts should improve about 12%, while new home sales increase approximately 10.5% and existing home sales grow 5.6%. Further moderate improvement is forecast for 2013. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels, especially free cash flow trends and uses, and the company's cash position. Beazer's ratings are constrained in the intermediate term due to weak credit metrics and high leverage. However, positive rating actions may be considered if the recovery in housing is maintained and is meaningfully better than Fitch's current outlook, BZH shows continuous improvement in credit metrics, and preserves a healthy liquidity position. Negative rating actions could occur if the anticipated recovery in housing does not materialize and the company prematurely steps up its land and development spending, leading to consistent and significant negative quarterly cash flow from operations and diminished liquidity position. In particular, Fitch will review the company's ratings if the company's liquidity position (unrestricted cash plus revolver availability) falls below $200 million. Fitch has upgraded the following ratings for BZH: -- Long-term IDR to 'B-' from 'CCC'; -- Secured revolver to 'BB-/RR1' from 'B+/RR1'; -- Second lien secured notes to 'BB-/RR1' from 'B+/RR1'; -- Senior unsecured notes to 'CCC+/RR5' from 'CCC/RR4'; -- Convertible subordinated notes to 'CCC/RR6' from 'C/RR6'; -- Junior subordinated debt to 'CCC/RR6' from 'C/RR6'. The Rating Outlook is Stable The Recovery Rating (RR) of 'RR1' on Beazer's secured credit revolving credit facility and second-lien secured notes indicates outstanding recovery prospects for holders of these debt issues. The 'RR5' on Beazer's senior unsecured notes indicates below- average recovery prospects for holders of these debt issues. Beazer's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debtholders. The 'RR6' on the company's mandatory convertible subordinated notes and junior subordinated notes indicates poor recovery prospects for holders of these debt issues in a default scenario. Fitch applied a liquidation value analysis for these recovery ratings. BENADA ALUMINUM: Hires Latham Shuker as Counsel ----------------------------------------------- Bernada Aluminum Products LLC asks for permission from the U.S. Bankruptcy Court to employ R. Scott Shuker and the law firm Latham, Shuker, Eden & Beaudine, LLP, as counsel, nunc pro tunc to Aug. 1, 2012. In the continuation of the Debtor's estate and in the administration of the case, legal services of Latham are required as to, but not limited to: (a) advising as to the Debtors' rights and duties in the case; (b) preparing pleadings related to the case, including a disclosure statement and plan of reorganization; and (c) taking any and all other necessary action incident to the proper preservation and administration of the estate. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The services will be billed at the standard hourly rates of the respective attorneys and paralegals of the firm, which range from $500 for its most experienced attorneys and $105 for its most junior paraprofessionals. Before the Chapter 11 filing, the Debtor paid an advance fee of $91,722 for postpetition services and expenses. About Benada Benada was formed in 2011 to purchase assets of two aluminum products manufacturing companies. It purchased via 11 U.S.C. Sec. 363 the Sanford facility of Florida Extruders International (Case No. 08-07761). It also purchased the assets Miami, Florida-based Benada Aluminum of Florida Inc. The Debtor has since consolidated operations and operates only out of its location in Sanford. The Company filed for Chapter 11 protection on Aug. 1, 2012 (Bankr. M.D. Fla. Case No. 12-10518). Judge Karen S. Jennemann presides over the case. R. Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, represents the Debtor. The Debtor estimated between $10 million and $50 million in assets and debts. BIOFUEL ENERGY: David Einhorn Discloses 36.2% Equity Stake ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, David Einhorn and his affiliates disclosed that, as of Aug. 27, 2012, they beneficially own 2,212,274 shares of common stock of Biofuel Energy Corp. representing 36.2% of the shares outstanding. A copy of the amended filing is available for free at http://is.gd/pb1oQk About Biofuel Energy Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) -- http://www.bfenergy.com/-- aims to become a leading ethanol producer in the United States by acquiring, developing, owning and operating ethanol production facilities. It currently has two 115 million gallons per year ethanol plants in the Midwestern corn belt. The Company reported a net loss of $10.36 million in 2011, compared with a net loss of $25.22 million during the prior year. BioFuel Energy's balance sheet at June 30, 2012, showed $275.09 million in total assets, $197.90 million in total liabilities and $77.18 million in total equity. Bankruptcy Warning "Drought conditions in the American Midwest have significantly impacted this year's corn crop and caused a significant reduction in the anticipated corn yield," the Company said in its quarterly report for the period ended June 30, 2012. "Since the end of the second quarter, this has led to a dramatic increase in the price of corn and a corresponding narrowing in the crush spread. Should current commodity margins continue for an extended period of time, we may not generate sufficient cash flow from operations to both service our debt and operate our plants. We are required to make, under the terms of our Senior Debt Facility, quarterly principal payments in a minimum amount of $3,150,000, plus accrued interest. We cannot predict when or if crush spreads will fluctuate again or if the current commodity margins will improve or worsen. If crush spreads were to remain at current levels for an extended period of time, we may expend all of our sources of liquidity, in which event we would not be able to pay principal and interest on our debt. In the event crush spreads narrow further, we may choose to curtail operations at our plants or cease operations altogether until such time as crush spreads improve. Any inability to pay principal and interest on our debt would lead to an event of default under our Senior Debt Facility, which, in the absence of forbearance, debt service abeyance or other accommodations from our lenders, could require us to seek relief through a filing under the U.S. Bankruptcy Code. We expect fluctuations in the crush spread to continue." BLAST ENERGY: Extends Maturity of Centurion Notes Until Nov. 30 --------------------------------------------------------------- On Aug. 30, 2012, PEDEVCO Corp., formerly known as Blast Energy Services, Inc., entered into the Third Amendment to Senior Secured Promissory Notes with Centurion Credit Funding, LLC, which amended certain provisions of the Senior Secured Promissory Note (First Tranche) and Senior Secured Promissory Note (Second Tranche) previously entered into with the Lender, each dated Feb. 24, 2011, as amended. The Promissory Notes were amended to provide an extension of the maturity date of such Promissory Notes, which were due as of Aug. 1, 2012, to the earlier of (i) Nov. 30, 2012, or (ii) the date all obligations and indebtedness under those Promissory Notes are accelerated in accordance with the terms and conditions of those Promissory Notes. Furthermore, the Company agreed to deposit an additional $700,000 as a "repayment deposit" into the Company's bank account that is subject to a deposit account control agreement entered into by and between the Company and the Lender in order to provide additional security to the Lender for the debt obligations underlying the Promissory Notes, with the DACA being revised to provide that the Lender may not have access to those funds until the maturity date of those Promissory Notes, unless a default or event of default under the Promissory Notes have occurred. Additionally, the Third Amendment to the Promissory Notes removed the prior prohibition which limited the Lender to converting the Promissory Notes only once every thirty days. A copy of the Third Amendment is available for free at: http://is.gd/622tsC About Blast Energy Houston, Texas-based Blast Energy Services, Inc., is seeking to become an independent oil and gas producer with additional revenue potential from its applied fluid jetting technology. The Company plans to grow operations initially through the acquisition of oil producing properties and then eventually, to acquire oil and gas properties where its applied fluid jetting process could be used to increase the field production volumes and value of the properties in which it owns an interest. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million for 2011, compared with a net loss of $1.51 million for 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $3.98 million in total liabilities and a $2.11 million total stockholders' deficit. BLUE SKY CAPITAL: Tenn. Court Issues Permanent Trading Ban ---------------------------------------------------------- The U.S. Commodity Futures Trading Commission obtained a federal court order requiring Blue Sky Capital Management Corp. and its principal, Gregory M. Schneider, jointly and severally to pay a $140,000 civil monetary penalty for making false statements to representatives of the National Futures Association (NFA), the futures industry self-regulatory organization, which operates under CFTC oversight. Schneider currently resides in Bellville, Ohio, and Blue Sky maintained a business address in Lebanon, Tenn. The consent order of permanent injunction, entered on August 28, 2012 by Judge John T. Nixon of the U.S. District Court for the Middle District of Tennessee, stems from a CFTC complaint filed on August 8, 2011. The complaint charged Blue Sky and Schneider with making false, fictitious, or fraudulent statements to the NFA and willfully concealing material facts from the NFA in connection with an NFA audit in 2008 of Blue Sky. Blue Sky at the time was a CFTC-registered Commodity Pool Operator and Commodity Trading Advisor. The order finds that during the NFA audit of Blue Sky, Blue Sky and Schneider misrepresented to the NFA that Blue Sky began managing customer accounts in 2008, managed 10 customer accounts with an aggregate equity of approximately $20,000, and had received no customer complaints. The order further finds that Blue Sky and Schneider failed to disclose that, in 2007, Blue Sky managed approximately 80 customer accounts with an aggregate equity of approximately $1.2 million, and that a Blue Sky customer complained about the unauthorized trading of his account before, and even during, the NFA audit. The order also imposes permanent trading and registration bans against the defendants and permanently prohibits them from further violations of the Commodity Exchange Act, as charged. The CFTC appreciates the assistance of the NFA in this action. CFTC Division of Enforcement staff responsible for this action are Stephanie Reinhart, Joseph Konizeski, Judith McCorkle, Scott Williamson, Rosemary Hollinger, and Richard Wagner. BON-TON STORES: Files Form 10-Q, Incurs $45MM Net Loss in Q2 ------------------------------------------------------------ The Bon-Ton Stores, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $45.04 million on $594.85 million of net sales for the 13 weeks ended July 28, 2012, compared with a net loss of $32.30 million on $595.48 million of net sales for the 13 weeks ended July 30, 2011. The Company reported a net loss of $85.81 million on $1.23 billion of net sales for the 26 weeks ended July 28, 2012, compared with a net loss of $68.28 million on $1.24 billion of net sales for the 26 weeks ended July 30, 2011. The Company's balance sheet at July 28, 2012, showed $1.56 billion in total assets, $1.51 billion in total liabilities and $48.33 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/bpsNCA About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 276 department stores, which includes 11 furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. The Company incurred a net loss of $40.8 million on $640 million of net sales for the 13 weeks ended April 28, 2012. * * * In the Jan. 12, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Bon-Ton Stores Inc. to 'B-' from 'B'. "The downgrade reflects the continued deterioration of the company's performance, which has been below our expectations due to merchandising that has not resonated with its customers," said Standard & Poor's credit analyst David Kuntz. He added, "It incorporates our view that operations will remain weak in the near term and that credit protection measures will erode further over the next year." As reported by the TCR on July 13, 2012, Moody's Investors Service revised The Bon-Ton Stores, Inc.'s Probability of Default Rating to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's exchange of $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. The LD designation indicates that a limited default on the company's 2014 notes has occurred, as Moody's deem that this transaction is a distressed exchange. The LD designation will be removed in approximately 3 business days. Moody's also affirmed the company's Corporate Family Rating at Caa1 and affirmed the Caa3 rating assigned to the company's senior unsecured notes due 2014. CAESARS ENTERTAINMENT: Fitch Publishes Comprehensive Credit Update ------------------------------------------------------------------ Fitch Ratings published a comprehensive credit update on Caesars Entertainment Corp. It includes detailed analysis of Caesar's primary operating subsidiary (Caesars Entertainment Operating Co., OpCo) and of its related subsidiaries. The report follows Fitch's Sept. 5, 2012 revision of the Rating Outlook on Caesars (IDR 'CCC') and certain subsidiaries to Negative from Stable. The OpCo's near- to medium-term cash burn rate is a key driver of the Negative Outlook, and the report details upcoming cash sources and uses, including relevant capital structure and parent company support assumptions. It also discusses a number of frequently asked questions about Caesars' credit profile. In addition to operating, liquidity and financial analyses, the report also provides a summary of the company's project pipeline; Fitch's outlook on key markets; a detailed maturity schedule; capital structure analyses with debt diagrams; and recovery analyses. The appendix of the report includes a recap of the LBO transaction, a historical timeline of debt transactions, summary of debt at each level, detailed debt document covenant summaries, and a corporate governance overview. CANYONS AT DEBEQUE: Wins Court OK to Hire Kutner Miller as Counsel ------------------------------------------------------------------ Canyons at DeBeque Ranch LLC won Bankruptcy Court permission to employ Kutner Miller Brinen P.C. as Chapter 11 counsel. Terms of the employment were reported in the July 24 edition of the Troubled Company Reporter. Prior to the petition date, the firm received $10,700 from the Debtors. Kutner Miller holds a prepetition retainer for payment of postpetition fees and costs in the amount of $8,613. The firm's hourly rates are: Lee M. Kutner $440 Jeffrey S. Brinen $380 David M. Miller $340 Aaron A. Garber $340 Jenny M.F. Fujii $290 Benjamin H. Shloss $240 Leigh A. Flanagan $290 To the best of the Debtor's knowledge, the firm has no connection or relationship with creditors and is disinterested as defined in the Bankruptcy Code. About Canyons at DeBeque Ranch Canyons @ DeBeque Ranch, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Colo. Case No. 12-24993) in Denver on July 18, 2012. Judge Elizabeth E. Brown oversees the case. The Debtor is represented by Jeffrey S. Brinen, Esq., at Kutner Miller Brinen, P.C., serves as counsel to the Debtor. Affiliate Bluestone Ridge Ranch East, LLC, aka Bluestone Ridge Ranch PUD, based in Butte, Montana, filed a separate Chapter 11 petition (Bankr. D. Colo. Case No. 12-24994) on the same day. CANYONS AT DEBEQUE: Has Go Signal to Hire Rosenberg as Accountant ----------------------------------------------------------------- Canyons at DeBeque Ranch LLC and Bluestone Ridge Ranch East LLC received the green light to hire Stephen M. Rosenberg, CPA, pursuant to an Aug. 30 court order. Mr. Rosenberg will provide professional accounting services. Mr. Rosenberg, a sole practitioner, has been an accountant for more than 20 years. According to papers filed by the Debtors in court, Mr. Rosenberg is familiar with the Debtors' businesses and books and records. Mr. Rosenberg will charge $150 per hour for his services. He attests he does not hold or represent any interest materially adverse to the Debtors' estate. About Canyons at DeBeque Ranch Canyons @ DeBeque Ranch, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Colo. Case No. 12-24993) in Denver on July 18, 2012. Judge Elizabeth E. Brown oversees the case. The Debtor is represented by Jeffrey S. Brinen, Esq., at Kutner Miller Brinen, P.C., serves as counsel to the Debtor. Affiliate Bluestone Ridge Ranch East, LLC, aka Bluestone Ridge Ranch PUD, based in Butte, Montana, filed a separate Chapter 11 petition (Bankr. D. Colo. Case No. 12-24994) on the same day. CANYONS AT DEBEQUE: Can Hire EquiReal as Appraiser -------------------------------------------------- Canyons at DeBeque Ranch LLC and Bluestone Ridge Ranch East LLC sought and obtained Bankruptcy Court permission to employ EquiReal Appraisal Services to perform professional appraisal services with respect to the Debtors' property in Mesa County, Colorado, and other related services. The Debtors may also call upon EquiReal to review documents and provide expert testimony before the Court. Elizabeth, Colorado-based EquiReal will bill a $4,000 flat fee for the appraisal services. Of the amount, $2,000 must be paid upfront and $2,000 is payable upon delivery of the report. For additional services, the firm will bill at an hourly rate. Gregory M. Owen, MAI, a certified general appraiser at EquiReal's office, charges $225 an hour for time spent on call or testifying, and $75 per hour for time spent preparing to testify. The firm attests it does not hold or represent an interest adverse to the estate on matters on which it is to be employed. About Canyons at DeBeque Ranch Canyons @ DeBeque Ranch, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Colo. Case No. 12-24993) in Denver on July 18, 2012. Judge Elizabeth E. Brown oversees the case. The Debtor is represented by Jeffrey S. Brinen, Esq., at Kutner Miller Brinen, P.C., serves as counsel to the Debtor. Affiliate Bluestone Ridge Ranch East, LLC, aka Bluestone Ridge Ranch PUD, based in Butte, Montana, filed a separate Chapter 11 petition (Bankr. D. Colo. Case No. 12-24994) on the same day. CANYONS AT DEBEQUE: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Canyons at DeBeque Ranch LLC filed with the Bankruptcy Court its schedules of assets and liabilities and statement of financial affairs, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A - Real Property $7,900,000 B - Personal Property $4,215,374 C - Property Claimed as Exempt D - Creditors Holding Secured Claims $5,804,737 E - Creditors Holding Unsecured Priority Claims $0 F - Creditors Holding Unsecured Non-Priority Claims $1,378,077 ------------ ----------- $12,115,374 $7,182,814 Canyons @ DeBeque Ranch reported that it earned $146,296 in gross income for fiscal year 2010. Gross income dropped steeply to $63,727 in 2011. From the beginning of the year to the petition date, gross income was $6,048. About Canyons at DeBeque Ranch Canyons @ DeBeque Ranch, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Colo. Case No. 12-24993) in Denver on July 18, 2012. Judge Elizabeth E. Brown oversees the case. The Debtor is represented by Jeffrey S. Brinen, Esq., at Kutner Miller Brinen, P.C., serves as counsel to the Debtor. Affiliate Bluestone Ridge Ranch East, LLC, aka Bluestone Ridge Ranch PUD, based in Butte, Montana, filed a separate Chapter 11 petition (Bankr. D. Colo. Case No. 12-24994) on the same day. CIP INVESTMENT: Sept. 27 Final Hearing Set on Cash Collateral Use ----------------------------------------------------------------- CIP Investment Properties, LLC, will return to the Bankruptcy Court in Kansas City on Sept. 27 at 1:30 p.m. for a final hearing on its request to use cash tied to its prepetition loan with 5400 Holdings LLC. On July 30, the Court issued an order permitting CIP to use to use cash collateral to pay expenses according to a budget, with up to a 10% total variance on budgeted amounts. 5400 Holdings is granted replacement liens on all of the Debtor's rents acquired after the bankruptcy filing to the same extent, validity, and priority as existed on the date the Chapter 11 case was filed pursuant to Section 552 of the Bankruptcy Code, and to the extent of cash collateral that is actually used. To the extent adequate protection is not paid by the Debtor, the Lender will be entitled to a super priority administrative claim pursuant to Section 507(b). The Debtor was to commence monthly adequate protection payments to Lender in the amount of $95,000 beginning Aug. 1, 2012, and on the first of each month thereafter until a Final Order Approving Use of Cash Collateral is entered. The Interim Order will be deemed sufficient and conclusive evidence of the validity of the Lender's postpetition liens and security interests granted hereunder and the Lender will not be required to anything to validate or perfect the liens and security interests granted. All rents and income from the operation of the Debtor's property at 8200 and 8300 Thorn Drive, Wichita, Kansas, will be deposited into the Debtor's Debtor-in-Possession accounts at Intrust Bank. Based in Wichita, Kansas, CIP Investment Properties, LLC, filed a Chapter 11 petition (Bankr. D. Kan. Case No. 12-21952) in Kansas City on July 17, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of $10 million to $50 million. Mark G. Stingley, Esq., and Keith M. Aurzada, Esq. -- keith.aurzada@bryancve.com -- at Bryan Cave LLP, serves as the Debtor's counsel. The petition was signed by David F. Hoff, president. Counsel to 5400 Holdings, LLC, is: Brian M. Holland, Esq. LATHROP & GAGE LLP 2345 Grand Blvd, Suite 2800 Kansas City, MO 64108 Telephone: 816-460-5329 Telecopier: 816-292-2001 E-mail: bholland@lathropgage.com CAPITAL CENTRE: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Chris Bagley, staff writer at Triangle Business Journal, reports that Capital Centre LLC filed on Aug. 31, 2012, for bankruptcy reorganization in connection with a $1.2 million loan from BB&T. According to the report, the company cited $1.3 million in total debt, including the BB&T loan. Its Chapter 11 filing put a value of $1.55 million on an industrial building. The filing showed about $100,000 in other assets. The report says one of the building's tenants, Capital Customer Wheels LLC, is listed as a co-debtor. Both companies are managed and owned or co-owned by Cary resident Scott Roberts. The report notes Bill Janvier represents the Company. CARLTON HOTEL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Carlton Hotel, LLC 1433 Collins Avenue Miami Beach, FL 33139 Bankruptcy Case No.: 12-31305 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Geoffrey S. Aaronson, Esq. 100 SE 2nd St # 2700 Miami, FL 33131 Tel: (786) 594-3000 E-mail: gaaronson@aspalaw.com Scheduled Assets: $8,100,000 Scheduled Liabilities: $15,313,777 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/flsb12-31305.pdf The petition was signed by Brian Scheinblum, managing member. CDC CORP: Confirmed Plan to Pay Up to $6.10 a Share to Equity ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that CDC Corp., a China-based software developer also known as Chinadotcom, won a bankruptcy judge's approval last week of a Chapter 11 plan under which shareholders are slated to receive as much as $6.10 a share. According to the report, the stock closed Sept. 6 at $5.44, up 9.9% in over-the-counter trading. The pile of cash for shareholders resulted from a sale of CDC's 87% interest in CDC Software Corp. that fetched a gross price of $249.8 million from Archipelago Holding, an affiliate of Vista Equity Holdings. The report relates that after paying a $65 million secured judgment claim and other costs, CDC was left with a net of $172.8 million when the sale was completed in April. Unsecured creditors with $2.9 million in claims were paid in full and thus didn't vote on the plan. According to the disclosure statement explaining the plan, $5.01 a share is the least shareholders should expect to receive. As reported by the Troubled Company Reporter, the Debtor's Plan provides that in addition to paying creditors in full and distributing the excess to shareholders, the plan would allow filing lawsuits against insiders who CDC claims were behind a motion to dismiss the case. China.com filed a competing reorganization plan. CDC interprets the plan as giving releases of claims that CDC's plan would prosecute instead. The Bloomberg report discloses that in the past three years, the stock's closing peak was $9.57 on April 12, 2010. The bottom was 7.8 cents on Dec. 1, 2011. When first announced, the sale caused CDC's stock to double in price, closing that day at $3.05. About CDC Corp Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corp., doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at US$100 million to US$500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corp. is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. The stock of CDC Software Corp. was sold for $249.8 million to an affiliate of Vista Equity Holdings. CELL THERAPEUTICS: Amends Rights Agreement with Computershare ------------------------------------------------------------- Cell Therapeutics, Inc., and Computershare Trust Company, N.A., as Rights Agent, entered into the First Amendment to Shareholder Rights Agreement, dated as of Aug. 31, 2012, effective as of Sept. 2, 2012. The First Amendment amends the Rights Agreement to decrease the Exercise Price under the Rights Plan from $36.00 to $14.00, decrease the number of shares of Preferred Stock purchasable upon the exercise of a Right from six ten-thousandths (6/10,000th) to one ten-thousandth (1/10,000th), and decrease the redemption price of each Right from $0.0006 to $0.0001. The First Amendment also revises and expands the definitions of "Acquiring Person" and "Beneficial Ownership" under the Rights Agreement. A person will be deemed to have beneficial ownership of any securities which are owned by any other person with which such person is acting in concert. To be Acting in Concert with another person for purposes of the Rights Agreement includes knowingly acting in concert with, or towards a common goal relating to the management, governance or control of the Company in parallel with, such other person where each person is conscious of the other person's conduct or intent and this awareness is an element in their decision-making process and at least one additional factor suggests that those persons intend to act in concert. Those additional factors may include attending meetings, conducting discussions or making or soliciting invitations to act in concert or in parallel. Any determination as to whether a person is Acting in Concert with any other person will be conclusively determined by the Board of Directors of the Company in its sole discretion. In addition, the definition of "Beneficial Ownership" now includes beneficial ownership of securities which are the subject of, the reference securities for, or that underlie any derivative interest of that person or any of that person's affiliates or associates. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at June 30, 2012, showed $38.34 million in total assets, $39.83 million in total liabilities, $13.46 million in common stock purchase warrants, and a $14.95 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL FALLS, RI: On the Verge of Exiting Bankruptcy ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the City of Central Falls, Rhode Island, is on the verge of emerging from a municipal bankruptcy begun on Aug. 1, 2011. At a hearing Sept. 6, the bankruptcy judge in Providence said he will sign a confirmation order approving the city's fourth-amended plan. The plan doesn't affect about $27 million in general obligation bonds for schools and other projects. As reported by the Troubled Company Reporter, the Central Falls, Rhode Island, on July 10, 2012, filed with the Bankruptcy Court a Second Amended Plan For The Adjustment Of Debts and an explanatory disclosure statement. The Chapter 9 Plan, if confirmed, will restructure the City's debt and its operations and put the City on a path towards fiscal stability. The Amended Plan also addresses and resolves the City's obligations to employees, retirees, and vendors. The Amended Plan does not impair the City's bond obligations. According to the report, creditors in the classes adversely affected by the plan were almost unanimous in support. U.S. Bankruptcy Judge Frank Bailey said the city had proven the plan to be feasible though testimony from an expert. The report relates that groups adversely affected by the plan include workers whose union contracts were revised, retirees with pensions reduced in varying amounts, employees who lost sick time benefits, individuals with personal-injury claims, and trade suppliers. The report notes that general unsecured creditors will be paid a maximum of 45% over six years from a $600,000 fund. In disclosure materials, the city said it lacked revenue to pay more "while maintaining an adequate level of municipal services such as the provision of fire and police protection." About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. CIRCLE ENTERTAINMENT: Borrows $200,000 from Directors & Officers ---------------------------------------------------------------- On Aug. 29, 2012, certain of the directors, executive officers and greater than 10% stockholders of Circle Entertainment Inc. made unsecured demand loans to the Company totaling $200,000, bearing interest at the rate of 6% per annum. The Company intends to use the proceeds from the Loans to fund working capital requirements and for general corporate purposes. Because certain of the directors, executive officers and greater than 10% stockholders of the Company made the Loans, a majority of the Company's independent directors approved the transaction. About Circle Entertainment New York City-based Circle Entertainment Inc. has been pursuing the development and commercialization of its new location-based entertainment line of business since Sept. 10, 2010, which has and will continue to require significant capital and financing. The Company does not currently generate any revenues from this new line of business. The Company has no long-term financing in place or commitments for such financing to develop and commercialize its new location-based entertainment line of business. As reported in the TCR on March 30, 2012, L.L. Bradford & Company, LLC, in Las Vegas, Nevada, expressed substantial doubt about Circle Entertainment'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 limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. The Company's balance sheet at June 30, 2012, showed $7 million in total assets, $16.50 million in total liabilities and a $9.50 million total stockholders' deficit. CIRCLE STAR: Executes Debt Conversion Agreement with Note Holder ---------------------------------------------------------------- Circle Star Energy Corp. announced the execution of a Debt Conversion Agreement with the holder of a $500,000 convertible note, to convert the outstanding principal and interest under the note into 1,100,000 shares of common stock of CRCL. CRCL CEO Jeff Johnson stated, "This agreement continues to show the confidence our stakeholders have in the strategy being pursued by management and the dedication the stakeholders have in taking the necessary steps to facilitate the company's objectives. We hope to continue our progress toward increasing hard asset value and equity returns." In converting this note into common shares, CRCL reduces the current liabilities on the balance sheet, improving its leverage ratio and also reducing interest expense going forward. CRCL is continuing its efforts in expanding its exposure in Northwest Kansas, which is also being pursued by other energy industry participants such as Chesapeake Energy Corp. (NYSE: CHK), Encana Corp. (NYSE: ECA), SandRidge Energy Inc. (NYSE: SD) and Apache Corp. (NYSE: APA). The common stock issued in connection with the conversion of the note have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws. 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. The Company reported 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. CITY NATIONAL: Delays Form 10-Q for Second Quarter -------------------------------------------------- City National Bancshares Corporation was unable to file its quarterly report on Form 10-Q for the quarter ended June 30, 2012, with the U.S. Securities and Exchange Commission by the Aug. 14, 2012, due date. The Company was not able to file a timely Form 10-Q because it has not completed its consolidated financial statements and related disclosures for that quarter. As previously reported, the Company was delayed in filing its annual report on Form 10-K for the year ended Dec. 31, 2011, with the SEC. The delay in the preparation and anticipated filing of the Company's Form 10-K resulted in the Company requiring additional time to complete its consolidated financial statements and related disclosures for the quarter ended March 31, 2012, and for its independent auditors to complete their required review of those financial statements and related disclosures. The delay in filing the First Quarter Form 10-Q contributed to the delay in filing the Form 10-Q for the Second Quarter, which the Company anticipates filing in September 2012. About City National Bancshares Newark, New Jersey-based City National Bancshares Corporation is a New Jersey corporation incorporated on Jan. 10, 1983. City National Bank, a wholly-owned subsidiary of CNBC, is a national banking association chartered in 1973 under the laws of the United States of America and has one subsidiary, City National Investments, Inc., an investment company which holds, maintains and manages investment assets for CNB. CNB provides a wide range of retail and commercial banking services through its retail branch network, although the primary focus is on establishing commercial and municipal relationships. The Company reported a net loss of $3.67 million in 2011, a net loss of $7.45 million in 2010, and a net loss of $7.82 million in 2009. The Company's balance sheet at March 31, 2012, showed $359.39 million in total assets, $339.90 million in total liabilities, and $19.49 million in total stockholders' equity. KPMG LLP, in Short Hills, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the period ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has entered into a consent order with the Office of the Comptroller of the Currency that raise substantial doubt about its ability to continue as a going concern. CLAIRE'S STORES: Offering Additional 9% Senior Secured Notes ------------------------------------------------------------ Claire's Stores, Inc., intends to offer additional 9.00% senior secured first lien notes due 2019. The notes will be of the same series as the Company's outstanding $500 million aggregate principal amount of 9.00% Senior Secured First Lien Notes due 2019. The terms of the notes, other than their issue date and issue price, will be identical to the previously issued notes. The Company intends to use the net proceeds of the issuance of the notes, together with cash on hand, to repay in full the term loan indebtedness under its senior secured credit facility. The notes are being offered only to "qualified institutional buyers" in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States only to non-U.S. persons in reliance on Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at July 28, 2012, showed $2.72 billion in total assets, $2.78 billion in total liabilities, and a $61.01 million stockholders' deficit. * * * Claire's Stores Inc. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. CLEAN BURN: Reorganization Goes to Chapter 7 -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Chapter 11 trustee for Clean Burn Fuels LLC sought an order converting the Chapter 11 case to liquidation in Chapter 7, with remaining cash dwindling. The trustee said that lawsuits are the principal remaining assets. At a Sept. 4 hearing, the bankruptcy judge granted the request and is converting the case to a Chapter 7 liquidation. About Clean Burn Fuels Founded in 2005, Clean Burn Fuels LLC is the first company to produce ethanol in North Carolina. It completed the construction of its ethanol plant in August 2010 and started producing and selling ethanol and dried distillers grains with solubles (DDGS) shortly thereafter. Clean Burn filed for Chapter 11 bankruptcy protection (Bankr. M.D.N.C. Case No. 11-80562) on April 3, 2011. John A. Northen, Esq., at Northen Blue, L.L.P., in Chapel Hill, N.C., represents the Debtor. Anderson Bauman Tourtellot Vos & Co. serves as financial consultant and chief restructuring officer. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP serves as special counsel to assist the Debtor in its state court litigation matters, including various lawsuits pending in Hoke County, North Carolina. The Debtor disclosed $79,516,062 in assets and $79,218,681 in liabilities as of the Chapter 11 filing. The Debtor lost its assets when the bankruptcy in Durham, North Carolina permitted foreclosure in July 2011. The foreclosing lender was Cape Fear Farm Credit ACA, owed $66 million. In January 2012, the bankruptcy court appointed a Chapter 11 trustee. Sara A. Conti, Chapter 11 trustee for the Debtor, tapped Northen Blue as special counsel. Charles M. Ivey, Esq., at Ivey McClellan Gatton, in Greensboro, N.C., represents the Creditors' Committee as counsel. COMPOSITE TECHNOLOGY: Court OKs Squar Milner as Tax Professionals ----------------------------------------------------------------- Composite Technology Corporation sought and obtained permission from the U.S. Bankruptcy Court to employ Squar, Milner, Peterson, Miranda & Williamson LLP as tax professionals. Headquartered in Irvine, California, Composite Technology Corporation (CTC) -- http://www.compositetechcorp.com/-- is a publicly traded company that owns all of the common stock of CTC Cable Corporation and Stribog, Inc. CTC Cable manufactured and marketed innovative energy efficient renewable energy products for the electrical utility industry. Stribog operated a wind turbine products business that was sold to Daewoo Shipbuilding and Marine Engineering on Sept. 4, 2009, for US$32.2 million in cash. CTC Renewables is a dormant company. Composite Technology filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-15058) on April 10, 2011, with Judge Mark S. Wallace presiding over the case. The Debtor's bankruptcy case was reassigned to Judge Scott C. Clarkson on April 13, 2011. BCC Advisory Services LLC, BCC Ho1dco LLC's FINRA registered Broker/Dealer, serves as investment banker to provide exclusive equity financing services and debt financing services. Composite Technology disclosed US$5,855,670 in assets and US$12,395,916 in liabilities as of the Chapter 11 filing. CTC Cable Corporation also filed for Chapter 11 (Bankr. C.D. Calif. Case No. 11-15059) on April 10, 2011. Stribog, Inc. (Bankr. C.D. Calif. Case No. 11-15065) filed for Chapter 11 protection on April 11, 2011. CTC Renewables Corp., a dormant company (Bankr. C.D. Calif. Case No. 11-15130) filed for Chapter 11 protection on April 12, 2011. The cases are jointly administered, with Composite Technology as the lead case. Garrick A. Hollander, Esq., Paul J. Couchot, Esq., and Richard H. Golubow, Esq., at Winthrop Couchot PC, in Newport Beach, Calif.; and Sean A. Okeefe, at Okeefe & Associates Law Corporation, in Newport Beach, Calif., serve as the Debtors' bankruptcy counsel. Peter C. Anderson, the U.S. Trustee for Region 16, appointed five members to the official committee of unsecured creditors in the Debtor's cases. Katherine C. Piper, Esq., at Steptoe & Johnson LLP, in Los Angeles, Calif., represents the Committee. CONTOURGLOBAL POWER: S&P Assigns Prelim 'B+' Corp. Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' corporate credit rating to ContourGlobal L.P. (CG), a developer of electric power generation and district heating assets. At the same time, S&P assigned its preliminary 'B+' corporate credit rating to ContourGlobal Power Holdings S.A. (CGPH), a 100% owned subsidiary of CG that benefits from a guarantee from both CG and its project owning subsidiaries. S&P also assigned its preliminary 'BB-' rating to CGPH's proposed $350 million senior secured notes due 2019. Finally, S&P assigned the notes a preliminary recovery rating of '2', indicating its expectation of substantial (70% to 90%) recovery in the event of a payment default. The outlook is stable. "Assignment of a final rating hinges on our receipt and review of executed documentation. The final rating could differ if any terms change materially," S&P said. "The rating reflects the application of our projects developer methodology," said Standard & Poor's credit analyst Ben Macdonald. "We view the financial profile to be aggressive and have assigned a quality of cash flow score of 8, equating to a weak business profile," Mr. Macdonald continued. The rating on CGPH reflects S&P's view of these weaknesses: * The debt will be interest-only with a bullet payment in seven years, and faces refinancing risk in 2019. * The portfolio has significant concentration risk. If S&P assume no projects are added to the current portfolio, the largest two assets -- Maritza, a Bulgarian coal plant and Arrubal, a Spanish combined-cycle gas plant -- contribute 52% of forecast cash flow for debt service during the next seven years. In a scenario in which the bond proceeds are used to expand the portfolio, S&P anticipates that this percentage would decline to 44%. * CGPH relies on substantial distributions from jurisdictions with considerable regulatory and operating uncertainties. * The KivuWatt project in Rwanda, which S&P anticipates will provide 8% of cash flow for the current portfolio, plans to use methane harvested from suspension in Lake Kivu. This technique has not yet been proven on a sustainable commercial scale, so the project has sizable operational risks. * The company's growth strategy is heavily dependent on smoothly working credit markets for additional debt issuances and refinancing planned at the individual project level, with the management base case including assumed debt issuance at six projects during the term of this rated debt. * Many regions of operations are facing political uncertainty. * Growth expenditure requirements are large. * Debt will be denominated in U.S. dollars, but more than 50% of cash flow for debt service that we project will be generated in euros. "The stable outlook reflects our view of the portfolio's diversified nature in terms of geography, technology, and counterparty exposure," S&P said. CPI CORP: Enters Into $500,000 Settlement Pact with Westfield ------------------------------------------------------------- During the second quarter of fiscal 2012, CPI Corp. discontinued its Portrait Gallery from Bella Pictures operations. The Company had previously entered into leases for 19 retail stores at certain shopping centers owned and managed by Westfield, LLC. On Aug. 30, 2012, the Company entered into a Settlement Agreement and General Release with Westfield. Under the Agreement, the Company will pay Westfield the sum of $500,000, in five equal installments on or before Oct. 15, 2012, Dec. 15, 2012, Jan. 15, 2013, Feb. 15, 2012, and March 15, 2012, as consideration and final settlement of the leases. About CPI Corp. Headquartered in St. Louis, Missouri, CPI Corp. provides portrait photography services at more than 2,500 locations in the United States, Canada, Mexico and Puerto Rico and offers on location wedding photography and videography services through an extensive network of contract photographers and videographers. The Company reported a net loss of $56.86 million for the fiscal year ended Feb. 4, 2012, compared with net income of $11.90 million for the fiscal year ended Feb. 5, 2011. KPMG LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the period ended Feb. 4, 2012, noting that the Company has suffered a significant loss from operations, is not in compliance with the financial covenants under its credit agreement, and has a net capital deficiency, all of which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at July 21, 2012, showed $61.04 million in total assets, $159.63 million in total liabilities, and a $98.59 million total stockholders' deficit. Bankruptcy Warning "Management is implementing plans to improve liquidity through improvements to results from operations, store closures, cost reductions and operational alternatives," the Company said in its quarterly report for the period ended July 21, 2012. "However, there can be no assurance that we will be successful with our plans or that our future results of operations will improve. If sales trends do not improve, our available liquidity from cash flows from operations will be materially adversely affected. There can be no assurance that we will be able to improve cash flows from operations, or that we will be able to comply with the terms of the Second Amendment. Therefore, there can be no guarantee that our existing sources of cash and our future cash flows from operations will be adequate to meet our liquidity requirements, including cash requirements that are due under the Credit Agreement and that are needed to fund our business operations. If we are unable to address our liquidity shortfall or comply with the terms of our Credit Agreement, as amended, then our business and operating results would be materially adversely affected, and the Company may then need to curtail its business operations, reorganize its capital structure, or liquidate." The Company further stated that should it not be able to sell its business by Dec. 31, 2012, it could be forced to seek additional financing, which may not be available, curtail its business operations or reorganize its capital structure, or be forced into bankruptcy. CYBERDEFENDER CORP: Xroads Approved as Solicitation Agent --------------------------------------------------------- CYDE Liquidating Co., formerly known as CyberDefender Corporation has sought and obtained approval from the U.S. Bankruptcy Court for permission to employ XRoads Case Management Services, LLC as balloting and solicitation agent. The firm, among other things, will: a. print ballots including the printing of creditor and shareholder specific ballots; b. prepare voting reports by plan class, creditor, or shareholder and amount for review and approval by the Debtor and his counsel; c. coordinate the mailing of ballots, disclosure statement, and plan of reorganization to all voting and non-voting parties and providing affidavit of service; and d. establish a toll-free "800" number to receive questions regarding voting on the plan. Tauheed D. Williams -- twilliams@xroadsllc.com -- attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About CyberDefender Los Angeles, Calif.-based CYDE Liquidating Co., fka CyberDefender Corporation, provided remote LiveTech services and security and computer optimization software to the consumer and small business market. In regulatory filings, the Company disclosed $7.96 million in total assets, $42.54 million in total liabilities, and a $34.58 million in total stockholders' deficit, as of Sept. 30, 2011. CyberDefender filed for Chapter 11 protection (Bankr. D. Del. Case No. 12-10633) on Feb. 23, 2012. XRoads Solutions Group, LLC serves as financial advisor to the Company and Pachulski Stang Ziehl & Jones LLP (James E. O'Neill) serves as bankruptcy counsel. The Debtor changed its name to CYDE Liquidating Co. following the sale of the business. CyberDefender obtained authority to sell the business to GR Match LLC for $12 million in debt and $250,000 cash. There were no competing bids, so an auction was canceled. An official committee of unsecured creditors has been appointed in the case. DAIS ANALYTIC: Scott Ehrenberg Quits as CTO and Secretary --------------------------------------------------------- Scott G. Ehrenberg resigned as Chief Technology Officer and Secretary of Dais Analytic Corporation effective Aug. 30, 2012. On Sept. 4, 2012, the Company's board of directors appointed Judith Norstrud, the Company's chief financial officer and treasurer, to the position of Secretary of the Company. About Dais Analytic Odessa, Fla.-based Dais Analytic Corporation has developed and patented a nano-structure polymer technology, which is being commercialized in products based on the functionality of these materials. The initial product focus of the Company is ConsERV, an energy recovery ventilator. The Company also has new product applications in various developmental stages. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in Orlando, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses since inception and has a working capital deficit and stockholders' deficit of $3.22 million and $4.90 million at Dec. 31, 2011. The Company reported a net loss of $2.33 million in 2011, compared with a net loss of $1.43 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.16 million in total assets, $5.81 million in total liabilities and a $4.64 million total stockholders' deficit. DCB FINANCIAL: Files Amendment No. 3 to Form S-1 Prospectus ----------------------------------------------------------- DCB Financial Corp filed with the U.S. Securities and Exchange Commission a Pre-Effective Amendment No. 3 to Form S-1 relating to the distribution of non-transferable rights to subscribe for and purchase up to 1,307,799 common shares to persons who owned the Company's common shares as of 5:00 p.m., Eastern Time, on the record date, [ ], 2012. The Company has entered into agreements with certain standby investors, pursuant to which those standby investors have agreed to purchase, in a private offering to be closed after the conclusion of the rights offering, either a minimum number of common shares, or a certain number of the remaining common shares that are not purchased through the exercise of rights, or both. No standby investor will own 10% or more of the common shares after completion of the rights offering and private offering. The maximum number of common shares to be issued by the Company in the rights offering and the subsequent private offering will not exceed 3,475,000 common shares. All common shares sold in the rights offering or pursuant to agreements with standby investors will be at the $3.80 subscription price. The Company's common shares are quoted on the Over-the-Counter Bulletin Board, under the trading symbol "DCBF.OB." A copy of the amended prospectus is available for free at: http://is.gd/wRXzBj 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." 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. DCP LLC: S&P Puts 'B' Corporate Credit Rating on Watch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Santa Monica, Calif.-based TV production company dcp LLC (B/Negative/--, the parent of Dick Clark Productions Inc.) on CreditWatch with negative implications. This includes the 'B' corporate credit rating and the 'B+' issue-level rating on the 10.75% senior secured notes due 2015. "The rating action follows the announcement that a group of investors, including Guggenheim Partners, Mandalay Entertainment and Mosaic Media Investment Partners, entered into a definitive agreement to purchase dcp from its current owner, RedZone Capital Management,' said Standard & Poor's credit analyst Naveen Sarma. Terms were not disclosed, but press reports indicate the sale price was $370 million. The transaction is expected be completed soon," S&P said. "In resolving the CreditWatch, we will assess the company's new capital structure and any shifts in business strategy. If the 2015 senior notes are redeemed, we will withdraw the ratings on the notes. We expect that regardless of the ratings outcome, a stable outlook is only possible if the company's ongoing litigation with the Hollywood Foreign Press Association over the rights for the Golden Globe Awards is resolved in dcp's favor," S&P said. DRINKS AMERICAS: Has License to Sell WBI Products in U.S. --------------------------------------------------------- Drinks Americas Holdings, Ltd., entered into Amendment No. 2 to a license agreement dated June 27, 2011, as amended, with Worldwide Beverage Imports, LLC. Pursuant to the Amendment: * the Company is now permitted to sell and distribute WBI licensed spirits in all states of the United States, including California; * the Company's previously agreed to exclusive license to use and display WBIs trademarks, service marks, and trade names which are applicable to WBI products was made into a non- exclusive license. The exclusive distribution license for WBI products was not altered. In consideration for and as an inducement to enter into the Amendment, the Company agreed to transfer to WBI 2,750,000 shares of the Company's common stock and 250,000 shares of the Company's newly created Series D Preferred Stock. A copy of the Amended License Agreement is available at: http://is.gd/zz6pPT On Aug. 30, 2012, the Company filed a Certificate of Designation of Series D Preferred Stock with the Secretary of State of Delaware. Pursuant to the Certificate of Designation: * 250,000 shares of preferred stock were designated Series D Preferred Stock. * If at any time the holder of Series D Preferred Stock and the holder's affiliates reduces its ownership of the Corporation's Common Stock below 50% of what it holds on the date hereof (as of Aug. 23, 2012, the Holder owns 10,229,602 shares of the Corporation's Common Stock) and the concentration of Common Stock has not exceeded 20% by any other individual or affiliate group, or the total number of shareholders exceeds 1,000 and provided the Preferred Stock Holder and its affiliates have been relieved of their personal guarantees on behalf of the corporation and all debt to the Holder and Holder's affiliates is paid in full, the Preferred Stock will automatically be converted into 250,000 shares of the Corporation's Common Stock. * The Series D Preferred Stock will vote as a single class with the common stock and the holders of the Series D Preferred Stock will have the number of votes equal to 100 times the number of shares of Series D Preferred Stock. * Upon liquidation, the holders of the Series D Preferred Stock will have the right to receive, prior to any distribution with respect to the common stock, but subject to the rights of the holders of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, the Stated Value (plus any other fees or liquidated damages payable thereon). About Drinks Americas Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. -- http://www.drinksamericas.com/-- through its majority-owned subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T. Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and markets unique premium wine and spirits and alcoholic beverages associated with icon entertainers, celebrities and destinations, to beverage wholesalers throughout the United States. The Company reported a net loss of $4.58 million on $497,453 of net sales for the year ended April 30, 2011, compared with a net loss of $5.61 million on $890,380 of net sales during the prior year. After auditing the fiscal 2011 financial statements, Bernstein & Pinchuk, 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 incurred significant losses from operations since its inception and has a working capital deficiency. The Company's balance sheet at Jan. 31, 2012, showed $6.74 million in total assets, $4.39 million in total liabilities, and $2.35 million in total stockholders' equity. DYNEGY HOLDINGS: Impending Train Wreck Becomes Approved Plan ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that at a hearing Sept. 5, Judge Cecilia Morris said she will sign a confirmation order approving a reorganization plan for Dynegy Holdings Inc. and parent Dynegy Inc. Examiner Susheel Kirpalani issued a report in March finding that an out-of-court restructuring last year included fraudulent transfers with actual intent to hinder and delay creditors of subsidiaries of parent Dynegy Inc. Also named by the bankruptcy judge to serve as mediator, Mr. Kirpalani presided over negotiations that culminated in early April with a settlement where creditors of Dynegy Holdings receive 99% of the stock when the company merges under the reorganization plan with parent Dynegy Inc. The report relates that the other 1% of the stock is earmarked for shareholders of parent Dynegy Inc. Only unsecured creditors of were entitled to vote on the plan. They were almost unanimous in support. Everyone else was either paid in full or not affected. Judge Morris said at a hearing on Sept. 5 that she will sign a confirmation order approving the plan. The report notes that Judge Morris previously approved a merger where the Dynegy parent will be the surviving entity in the merger. The company said Sept. 5 that it expects to complete the merger and emerge from Chapter 11 by Oct. 1. Unsecured creditors of Dynegy Holdings with claims totaling about $4.2 billion were told in disclosure materials they could expect a recovery between 59% and 89%. As part of the previously approved settlement, the shareholders of the Dynegy parent receive warrants for an additional 13.5% of the stock on top of the 1% they receive up front. The $1.05 billion in 8.375% senior unsecured notes of Dynegy Holdings LLC last traded Sept. 5 for 59.6 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. ELPIDA MEMORY: Bondholders Want to Keep Right for Involuntary ------------------------------------------------------------- Certain members of the steering committee of the Ad Hoc Group of Bondholders of Elpida Memory, Inc., ask the U.S. Bankruptcy Court for the District of Delaware to modify the order dated April 24, 2012, recognizing foreign representatives and foreign main proceeding to: i) condition the relief granted in the recognition order by requiring certain protections with respect to all property of Elpida's estate within the territorial jurisdiction of the United States; and ii) clarify that the automatic stay imposed by the recognition order does not prevent the bondholders from commencing, if necessary and appropriate, an involuntary bankruptcy case against Elpida. On April 24, 2012, the Court entered the recognition order, which recognized Elpida's ongoing Japanese restructuring proceeding as a foreign main proceeding under Chapter 15. That order also extended the protections of Sections 361 and 362 of the Bankruptcy Code to property of Elpida within the territorial jurisdiction of the United States. The steering committee relates that after the entry of the recognition order, it is concerned whether Elpida is attempting to maximize the value of its estate and recoveries to its prepetition creditors (who the bondholders understand hold in excess of $5.4 billion in allowed claims against Epida). Specifically, on July 2, 2012, Elpida entered into a sponsorship agreement pursuant to which it will sell its stock to Micron Technology, Inc. That stock sale will be made free and clear of all of Elpida's prepetition liabilities, and prepetition creditors will receive cash and new paper issued by the reorganized entity, which the bondholders anticipate will be worth less than $1.8 billion. The steering committee notes that the Debtor made no disclosures regarding, among other things, the fair market value of Elpida and its subsidiaries, the terms of the proposed sale, or the range of post-sale recoveries to Elpida creditors. The steering committee says that the unwillingness of Elpida, its court-appointed trustees and Micron to discuss material aspects of their proposed arrangement creates significant concern for any Elpida creditor. These concerns include, among other things: -- Elpida's two court-appointed trustees, one of whom will apparently be employed by Micron post-emergence, precluded themselves by the terms of the sponsorship agreement from discussing any alternate transactions or disclosing material information without Micron's consent. -- No other creditor representative with any meaningful power and with fiduciary duties owed to creditors participated in, or signed off on, Elpida's sale decision. -- No transparent or stalking-horse bid process has taken, or is scheduled to take, place, and the trustees have repeatedly rebuffed the bondholders' attempts to discuss creditor-led initiatives to provide substantially more value to Elpida's creditors and estate. A copy of the motion is available for free at http://bankrupt.com/misc/ELPIDAMEMORY_modify_foreign_proceeding.pdf About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. The Court entered an order recognizing foreign representatives and foreign main proceeding on April 24, 2012. EMMIS COMMUNICATIONS: Modifies Terms of Preferred Stock ------------------------------------------------------- On Sept. 4, 2012, Emmis Communications Corporation filed amendments to its Articles of Incorporation that modify the rights of holders of the Company's 6.25% Series A Cumulative Convertible Preferred Stock. The amendments: (1) cancel the amount of undeclared dividends in respect of the Preferred Stock that is accumulated but undeclared on or prior to the effectiveness of the Proposed Amendments; (2) change the designation of the Preferred Stock from "Cumulative" to "Non-Cumulative" and change the rights of the holders of the Preferred Stock such that dividends or distributions on the Preferred Stock will not accumulate unless declared by the board of directors and subsequently not paid (and thereby effectively cancel associated rights to elect directors in the event of dividend arrearages); (3) cancel the restrictions on Emmis' ability to pay dividends or make distributions on, or repurchase, its Common Stock or other junior stock prior to paying accumulated but undeclared dividends or distributions on the Preferred Stock; (4) change the ability of the holders of the Preferred Stock to require Emmis to repurchase all of those holders' Preferred Stock upon certain going-private transactions in which an affiliate of Mr. Smulyan participates that do not constitute a change of control transaction, to cause the holders of the Preferred Stock to no longer have such ability; (5) change the ability of the holders of the Preferred Stock to convert all of those Preferred Stock to Class A Common Stock upon a change of control at specified conversion prices to cause the holders of the Preferred Stock to no longer have that ability; (6) change the ability of holders of the Preferred Stock to vote as a separate class on a plan of merger, share exchange, sale of assets or similar transaction to the ability to vote with the Common Stock on an as-converted basis; and (7) change the conversion price adjustment applicable to certain merger, reclassification and other transactions to provide that the Preferred Stock converts into the right to receive property that would have been receivable had such Preferred Stock been converted into Class A Common Stock immediately prior to that transaction. The Company's shareholders approved the amendments at the special held on Sept. 4, 2012. With the filing of the Amendments, the terms of directors elected by holders of the Preferred Stock, David Gale and Michelle Bergman, automatically expired. A copy of the Amended Bylaws is available for free at: http://is.gd/lVHpVJ About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at May 31, 2012, showed $350.94 million in total assets, $360.51 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $56.45 million total deficit. * * * Emmis carries Caa2 corporate family rating and a Caa3 probability of default rating from Moody's. In July 2011, Moody's Investors Service placed the ratings of Emmis on review for possible upgrade following the company's earnings release for 1Q12 (ended May 31, 2011) including additional disclosure related to the pending sale of controlling interests in three radio stations. The sale of the majority ownership to GCTR will generate estimated net proceeds of approximately $100 million to $120 million, after taxes, fees and related expenses. Emmis will retain a minority equity interest in the operations of the three stations and Moody's expects senior secured debt to be reduced resulting in improved credit metrics. ESPERANZA AVIATION: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Esperanza Aviation MSN 23124, LLC. 4850 Azusa Canyon Road. Irwindale, CA 91706 Bankruptcy Case No.: 12-40202 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Robert M. Yaspan, Esq. LAW OFFICES OF ROBERT M YASPAN 21700 Oxnard St., Ste 1750 Woodland Hills, CA 91367 Tel: (818) 905-7711 Fax: (818) 501-7711 E-mail: court@yaspanlaw.com Scheduled Assets: $978,000 Scheduled Liabilities: $4,952,312 A copy of the Company's list of its seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-40202.pdf The petition was signed by Frank Smith, co-manager. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Frank J. Smith 11-54945 10/28/11 FENTURA FINANCIAL: Three Directors Elected at Annual Meeting ------------------------------------------------------------ Fentura Financial, Inc., held its annual meeting of shareholders on April 25, 2012. The shareholders elected Frederick P. Dillingham, Donald L. Grill and Randy D. Hicks as directors. The shareholders also ratified the selection of Rehman Robson, P.C., as independent auditors for 2011. About Fentura Financial Based in Fenton, Michigan, Fentura Financial, Inc., is a registered bank holding company, owns and controls The State Bank, Fenton, Michigan, and West Michigan Community Bank, Hudsonville, Michigan, both state nonmember banks, and two nonbank subsidiaries. Fentura Financial shares are traded over the counter under the FETM trading symbol. Fentura Financial, Inc., entered into a Written Agreement with the Federal Reserve Bank of Chicago on Nov. 4, 2010. Among other things, the Written Agreement requires that the Company obtain the approval of the FRB prior to paying a dividend; requires that the Company obtain the approval of the FRB prior to making any distribution of interest, principal, or other sums on subordinated debentures or trust preferred securities; prohibits the Company from purchasing or redeeming any shares of its stock without the prior written approval of the FRB; requires the submission of a written capital plan by Jan. 3, 2011, and; requires the Company to submit cash flow projections for the Company to the FRB on a quarterly basis. The Company reported a net loss of $1.51 million in 2011, compared with a net loss of $5.38 million in 2010. The Company's balance sheet at June 30, 2012, showed $297.87 million in total assets, $283.52 million in total liabilities and $14.34 million in total stockholders' equity. FLINTKOTE COMPANY: Has Until Jan. 31 to Propose Chapter 11 Plan --------------------------------------------------------------- The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware, in a 23rd order, extended The Flintkote Company and Flintkote Mines Limited's exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Jan. 31, 2013, and March 31, 2013, respectively. As reported in the Troubled Company Reporter on Aug. 22, 2012, the Official Committee of Asbestos Personal Injury Claimants supported the Debtors' extension request. The Debtors filed an amended joint plan of reorganization in respect of the Debtors dated July 17, 2009 (as further modified on Aug. 5, 2010, Aug. 31, 2011, Nov. 16, 2011, and as may be further modified in the future), along with a supplemental document describing the minor modifications embodied under the modified plan. The Court approved that supplemental disclosure document on July 30, 2009. The Modified Amended Plan was accepted by majority of all the classes of creditors and asbestos claimants, including nearly 95% of the Asbestos Personal Injury Claimants. The trial on confirmation of the Modified Amended Plan was held on Oct. 25-26, 2010, Sept. 12-13, 2011, and Sept. 19, 2011. The Modified Amended Plan has now been accepted by all classes of creditors and claimants, including the vast majority of Asbestos Personal Injury Claimants. "Preserving exclusivity at this crucial point in the plan process is necessary to further one of the principal goals of the Chapter 11 process -- the successful rehabilitation of a debtor through a consensual plan of reorganization," the Debtors stated. Collectively, the Debtors are defendants in over 157,000 asbestos- related personal injury claims pending in various jurisdictions and an unknown number of future asbestos-related personal injury claims. The Debtors' current and future liability for Asbestos Personal Injury Claims is estimated to exceed $3 billion. The Plan proposes establishing a section 524(g) trust to fairly and equitably address and resolve the large number and amount of Asbestos Personal Injury Claims. The Debtors successfully negotiated and formulated the Modified Amended Plan with the Asbestos Claimants Committee and Future Claimants Representative. The Debtors are in the process of resolving certain non-asbestos-related claims filed against their estates and, in this regard, have made significant progress in negotiating remediation and entering into settlement agreements with various environmental claimants. The Debtors are also continuing in their efforts to negotiate "buy-out" arrangements with their remaining insurers. About The Flintkote Company Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. Flintkote Mines Limited is a subsidiary of Flintkote Company and is engaged in the mining of base-precious metals. The Flintkote Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004. Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D. Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq., Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E. Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin, LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Debtors in their restructuring efforts. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del., represent the Asbestos Claimants Committee as counsel. When Flintkote Company filed for protection from its creditors, it estimated more than $100 million each in assets and debts. When Flintkote Mines Limited filed for protection from its creditors, it estimated assets of $1 million to $50 million, and debts of more than $100 million. FNB UNITED: David Lavoie to Resign as CRO Effective Dec. 31 ----------------------------------------------------------- FNB United Corp., the holding company for CommunityOne Bank, N.A., and Bank of Granite, announced that David C. Lavoie, chief risk officer for the Company, will retire effective Dec. 31, 2012. Mr. Lavoie was part of the management group that led the recapitalization of the Company that closed on Oct. 21, 2011. In order to assist in the recapitalization efforts, Mr. Lavoie joined the Company as Chief Credit Officer on Dec. 22, 2010. Mr. Lavoie and his associates within the risk team, many of whom he recruited, successfully reduced the Company's problem assets prior to the closing of the recapitalization, allowing the transaction to close. Since the closing of the recapitalization, Mr. Lavoie has continued to build a strong risk organization within the Company. Over the next few months, the Company will undertake a search to identify Mr. Lavoie's successor. About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. FNB United reported a net loss of $137.31 million in 2011, a net loss of $131.82 million in 2010, and a net loss of $101.69 million in 2009. The Company's balance sheet at June 30, 2012, showed $2.30 billion in total assets, $2.19 billion in total liabilities and $108 million in total shareholders' equity. FOXCO ACQUISITION: S&P Rates Proposed Extended Sr. Credit 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned Newport, Ky.-based media company FoxCo Acquisition Sub LLC's proposed amended-and- extended senior secured credit facilities its 'B+' issue-level rating (the same as S&P's 'B+' corporate credit rating on the company). "We also assigned a recovery rating of '3' to this proposed debt, indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. Pro forma for the proposed transaction the company will have an undrawn $20 million revolving credit facility and a $715 million term loan B both due in 2017," S&P said. "All other related ratings on the company, including the 'B+' corporate credit rating, remain unchanged. We analyze FoxCo Acquisition LLC and operating subsidiary FoxCo Acquisition Sub LLC on a consolidated basis. The rating outlook is stable," S&P said. "We rate FoxCo Acquisition Sub LLC's existing senior secured credit facilities 'BB' (two notches higher than the corporate credit rating) with a '1' recovery rating. The '1' recovery rating reflects our view that lenders would experience very high (90% to 100%) recovery in the event of a payment default. We rate the company's senior unsecured notes 'B-' (two notches below the corporate credit rating) with a recovery rating of '6', indicating the likelihood of negligible (0% to 10%) recovery," S&P said. The ratings on the existing debt will be withdrawn once the proposed transaction closes. "The corporate credit rating reflects our expectation that FoxCo will maintain debt to average trailing-eight-quarter EBITDA below 6x over the intermediate term," said Standard & Poor's credit analyst Jeanne Shoesmith. "Standard & Poor's also believes the company will continue to convert roughly 60% of its EBITDA into operating cash flow after capital spending. We consider the company's business risk profile as 'fair' (as per our criteria), based on its portfolio of TV stations in mostly top-50 markets and a healthy EBITDA margin, 37% for the 12 months ended June 30, 2012, comparable with its peers'. Pro forma for the debt financed distribution, FoxCo's lease-adjusted debt to average trailing- eight-quarter EBITDA remains relatively high, at 5.8x as of June 30, 2012. We expect this metric to moderate below 5x by the end of 2013 underpinning our view that the company's financial risk is 'aggressive,'" S&P said. "The stable rating outlook reflects our view that FoxCo will maintain debt to average trailing-eight-quarter EBITDA below 6x over the intermediate term. We currently regard an upgrade and downgrade as equally unlikely over the intermediate term. We could raise the rating if the company maintains an adequate cushion of compliance with covenants and reduces debt to average trailing- eight-quarter EBITDA below 5x on a sustained basis while articulating a commitment to keep leverage at this level. This scenario would likely involve the company growing core revenue at a low-single-digit percent rate, coupled with political revenue in excess of $45 million in 2012 and robust growth in retransmission revenue," S&P said. "We could lower the rating if additional debt-financed dividends or acquisitions cause the company's debt to average trailing- eight-quarter EBITDA to exceed 6x without the prospect of a near- term return to less than 6x," S&P said. FREEDOM ENVIRONMENTAL: Fires CFO After Sending Firm to Bankruptcy ----------------------------------------------------------------- Michael Ciarlone was terminated for cause related to the misappropriation of company funds and for placing Freedom Environmental Services, Inc., in bankruptcy after being dismissed as an officer and director of the Company, according to a regulatory filing. Effective Aug. 10, 2012, Mr. Ciarlone was placed on paid administrative leave and removed from the Board of Directors by a majority vote. Freedom Environmental filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 12-10958) on Aug. 13, 2012. Michael Ciarlone signed the petition as COO & CFO. The Debtor estimated assets and debts of $1 million to $10 million. The Debtor is represented by Paul DeCailly, Esq., at DECAILLY LAW GROUP, P.A. Orlando, Florida-based Freedom Environmental provides wastewater management and recycling services to its customers through its different divisions. FULTON CAPITAL: Fitch Affirms 'BB+' Preferred Stock Rating ---------------------------------------------------------- Fitch Ratings has affirmed the long-term and short-term Issuer Default Ratings (IDRs) of Fulton Financial Corporation (FULT) at 'A-' and 'F1' respectively. The Rating Outlook is Stable. The ratings affirmation reflects earnings performance and asset quality improvement in line with Fitch's expectations. Further improvement is expected in line with peer institutions to maintain its current rating. Profitability improved versus 2011 due to declining provisions for loan losses and increasing non-interest income. Fitch expects FULT to face earnings headwinds in the near term as net interest margin compression from the low interest rate environment will partially offset reductions in credit costs and non-interest income gains. Year to date asset quality measures continue to improve in terms of both non-performing loans and net charge-offs compared to 2011. Fitch expects credit improvement in the near term as NPL inflow continues to decline. The institution continues to have a significant concentration in commercial real estate (CRE) at 32% of total assets. Fitch believes that negative macroeconomic trends would have a more muted impact to FULTs loan portfolio given conservative underwriting and exposure that is contained to the relatively more stable markets of the Mid-Atlantic. Residential construction exposure has been reduced considerably and over 44% of the CRE portfolio is owner occupied. FULT's capital position is expected to remain at conservative levels. The institution continues to build capital via its profitable bank subsidiaries. As reported in regulatory filings, double leverage appears high at 121%; Fitch adjusts this for FFC Management which holds passive investments for the holding company, which brings double leverage down to 108%. Holding company liquidity is sound with good coverage of debt servicing costs. FULT has considerable flexibility to service holding company obligations given that's its primary obligations include salary expenses which are mostly billed internally to bank subsidiaries and TRUPS allows interest payment deferral. Ratings Drivers and Sensitivities Fitch believes further ratings improvement is unlikely in the near term given earnings performance relative to peers, the concentration in commercial real estate, size of the franchise and the level of problem loans. Negative ratings pressure could occur if performance improvement relative to peer institutions lags. At present, earnings and asset quality metrics rank near the bottom quartile of its ratings peer group. An inability to keep pace with peer institutions' improving levels of problem loans or a widening gap in return on average assets relative to peers could result in negative ratings action. Fitch affirms the following ratings with a Stable Outlook. Fulton Financial Corporation -- Long-term IDR at 'A-'; -- Short-term IDR at 'F1'; -- Viability Rating at 'a-' -- Subordinated debt at 'BBB+'; -- Support at '5'; -- Support Floor at 'NF'. Fulton Bank, N.A. -- Long-term IDR at 'A-'; -- Long-term deposits at 'A'; -- Short-term IDR at 'F1'; -- Short-term deposits at 'F1'; -- Viability Rating at 'a-' -- Support at '5'; -- Support Floor at 'NF'. The Columbia Bank -- Long-term IDR at 'A-'; -- Long-term deposits at 'A'; -- Short-term IDR at 'F1'; -- Short-term deposits at 'F1'; -- Viability Rating at 'a-' -- Support at '5'; -- Support Floor at 'NF'. Lafayette Ambassador Bank -- Long-term IDR at 'A-'; -- Long-term deposits at 'A'; -- Short-term IDR at 'F1'; -- Short-term deposits at 'F1'; -- Viability Rating at 'a-' -- Support at '5'; -- Support Floor at 'NF'. Fulton Bank of New Jersey (previously The Bank) -- Long-term IDR at 'A-'; -- Long-term deposits at 'A'; -- Short-Term IDR at 'F1'; -- Short-Term deposits at 'F1'; -- Viability Rating at 'a-' -- Support affirmed at '5'; -- Support Floor at 'NF'. Fulton Capital Trust I -- Preferred stock at 'BB+'. GAMETECH INT'L: Court Sets Sept. 25 Auction of Assets ----------------------------------------------------- On Aug. 21, 2012, the U.S. Bankruptcy Court for the District of Delaware approved the bid procedures relating to the sale of substantially all of the assets of GameTech International, Inc., and its affiliated debtors. The Court also approved the payment of a breakup fee ($400,000) and reimbursement (not to exceed $140,000) in accordance with the terms of the Asset Purchase Agreement between the Debtors and stalking horse bidder YI GT Acquisition, Inc. The bid protections will be payable upon the approval of the Court of the sale of the assets to another party. If qualified bids are received by the deadline, an auction will be held on Sept. 25, 2012, at 10:00 a.m. (Eastern Time), at the offices of Greenberg Traurig, LLP, in Wilmington, Delaware, or at any such location as the Debtors may designate. The hearing to consider the acceptance of the successful bids and backup bids will be held on Sept. 27, 2012, at 2:00 p.m. (Eastern Time). Objections to the sale are due Sept. 17. The Official Committee of Unsecured Creditors objected to the expedited bidding process proposed by the Debtors. About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. GameTech International, Inc. and its wholly owned subsidiaries have filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11964) on July 2, 2012, to effect a restructuring of the company's debt obligations. GameTech disclosed total assets of $27.22 million and total liabilities of $22.88 million as of Jan. 29, 2012. Judge Peter J. Walsh presides over the case. Andrew E. Robinson signed the petition as senior vice president, chief financial officer, and treasurer. The Debtors are represented by Greenberg Traurig, LLP. Kinetic Advisors, LLC, serves as the Debtors' financial advisor. GLOBAL GREEN: Had C4381,317 Net Loss in Second Quarter ------------------------------------------------------ Global Green Matrix Corporation reported a net loss of C$381,317 on C$24,718 of revenues for the three months ended June 30, 2012, compared with a net loss of C$82,994 on no revenue for the same period a year ago. For the six months ended June 30, 2012, the Company had a net loss of C$605,924 on C$143,288 of revenues, compared with a net loss of C$150,629 on no revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed C$3.9 million in total assets, C$1.4 million in total current liabilities, and total equity of C$2.5 million. "The Company incurred a net loss for the six months ended June 30, 2012 of C$605,924 with a total accumulated deficit of C$11,890,621. There is doubt about the Company's ability to continue as a going concern." As of June 30, 2012, the working capital deficiency was C$472,742 as compared to working capital of C$625,979 as at Dec. 31, 2011. A copy of the Company's Condensed Interim Consolidated Financial Statements for the six months ended June 30, 2012, is available for free at http://is.gd/yEWyI1 About Global Green Headquartered in Gabriola, British Columbia, Canada, Global Green Matrix Corp., formerly Poly-Pacific International Inc., was incorporated under the Alberta Business Corporations Act on Oct. 25, 1995. The Company is focused on exploring and pursuing new environmentally sound methods and technologies in recycling, and in particular, the reclamation sector. * * * As reported in the TCR on July 5, 2012, K.R. Margetson Ltd., in Vancouver, Canada, expressed substantial doubt about Global Green's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has a net working capital deficiency. GOLDEN TEMPLE: Myers Asks to be Appointed as Receiver ----------------------------------------------------- Myers & Co. Consultants LLC asks the Bankruptcy Court to appoint it as Receiver/Custodian in the Chapter 11 case of EWTC Management LLC, fka Golden Temple Management LLC. Myers & Co. is the putative Special Fiduciary in the Multnomah County Circuit Court, case captioned Khalsa, et al. v. Khalsa, Case No. 0909-13281, and the putative "Receiver/Custodian" in the case. Conrad Myers, and his company, Myers and Co., specialize in interim and crisis management, financial consulting, and fiduciary services to businesses and their stakeholders. Conrad Myers, the principal of Myers & Co. is an experienced corporate executive with international business experience and is credentialed as a Certified Turnaround Professional (CTP). Two members of Myers & Co. hold fraud examiner certifications (William L. Rich is a Certified Financial Forensic Analyst and Kenneth E. Davis is a Certified Fraud Examiner). Conrad Myers' financial training includes qualifications and practice experience as both a UK Chartered Accountant and as a Certified Public Accountant. Although Mr. Myers does not practice as an accountant, his international accounting experience has been invaluable background. Conrad Myers and Myers & Co. specialize in services to troubled businesses and businesses in transition. They often are called to lead in environments where there is a management/leadership void, where management has been removed or left the scene, and/or where leadership has lost credibility with parties-in-interest. They are also retained to investigate and report on allegations of fraud, embezzlement, defalcation, mismanagement, and other instances of misconduct by management or employees. Myers & Co. served as an equity receiver or a special receiver in cases in state and federal court. Myers & Co. have also served in numerous Bankruptcy Court cases as a Chapter 11 trustee, an examiner, a plan agent, a chief restructuring officer, a post confirmation trustee, a financial consultant to debtors, and a financial advisor to creditors' committees. Conrad Myers have had considerable experience in a variety of assignments, managing all types of businesses including, but not limited to, food products, branded goods, and international businesses. Fees for the professional services provided by Myers & Co. will be billed at its normal and usual billing rates. The hourly rates range from $200 to $385. The rates for some of the professionals expected to be primarily involved in this case are as follows: Professional Hourly Rate Conrad Myers Principal $385 per hour William Rich Sr. Consultant $290 per hour Timothy Donovan Sr. Consultant $290 per hour Matthew McKinlay Consultant/Analyst $220 per hour Kenneth Davis Consultant/Accountant $200 per hour About Golden Temple Management EWTC Management LLC, fka Golden Temple Management LLC, the management company of Golden Temple of Oregon LLC, maker of Yogi Tea, filed for Chapter 11 protection (Bankr. D. Ore. Case No. 12-60536) on Feb. 18, 2012. Winston & Cashatt, Lawyers, P.S., serves as its lead Chapter 11 counsel. Albert & Tweet, LLP, serves as its local counsel. The Debtor's primary asset is its 90% ownership of Golden Temple of Oregon LLC, which has its principal assets in Springfield, Oregon. The Debtor and GTO are parties to a number of suits involving monetary and equitable relief sought against them as well as litigation related to the intellectual property of the companies, notably the Golden Temple and Yogi Tea brands. The Register-Guard reports that Golden Temple CEO Kartar Singh Khalsa and the company's management group filed for Chapter 11 in anticipation of large claims being filed against them after they lost a lawsuit in December 2011. Multnomah County Circuit Judge Leslie Roberts ruled that Mr. Khalsa breached his fiduciary duties to the Sikh religious community founded by the late Yogi Bhajan and that he and other Golden Temple Management members were unjustly enriched, when they gained ownership of 90% of the company in 2007. GTO itself is not a party to the bankruptcy. GOLDEN TEMPLE: Proposed Receiver Hires Sussman Shank as Counsel --------------------------------------------------------------- Myers & Company Consultants LLC, as the Special Fiduciary in the Multnomah County Circuit Court, case captioned Khalsa, et al. v. Khalsa, Case No. 0909-13281 and the putative "Receiver/Custodian" in the bankruptcy case of EWTC Management LLC, asks the Bankruptcy Court for authority to retain Sussman Shank LLP as counsel. Myers believes that Sussman Shank LLP is well qualified to perform as counsel in this case and to provide these services: A. Provide legal advice to Myers with respect to a determination of its power, duties, and obligations as custodian/receiver; B. Assist Myers in the performance of its duties as those duties may be ordered by the Court; C. Prepare necessary applications, answers, orders, reports, motions, and other legal pleadings and documents; and D. Address and appear in court proceedings before this Court and others. Fees for the professional services provided by Sussman Shank LLP will be billed at its normal and usual billing rates. The hourly rates range from $100 for certain 10 paralegals up to $475 for certain attorneys. The rates for some of the professionals expected to be primarily involved in the case are: Lawyer Hourly Rate ------ ----------- Howard M. Levine (attorney) $475 Thomas W. Stilley (attorney) $430 Timothy A. Solomon (attorney) $295 Kathy A. Moody (paralegal) $185 The Receiver assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Golden Temple Management EWTC Management LLC, fka Golden Temple Management LLC, the management company of Golden Temple of Oregon LLC, maker of Yogi Tea, filed for Chapter 11 protection (Bankr. D. Ore. Case No. 12-60536) on Feb. 18, 2012. Winston & Cashatt, Lawyers, P.S., serves as its lead Chapter 11 counsel. Albert & Tweet, LLP, serves as its local counsel. The Debtor's primary asset is its 90% ownership of Golden Temple of Oregon LLC, which has its principal assets in Springfield, Oregon. The Debtor and GTO are parties to a number of suits involving monetary and equitable relief sought against them as well as litigation related to the intellectual property of the companies, notably the Golden Temple and Yogi Tea brands. The Register-Guard reports that Golden Temple CEO Kartar Singh Khalsa and the company's management group filed for Chapter 11 in anticipation of large claims being filed against them after they lost a lawsuit in December 2011. Multnomah County Circuit Judge Leslie Roberts ruled that Mr. Khalsa breached his fiduciary duties to the Sikh religious community founded by the late Yogi Bhajan and that he and other Golden Temple Management members were unjustly enriched, when they gained ownership of 90% of the company in 2007. GTO itself is not a party to the bankruptcy. GULF COLORADO: Can Employ Frances Smith as Counsel -------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas has granted Gulf, Colorado & San Saba Railway Corporation permission to employ Frances Smith, Esq., at Shackelford, Melton & McKinley, LLP, as attorney for the Debtor, effective as of April 25, 2012. As reported in the TCR on Aug. 24, 2012, Shackelford Melton will, among other things, advise the Debtor of its rights, powers, and duties as debtor-in-possession under the Bankruptcy Code and perform all legal services for and on behalf of the Debtor that may be necessary or appropriate in the administration of this bankruptcy case and the Debtor's businesses at these hourly rates: Frances A. Smith, Of Counsel $325 Subvet D. West, Associate $240 Joanne Dixon, Paralegal $130 To the best of the Debtors' knowledge, Shackelford Melton is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About GCSR Gulf, Colorado & San Saba Railway Corporation operates the Gulf, Colorado and San Saba Railway, a former Atchison, Topeka and Santa Fe Railway "San Saba branch line." The Railway is a short-line freight railroad headquartered in Brady, Texas and operates from an interchange with the BNSF Railway at Lometa, Texas 67.5 miles west to Brady, Texas. The Railway is located within the counties of Lampasas, Mills, San Saba and McCulloch, Texas. The Company filed for Chapter 11 relief (Bankr. W.D. Tex. Case No. 12-11531) on July 3, 2012. Judge H. Christopher Mott presides over the case. Frances A. Smith, Esq., and Subvet D. West, Esq., at Shackelford Melton & McKinley, in Dallas, Tex., represents the Debtor as counsel. In its schedules, the Debtor disclosed $24,534,864 in total assets and $3,710,371 in total liabilities. The petition was signed by Richard C. McClure, president and CEO. GULF COLORADO: Can Employ Jeremy Fortin as Financial Advisor ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Texas has granted Gulf, Colorado & San Saba Railway Corporation permission to employ Jeremy Fortin as Financial Advisor to the Debtor, effective as of July 3, 2012. Mr. Fortin will, among other things: a. assist the Debtor in completing its schedules and statements of financial affairs; and b. assist the Debtor in managing the Gulf, Colorado and San Saba Railway including all financial aspects and all compliance issues. Mr. Fortin's usual rate for these services is $1,250 per week. To the best of the Debtors' knowledge, Mr. Fortin is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About GCSR Gulf, Colorado & San Saba Railway Corporation operates the Gulf, Colorado and San Saba Railway, a former Atchison, Topeka and Santa Fe Railway "San Saba branch line." The Railway is a short-line freight railroad headquartered in Brady, Texas and operates from an interchange with the BNSF Railway at Lometa, Texas 67.5 miles west to Brady, Texas. The Railway is located within the counties of Lampasas, Mills, San Saba and McCulloch, Texas. The Company filed for Chapter 11 relief (Bankr. W.D. Tex. Case No. 12-11531) on July 3, 2012. Judge H. Christopher Mott presides over the case. Frances A. Smith, Esq., and Subvet D. West, Esq., at Shackelford Melton & McKinley, in Dallas, Tex., represents the Debtor as counsel. In its schedules, the Debtor disclosed $24,534,864 in total assets and $3,710,371 in total liabilities. The petition was signed by Richard C. McClure, president and CEO. GULF COLORADO: Hornberger Taps JR Bentley as Railroad Consultant ---------------------------------------------------------------- Ronald Hornberger, Chapter 11 trustee for Gulf, Colorado & San Saba Railway Corporation, asks the U.S. Bankruptcy Court for the Western District of Texas for authorization to employ The JR Bentley Company as railroad consultant. Robert J. Brocker, managing director of JR Bentley, will perform most, if not all of the consulting services provided by Consultant. The Consultant will: a. Identify areas where expertise needs to be employed to make assessments of the assets and help enlist credible people to do those assessments, to help establish the underlying value. Areas could include establishing base line costs and plans: a) to ensure the safety of the bridges, costs to upgrade them to handle higher capacity loads. b) track conditions and costs to restore the railroad to 10MPH operating speed. c) costs to repair the highway grade crossing signals, in particular the one concerning which the FRA has cited Debtor previous to Trustee's involvement in the Case. d) Determine whether there are out of service tracks and if they are needed, the cost to restore to service. e) locomotive equipment assessment. b. Meet the employees and assess their competence and interest in continuing to work for Debtor or a successor. c. Review Debtor's books and analyze the existing agreements BNSF and others. d. Confer with shippers and assess short-term and long-term business forecasts and needs. e. Determine the work process changes needed to satisfy the FRA requirements and speak with the FRA about developing a plan to meet them. f. Counsel with the Trustee concerning, and if necessary, find a temporary replacement for Mr. Richard McClure, current operator and manager, to manage the operation of the railroad and line until it is sold. g. Help identify potential purchasers for Debtor's assets and sort through and evaluate potential offers for purchase of the Debtor's assets and assist the Trustee in the process. h. Assist in educating Trustee on the railroad business, regulations and operations. I. Any other railroad consulting services of which the Debtor may determine he has a need in the Case. The Trustee tells the Court that he has chosen Consultant to be the Railroad Consultant because it is disinterested and, in his judgment, is experienced in matters of this nature. The remuneration of Consultant has been agreed upon to be paid at and from the proceeds of the closing of a sale of Debtor's assets on the following scale: a fee representing 3% of the first $6,000,000 of proceeds of a sale of the Debtor's assets, or up to a total of $180,000; a fee of 2% on all proceeds over and above proceeds of $6,000,000. About GCSR Gulf, Colorado & San Saba Railway Corporation operates the Gulf, Colorado and San Saba Railway, a former Atchison, Topeka and Santa Fe Railway "San Saba branch line." The Railway is a short-line freight railroad headquartered in Brady, Texas and operates from an interchange with the BNSF Railway at Lometa, Texas 67.5 miles west to Brady, Texas. The Railway is located within the counties of Lampasas, Mills, San Saba and McCulloch, Texas. The Company filed for Chapter 11 relief (Bankr. W.D. Tex. Case No. 12-11531) on July 3, 2012. Judge H. Christopher Mott presides over the case. Frances A. Smith, Esq., and Subvet D. West, Esq., at Shackelford Melton & McKinley, in Dallas, Tex., represents the Debtor as counsel. In its schedules, the Debtor disclosed $24,534,864 in total assets and $3,710,371 in total liabilities. The petition was signed by Richard C. McClure, president and CEO. HALIFAX GROUP: Converted to Chapter 7 in Less Than One Month ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Halifax Group LLC didn't last long in Chapter 11. According to the report, the company's reorganization filing on Aug. 6 was converted to liquidation in Chapter 7 by the end of the month. The case began in an atypical fashion, with the petition signed by a company executive from his federal prison cell, according to papers filed by secured creditor DLJ Mortgage Capital Inc. requesting conversion to Chapter 7 or permission to foreclose. DLJ contended that the bankruptcies were begun to forestall foreclosures that were to occur within days. The report relates that the bankruptcy judge in Brooklyn, New York, decided that appointing a Chapter 7 trustee was in the best interest of creditors at this time. She will hold another hearing on Oct. 10 to decide whether DLJ and other lenders should be permitted to foreclose. About Halifax Group Long Island real estate developer Thomas Kontogiannis have sent five entities to Chapter 11. Halifax Group LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-45736) on Aug. 6, 2012. Mr. Kontogiannis on Aug. 7 filed in bankruptcy court in Brooklyn (Bankr. E.D.N.Y.) Chapter 11 petitions for four entities: Debtor Case No. ------ -------- Loring Estates LLC 12-45757 Edgewater Development, Inc. 12-45759 Group Kappa Corp. 12-45761 Plaza Real Estate Holding Inc 12-45764 Each of the Debtors disclosed debt of $48.27 million to DLJ Mortgage Capital, Inc., on a bank loan. In October 2011, the U.S. District Court in Brooklyn sentenced Mr. Kontogiannis to 9 years imprisonment for leading a mortgage fraud conspiracy resulting in more than $98 million in losses. HARMAN INT'L: S&P Raises Corporate Credit Rating From 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Harman International Industries Inc. to 'BBB-' from 'BB+'. The outlook is stable. "At the same time, we also raised our rating on the senior unsecured debt to 'BB+' from 'BB'," S&P said. "The upgrade reflects our revision of Harman's business risk profile to 'satisfactory' from 'fair,' based on our assumption that the company will be able to sustain profitability at or above double-digit EBITDA margins, expand its global manufacturing presence along with the automakers it supplies, and continue to successfully innovate its software- and hardware-based product lines," said Standard & Poor's credit analyst Nancy Messer. "We believe this is feasible, given the track record of recent years and our expectation of mixed but overall slow recovery in auto sales and vehicle production globally. We assume growth in the emerging markets will exceed that for most mature markets in the year ahead. We expect new-vehicle demand to improve in North America at about 11% year over year in 2012, but sales will likely fall in Europe for the fifth year in a row in 2012." "We believe Harman's products, which are largely software based, can withstand the risk of commoditization, as well as potential inroads from other competitors that may have greater financial resources. In our opinion, the company has the technological capabilities to continue a leadership position in innovating product for the connectivity-infotainment segment of the auto industry, where vehicle performance safety and satisfaction of consumer's desire for information intersect. Harman's recently developed scalable infotainment products have the potential to expand its vehicle exposure beyond premium brands to more price sensitive volume brands," S&P said. "The ratings also reflect Harman's 'intermediate' financial profile, including our expectation that the company can generate positive free cash flow after capital spending of at least $150 million per year in the next two years, lease-adjusted leverage will remain below 2.5x (it was 1.4x for fiscal year end June 30, 2012), and funds from operations (FFO) to total debt will remain above 30% (it was 65.4% as of June 30). We believe that, given the company's sizable backlog of new automotive business to be launched in the next several years, the company will be able to generate double-digit margins and free cash flow next year despite significant economic uncertainty. Less profitable auto business has been running off and should be minimal by 2016 at worst," S&P said. "Through its multiyear restructuring program and relocation to low-cost countries, Harman, in our opinion, has achieved an operational break-even point that better fits expected intermediate-term global auto production levels. Also, the company continues to win new business awards from major global automakers that should boost revenues beginning in 2013, when this new business is scheduled to launch. The automotive order backlog totaled $16.1 billion at fiscal year-end June 30, 2012. New auto order in fiscal 2012 totaled $4 billion for infotainment and $1.2 billion for branded car audio. We believe the company's profit potential and competitive standing in its markets depend on operational efficiencies and ongoing technological innovation, which is why the company targets research and development (R&D) spending at 8% of sales," S&P said. "We believe that management's financial policies will remain conservative. Still, we expect the company will pursue periodic acquisitions of technology, although most should not lead to higher leverage, depending on the size of the investment. Also, the board has recently authorized a $200 million share repurchase authorization and initiated dividend payments to shareholders. We believe the company's free cash flow will support these shareholder friendly actions rather than debt," S&P said. "The upgrade incorporates the assumption that the company will be able to comfortably manage its $400 million October 2012 debt maturity with cash on hand or alternative borrowing. Kohlberg Kravis Roberts & Co. L.P. (KKR; not rated), holds Harman's $400 million 1.25% convertible notes and controls one seat on Harman's board of directors. We do not expect KKR to make a renewed leveraged buyout attempt, given a standstill agreement, and we have no reason to believe KKR's presence in the corporate capital and governance structures has hurt Harman's financial and business strategies. In addition to KKR, an activist shareholder-- Relational Investors LLC (not rated; Ralph Whitworth and David Batchelder) -- has held shares in Harman since 2009. We acknowledge the potential for more aggressive shareholder friendly actions typically associated with such investors. But our rating on Harman incorporates the assumption that it will remain an independent, publicly traded company with a conservative financial policy based upon the track record developed under current management and while Relational has been a shareholder," S&P said. The company reports three business segments: * Infotainment, which provides 56% of sales and EBITDA margin of 10.2% in fiscal 2012; * Lifestyle (auto and consumer audio products), with 30% of revenues and 13.1% EBITDA margin; and * Professional audio, with 14% of revenues and 16.7% EBITDA margin. "Harman's satisfactory automotive business position benefits from its expertise in audio technology, which is evident from its strong position in the professional audio market, and from brand awareness garnered in the consumer audio market. The company has well-recognized brand names in audio products, such as Harman/Kardon, JBL, and Infinity, and a leading market position in branded automotive audio products, as well as in general audio equipment for professional use," S&P said. "Harman's business risk profile reflects its material exposure to the highly competitive global auto market -- which accounts for about 70% of the company's revenues -- and concentration of sales with certain automakers. Harman holds a significant position (a reported 22% market share) in infotainment technology for the auto market. Harman has fair geographic diversity with its $4.4 billion of fiscal 2012 revenues derived 30% in Europe (74% from Germany, and the remainder from U.K., France, Italy, and Spain), 40% in North America, 12% in the BRIC countries (Brazil, Russia, India, and China), and 18% in the rest of the world. Harman's auto products are concentrated among premium branded vehicles--BMW AG constituted 19% of automotive sales in fiscal 2012, Audi/Volkswagen AG 14%, followed by Toyota, Fiat Chrysler, and Daimler AG," S&P said. "Our stable rating outlook on Harman reflects our view that its improved operating performance, resulting from attention to cost, efficiency, and engineering initiatives, and currently strong financial metrics will enable it to remain profitable and cash flow positive despite weak demand in Europe in the year ahead. The company occupies a growth segment within the auto market - driver- oriented electronic information devices that are safely interconnected with vehicle operations. Our base case assumes that the company will remain committed to balancing investments, dividends, and acquisitions in line with an investment-grade financial profile. At the current rating, we believe the company has sufficient free cash flow to accommodate some acquisitions and modest share buybacks," S&P said. "We could raise the rating in the next two years if Harman continues to win business with good margins, demonstrates its ability to innovate to maintain its leadership position in Western markets for auto audio and infotainment, further diversifies its customer base, and generates EBITDA margins that remain in the top quartile of the auto supplier sector. For an upgrade, we would also expect the company's credit metrics and cash flow after capital spending to remain somewhat improved from those reported as of June 30, 2012. This will be challenging because of the company's exposure to cyclical and highly competitive end-markets with potential swings in profitability and our view that there will be some expansion through acquisitions that may add some debt from time to time. Over the longer term, it is less likely that the business profile could improve, given our view that the auto industry is evolving into a global marketplace and, as a result, competition and cyclicality will continue to be a major consideration in the years ahead," S&P said. "We could lower our ratings if we see an increased likelihood of a combination of adverse market conditions, large acquisitions, or share buybacks that would weaken the company's credit measures to below what we see as commensurate for the 'BBB-' rating. We could lower the ratings if free operating cash flow turns negative for multiple quarters, or if FFO to total debt were to decline below 30%. We believe this would not occur unless another very substantial downturn in auto production caused Harman's revenues to decline 25% or more," S&P said. HARPER BRUSH: Court OKs Michael Pellegrino as IP Expert ------------------------------------------------------- Harper Brush Works, Inc., obtained permission from the U.S. Bankruptcy Court to employ Michael J. Pellegrino and Pellegrino & Associates LLC as its patent and trademark valuation expert in the bankruptcy case. An objection to the application was withdrawn. Michael Pellegrino will be the primary contact with the Debtor and will render services to the Debtor. The Debtor proposes to engage Pellegrino to prepare a written report on the value of both the Debtor's patent asset portfolio and its trademark asset portfolio on a flat fee basis of $37,425. To the extent Mr. Pellegrino is called as a witness to testify, the Debtor proposes to pay his regular hourly testimony rate of $525 per hour, plus his actual, reasonable, and necessary expenses. Michael Pellegrino attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtor proposed that upon approval of the employment application and completion of the written report, Pellegrino will be entitled to payment of the $37,425 flat fee, and at the conclusion of the hourly portion of the engagement, for testimony, Pellegrino will file an appropriate final application seeking allowance of all hourly fees and costs. Upon allowance of the hourly fees and costs, the Debtor will pay Pellegrino the allowed compensation. About Harper Brush Works Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012. Family-owned Harper Brush -- http://www.harperbrush.com/-- provides more than 1,000 products, including pushbrooms, mops, floor squeegees, automotive brushes, dust pans, and buckets. The Company disclosed assets of $10.4 million against debt totaling $10 million, including $6 million owing to secured creditors. Judge Anita L. Shodeen presides over the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc B. Ross serves as the Debtor's Chief Restructuring Officer. An official committee of unsecured creditors has been appointed in the case. The panel is represented by Freeborn & Peters LLP as general bankruptcy counsel. The Committee tapped Day Rettig Peiffer, P.C., as its local counsel, and MorrisAnderson as its financial advisor. HARPER BRUSH: Court OKs MorrisAnderson as Financial Advisor ----------------------------------------------------------- The Unsecured Creditors' Committee of Harper Brush Works, Inc., obtained permission from the U.S. Bankruptcy Court to retain MorrisAnderson as financial advisor to, among other things, assist the Committee: (a) in the review of financial related disclosures required by the Court, including the Debtor's Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; (b) with information and analyses required pursuant to a possible Debtor-In-Possession financing, including, but not limited to, preparation for hearings regarding the use of cash collateral and DIP financing; and (c) with a review of any of the Debtor's proposed key employee retention and other critical employee benefit programs. MorrisAnderson will charge for its services on an hourly basis, in accordance with its hourly rates. The firm's billing rates for professionals for the 2012 calendar year range from $75 per hour for administrative support to $525 per hour for work performed by principals. MorrisAnderson personnel expected to provide work for the Committee and their hourly rates are: Professional Rates ------------ ----- Daniel F. Dooley (Principal) $525/hour Mark T. Iammartino (Director) $325/hour Aaron G. Gillum (Director) $325/hour Other professionals as needed $250-$350 per hour Administrative Assistance $75/hour MorrisAnderson director Mark T. Iammartino attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Harper Brush Works Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012. Family-owned Harper Brush -- http://www.harperbrush.com/-- provides more than 1,000 products, including pushbrooms, mops, floor squeegees, automotive brushes, dust pans, and buckets. The Company disclosed assets of $10.4 million against debt totaling $10 million, including $6 million owing to secured creditors. Judge Anita L. Shodeen presides over the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc B. Ross serves as the Debtor's Chief Restructuring Officer. An official committee of unsecured creditors has been appointed in the case. The panel is represented by Freeborn & Peters LLP as general bankruptcy counsel. The Committee tapped Day Rettig Peiffer, P.C., as its local counsel, and MorrisAnderson as its financial advisor. HAWKER BEECHCRAFT: IAM Opposes Key Employee Incentive Plan ---------------------------------------------------------- International Association of Machinists and Aerospace Workers, AFL-CIO, asks the U.S. Bankruptcy Court for the Southern District of New York to deny Hawker Beechcraft, Inc., et al.'s key employee incentive plan. As reported in the Troubled Company Reporter on Aug. 1, 2012, Lisa Uhlman at Bankruptcy Law360 reported that U.S. Bankruptcy Judge Stuart M. Bernstein allowed the Debtor to institute a $1.9 million retention plan for 31 management employees, while asking for more information on a $5.3 million incentive plan for eight insiders before he decides that matter. According to IAM, the KEIP is not an incentive program designed to reward the Debtors' senior executives for achieving material, value-enhancing targets and challenging targets either during or after the chapter 11 cases. Rather, through the KEIP the Debtors propose to make lump sum awards totaling up to approximately $5.3 million (or up to 200% of the base salary) to eight insiders to remain with the Debtors while they complete the restructuring process that is already in place and close to consummation. The motion, IAM notes that, in substance, seeks to approve a postpetition retention program whose primary purpose is to encourage the SLT ((the KEIP Executives) insiders to remain with the Debtors for a short period of time and to pay them millions of dollars for doing so. IAM relates that the SLT consists of the chairman, the executive vice president of operations, the vice president of human resources, the vice president of engineering, the executive vice president and general counsel, the senior vice president and global customer support, the chief financial officer, and the executive vice president of customers. The total annual base salaries of the KEIP executives is $2,664,000. Under the KEIP, the Debtors are proposing two potential (but exclusive) methods for providing bonuses to the KEIP executives: either (i) consummation of the standalone transaction, which is the consensual restructuring plan that was agreed to by a majority of the prepetition lenders and bondholders prior to the Petition Date; or (ii) approval and consummation of a Third-Party Transaction. About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker Beechcraft disclosed assets of $1,831,097 plus undetermined amounts, and liabilities of $1,704,736,958 plus undetermined amounts. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee tapped FTI Consulting, Inc., as its financial advisor. HEALTHSOUTH CORP: S&P Rates New $250MM Sr. Unsecured Notes 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to the proposed $250 million senior unsecured notes due 2024 to be borrowed by Birmingham, Ala.-based HealthSouth Corp. "We rated the notes 'BB-' (the same as the 'BB-' corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. The company will use the proceeds of this new issue to repay existing debt," S&P said. "Our 'BB-' corporate credit rating and stable outlook on HealthSouth is unchanged. The rating reflects our assessment of the company's business risk profile as 'weak' (according to our criteria), because of sensitivity to significant reimbursement risk, particularly from the government as Medicare generates over 70% of total revenues. The rating is also based on our view of the company's financial risk profile as 'significant,' reflected in our expectation that the leverage will remain near the current debt to EBITDA level of about 3.3x," S&P said. RATINGS LIST HealthSouth Corp. Corporate credit rating BB-/Stable/-- Rating Assigned $250 mil sr unsec notes due 2024 BB- Recovery rating 3 HEALTHWAREHOUSE.COM INC: Had $1.6-Mil. Net Loss in First Quarter ---------------------------------------------------------------- HealthWarehouse.com, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.6 million on $3.2 million of sales for the three months ended March 31, 2012, compared with a net loss of $1.1 million on $2.3 million of sales for the corresponding period of the prior year. The Company's balance sheet at March 31, 2012, showed $2.5 million in total assets, $5.7 million in total liabilities, redeemable preferred stock of $659,310, and a stockholders' deficit of $3.9 million. "As of March 31, 2012, and Dec. 31, 2011, the Company had negligible cash and a working capital deficiency of $4,479,571 and $2,404,464, respectively. For the three months ended March 31, 2012, cash flows included net cash used in operating activities of $177,395, net cash used in investing activities of $81,043 and net cash provided by financing activities of $258,401. These conditions raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/uKGeVQ About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare e- commerce company that sells brand name and generic prescription drugs as well as over-the-counter ("OTC") medical products. * * * As reported in the TCR on July 5, 2012, Marcum LLP, in New York, N.Y., expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. HEALTHWAREHOUSE.COM INC: Incurs $1.5 Million Net Loss in Q1 ----------------------------------------------------------- HealthWarehouse.com, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.55 million on $3.15 million of net sales for the three months ended March 31, 2012, compared with a net loss of $1.07 million on $2.28 million of net sales for the same period a year ago. The Company reported a net loss of $5.71 million on $10.36 million of sales in 2011, compared with a net loss of $3.69 million on $5.69 million of sales in 2010. The Company's balance sheet at March 31, 2012, showed $2.45 million in total assets, $5.73 million in total liabilities, $659,310 in redeemable preferred stock, and a $3.93 million total stockholders' deficiency. "Since inception, the Company has financed its operations primarily through product sales to customers, debt and equity financing agreements, and advances from stockholders. As of March 31, 2012 and December 31, 2011, the Company had negligible cash and a working capital deficiency of $4,479,571 and $2,404,464, respectively. For the three months ended March 31, 2012, cash flows included net cash used in operating activities of $177,395, net cash used in investing activities of $81,043 and net cash provided by financing activities of $258,401. These conditions raise substantial doubt about the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended March 31, 2012. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, Marcum LLP, in New York, expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. A copy of the Form 10-Q is available for free at: http://is.gd/uKGeVQ About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a Verified Internet Pharmacy Practice Sites accredited retail mail-order pharmacy and healthcare e-commerce company that sells discounted generic and brand name prescription drugs, as well as, over-the-counter (OTC) medical products. HOVNANIAN ENTERPRISES: Reports $34.7 Million Net Income in Q3 ------------------------------------------------------------- Hovnanian Enterprises, Inc., reported net income of $34.67 million on $387.01 million of total revenues for the three months ended July 31, 2012, compared with a net loss of $50.93 million on $285.61 million of total revenues for the same period during the prior year. The Company reported net income of $18.21 million on $998.31 million of total revenues for the nine months ended July 31, 2012, compared with a net loss of $187.73 million on $793.28 million of total revenues for the same period a year ago. The Company's balance sheet at July 31, 2012, showed $1.62 billion in total assets, $2.02 billion in total liabilities, and a $404.20 million total deficit. "Despite a continuing weak United States economy, the dollar amount of our net contracts reflected strong year-over-year increases of 43% and 32% for our first nine months and the third quarter of fiscal 2012, respectively, as compared to the same periods in fiscal 2011. Unlike the past few years, the market for new homes has been resilient through both the spring selling season and throughout the summer months this year. We believe the housing market's recent overall strength and our significantly improved sales pace this year indicates that the market for new homes has bounced off the bottom and is already in a period of gradual recovery. Additionally, we are encouraged with the progress we made in our operating metrics, particularly with the 290 basis point year-over-year improvement in our gross margin and the 390 basis point reduction in total SG&A as a percentage of total revenues during the third quarter," commented Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. A copy of the press release is available for free at: http://is.gd/haFF4d About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company reported a net loss of $286.08 million for the fiscal year ended Oct. 31, 2011, compared with net income of $2.58 million during the prior fiscal year. * * * Hovnanian carries 'Caa2' corporate family and probability of default ratings from Moody's. Moody's said in April 2012 that the Caa2 corporate family rating reflects Hovnanian's elevated debt leverage weak gross margins, continued operating losses, negative cash flow generation, and Moody's expectation that the conditions in the homebuilding industry over the next one to two yeas will provide limited opportunities for improvement in the company's operating and financial metrics. In addition, the ratings consider Hovnanian's negative net worth position, which Moody's anticipates will be further weakened by continuing operating losses and impairment charges. As a result, adjusted debt leverage, currently standing at 149%, is likely to increase further. Hovnanian carries a 'CCC-' credit rating from Standard & Poor's and a 'CCC' issuer default rating from Fitch. HMC/CAH CONSOLIDATED: CAH 2 Taps Olsen as Special Legal Counsel --------------------------------------------------------------- CAH Acquisition Company #2, LLC, asks the U.S. Bankruptcy Court for the Western District of Missouri for authorization to employ The Olsen Law Firm, LLC, for the special purpose of providing legal services to CAH 2, in connection with Claim No. 20 filed in Case No. 11-44740-11 by Diamond Healthcare West, Inc., upon the terms and conditions contained in the Engagement Letter, dated as of Aug. 22, 2012. CAH 2 tells the Court that its lead bankruptcy counsel, Husch Blackwell LLP, has a potential conflict of interest with respect to Diamond Healthcare West, Inc., and, as such, CAH 2 has determined it is necessary to employ special legal counsel to analyze the Claim and prosecute any objection to the Claim. To the best of CAH 2's knowledge, Olsen does not hold or represent an interest adverse to its estate and that Olsen is disinterested, as that term is defined in Section 101(14) of the Bankruptcy Code. Jill D. Olsen, Esq., the professional who will be working for CAH 2, charges $275 per hour. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., Marshall C. Turner, Esq., and Matthew Gartner, Esq., at Husch Blackwell LLP, in Kansas City, Mo., represent the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HUDBAY MINERALS: S&P Rates New $400MM Senior Unsecured Notes 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating, and '3' recovery rating, to Toronto-based copper producer HudBay Minerals Inc.'s proposed US$400 million senior unsecured notes. "A '3' recovery rating indicates our expectations of meaningful (50%-70%) recovery in the event of default," S&P said. "We expect that proceeds from the issuance will be used to fund general corporate purposes including outlays for several of HudBay's larger development projects, including the Lalor mine in Manitoba and the Constancia mine in Peru," said Standard & Poor's credit analyst Donald Marleau. Standard & Poor's long-term corporate credit rating on Hudbay is unchanged at 'B' with a stable outlook. "The ratings on HudBay reflect what we consider the company's vulnerable business risk profile and aggressive financial risk profile," S&P said. "The ratings incorporate HudBay's very limited operating diversity and heavy reliance on volatile metals prices during a period of considerable growth-oriented capital expenditures. These weaknesses are offset somewhat, we believe, by HudBay's relatively stable operating profile that features an attractive first- quartile cost position, consistent earnings generation, and producing assets located in a low-risk mining jurisdiction," S&P said. "HudBay operates several mines in the Flin Flon Greenstone belt in the province of Manitoba, including its flagship producing asset, the 777 mine. The company is developing several projects, including the Lalor mine in Manitoba and the Constancia mine in Peru," S&P said. "The stable outlook on HudBay reflects our view that the company's low-cost mining operations, at our base case scenario metals prices, should support fairly stable earnings and funds from operations (FFO) generation. We estimate that, under our base case scenario assumptions, the company's stable operating profile should reinforce its liquidity position alongside an adjusted debt-to-EBITDA ratio in the 3x-4x range and adjusted FFO to debt of about 15%-20% in the next 12 months," S&P said. "Conversely, we would expect the rating to come under pressure if HudBay's adjusted debt-to-EBITDA ratio reaches 4.5x. In our opinion, such a scenario would require copper prices to fall below US$3.00 per pound or costs to materially increase from operational challenges at the 777 mine, both of which we view as unlikely this year," S&P said. "Given the company's capital spending requirements, we believe that a positive rating action is unlikely in the next 12 to 18 months. However, one could occur should HudBay's margins expand substantially relative to our base case assumptions while its development projects achieve commercial production ahead of schedule and significantly below budget," S&P said. IHS HOTELS: Case Summary & 4 Unsecured Creditors ------------------------------------------------ Debtor: IHS Hotels, Inc. dba Super 8/Knights Inn 3231 Allen Parkway, #1216 Houston, TX 77019 Bankruptcy Case No.: 12-36662 Chapter 11 Petition Date: September 3, 2012 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: David R. Jones Debtor's Counsel: Samuel L. Milledge, Esq. MILLEDGE LAW FIRM, P.C. 10333 Northwest Freeway, Suite 202 Houston, TX 77092 Tel: (713) 812-1409 Fax: (713) 812-1418 E-mail: milledge@milledgelawfirm.com Scheduled Assets: $2,615,700 Scheduled Liabilities: $2,155,500 A copy of the Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txsb12-36662.pdf The petition was signed by Ankit Amin, president. IMAGEWARE SYSTEMS: Bruce Toll Discloses 9.6% Equity Stake --------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Bruce Toll and his affiliates disclosed that, as of June 20, 2011, they beneficially own 7,047,434 shares of common stock of ImageWare Systems, Inc., representing 9.65% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/Trk1E8 About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc. is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. The Company reported a net loss of $3.18 million in 2011, compared with a net loss of $5.05 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.80 million in total assets, $6.60 million in total liabilities and $1.19 million in total shareholders' equity. INTERNATIONAL HOME: Wants Until Sept. 28 to File Ch. 11 Plan ------------------------------------------------------------ International Home Products, Inc., and Health Distillers International, Inc., ask the U.S. Bankruptcy Court for the District of Puerto Rico to extend their exclusive periods to propose a chapter 11 plan and explanatory disclosure statement until Sept. 28, 2012. The Debtors also request that the Court extend their solicitation period to 60 days from the date that the Court approves the Disclosure Statement. The Debtors explain that they need more time to formulate the proposed plan of reorganization. The Debtors note that the litigation in relation to the Debtors' cases had interfered with and distracted from the Debtors' efforts to reorganize. About International Home Products International Home Products, Inc., is engaged in the sale, financing of "Lifetime" cookware and other kitchenware as well as sale of account receivables in the secondary market. It is the exclusive distributor of "Lifetime" products in Puerto Rico for over 40 years. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 12-02997) on April 19, 2012. Carmen D. Conde Torres, Esq., in San Juan, P.R., serves as the Debtor's counsel. Wigberto Lugo Mendel, CPA, serves as its accountants. The Debtor disclosed $66,155,798 and $43,350,031 in liabilities as of the Chapter 11 filing. Secured lender First-Bank Puerto Rico is represented by Manuel Fernandez-Bared, Esq., and Jane Patricia Van Kirk, Esq., at Toro, Colon, Mullet, Rivera & Sifre, P.S.C. IRVINE SENSORS: To Acquire Assets of Bivio Networks for $10.5MM --------------------------------------------------------------- ISC8 Inc., formerly known as Irvine Sensors Corporation, has entered into an agreement to acquire certain cybersecurity related assets of Bivio Networks, Inc., a leading provider of cybersecurity solutions and products. The acquisition provides ISC8 with advanced products and technologies for Security Intelligence, Incident Response, Content Control and mitigation of Advanced Persistent Threats in enterprise, service provider and government networks. Under the terms of the agreement, ISC8 will pay up to $10.5 million in a combination of cash and stock. For the twelve months ended July 31, 2012, the business units of Bivio Networks to be acquired generated $2.2 million in sales. In addition, ISC8 will acquire an installed base consisting of nine accounts including leading Tier 1 service providers, enterprises and government agencies worldwide. The acquired assets are expected to be accretive to ISC8's EBITDA within the next twelve months. The acquisition is expected to accelerate the growth of ISC8's cybersecurity business by adding existing customer accounts, a significant pipeline, a receivables backlog, an installed base and a global sales force. ISC8 will purchase the NetFalcon and Network Content Control System business units of Bivio Networks, including all related intellectual property, sales, engineering, managerial, and other operational resources. "Bivio's technology is a natural fit for the cybersecurity solutions we have been advancing at ISC8 since I joined the Company two years ago," said Bill Joll, president and CEO of ISC8. With the addition of Bivio's worldwide sales and support network, sizeable sales pipeline, superb engineering talent, and Tier 1 customer accounts which include mobile operators, international enterprise accounts, and international government agencies, ISC8's cybersecurity portfolio will not only address traditional corporate and defense networks but will also extend to mobile networks. Furthermore, by combining Bivio's "Big Data" analytics with ISC8's full-payload analysis of network traffic, we will provide Chief Security Officers with unmatched visibility into whether advanced malware such as APTs are active on their networks. This acquisition is a defining moment for ISC8 and comes at an especially opportune time as we ramp up our cybersecurity business efforts." "Bivio's NetFalcon product utilizes patent-pending "Big Data" analytics technologies to provide customers with visibility and intelligence into their networks over massively large time windows, while its NCCS product provides mobile and landline network operators fine grained content control for the purposes of "safe internet," parental control and cybersecurity," commented Elan Amir, president and CEO of Bivio Networks. "Recent breaches have demonstrated the need for innovative and new technologies to address network cybersecurity. The combination of NetFalcon, NCCS and ISC8's products and technologies will enable enterprises, government agencies and mobile network operators to have unmatched security intelligence, awareness and control to detect, prevent and respond to the most advanced cybersecurity threats." The purchase agreement specifies that ISC8 will initially pay shareholders of Bivio Networks $500,000 in cash and up to 30 million shares of ISC8 common stock. Bivio shareholders will also receive payment of up to $7 million in additional consideration (a portion of which will be paid in cash and the remainder of which will be paid in shares of ISC8 common stock) upon meeting certain goals and conditions within the first twenty-four months after the acquisition closes. This acquisition is subject to customary closing conditions including consents from Bivio's credit holders and regulatory approvals. About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. The Company reported a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at July 1, 2012, showed $8.87 million in total assets, $36.99 million in total liabilities and a $28.12 million total stockholders' deficit. JEFFERSON COUNTY, AL: Citizens Sue to Void Lien on Sewer Revenue ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that city council members from Birmingham, Alabama, elected state officials, and citizens filed a lawsuit in bankruptcy court aimed at proving bondholders' liens on sewer revenues are invalid. The suit was filed last week as part of the Chapter 9 municipal bankruptcy of Jefferson County, Alabama. According to the report, the suit resulted from a ruling in August by the U.S. Bankruptcy Judge in Birmingham telling the officials to file a separate class suit on behalf of 140,000 property owners rather than become a party to the suit brought in February by the bondholders' indenture trustee against Jefferson County. In their suit, the bondholders claim the right to control the sewer system and its revenue. The report relates that the citizens' class suit alleges that the sewer bonds and accompanying liens on sewer revenue violated the Alabama state constitution and state laws. In June, the city council members filed what they styled as a class proof of claim against the county for $1.6 billion in overcharges from the sewer system arising from what they called "misconduct and criminal activity by managerial personnel and others acting in collusion." The report recounts that the bankruptcy judge ruled that the county's filing for Chapter 9 municipal bankruptcy ousted the receiver appointed before bankruptcy in state court at the bondholders' request. The dispute is on appeal to the U.S. Court of Appeals in Atlanta. The city council wanted a suit of its own because it contends the county has a conflict of interest and can't adequately represent citizens who pay what they claim are inflated sewer bills resulting from criminal activity. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. K-V PHARMACEUTICAL: Loses Suit That Controls Outcome of Ch. 11 -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that K-V Pharmaceutical Co. lost a lawsuit in U.S. District Court in Washington which the provider of women's health- care products said would determine the outcome of the Chapter 11 reorganization begun Aug. 4. According to the report, the suit, filed in July, contended that the U.S. Food and Drug Administration effectively nullified K-V's seven-year exclusive right under the Orphan Drug Act to sell a drug called Makena which no one else was interested in producing. The report relates that K-V charged that the FDA caved in to political pressure based on allegations it was selling the drug at too high a price. A U.S. district judge dismissed the suit on Sept. 6, saying the court has no power to oversee the FDA's enforcement activities. The first-lien notes traded on Aug. 8 for 31 cents on the dollar, a 36% decline since July 11, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. There is $200 million owing on 2.5% contingent convertible subordinated notes due 2033. The Bloomberg report discloses that the notes traded on Aug. 29 for 1.9 cents on the dollar, a 47% decline since Aug. 13, Trace said. K-V owes $30 million on a mortgage loan. About K-V Pharmaceutical KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. KB HOME: Fitch Affirms 'B+' Senior Unsecured Rating --------------------------------------------------- Fitch Ratings has affirmed KB Home's (NYSE: KBH) Issuer Default Rating (IDR) at 'B+' and senior unsecured rating at 'B+/RR4'. The Rating Outlook has been revised to Stable from Negative. The change in the Outlook to Stable largely reflects the following events: * The 2012 housing recovery although moderate is clearly stronger than was anticipated in 2011; * KBH is successfully mining the trade up market and de- emphasizing entry level (as reflected in the 8% increase in average sales price so far in 2012); * The South Edge legal issues and liabilities have been dealt with; * Operating and financial comparisons so far in 2012 are much improved (especially unit dollar backlog, gross profit margin, EBITDA and homebuilding and corporate pretax loss); and * Perhaps most importantly, the company has been successful so far in refinancing a substantial portion of the $1 billion of debt that was scheduled to mature in 2014 and 2015. However, the company does continue to lag its peers in certain operational and financial categories. The ratings for KBH are also based on the company's geographic diversity, customer and product focus, conservative building practices and effective utilization of return on invested capital criteria as a key element of its operating model. The company did a good job in reducing its inventory exposure and generating positive operating cash flow during this severe industry downturn. Since its peak in the third quarter of 2006, homebuilding debt has been reduced from $7.89 billion to $1.69 billion currently (pro forma). So far KBH has been relatively conservative in committing to incremental land purchase and should not become stressed so long as it maintains its minimum return parameters for real estate that it purchases. If the economy and housing were to experience a double dip downturn in 2012 or 2013, KBH has access to the liquidity to sustain itself, primarily utilizing its current cash position and possibly monetizing its South Edge real estate. Builder and investor enthusiasm have for the most part surged so far in 2012. However, national housing metrics have not entirely kept pace. Year-over-year (yoy) comparisons have been solidly positive on a consistent basis. However, month to month the national statistics (single-family starts, new home, and existing home sales) have been erratic and, at times, below expectations. In any case, year to date these housing metrics are well above 2011 levels. As Fitch has noted in the past, recovery will likely occur in fits and starts. Fitch's housing forecasts for 2012 have been raised since early spring but still assume only a moderate rise off a very low bottom. In a slowly growing economy with relatively similar distressed home sales competition, less competitive rental cost alternatives, and new home inventories at historically low levels, single-family housing starts should improve about 12%, while new home sales increase approximately 10.5% and existing home sales grow 5.6%. Further moderate improvement is forecast for 2013. The ratings also reflect KBH's business model and marketing prowess. The ratings take into account the company's current primary exposure to entry-level and to a lesser degree first-step trade-up housing (the deepest segments of the market), its leadership role in constructing energy efficient homes, its reemphasis of the value-engineered Open Series of home designs, its conservative building practices, utilization of return on invested capital criteria as a key element of its operating model and its capital structure. KBH employs what it labels as the KBnxt operational business model. This strategy includes regular detailed product preference surveys, primarily acquisition of developed and entitled land in markets with high growth potential, generally commencement of construction of a home only after a purchase contract has been signed, establishment of an even-flow production, pricing homes to compete with existing homes, and utilizing design centers to customize homes to the preferences of home buyers. Also, KBH strives to be among the top five builders or, in very large markets, top 10 homebuilders in order to have access to the best land and subcontractors. Most of KBH's communities now feature the 'Open Series' product designs which have been value engineered to reduce production costs and cycle times, enabling the company to more effectively compete on price with existing homes in the current market. Also, KBH is one of a handful of public builders aggressively marketing energy efficient homes as a way of differentiating its homes from other builders' product and existing homes for sale. The company maintains a 7.4-year supply of lots (based on last 12 months deliveries), 73.3% of which are owned and the balance controlled through options. (The options share of total lots controlled is down sharply over the past six years as the company has written off substantial numbers of options.) KBH's most recent credit metrics, while improving in certain cases, remain stressed. Debt to capitalization was 81.1% as of May 31, 2012, up from 78.2% at year-end 2011. Net debt to capitalization was 77.4%, up from 72.5% as of Nov. 30, 2011. Debt to LTM EBITDA, excluding real estate impairments, was 28.0x times (x) and was 37.0x at the end of 2011. Funds from operations (FFO) adjusted leverage was 24.2x at the conclusion of the 2012 second quarter and 21.7x a year earlier. Adjusted interest coverage was 0.5x as of May 31, 2012 and 0.9x as of May 31, 2011, while FFO interest coverage was 0.5x as of May 31, 2012, down from 0.7x the prior year. The gross inventory has been stable in 2012 and 2011 at 0.7x. The sales value of backlog represented 40% of construction debt at the conclusion of the 2012 second quarter, up from 30% a year ago. KBH's unrestricted cash and equivalent was sharply reduced during the past year and a half from $904.4 million at Nov. 30, 2010 to $415 million at Nov. 30, 2011 and $314.3 million at May 31, 2012. The reduction in cash position largely resulted from land and development spending, repayment of maturing senior notes and other debt and $251.9 million in payments relating to legal matters surrounding the South Edge, LLC joint venture. The company currently has adequate liquidity to fund working capital and debt service. The challenge in 2012 will be to absorb annual interest expense of about $130 million and manage land and development expenditures to a level that does not meaningfully deplete the current cash position. The company reported $89.9 million negative cash flow from operations (CFFO) during the first half of 2012 despite positive CFFO of $19.7 million for the second quarter. On a LTM basis CFFO was a negative $166.1 million. For all of fiscal 2012, Fitch expects KBH to be $50 - 75 million cash flow negative. The company is likely to spend about $550 million on land and development this year. It expended $553 million in 2011 and $478 million in 2010. KBH terminated its revolving credit facility, effective March 31, 2010. Consistent with Fitch's comment on certain homebuilders' termination and reduction of revolving credit facilities, in the absence of a revolving credit line, a consistently higher level of cash and equivalents than was typical should be maintained on the balance sheet, especially in these still uncertain times. As of May 31, 2012, KBH had an investment of $121.4 million in eight unconsolidated joint ventures (JVs). These JVs have no debt. During the 2011 fourth quarter, the bankruptcy and lender-related legal matters concerning South Edge, LLC and KBH's obligations with respect to those matters were essentially resolved. A $6.6 million gain on loan guaranty during the fourth quarter reflected the consummation of a consensual plan of reorganization of South Edge, LLC that was confirmed by a bankruptcy court in November 2011 and included, among other things, the satisfaction of a limited several repayment guaranty the company provided to the administrative agent for the lenders to South Edge, LLC. In connection with the reorganization plan and the settlement of other South Edge-related legal matters, KBH made payments of $251.9 million in the fourth quarter of 2011. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels, free cash flow trends and uses, and the company's cash position. Positive rating actions may be considered if the recovery in housing is maintained and is meaningfully better than Fitch's current outlook, KB Home shows continuous improvement in credit metrics, and maintains a healthy liquidity position. Negative rating actions could occur if the housing recovery is not sustained and the company steps up its land and development spending prematurely, leading to consistent and significant negative quarterly cash flow from operations and a diminished liquidity position below $350 million. Underperforming operating metrics could also contribute to a rating action. Fitch affirms ratings for KB Home as follows: -- IDR at 'B+'; -- Senior unsecured debt at 'B+/RR4'. The Rating Outlook is revised to Stable from Negative. The Recovery Rating (RR) of 'RR4' on KBH's senior unsecured notes indicates average recovery prospects for holders of these debt issues. KBH's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debtholders. Fitch applied a liquidation value analysis for these RRs. KNIGHT CAPITAL: Royce Associates Owns 4.9% of Class A Shares ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Royce & Associates, LLC, disclosed that, as of Aug. 31, 2012, it beneficially owns 4,802,748 shares of Class A Common Stock of Knight Capital Group, Inc., representing 4.91% of the shares outstanding. A copy of the filing is available for free at http://is.gd/fKA3gs About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KNIGHT-CELOTEX: Equitable Estoppel Can't Be Used to Cause Inequity ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the doctrine of equitable estoppel can't be used to accomplish an inequitable result, according to a Sept. 5 opinion from the U.S. Court of Appeals in Chicago. The case involved two companies in Chapter 7 liquidation. According to the report, the companies' principal is in his own parallel bankruptcy. One bankruptcy trustee and one law firm were engaged to serve in all three cases. At the hearing where the court approved the retention, neither the trustee nor the law firm disclosed they planned to sue the individual on behalf of the two companies. The report relates that when the suit arrived, the individual argued unsuccessfully to the bankruptcy judge that the failure to disclose a potential conflict of interest arising from the suit gave rise to judicial estoppel precluding the suit. A district court on appeal rejected use of the judicial estoppel theory as did Circuit Judge David F. Hamilton in his 19-page opinion for the Seventh Circuit in Chicago. The report notes that Judge Hamilton said it would be "inequitable and an improper use of judicial estoppel -- an equitable remedy -- to permit" the individual to "reap a huge benefit from an otherwise harmless omission." Near the end of the opinion, he said there were "larger equities at stake." The Bloomberg report discloses that to the extent there should be a remedy for the failure to disclose, Hamilton said it lay in denying or reducing compensation for the trustee and the law firm. About Knight-Celotex Headquartered in Northfield, Illinois, Knight-Celotex, LLC -- http://www.knightcelotex.com/-- is the largest fiberboard manufacturer in the world and the only U.S. fiberboard manufacturer that both manufactures and ships products nationally within the United States. Knight-Celotex is privately owned by Knight Industries, LLC, and has operations in Lisbon Falls, Maine; Sunbury, Pennsylvania; and Danville, Virginia. Knight-Celotex and Knight Industries, LLC, filed Chapter 11 petitions (Bankr. N. D. Ill. Case Nos. 09-12219 to 09-12200) on April 6, 2009. Scott R. Clar, Esq., at Crane Heyman Simon Welch & Clar represents the Debtor in its restructuring efforts. Knight- Celotex estimated assets and debts ranging $10 million to $50 million. LDK SOLAR: To Release Second Quarter Results Sept. 17 ----------------------------------------------------- LDK Solar Co., Ltd., will report financial results for the second quarter ended June 30, 2012, before the market opens on Monday, Sept. 17, 2012. The company will host a corresponding conference call and live webcast at 8:00 a.m. Eastern Time (ET) the same day. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd. to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. The Company's balance sheet at March 31, 2012, showed US$6.63 billion in total assets, US$5.96 billion in total liabilities, US$228.21 million in redeemable non-controlling interests and US$447.32 million in total equity. LEAGUE NOW: Sells $27,500 Convertible Note to Asher Enterprises --------------------------------------------------------------- League Now Holdings Corporation sold and issued a Convertible Promissory Note to Asher Enterprises, Inc., in the principal amount of $27,500 pursuant to the terms of a Securities Purchase Agreement dated Aug. 29, 2012. The Note, together with accrued interest at the annual rate of 8%, is due on April 10, 2013. The Note is convertible into the Company's common stock commencing 180 days from the date of issuance at a conversion price equal to 60% of the Market Price of the Company's common stock on the date of conversion. "Market Price" is defined in the Note as the average of the lowest three trading prices for the Company's common stock during the 10 trading days prior to the conversion date. The Company has the right to prepay the Note at any time from the date of issuance until the 180th day the Note was issued at an amount equal to 135% of (i) the then outstanding principal amount of the Note, including accrued and unpaid interest due on the prepayment date. 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. 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. LIGHTSQUARED INC: Has No Ongoing Business, Lenders Point Out ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that secured lenders of LightSquared Inc. say the Debtor does "not have an ongoing business that needs to be rehabilitated." According to the report, they want the bankruptcy judge to allow them to exercise the right established this year in the U.S. Supreme Court to use their $1.7 billion of secured debt to buy the assets unless owner Harbinger Capital Partners LLC or an outsider is willing to pay the debt in full. The report relates that the lenders' statements were made in papers filed Sept. 6 with the U.S. Bankruptcy Court in New York opposing LightSquared's request for a five-month expansion of the exclusive right to propose a Chapter 11 reorganization plan. The bankruptcy judge will resolve the dispute at a Sept. 12 hearing. The report discloses that LightSquared, in requesting an initial five-month expansion of exclusivity, argues that it's entitled to "breathing room from its creditors" while it works out "technology and policy issues" with the FCC. The company says that no reorganization plan can be promulgated until the government acts. At the Sept. 12 hearing, the lenders will also object to the company's proposal to establish a bonus program that could pay $6 million to four top executives. The lenders see the bonus program as locking management into a high-risk business strategy based on hope the FCC will have a change of heart. The lenders also object to giving the executives 2.4% of the reorganized company's equity for merely remaining with the company. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. The Office of the U.S. Trustee has not appointed a statutory committee of unsecured creditors. LIVE OAK DEVELOPMENT: Taps J. Craig Cowgill as Lead Counsel ----------------------------------------------------------- Live Oak Development, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Texas for authorization to employ J. Craig Cowgill & Associates, P.C., as its lead counsel, nunc pro tunc to the Petition Date. J. Craig Cowgill & Associates will render these legal services: 1. give Debtor legal advice with respect to the bankruptcy proceeding; 2. prepare on behalf of the Debtor necessary applications, answers, orders, reports and other legal papers; and 3. perform all other legal services for the Debtor which may be necessary in the bankruptcy proceeding. To the best of Debtor's knowledge, J. Craig Cowgill, Esq., and the law firm represent no interest adverse to the Debtor or the estate in the matters upon which the said firm is to be engaged. The Debtor desires to employ J. Craig Cowgill as lead counsel under a general retainer which was paid by a third party, Mike E. Fitzmaurice, President of the General Partner, L.O. Development, Inc., because of the extensive legal services required in the Debtor's case. The law firm charges: J. Craig Cowgill, Attorney in Charge $500 per hour Associate Attorney $400 per hour Paralegal/Law Clerk $95 to $150 per hour Mongolia, Tex.-based Live Oak Development, Ltd., filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 12-35873) on Aug. 6, 2012. The Hon. Letitia Z. Paul presides over the bankruptcy case. J. Craig Cowgill, Esq., at J. Craig Cowgill & Associates, P.C., in Houston, represents the Debtor. In its petition, the Debtor disclosed assets of between $10 million and $50 million, and debts of between $1 million and $10 million. LON MORRIS: Capstone Approved as Financial Advisor -------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas authorized Lon Morris College to employ Capstone Partners, LLC as financial advisor and investment banker, nunc pro tunc to July 2, 2012. Capstone Partners is expected to assist in marketing the Debtor's assets as a going concern. According to Lon Morris College, because continuing negative cash flow issues cannot be cured with its current resources, the Debtor likely cannot continue to operate as a standalone entity. The Debtor said it needs either new capitalization or a strong educational partner. Lon Morris said its creditors and the public at large would be best served by marketing the Debtor (and its assets) by professionals with expertise in this field. Lon Morris said Capstone has experience in the area of selling educational institutions. Capstone assisted in the sale of Heald College, a 140-year-old junior college in California, Oregon and Hawaii. At the time, Heald was insolvent and the success of the transaction and the salvage of the College was the direct result of their team's marketing, industry knowledge, access to key decision makers and consulting on regulatory and socio-political issues. This was a transition from non-profit to for-profit, and required working in the sensitive California political climate. Capstone also brokered the equity sale of Henley Putnam University. Using their contacts, they were able to make an equity deal with two investors to recapitalize the school. During that search, they created a "buyer universe" of over 250 venture capital and private equity firms. In the end, they combined two firms to syndicate the equity raise. Capstone also brokered the sale and recapitalization of the Pacific College of Oriental Medicine, with students in California, New York, and Illinois; and the sales of Ogle Schools, a cosmetic and beauty school chain in Dallas with 1,000 students and compliance difficulties. Most of Capstone's transactions are not publicly advertised because of confidentiality restrictions. Capstone represents that it "maintains the most active education & training practice in the middle market, currently representing multiple clients across various regions and core curriculum." The transaction team that has committed to the Debtor will be led by John Ferrara (Founder, President and Managing Partner) and Jacob Voorhees (Partner and Head of the national Technology & Training Group). Together, Mr. Ferrara and Mr. Voorhees have over 30 years of M&A experience, both having spent the past decade primarily dedicated to transactions in the post-secondary education market. Capstone's fees consist of: -- a non-refundable retainer for the marketing, negotiation, and transaction process of $50,000; -- a success fee of $300,000 plus 3% of transaction value, subject to a $500,000 minimum; -- an hourly fee for expert or transaction related testimony; and -- customary indemnification from the estate. To the best of Debtor's knowledge, Capstone has no connections with the Debtor, creditors, or any other party in interest, its attorneys and accountants, the United States Trustee, or any person employed in the office of the United States Trustee, except for professional connections through the Turnaround Management Association and other trade organizations where reorganization practitioners educate themselves on bankruptcy-related issues, and any other connections. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at McKool Smith P.C., and Webb and Associates serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. LON MORRIS: McKool Smith Approved as Bankruptcy Counsel ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas authorized Lon Morris College to employ McKool Smith P.C. as counsel. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at McKool Smith P.C., and Webb and Associates serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. LON MORRIS: Webb & Associates Approved as Estate's Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas authorized Lon Morris College to employ Webb & Associates as counsel for the estate. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at McKool Smith P.C., and Webb and Associates serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. MB2 INC: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------ Debtor: MB2, Inc. 13300 Biscayne Drive Suite C Homestead, FL 33033 Bankruptcy Case No.: 12-31308 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Douglas M. Johnson, Esq. AVO LAW GROUP 169 E Flagler St. #1125 Miami, FL 33131 Tel: (786) 517-5297 E-mail: douglaw@att.net Scheduled Assets: $5,747,409 Scheduled Liabilities: $4,661,829 A copy of the Company's list of its 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb12-31308.pdf The petition was signed by Michael A. Kram, president. MF GLOBAL: Lawsuit Agreement to Be Approved By Judge ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for broker MF Global Inc. will be given permission to transfer his right to file lawsuits to customers already prosecuting class-action suits pending in U.S. District Court in Manhattan, as the result of a ruling Sept. 5 in bankruptcy court. According to the report, the separate trustee for the parent MF Global Holdings Ltd., representing creditors as opposed to customers, wanted the ability to bring suits of his own rather than have them prosecuted by the class plaintiffs. The bankruptcy judge said at Sept. 5 hearing that he will approve the transfer of claims when the agreement is changed to give him more authority over approval of settlements and division of proceeds between customers and creditors. 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. MIDSTATES PETROLEUM: S&P Rates New $550MM Sr. Unsecured Notes 'B-' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Houston, Texas-based Midstates Petroleum Co. The outlook is stable. "At the same time, we assigned our 'B-' issue rating to Midstates' proposed $550 million senior unsecured notes due 2020. The recovery rating is '5', indicating our expectation of modest (10% to 30%) recovery in the event of a payment default," S&P said. "We expect proceeds from the offering to be used to help fund the acquisition of Eagle Energy Production LLC, repay outstanding borrowings on the company's credit facility, and for general purposes," S&P said. "The ratings on Midstates Petroleum Co. reflect our view of the company's 'vulnerable' business risk, 'aggressive' financial risk, and 'adequate' liquidity," said Standard & Poor's credit analyst Paul Harvey. "These assessments reflect Midstates' small asset base and production levels, lack of geographical diversification, and spending levels in excess of projected operating cash flows during the next 18 months. The ratings also reflect the company's significant exposure to favorable crude oil prices, high operatorship of its properties, solid financial measures, and an experienced management team," S&P said. "Standard & Poor's views Midstates' business risk profile as vulnerable. The company's pro forma proved reserves should total about 63 million barrels of oil equivalents (boe; 65% crude oil and natural gas liquids), with production of 15,200 boe per day. This positions the company on the smaller end of the 'B' rating category exploration and production (E&P) companies. Although the Eagle acquisition will add a second core area (the Mississippian Lime) to complement its Wilcox assets, we view asset diversity as limited. In addition, we view with caution the potential for strong near-term organic reserve growth. Midstates' use of horizontal drilling techniques in the Wilcox is relatively new for the industry, with little history to suggest future results. Although the company has been successful in its vertical well program, we view the horizontal wells as having higher risk, and if unsuccessful, would limit the pace and extent of reserve and production growth," S&P said. "The stable outlook reflects our expectation that Midstates will maintain above-average financial performance and adequate liquidity. In addition, the stable outlook assumes the successful completion and integration of Eagle Energy and success in its Wilcox development," S&P said. "An upgrade is possible if Midstates can execute its growth strategy such that proved reserves increase above 110 MMBoe (40% proved developed), its proved developed reserve life improves to over five years, and debt leverage remains below 4.5x. The most likely scenario for this to occur would include continued strong crude oil prices, over $85 per barrel, and successful horizontal development of its Wilcox and Mississippian Lime reserves," S&P said. "We could lower the rating if debt leverage exceeds 4.75x or liquidity falls below $50 million with no near term solution. Both likely the results of weak drilling results combined with a prolonged period of realized crude oil prices below $65 per barrel," S&P said. MOSDOS CHOFETZ CHAIM: Jewish Campus Files for Chapter 11 -------------------------------------------------------- Mosdos Chofetz Chaim, Inc., filed a bare-bones Chapter 11 petition on Sept. 6, 2012 in White Plains, New York, on Sept. 6. Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck, P.C., in New York, serves as counsel. According to the case docket, the Chapter 11 Plan and the explanatory disclosure statement are due Jan. 4, 2013. The Debtor estimated $10 million to $50 million in assets and liabilities. In the schedules, the Debtor disclosed it owns a yeshiva religious school campus on five acres of land in Spring Valley, New York. The value of the property is unknown. The property secures a $13 million debt to RBS Citizens Financial Group. Liabilities total $19.9 million. The property is site to a 12-building development and 60-apartment religious facility run by Rabbi Israel Mayer Kagan, also known as Mosdos Chofetz Chaim, Kagan. Housing is for scholars and students who follow the teachings and philosophies of the Torah and Talmud. NAVISTAR INTERNATIONAL: Reports $96 Million Net Income in Q3 ------------------------------------------------------------ Navistar International Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $96 million on $3.31 billion of net sales and revenues for the three months ended July 31, 2012, compared with net income of $1.41 billion on $3.53 billion of net sales and revenues for the same period during the prior year. The Company reported a net loss of $206 million on $9.66 billion of net sales and revenues for the nine months ended July 31, 2012, compared with net income of $1.50 billion on $9.63 billion of net sales and revenues for the same period a year ago. The Company's balance sheet at July 31, 2012, showed $11.14 billion in total assets, $11.50 billion in total liabilities, and a $363 million total stockholders' deficit. "Clearly we are not pleased with these results," said Lewis B. Campbell, Navistar chairman and chief executive officer. "However, I was satisfied to learn on day one that Troy Clarke and his team were already working on a plan to deal with many of the important issues we face, most importantly restoring our core North American Truck, Engine and Parts businesses to their market leader positions. I believe we have good line of sight and a keen sense of urgency for moving forward." "Navistar is a great company with great people and great brands," added Campbell. "With a laser focus on getting our quality right and hitting our clean engine launch dates, combined with actions to maximize cash flow and improve our balance sheet, I believe we can accelerate the pace of progress to deliver significant improvements during the next 12 to 18 months." A copy of the Form 10-Q is available for free at: http://is.gd/L5TgUG About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 13, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B+', from 'BB-'. "The downgrade and CreditWatch placement reflect the company's operational and financial setbacks in recent months," said Standard & Poor's credit analyst Sol Samson. As reported by the TCR on Aug. 8, 2012, Fitch Ratings has downgraded the Issuer Default Ratings (IDR) for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) to 'B-' from 'B+'. The rating downgrades for NAV and NFC consider the negative impact of recent developments including already weak operating results in 2012 that are likely to be worse than previously expected by Fitch. NET ELEMENT: Receives $9.5-Mil. Credit Facility from Alfa-Bank -------------------------------------------------------------- Net Element announced that Alfa-Bank, Russia's largest private bank, has extended Net Element's mobile payment processing company, TOT Money, a credit facility of 300 million rubles (approximately $9.5 million) and plans to extend to TOT Money another 300 million rubles (approximately $9.5 million) under a planned factoring agreement to support the company's next stage of growth and operations. TOT Money, a mobile payment platform that will facilitate transactions via SMS on any phone and mobile network in Russia, is expected to become the driver of Net Element's mobile commerce payment processing division. The current 300 million rubles credit facility, along with the 300 million rubles factoring agreement expected to be executed in the coming weeks, will provide TOT Money with financial resources to attract top customers and build upon its mobile commerce and payment-processing platform for Russia and other emerging markets. When executed, the factoring agreement will call for Alfa-Bank to serve as the collector and processor of accounts receivables for TOT Money, and will provide TOT Money with working capital to support its growth strategy. "We extended this credit facility to TOT Money based on our extensive due-diligence process and our understanding that the company is well-positioned to capitalize on demand for mobile payment processing," said Ilina Polina, business development director at Alfa-Bank. Added Dmitry Kozko, Net Element's executive vice president: "The credit facility from Alfa-Bank, combined with Net Element's key relationships with the Big Three mobile operators in Russia, will strategically position TOT Money to become one of the leading companies in Russia's upcoming mobile commerce boom. With this credit facility and factoring agreement, we hope to strategically grow the TOT Money business and provide TOT Money with the capacity to process mobile payments up to 600 million rubles per month. Furthermore, our business relationship with the prestigious Alfa-Bank is further testament to our company's business model and growth potential." About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. Following the 2011 results, Daszkal Bolton LLP, in Fort Lauderdale, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2011. The Company reported a net loss of $24.85 million in 2011, compared with a net loss of $3.10 million in 2010. The Company's balance sheet at June 30, 2012, showed $3.22 million in total assets, $7.69 million in total liabilities, and a $4.46 million total stockholders' deficit. NEW SALEM MISSIONARY: Bankruptcy Filing Blocks Bank Foreclosure --------------------------------------------------------------- Michael Sasso at The Tampa Tribune reports that New Salem Missionary Baptist Church of Tampa filed for Chapter 11 bankruptcy protection on July 6, 2012, to fend off foreclosure by Fifth Third Bank. The bank says it loaned the church $1.1 million in 2007 but that New Salem missed payments and defaulted. The report relates the bankruptcy filing appears to have stopped the bank from taking back any properties for now. According to the report, the church took out a $1.1 million loan from Fifth Third Bank five years ago, at least in part to help it purchase land for a new church on Sligh Avenue near Interstate 4. The report says, by fall 2009, New Salem began missing payments and defaulted on the loan. The bank filed a foreclosure lawsuit in August 2010, and the two sides have been fighting ever since. The report, citing court documents, notes Fifth Third Bank said the church shuffled the ownership of some of the mortgaged properties. It appears the church no longer owns several of the properties it took out the mortgage upon, the bank said. Based in Tampa, Florida, New Salem Missionary Baptist Church of Tampa, Inc. -- http://www.newsalemcares.org/-- is a religious institution. NEWLEAD HOLDINGS: Fails to Comply with NASDAQ Market Value Rule --------------------------------------------------------------- NewLead Holdings Ltd. received a written notification from The NASDAQ Stock Market LLC indicating that the Company is not in compliance with NASDAQ Listing Rule 5450(b)(3)(C) for continued listing on The NASDAQ Global Select Market because the Market Value of the Company's Publicly Held Shares was below $15,000,000 for the previous 30 consecutive business days. In accordance with the NASDAQ Listing Rules, the Company has been granted a 180-day compliance period to regain compliance with the requirements of the NASDAQ Listing Rules. The compliance period for the MVPHS requirement ends on Feb. 26, 2013. During the compliance period, the Company's common shares will continue to be listed and traded on The NASDAQ Global Select Market. Pursuant to its discussions with the NASDAQ, the Company intends to regain compliance with the MVPHS requirement by furnishing updated information regarding the Company's principal stockholders in a Form 6-K. It is anticipated that the information in that Form 6-K will show that the Company had maintained compliance with the MVPHS requirement as of Aug. 29, 2012. As of Aug. 29, 2012, the reference date for NASDAQ, the Company had 38,969,814 common shares that are expected to be considered as Publicly Held Shares by the NASDAQ of the total 309,339,711 common shares outstanding. About NewLead Holdings NewLead Holdings Ltd., incorporated under the Bermuda Companies Act of 1981 on Jan. 12, 2005, has been an international shipping company engaged in the transportation of refined products, such as gasoline and jet fuel, and dry bulk goods, such as iron ore, coal and grain. Based in Piraeus, Greece, the Company currently operates a fleet of two double-hulled product tankers and three drybulk carriers. PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15, 2012, audit report, that NewLead Holdings Ltd. has incurred a net loss, has negative cash flows from operations, negative working capital, an accumulated deficit and has defaulted under its credit facility agreements resulting in all of its debt being reclassified to current liabilities. These raise substantial doubt about its ability to continue as a going concern, PwC said. The Company's balance sheet at Dec. 31, 2011, showed US$396.75 million in total assets, US$599.18 million in total liabilities and a US$202.43 million total shareholders deficit. The Company reported a net loss of US$290.39 million in 2011, compared to a net loss of US$86.34 million in 2010. NORTHCORE TECHNOLOGIES: Launches New Customer Application --------------------------------------------------------- Northcore Technologies Inc. launched a new customer web presence delivered through its portfolio company Envision Online Media Inc. Northcore has acquired Envision, an Ottawa-based software development company and Microsoft Partner. Envision has been one of the most respected boutique web solutions providers in the National Capital Area for over a decade and brings a complementary product and skill set to Northcore. The customer, McDonald Brothers Construction is a significant player in the large scale construction industry in Eastern Ontario and more recently throughout Canada. The company has been in operation since 1988 and has amassed an enviable record of on time delivery of major industrial, commercial and institutional projects while respecting optimal cost and quality profiles. Additional information can be found at the Company's Web site at: http://www.mbconstruction.ca/en/home.aspx The new Web site represents a new industry paradigm in integration with clients, trades and wholesalers. Through facilitating the interaction and collaboration of partners online, it will help to maximize the value chain for all participants. "Our current tender portal is completely new, works like a charm, and will shake up our industry," said Paul McDonald, president of McDonald Brothers Construction. "The sharing and access of project files between players is now accessible from your desk top, smart phone or tablet." "Envision listened to what we needed and they delivered a custom environment that's going to become a huge part of how we share information with our partners." "McDonald Brothers Construction is a great company and a fantastic addition to our growing list of partners," said Amit Monga, CEO of Northcore Technologies. "It is always exciting to collaborate with industry visionaries and we believe that the end product will serve them well. This is another example of the superior delivery capability of our team at Envision." Further disclosure on Envision's portfolio and capabilities can be found on their web presence located at http://www.Envisiononline.ca About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. The Company reported a loss and comprehensive loss of C$3.93 million in 2011, compared with a loss and comprehensive loss of C$3.03 million in 2010. The Company's balance sheet at June 30, 2012, showed C$3.49 million in total assets, C$852,000 in total liabilities, and C$2.64 million in shareholders' equity. OCALA FUNDING: Taps Gamba & Lombana as Deloitte Litigation Counsel ------------------------------------------------------------------ Ocala Funding, LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Gonzalo R. Dorta, P.A. and Gamba & Lombana, P.A., as special litigation local counsel. Prior to the Petition Date, Deloitte & Touche LLP provided audit and related accounting and professional services to the managing member of the Debtor -- Taylor Bean & Whitaker Mortgage Corp. -- on a consolidated basis for and certain affiliates of TBW, including the Debtor. In 2009, fraud by certain TBW employees was uncovered, resulting in cessation of TBW's business and ultimately, the Debtors' business. On August 2009, TBW and certain affiliates filed voluntary petitions for relief under Chapter 11. As a result, TBW confirmed a plan that, among other things, created the TBW Plan Trustee to hold and administer certain assets of the estate. The Debtor and TBW each believe that they hold independent, although similar and perhaps related claims against Deloitte. Accordingly, prior to the Petition Date, the Debtor and TBW each retained Thomas, Alexander & Forrester, LLP and Berger Singerman, LLP, to litigate their respective claims against Deloitte. To facilitate litigation of their claims against Deloitte, the Debtor and TBW also retained the services of Deloitte litigation local counsel. Thereafter, each of TBW and the Debtor sued Deloitte in the 11th Judicial Circuit in and for Miami-Dade County, Florida. The litigation is ongoing. According to the Debtor, retaining the same primary litigation and local counsel to assist in the prosecution of the claims has prevented and will continue to prevent, duplication of effort and total litigation costs. Gonzalo R. Dorta, principal of the firm, tells the Court that his hourly rate is $500, and the hourly rates of the firm's personnel are: Attorneys $225 - $500 Associate $225 - $500 Legal Assistants and Paralegal $100 - $125 To the best of the Debtor's knowledge, the firm represents no interest adverse to the Debtor's estate with respect to the Deloitte litigation. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCEAN BREEZE PARK: Sec. 341 Creditors' Meeting Set for Sept. 12 --------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a Meeting of Creditors under U.S.C. Sec. 341(a) meeting in the Chapter 11 case of Ocean Breeze Park Homeowners' Association, on Sept. 12, 2012, at 10:00 a.m. at 1515 North Flagler Drive, Room 870, West Palm Beach, Fla. The deadline to file a complaint to determine dischargeability of certain debts is Nov. 13, 2012. Proofs of Claim are due by Dec. 11, 2012. About Ocean Breeze Park Homeowners' Association Jensen Beach, Florida-based Ocean Breeze Park Homeowners' Association, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-28820) in West Palm Beach on Aug. 3, 2012. Bankruptcy Judge Erik P. Kimball presides over the case. Ocean Breeze Park Homeowners' Association operates a residential cooperative mobile home park located at 3000 N.E. Indian River Drive, Jensen Beach. The shareholders have equity ownership in the Cooperative, allowing them to hold proprietary leases which provide for 99-year leasehold agreements. There are 549 mobile home units, 39 cottages and 16 recreational vehicle units. There are 137 units subject to the proprietary leases. Bankruptcy Judge Erik P. Kimball presides over the case. Lawyers at Furr and Cohen, P.A., serve as the Debtor's counsel. In its schedules, the Debtor listed $13,472,535 in assets and $24,870,355 in liabilities. The petition was signed by Harry Bartlett, president. OCEAN BREEZE PARK: Taps Proctor Crook as Accountants ---------------------------------------------------- Ocean Breeze Park Homeowners' Association, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida for authorization to employ Kevin M. Payne, CPA, and Proctor, Crook, Crowder & Fogal, CPA's, in Stuart, Fla. as the Debtor's accountant in its bankruptcy case, nunc pro tunc to the Chapter 11 filing. Proctor Crook will provide these services: a. prepare required Federal, State and local tax returns with supporting schedules for the tax years ended March 31, 2013, et seq.; b. prepare monthly compilations of the Debtor-In-Possession's financial statements; c. assist debtor in preparation of its Plan, Disclosure Statement and other work appropriate to this Chapter 11 proceeding; and d. assist in the preparation of the Debtor's Chapter 11 monthly operating report. The Debtor tells the Court that under present circumstances and reasonable foreseeable circumstances, Kevin M. Payne, CPA, and Proctor, Crook, Crowder & Fogal, CPA's, represent no interest adverse to the Debtor. However, Kevin M. Payne, CPA, and Proctor, Crook, Crowder & Fogal, CPA's, have acted as accountant for the Debtor pre-petition performing various accounting service since July 1, 2011. There are no outstanding pre-petition fees for services due to Proctor, Crook, Crowder & Fogal, CPA's. The Debtor paid the following amounts to the proposed accountant within the 90 days preceding the filing of the bankruptcy petition: June 13, 2012 $5,635 July 1, 2012 $9,194 July 12, 2012 $15,000 July 13, 2012 $2,837 July 26, 2012 $5,294 ------- Total $37,960 Kevin M. Payne, CPA, and Proctor, Crook, Crowder & Fogal, CPA's have agreed to accept compensation on an hourly basis at its standard billing rate ranging from $205.00 to $76.00 per hour based on the individuals in the firm providing services, for preparation and filing of the required monthly, quarterly and yearly returns and reports and for preparation of yearly Federal Income Tax Return and other accounting matters, plus necessary and actual expenses from the bankruptcy estate pursuant to the provisions of the Bankruptcy Code. Todd Laycock, a partner with the proposed accountant, does tax work for Gary Hendry, one of the secured creditors in this case; however, Mr. Laycock is not involved with the representation of the Debtor, and the proposed accountant was in part recommended to the Debtor by Mr. Hendry. About Ocean Breeze Park Homeowners' Association Jensen Beach, Florida-based Ocean Breeze Park Homeowners' Association, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-28820) in West Palm Beach on Aug. 3, 2012. Bankruptcy Judge Erik P. Kimball presides over the case. Ocean Breeze Park Homeowners' Association operates a residential cooperative mobile home park located at 3000 N.E. Indian River Drive, Jensen Beach. The shareholders have equity ownership in the Cooperative, allowing them to hold proprietary leases which provide for 99-year leasehold agreements. There are 549 mobile home units, 39 cottages and 16 recreational vehicle units. There are 137 units subject to the proprietary leases. Bankruptcy Judge Erik P. Kimball presides over the case. Lawyers at Furr and Cohen, P.A., serve as the Debtor's counsel. In its schedules, the Debtor listed $13,472,535 in assets and $24,870,355 in liabilities. The petition was signed by Harry Bartlett, president. OCONEE REGIONAL: S&P Lowers Rating on Revenue Debt to 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Baldwin County Hospital Authority, Ga.'s revenue debt, issued for Oconee Regional Medical Center, two notches to 'B+' from 'BB'. The outlook is negative. "The multinotch downgrade reflects Standard & Poor's assessment of the medical center's sharp operating performance deterioration in fiscal 2011 that exceeded the previous negative trend that resulted in Standard & Poor's decision to lower the rating and assign a negative outlook during its last review. More specifically, Oconee reported a large operating loss in fiscal 2011 that resulted in a debt service coverage violation," S&P said. "The negative outlook reflects Standard & Poor's uncertainty about the hospital's ability to make debt service payments and its ongoing financial viability due to its current operating challenges and inability to obtain a waiver from bondholders to date," S&P said. "We could lower the rating further if Oconee were unable to maintain 1.3x debt service coverage over a sustained period or if any material balance sheet deterioration were to occur," said Standard & Poor's credit analyst Margaret McNamara. "We, however, could consider returning the outlook to stable if Oconee were to generate maximum annual debt service coverage consistently in excess of 1.5x and if we believe this were sustainable." "According to Oconee's bond documents, the event of default makes the debt callable and gives the trustee and bondholders the ability to accelerate the debt. The rating service recognizes Oconee submitted a formal request for a waiver for the event of default to the trustee. According to the trustee, however, to date, Oconee has not obtained a waiver. Standard & Poor's understands that Oconee continues to make timely monthly principal payments and that, to date, it has not yet accessed the debt service reserve fund," S&P said. "In addition, while the operating losses appear to be slowing year to date through the 10-month period ended July 31, Oconee is still reporting decreasing revenue and sizable operational losses. Oconee could again be at risk of violating its debt service coverage covenant at year-end; there, however, is some room due to the current calculation that shows debt service coverage of 1.6x compared with the required calculation of 1.2x. Standard & Poor's believes the operating environment will likely remain challenging for Oconee due to a difficult service area economy and the fact that Oconee has recently learned it will lose its Atlanta metropolitan statistical area designation; Standard & Poor's understands this will ultimately result in the loss of $1.5 million of revenue annually, beginning on Oct. 1, 2012," S&P said. "Oconee's balance sheet provides limited flexibility due to, what Standard & Poor's views as, its light liquidity and weak cash-to- long-term-debt ratio. The rating service believes these credit factors indicate Oconee is currently vulnerable to adverse business and financial conditions related to its ability to make debt service payments, which, by Standard & Poor's definition, indicates a 'B' rating," S&P said. A gross revenue pledge of the medical center secures the bonds. ODYSSEY PICTURES: Palmstierna Moberg Holds 5.1% Equity Stake ------------------------------------------------------------ In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Palmstierna Moberg Invest & Medicin AB disclosed that, as of June 5, 2012, it beneficially owns 4,175,262 shares of common stock of Odyssey Pictures Corporation representing 5.06% of the shares outstanding. A copy of the filing is available at: http://is.gd/VesYYT About Odyssey Plano, Tex.-based Odyssey Pictures Corp., during the nine months ended March 31, 2012, realized revenues from the sale of branding and image design products and media placement services. As of the date of the filing of this report, the Company's ongoing operations have consisted of the sale of these branding and image design products, increasing media inventory, productions in progress and development of IPTV Technology and related services. The Company's balance sheet at March 31, 2012, showed $1.01 million in total assets, $3.62 million in total liabilities, and a stockholders' deficit of $2.61 million. Michael F. Cronin, in Orlando, Fla., expressed substantial doubt about Odyssey Pictures' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditor noted that the Company has a $1.9 million working capital deficiency. "The Company may not have adequate readily available resources to fund operations through June 30, 2012. This raises substantial doubt about the Company's ability to continue as a going concern." OLYMPIC HOLDINGS: Wants to Employ M. Jonathan Hayes as Counsel -------------------------------------------------------------- Olympic Holdings, LLC, asks the Bankruptcy Court to employ the law offices of M. Jonathan Hayes as its general bankruptcy counsel. The Debtor requires the services of Hayes to render these types of professional services relating to the Chapter 11 proceeding: A. Preparation of the schedules and the additional forms required to begin the bankruptcy case; B. Advice and assistance regarding compliance with the requirements of the United States Trustee; C. Advice regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regard to its assets and with respect to the claims of creditors; D. Negotiate use of cash collateral and obtain court permission for same; E. Conduct examinations of witnesses, claimants or adverse parties and prepare and assist in the preparation of reports, accounts and pleadings; F. Advice concerning the requirements of the Bankruptcy Code and applicable rules; G. Assist with the negotiation, formulation, confirmation and implementation of a Chapter 11 plan; H. Make any appearances in the Bankruptcy Court on behalf of the Debtor; and I. to take such other action and to perform such other services as the Debtor may require. Hayes will render services to the Debtor at his regular hourly rates, which may be subject to adjustment from time to time, and Hayes understands that his compensation in this case is subject to approval of this court. Hayes will bill his time in this case at $385 per hour, associate Roksana Moradi at $265 per hour, and associate Carolyn Afari at $165 per hour. Hayes also intends to apply for compensation and reimbursement for fees incurred and costs advanced. The Debtor assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Beverly Hills, California-based Olympic Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-32707) on June 29, 2012 in Los Angeles. The Debtor estimated assets and liabilities of $10 million to $50 million. A related entity, Wooton Group, LLC, earlier sought bankruptcy protection (Case No. 12-31323) on June 19, 2012. OLYMPIC HOLDINGS: JPMorgan Says Case Filed in Bad Faith ------------------------------------------------------- JPMorgan Chase Bank, N.A., asks the Bankruptcy Court for relief from the automatic stay to permit JPMC to pursue all of its remedies under its loan documents with Olympic Holdings, LLC, and under applicable state law with respect to the Debtor's property and to annul the automatic stay with respect to JPMC's actions in connection with a state court action. JPMC is a secured creditor with respect to its $12 million loan to Olympic Holdings on a real property and improvements located at 4851 S. Alameda Street in Los Angeles, Calif., including the rents, issues, profits, and proceeds of the Property, which Rents constitute JPMC's cash collateral. Douglas J. Tennant, Esq., at Frankel & Tennant P.C., representing JPMorgan, tells the Court that the Debtor's bankruptcy case was filed in bad faith to delay, hinder and defraud JPMC. The Debtor filed the bankruptcy case the day of JPMC's scheduled hearing on the appointment of a receiver on the Property. The Debtor itself admits that it filed the bankruptcy case for the purpose of delaying and obstructing JPMC's hearing for the appointment of a receiver on the Property. Mr. Tennant notes that the case is a two-party dispute only. JPMC is one of only a few creditors scheduled by the Debtor. More importantly, JPMC holds more than 94.4% in amount of the total claims against the Debtor. According to Mr. Tennant, the Debtor willfully failed to disclose in its petition that this case is a Single Asset Real Estate case as defined in 11 U.S.C. Section 10J(51B). The Debtor failed to disclose in its petition that the case is a single Asset Real Estate case. The Debtor admits that it has no employees and no assets other than the Property and $10,000 in a bank account. The rental income generated by the Property is the Debtor's sole source of income. This is a clear cut Single Asset Real Estate case. The Debtor's failure to properly disclose this information is further evidence of Debtor's bad faith. Mr. Tennant contends that the Debtor has been skimming rents from the Property since December 2011. The Debtor discloses that the Property generates monthly rental income of $97,729. It is reasonable to conclude that the Debtor received approximately $684,103 of rental income between December 1, 2011, and June 30, 2012. The Debtor's filings reflect that monthly operating income for the Property is approximately $18,200. The Debtor has not made a payment to JPMC since November 2011, and has also failed to pay the last two real property tax installments. Thus, it is reasonable to conclude that Debtor's only expenses between December 2011 and June 2012 were the Property's operating expenses which were equal to approximately $91,000. Mr. Tennant states that the Debtor has breached its fiduciary duties by providing improper benefits to insiders. The Debtor has allowed Antiquadan Traders (an insider) to occupy approximately 30% of the Property without paying rent. A debtor-in-possession owes certain fiduciary duties to its creditors, including the duty to maximize the return on property of the estate. The Debtor has and continues to fail to comply with its fiduciary duties. Mr. Tennant notes that the Debtor has been using cash collateral without authorization from the Court or JPMC. It is undisputed that the Debtor has never received authorization to use cash collateral from the Court or JPMC. The Debtor's sole source of income is the rental income generated by the Property. Consequently, it appears that the Debtor is using cash collateral without authority from the Court or permission from JPMC. Mr. Tennant argues the JPMC lacks adequate protection of its interest in the Property. As of Aug. 2, 2012, the total claim of JPMC and interests senior to JPMC's on the Property is at least $14,523,769. JPMC has obtained an appraisal of the Property from an appraiser which values the property at $13.5 million. Accordingly, even excluding costs of sale of 6% or $810,000, there clearly is no equity in the Property for the Debtor or the bankruptcy estate. Moreover, there is compelling evidence that the fair market value of the Property is declining. The appraisal report evidences that the fair market value of the Property has decreased approximately 5.3% since December 1, 2010. Consequently, JPMC is not adequately protected and entitled to relief from the automatic stay. JPMorgan Chase Bank, N.A., is represented by: Douglas J. Tennant, Esq. FRANKEL & TENNANT, P.C. 895 Dove Street Newport Beach, CA 92660 Tel: (949) 222-3456 Fax: (949) 222-3453 Beverly Hills, California-based Olympic Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-32707) on June 29, 2012 in Los Angeles. The Debtor estimated assets and liabilities of $10 million to $50 million. A related entity, Wooton Group, LLC, earlier sought bankruptcy protection (Case No. 12-31323) on June 19, 2012. OTOLOGICS LLC: Court OKs Sale to Cochlear for $14 Million --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Otologics LLC, a developer of hearing devices, was authorized Sept. 6 by the U.S. Bankruptcy Court in St. Louis to sell the assets for about $14 million to Cochlear Ltd. There were no competing bids. Cochlear swapped $10.3 million in secured debt and cash of $3.7 million for ownership of the assets. About Otologics Otologics, L.L.C., filed a Chapter 11 petition (Bankr. E.D. Mo. Case No. 12-47045) in St. Louis on July 23, 2012, intending to sell its assets to Cochlear Limited. Otologics was founded in 1996 to acquire ceratin implantable hearing device technology from Storz Instrument Co, and further develop and test such technology for future commercial marketability. The Debtor's first product, the semi-implantable MET (middle ear implant) has received the CE Mark and is currently being sold in Europe. In October 2006, the Debtor completed the European clinical trial for its second product, the fully implantable CARINA middle ear implant, and received the CE Mark, authorizing European sales. In the United States, the CARINA fully implantable device is currently in Phase II clinical trials. The Debtor's proprietary technology is protected with roughly 40 U.S. patents, 17 pending applications, and 46 proposed applications. The Debtor also has roughly 11 issued patents and 18 pending patent applications in various international jurisdictions. The patents cover hearing implant systems, actuators, electrical stimulation and implanted microphones. The Debtor owns or has exclusive, worldwide licenses to these patents and applications, many of which cover the design and manufacture of its products. Cochlear is a global participant in the hearing impaired device industry. It is publicly traded on the Australian Stock exchange and has over 2,500 employees. Bankruptcy Judge Charles E. Rendlen III oversees the case. Otologics is represented in the case by Thompson Coburn LLP as lead bankruptcy counsel, and Roberts & Olivia LLP as special counsel. The petition was signed by Jose H. Bedoya, chief executive officer. OVERLAND STORAGE: Incurs $2.7 Million Net Loss in Fourth Quarter ---------------------------------------------------------------- Overland Storage reported a net loss of $2.69 million on $15.30 million of net revenue for the three months ended June 30, 2012, compared with a net loss of $3.72 million on $17.56 million of net revenue for the same period during the prior year. The Company reported a net loss of $16.16 million on $59.63 million of net revenue for the year ended June 30, 2012, compared with a net loss of $14.50 million on $70.19 million of net revenue for the year ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $38.26 million in total assets, $35.22 million in total liabilities and $3.04 million in shareholders' equity. Total cash and cash equivalents at June 30, 2012, was $10.5 million, compared to $10.2 million at June 30, 2011. At June 30, 2012, the Company had $3.5 million outstanding under its credit facility. "We are very pleased with the progress we made in the past year to continue the transformation of our business in fiscal 2012. We introduced several significant new products, improved gross margins, lowered our operating expenses and received validation of two key patents in our intellectual property portfolio," said Eric Kelly, President and CEO of Overland Storage. "As we continue to make substantial operational improvements, we remain focused on innovative product introductions, accelerating our revenue growth and achieving profitability. In addition to greater sales from these new products, we expect to see acceleration in revenue growth as we enter the fourth calendar quarter from our recently launched SnapSAN solutions and our Scale-out NAS product, which is scheduled to launch as planned." A copy of the press release is available for free at: http://is.gd/XXAdNG About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. In its report accompanying the fiscal 2011 financial statements, Moss Adams LLP, in San Diego, California, noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. PACIFIC GOLD: Investor Converts Debt Into 52.9MM Common Shares -------------------------------------------------------------- On Aug. 2, 2012, a holder of $150,000 in principal amount of debt issued by Pacific Gold Corp. transferred the obligation to a third party. In connection with the transfer, the Company agreed to modify the rate of conversion of principal and interest into shares of common stock to a formula based on the market value of a share of common stock, from time to time. The investor has converted a portion of the debt obligation into 52,983,987 shares of common stock on a restricted issuance basis, which has been sold by the third party investor under Rule 144. The Company anticipates that an additional 15,000,000 shares will be issued on conversion of the balance of the debt obligation, based on the current market prices and the conversion formula of the obligation. About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. The Company reported a net loss of $1.38 million in 2011, compared with a net loss of $985,278 in 2010. The Company's balance sheet at June 30, 2012, showed $1.48 million in total assets, $6.16 million in total liabilities and a $4.68 million total stockholders' deficit. PACIFIC THOMAS: Taps Matlock Law as General Insolvency Counsel -------------------------------------------------------------- Pacific Thomas Corporation asks the U.S. Bankruptcy Court for the Northern District of California, Oakland Division, for permission to employ Matlock Law Group, P.C., as Debtor's general insolvency counsel. Matlock Law Group will: a. advise and assist the Debtor with respect to compliance with the requirements of the United States Trustee; b. advise the Debtor regarding matters of bankruptcy law, including the rights and remedies of a debtor-in-possession; c. represent the Debtor with respect to applications, motions and adversary proceedings and other hearing in the Bankruptcy Court and in any action in any other court where the Debtor's rights under the Bankruptcy Code may be litigated or affected; and d. conduct examination of witnesses, claimants, or adverse parties and to prepare and assist in the preparation of reports, accounts and pleadings related to the Chapter 11 case. The current hourly rates for attorneys and paralegals who are expected to provide services are: * Attorneys: Anne-Leith Matlock, Esq. $325.00 K. Brian Matlock, Esq. $325.00 Patrick Perkins. Esq. $325.00 Kathrin R. Dimas, Esq. $250.00 * Paralegals: Janis Klein $125.00 Karen Smith $125.00 To the best of Debtor's knowledge, no member or employee of the law firm has any connection with the Debtor, Debtor's creditors, any other party in interest, or with its respective attorneys and accountants, the U.S. Trustee or any person employed by the U.S. Trustee outside of the law firm's legal representation of Debtor. The Debtor tells the Court that they retained the law firm in June 2011 to pursue a Chapter 11 filing but other pre-bankruptcy planning issues arose and required the law firm to defend Debtor in a pre-bankruptcy receivership action. The Debtor was hoping to reorganize through the receivership but on the eve of a foreclosure sale on Aug. 6, 2012, the Debtor was forced to eventually file the instant bankruptcy case. The Debtor and the law firm believe that the law firm is "disinterested", as that term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Thomas Corp. Walnut Creek, California, Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C. The petition was signed by Jill V. Worsley, COO, secretary. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. PACTIV CORP: $300-Mil. Note Rating Lowered to Caa2 -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pactiv Corp. saw its $300 million in 8.125% senior unsecured bonds lowered by one step Sept. 6 to a Caa2 rating as Moody's Investors Service downgraded affiliates, including parent Reynolds Group Holdings Ltd. The parent's corporate grade slipped one level to B3. Pactiv's unsecured notes last traded Sept. 6 for 92.5 cents on the dollar, to yield 10.143 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Reynolds, based in Auckland, New Zealand, acquired Pactiv in a $5.9 billion transaction in November 2010. Pactiv is based in Lake Forest, Illinois. PANDA SHERMAN: S&P Affirms Prelim 'B+' Rating on $350MM Credit -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its preliminary 'B+' senior secured rating and '2' recovery rating on Panda Sherman Power LLC's (Sherman) proposed first-lien senior secured $320 million term loan B and $30 million letter-of-credit facility. The '2' recovery rating indicates substantial recovery (70% to 90%) of principal in a default scenario. The outlook is stable. "Sherman is a special-purpose, bankruptcy-remote operating entity, set up to build the Panda Sherman Power Plant, a 758-megawatt (MW) natural gas-fired facility in Sherman, Texas, about 60 miles north of Dallas. The unit will dispatch into the North sub-region of the Electric Reliability Council of Texas (ERCOT) interconnect. Sherman will initially be capitalized with $380 million of equity and $350 million of secured debt," S&P said. "We expect project construction will last until 2014. Upon completion, Sherman will generate revenue by selling electricity into the ERCOT market. We expect revenues to be volatile, although the volatility will be somewhat muted by financial hedges. Initial leverage is about $461 per kilowatt (kW), falling to about $353 per kW under our base case assumptions at maturity (midyear 2018), suggesting moderate refinancing risk. By way of reference, power plants in the region have sold in the $300 to $400 per kW area in more difficult market conditions. 'We will finalize the rating following the financial close of the transaction and a successful review of the executed transaction documents," said Standard & Poor's credit analyst Nora Pickens. "The stable outlook on the debt ratings reflects our view that the project has sufficient liquidity during the construction phase and that the cash flows, while volatile, will comfortably cover debt service throughout the debt tenor. A downgrade is possible if our expectation of debt at maturity changes to greater than $400 per kW or if DSCRs steadily decline below 1.10x. This would likely result from construction delays, lower-than-expected spark spreads, poor operational performance, or higher operating and maintenance costs. An upgrade would require a large and sustainable improvement in merchant market prices that would reduce refinance risk to below $100 per kW," S&P said. PAR PHARMACEUTICAL: S&P Assigns 'B+' Prelim Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' corporate credit rating to Woodcliff Lake, N.J.-based pharmaceutical company Par Pharmaceuticals Cos. Inc. The outlook is stable. "At the same time, we assigned a preliminary 'B+' issue-level rating to the company's senior secured credit facility, which consists of a $980 million term loan B and a $150 million revolving credit facility (undrawn). The credit facility has a recovery rating of '3', indicating our expectation of meaningful (50%-70%) recovery in the event of payment default," S&P said. "We also assigned a preliminary 'B-' issue-level rating to the company's $490 million of senior unsecured notes. The notes have a recovery rating of '6', indicating our expectation of negligible (0%-10%) recovery in the event of payment default," S&P said. "The rating on Par reflects our assessment that the company has a 'weak' business profile because of its position as the fifth- largest generic pharmaceutical company and its lack of scale compared with other larger generic companies," said Standard & Poor's credit analyst Michael Berrian. "We also believe that Par has an 'aggressive' financial risk profile. Despite pro forma leverage of 5.3x at June 30, 2012, we expect that EBITDA growth and the use of some free cash flow for debt reduction will bring leverage to less than 5x over the next year. Par is a manufacturer and marketer of a broad portfolio of generic drugs," S&P said. "The stable outlook reflects our expectation that revenue growth will result in higher free cash flow that we believe the company will use for debt reduction over the near term," S&P said. "We could lower the rating if EBITDA growth is less than we expect and the company can't meaningfully reduce debt. This would result in leverage increasing to more than 5x, at which point we would consider the company's financial risk profile 'highly leveraged.' Revenue growth of 11% or less and margins of 47% or less, without prospects for immediate improvement, would result in this outcome," S&P said. "We could raise the rating if the company both reduces leverage and sustains it at less than 4x with a financial policy committed to preserving stronger credit protection measures. We do not consider this likely, though, given sponsor ownership and future demands to use cash flow for business development activities to grow its generic division," S&P said. PARADISE HARBOR: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Paradise Harbor Place Trust c/o Resources Group LLC 900 Las Vegas Blvd S. #810 Las Vegas, NV 89107 Bankruptcy Case No.: 12-20213 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce T. Beesley Debtor's Counsel: Ryan Alexander, Esq. LAW OFFICES OF RYAN ALEXANDER 200 E. Charleston Blvd Las Vegas, NV 89104 Tel: (702) 222-3476 Fax: (702) 252-3476 E-mail: ryan@thefirm-lv.com Scheduled Assets: $1,249,000 Scheduled Liabilities: $2,907,550 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/nvb12-20213.pdf The petition was signed by Eddie Haddad, managing owner. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- 4208 Rollingstone Dr Trust 12-12363 03/01/12 Bourne Valley Court Trust 12-16387 05/31/12 Cape Jasmine Court Trust 12-17498 06/26/12 Oliver Sagebrush Dr Trust 12-18558 07/23/12 River Glider Ave Trust 12-17862 07/03/12 Villa Vecchio Court Trust 12-15254 05/02/12 PEREGRINE FINANCIAL: Trustee Proposes to Distribute $123 Million ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for commodity broker Peregrine Financial Group Inc. filed papers Sept. 5 for bankruptcy court permission to make a first distribution of $123 million to futures customers from the $181 million in customer property he is holding. According to the report, there will be a hearing on Sept. 12 in U.S. Bankruptcy Court in Chicago to approve the interim distribution. If the judge goes along, futures customers with accounts of less than $50,000 will receive payments by Sept. 28. Distributions to other futures customers will begin about Oct. 15. The report relates that the interim distribution will be 30% for so-called 4d customers with commodity futures and options accounts. The first distribution will be 40% for so-called 30.7 customers with accounts for trading futures or options on foreign exchanges. The distribution will be made under commodity brokerage provision in the Bankruptcy Code because Peregrine isn't covered by the Securities Investors Protection Act and its customers therefore aren't entitled to payments from the SIPC fund. Trustee Ira Bodenstein explained in his filing Sept. 5 that foreign exchange and so-called metals customers don't qualify as having customer accounts and won't be covered by the first distribution. They will be covered by later distributions. The report notes that Mr. Bodenstein is holding back $58 million pending resolutions of customers claims and determinations if there were any "inappropriate historical cash movements." The trustee said he will entertain offers from other brokers to receive bulk transfers of customers' accounts. The U.S. Commodity Futures Trading Commission started a receivership on July 10 in U.S. District Court in Chicago, where the judge appointed a receiver and froze the assets the same day. The company itself filed a liquidating Chapter 7 petition later that day, leading to Mr. Bodenstein's appointment. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PHIL'S CAKE: Files for Chapter 11 in Tampa ------------------------------------------ Phil's Cake Box Bakeries, Inc., doing business as Alessi's Bakery, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-13635) in Tampa, Florida, on Sept. 5, 2012. No first day motions were filed other than an application to employ Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, as counsel. According to the case docket, the Chapter 11 plan and the explanatory disclosure statement are due Jan. 3, 2013. PHIL'S CAKE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Phil's Cake Box Bakeries, Inc. dba Alessi's Bakery aka Alessi Bakery 5202 Eagle Trail Drive Tampa, FL 33634 Bankruptcy Case No.: 12-13635 Chapter 11 Petition Date: September 5, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Harley E. Riedel, Esq. STICHTER RIEDEL BLAIN & PROSSER, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 E-mail: hriedel.ecf@srbp.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Philip Alessi, Jr., president. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sysco Food Services -- $77,098 West Coast Florida Inc. P.O. Box 1839 Palmetto, FL 34220 Sunny Morning Foods, Inc. -- $47,752 5330 NW 35th Avenue Ft. Lauderdale, FL 33309 Southeastern Paper Group -- $43,762 P.O. Box 890672 Charlotte, NC 28289-0672 Flavor Right -- $42,281 Dawn Food Products Inc. -- $37,439 Paramount Marketing Group -- $35,016 FACS -- $26,187 SunTrust Bankcard, N.A. -- $23,738 Tampa Electric Company -- $23,724 Stephen Gould of Florida -- $22,576 eWorkplace Solutions, Inc. -- $22,376 Gregory Sharer & Stuart -- $18,628 Blue Cross Blue Shield Florida -- $18,403 Rich Products Corporation -- $16,272 Bakemark Best Brands Inc. -- $15,950 Paradise Plastics Inc. -- $14,639 Niagara Distributors Inc. -- $14,024 K L M Realty Inc. -- $13,375 GloVal Industries, LLC -- $12,600 Zep Manufacturing Company -- $11,973 PINNACLE AIRLINES: Wants Deal Cut With Union by Sept. 13 -------------------------------------------------------- Lez Fedor at MinnPost notes that the pilots union of Pinnacle Airlines said the airline is pressing for its pilots to take 7% to 24% hourly pay cuts and a host of other concessions. If the pilots and the airline fail to strike a deal by Sept. 13, 2012, Pinnacle management has signaled it would ask the bankruptcy judge to throw out the pilots' contract and allow management to impose work terms. According to the report, Tom Wychor, Pinnacle pilots union chairman, said in a MinnPost interview that he's willing to negotiate a fair contract, but warns that forcing management's work terms on pilots would have dire consequences. "If they impose, we will liquidate," Mr. Wychor said, explaining that pilots would leave Pinnacle in droves for other airlines or exit the industry and the airline couldn't survive the upheaval. He emphasized that Pinnacle already has had trouble attracting new pilot hires. In addition, the carrier has acknowledged that it has struggled to meet its operational goals, and Mr. Wychor argued that Pinnacle needs to avoid putting more "stress" on the system that would be caused by high turnover in the pilot and other employee ranks, the report says. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. PROFESSIONAL ROOFING: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Professional Roofing, Inc. dba Prefessional Roofing dba Professional Exteriors dba Professional Roofing and Exteriors 5790 Lamar Street Arvada, CO 80002 Bankruptcy Case No.: 12-28478 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Stephen C. Nicholls, Esq. NICHOLLS & ASSOCIATES, P.C. 1850 Race St. Denver, CO 80206 Tel: (303) 329-9700 E-mail: steve.nicholls@nichollslaw.com Scheduled Assets: $327,215 Scheduled Liabilities: $1,923,766 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/cob12-28478.pdf The petition was signed by Daniel J. Cupit, president. PROTEONOMIX INC: Restates Q1 Report to Correct Errors ----------------------------------------------------- Proteonomix, Inc., has restated its financial statements for the three months ended March 31, 2012, to reflect errors in the accounting treatment under ASC 815 for the Series A, B, and C warrants that were issued in the private placement on March 5, 2012. The warrant value was originally treated as equity in additional paid in capital. After further review of the ASC, the Company has reclassified this value as a derivative liability at inception on March 5, 2012, and will adjust the fair value of this derivative liability each reporting period. The net effect of the reporting for the warrants as a derivative was a reclassification of $2,747,204 from equity to liabilities at March 5, 2012, then a subsequent fair value adjustment at March 31, 2012, which reduced the liability by $932,145 to other income. This $932,145 adjustment to the net loss brought the net loss for the three months ended March 31, 2012, from $2,192,193 to $1,260,048. This change decreased the loss per share from $0.28 to $0.16, and reduced the accumulated deficit to $22,011,917 from $22,944,062. The Company reported a net loss of $1.3 million on $2,290 of revenues for the three months ended March 31, 2012, compared with a net loss of $299,524 on $8,165 of revenues for the same period of the prior year. The Company's balance sheet at March 31, 2012, showed $7.0 million in total assets, $8.5 million in total current liabilities, and a stockholders' deficit of $1.5 million. "There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period." KBL, LLP, in New York City, expressed substantial doubt about Proteonomix's ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2011. 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. A copy of the Form 10-Q/A is available at http://is.gd/Rtzi6l Paramus, N.J.-based Proteonomix, Inc., is a biotechnology company engaged in the discovery and development of cell therapeutics, tissue banking services and cosmeceutical products. PROTEONOMIX INC: Amends Q1 Form 10-Q, Reports $1.3MM Net Loss ------------------------------------------------------------- Proteonomix, Inc., filed with the U.S. Securities and Exchange Commission an amended first quarter report to reflect a net loss applicable to common shares of $1.26 million on $2,290 of sales for the three months ended March 31, 2012. The Company originally reported a net loss applicable to common shares of $2.19 million on $2,290 of sales for the first quarter of 2012. The Company's restated balance sheet at March 31, 2012, showed $6.99 million in total assets, $8.45 million in total liabilities and a $1.45 million total stockholders' deficit. The Company previously reported $6.99 million in total assets, $6.64 million in total liabilities and $356,650 in total stockholders' equity at March 31, 2012. The restatement was 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. A copy of the amended Form 10-Q is available for free at: http://is.gd/Rtzi6l 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 June 30, 2012, showed $5.75 million in total assets, $6.33 million in total liabilities and a $584,199 total stockholders' deficit. PURADYN FILTER: Settles Civil Suit with Former CEO -------------------------------------------------- In July 2009, Puradyn Filter Technologies Incorporated filed a lawsuit in the Circuit Court in 15th Judicial District in and for Palm Beach County, Florida, styled Puradyn Filter Technologies, Inc., versus Richard C. Ford case number 502009CA023128XXXXMB. In this action against Mr. Ford, the Company's former Chief Executive Officer, the Company alleged non-payment of three promissory notes totaling $756,250 with interest at a rate of 5.63% per annum since July 25, 2001, and the Company sought payment of the promissory notes and accrued interest which totaled $1,110,046 in the aggregate. On Aug. 22, 2012, the Company reached a settlement with the defendant in this civil suit. Under the terms of the settlement, Mr. Ford agreed to transfer to the Company a total of 875,000 shares of the Company's common stock, with 6,000 shares due within one week of the execution of a settlement agreement, 133,000 shares by Dec. 31, 2012, and the balance at the rate of 184,000 shares per quarter beginning on March 1, 2013. In the event Mr. Ford should default in these arrangements, he is obligated to pay the Company $145,000 less any monies or shares previously tendered to the Company, the Company is entitled to obtain a judgment in that amount and he will waive any rights he may have to discharge that judgment through bankruptcy. This agreed upon settlement is subject to the execution of a definitive settlement agreement containing these and other containing customary terms. About Puradyn Filter Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated (OTC BB: PFTI) designs, manufactures and markets the puraDYN�' Oil Filtration System. The Company's balance sheet at June 30, 2012, showed $1.4 million in total assets, $9.8 million in total liabilities, and a stockholders' deficit of $8.4 million. As reported in the TCR on April 10, 2012, Webb and Company, P.A., in Boynton Beach, Florida, expressed substantial doubt about Puradyn's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations, its total liabilities exceed its total assets, and it has relied on cash inflows from an institutional investor and current stockholder. R&S ST. ROSE: Ghandi Law Offices Approved as Bankruptcy Counsel --------------------------------------------------------------- The Hon. Lloyd King of the U.S. Bankruptcy Court for the District of Nevada, in a May 22, 2012, order, authorized R&S St. Rose Lenders, LLC to employ Nedda Ghandi, Esq. of Ghandi Law Offices as counsel under a general retainer of $10,000 (with an additional $16,000 forthcoming). As reported in the Troubled Company Reporter on March 2, 2012, the Court approved the withdrawal of Zachariah Larson, Esq., of Marquis Aurbach & Coffing, as counsel of record for the Debtor. Larson & Larson merged with Marquis Aurbach Coffing on Jan. 3, 2012. As of Jan. 11, 2012, an order has not been entered by the Court with regards to the Debtor's application to employ Larson & Larson as counsel, which Application was opposed by the U.S. Trustee. The firm told that Court it is in the best interest of the Debtor that the Debtor obtain new counsel. About R & S St. Rose Lenders R & S St. Rose Lenders, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-14973) on April 4, 2011. Zachariah Larson, Esq., and Sarah Larson, Esq., at Larson & Stephens, LLC, in Las Vegas, serve as bankruptcy counsel. David J. Merrill, P.C. serves as special counsel. The Debtor amended its schedules disclosing $12,041,574 in assets and $24,502,319 in liabilities. The Debtor's previously filed schedules showed $12,041,574 in assets and $19,688,291 in liabilities. RAVENWOOD HEALTHCARE: Authorized to Pay Critical Vendors Claims --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Louisiana, in a May 30 order, authorized Ravenwood Healthcare, Inc., to pay the prepetition claims of critical vendors Sysco, Proactive Therapy, Gulf South Medical, Dr. Daniel Howard and Millennium Pharmacy. Ravenwood Healthcare, Inc. filed a Chapter 11 petition (Bankr. M.D. La. Case No. 12-10612) on April 27, 2012, in its home-town in Baton Rouge. Ravenwood Healthcare is a not-for-profit corporation which owns and operates the Harborside Nursing and Rehabilitation Center, a 165-bed skilled care facility in Baltimore, Maryland. It has 134 hourly rate based and 11 salaried rate based employees. Bankruptcy Judge Douglas D. Dodd oversees the case. William E. Steffes, Esq., and Noel Steffes Melancon, Esq., at Stefes, Vingiello & McKenzie, LLC, serve as the Debtor's counsel. The Debtor disclosed $9,561,783 in assets and $24,113,224 in liabilities. The petition was signed by Richard T. Daspit, Sr., president. RAVENWOOD HEALTHCARE: Court OKs Mitchell Day as Special Counsel --------------------------------------------------------------- Ravenwood Healthcare, Inc., sought and obtained approval from the U.S. Bankruptcy Court to employ Mitchell Day Law Firm, PLLC, as special counsel. According to the Debtor, Mitchell has effectively represented the Debtor prior to the Petition Date and is familiar with the pending matters and the Debtor's business and has the necessary background to deal effectively with the pending matters and with many of the potentially complex legal issues and problems that may arise. The Debtor believes that Mitchell is uniquely qualified to act as the Debtor's special counsel during the pendency of the Chapter 11 case in a most efficient and timely manner. Employing Mitchell will save the Debtor's estate resources and prevent having to waste resources in the process of educating new counsel on the pending matters. Mitchell Day will be paid on an hourly basis at these rates: Professional Hourly Rate ------------ ------------ Julie B. Mitchell $250 Members $250 Associates $200 Legal Assistants and Law Clerks $95 The firm will also seek reimbursement of actual and necessary out of pocket expenses. The firm will apply to the Court for payment of compensation and reimbursement of expenses. The Debtor believes that the firm doesn't hold or represent any adverse interests to the Debtor or the estate. Mitchell is employed by Foundation Health Services, Inc., and receives payments from FHS. The Debtor reimburses FHS for its share of services provided by Mitchell pursuant to a financial services agreement between the Debtor and FHS. The Debtor has reimbursed FHS $28,154 for services performed by Mitchell in the one year period prior to the Petition Date. There is no outstanding balance owed to Mitchell by the Debtor for billed unpaid prepetition work for which it would have a claim against the estate, although Mitchell is owed monies by FHS for work performed by non-Debtor entities. The Debtor reimbursed FHS for its share of prepetition services prior to the Petition Date. About Ravenwood Healthcare Ravenwood Healthcare, Inc. filed a Chapter 11 petition (Bankr. M.D. La. Case No. 12-10612) on April 27, 2012, in its home-town in Baton Rouge. Ravenwood Healthcare is a not-for-profit corporation which owns and operates the Harborside Nursing and Rehabilitation Center, a 165-bed skilled care facility in Baltimore, Maryland. It has 134 hourly rate based and 11 salaried rate based employees. Bankruptcy Judge Douglas D. Dodd oversees the case. William E. Steffes, Esq., and Noel Steffes Melancon, Esq., at Stefes, Vingiello & McKenzie, LLC, serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by Richard T. Daspit, Sr., president. RAVENWOOD HEALTHCARE: Governmental Proofs of Claim Due Nov. 21 -------------------------------------------------------------- The U.S. Bankruptcy Court set Nov. 21, 2012, as the deadline for governmental entities to file proofs of claim against Ravenwood Healthcare, Inc. Non-governmental entities were required to submit their claims by July 13. About Ravenwood Healthcare Ravenwood Healthcare, Inc. filed a Chapter 11 petition (Bankr. M.D. La. Case No. 12-10612) on April 27, 2012, in its home-town in Baton Rouge. Ravenwood Healthcare is a not-for-profit corporation which owns and operates the Harborside Nursing and Rehabilitation Center, a 165-bed skilled care facility in Baltimore, Maryland. It has 134 hourly rate based and 11 salaried rate based employees. Bankruptcy Judge Douglas D. Dodd oversees the case. William E. Steffes, Esq., and Noel Steffes Melancon, Esq., at Stefes, Vingiello & McKenzie, LLC, serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by Richard T. Daspit, Sr., president. RESIDENTIAL CAPITAL: Committee Opposes 9 Months of Exclusivity -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Residential Capital LLC official creditors' committee filed papers Sept. 5 opposing an expansion until June of the company's exclusive right to propose a reorganization plan. According to the report, saying ResCap has failed even to discuss a plan with the committee over the first three months in bankruptcy, the committee proposes that so-called exclusivity expire on the earlier of March 1 or 30 days after the examiner files his report. The examiner predicted his report will be completed around early February. 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. 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). ROCK POINTE: Creditors Committee Taps Ken Gates as Attorney ----------------------------------------------------------- The Unsecured Creditors Committee of Rock Pointe Holdings Company LLC sought and obtained approval from the U.S. Bankruptcy Court for the Eastern District of Washington to retain Kenneth W. Gates, as counsel. The attorney will charge the Debtor's estates $230 per hour. Daily charge is limited to $1,840 if traveling to out of area representation. Robert D. Miller Jr., the United States Trustee for Region 18, in June appointed five unsecured creditors to serve on the Official Committee of Unsecured Creditors of Rock Pointe. The Creditors Committee members are: 1. KC Charles, Inc. Cary E. Berger 5685 Jergens Road Nine Mile Falls, WA 99026 Tel: (509) 276-1228 2. Yadon Construction Specialties, Inc. Barbara Rhodes P.O. Box 2672 Spokane, WA 99220 Tel: (509) 535-0301 3. Green Johnny LLC John M. Thornton P.O. Box 48542 Spokane, WA 99228 Tel: (509) 496-3244 4. BK Enterprises - GW DeMaine Bill DeMaine 1116 N. Best Rd. Spokane Valley, WA 99216 Tel: (509) 926-0143 5. ABM Janitorial / American Building Maintenance Jewell Swinyard 1766 Fowler Street, Ste. A Richland, WA 99352 Tel: (509) 735-9570 About Rock Pointe Holdings Rock Pointe Holdings Company LLC owns the Rock Pointe Corporate Center in Spokane, Washington. The Company filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.11-05811) on Dec. 2, 2011. Brett L. Wittner, Esq., at Kent & Wittner PS, represents the Debtor. The Debtor estimated both assets and debts of between $50 million and $100 million. The U.S. Trustee said an official committee has not been appointed in the bankruptcy case of Rock Pointe Holdings Company LLC because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. RTW PROPERTIES: Can Access Wells Fargo Cash Thru Dec. 31 -------------------------------------------------------- The bankruptcy judge has entered a final order authorizing RTW Properties, LP, to use cash collateral after an agreement with the lender was reached. Wells Fargo Bank, N.A., owed not less than $24.9 million for loans prepetition, has agreed to allow the Debtor to use cash collateral through Dec. 31, 2012. As adequate protection, the court in the order grated Aug. 15 permitted the Debtor to grant Wells Fargo a replacement lien in the Debtor's property in Schertz, Texas, and proceeds thereof. The Debtor will maintain insurance on the property. About RTW Properties Schertz, Texas-based RTW Properties, LP, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-20319) in Corpus Christi on June 18, 2012. RTW Properties owns a petroleum-storage facility in the Port of Brownville, Texas. The facility includes tanks with storage capacity of 230,000 barrels. The Debtor also owns a tract of land in Schertz, Texas. The Debtor sought bankruptcy protection to deal with a $22 million federal income tax lien. Langley & Banack, Inc., serves as the Debtor's bankruptcy counsel. William O. Grimsinger and Chamberlain Hrdlicka serve as special counsel to prosecute an adversary complaint in connection with the tax lien. William R. Mallory, member manager of Royal Holding, LLC, the general partner of the Debtor, explains in a court filing that before the petition date, the Internal Revenue Service asserted a federal tax lien in the amount of $22 million on account of unpaid excise taxes dating back to years as early as 2003. For years prior to the petition date, the Debtor has attempted to resolve the IRS tax lien to no avail. The Debtor believes that the Federal tax lien claimed by the IRS is overstated. The Debtor intends to resolve the tax lien through an adversary proceeding. RTW PROPERTIES: Has Access to Arvest Bank Cash Thru March 2013 -------------------------------------------------------------- The bankruptcy judge has entered a final order authorizing RTW Properties, LP, to use cash collateral of Arvest Bank. Arvest Bank asserts that it holds claims of $6 million in principal plus accrued interest secured by all of the Debtor's property and cash collateral. The judge in the order dated Aug. 10 ruled that the Debtor is authorized, in accordance with a budget, to use cash collateral from the Petition Date until March 1, 2013. As adequate protection, the Debtor will stay current on all payments that come due under the Arvest loan by paying them in the same manner as they were paid prior to the filing of the Bankruptcy case. As additional adequate protection for the use of cash collateral, the Debtor will pay all attorneys fees incurred by Arvest Bank. The Payments will be made without prejudice to Arvest Bank's or the Debtor's rights regarding the application of the payment to the indebtedness, which shall be determined by further order of the Court or agreement between Arvest Bank and the Debtor. About RTW Properties Schertz, Texas-based RTW Properties, LP, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-20319) in Corpus Christi on June 18, 2012. RTW Properties owns a petroleum-storage facility in the Port of Brownville, Texas. The facility includes tanks with storage capacity of 230,000 barrels. The Debtor also owns a tract of land in Schertz, Texas. The Debtor sought bankruptcy protection to deal with a $22 million federal income tax lien. Langley & Banack, Inc., serves as the Debtor's bankruptcy counsel. William O. Grimsinger and Chamberlain Hrdlicka serve as special counsel to prosecute an adversary complaint in connection with the tax lien. William R. Mallory, member manager of Royal Holding, LLC, the general partner of the Debtor, explains in a court filing that before the petition date, the Internal Revenue Service asserted a federal tax lien in the amount of $22 million on account of unpaid excise taxes dating back to years as early as 2003. For years prior to the petition date, the Debtor has attempted to resolve the IRS tax lien to no avail. The Debtor believes that the Federal tax lien claimed by the IRS is overstated. The Debtor intends to resolve the tax lien through an adversary proceeding. SALLY HOLDINGS: To Offer Additional $150-Mil. 5.75% Senior Notes ---------------------------------------------------------------- Sally Holdings LLC and Sally Capital Inc. filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to a proposed issuance of $150 million of 5.75% senior notes due 2022. This is offering is in addition to the $700 million senior notes they issued on May 18, 2012. Merrill Lynch, Pierce, Fenner & Smith Incorporated serves as the sole book-running manager of the offering. A copy of the free writing prospectus is available for free at: http://is.gd/X6FLQ9 About Sally Holdings Sally Holdings, LLC, based in Denton, Texas, is a leading retailer and distributor of beauty products with over 3,800 stores in 10 countries. Annual revenues are around $2.6 billion. The Company's balance sheet at Sept. 30, 2011, showed $1.72 billion in total assets, $2.01 billion in total liabilities, and a $281.69 million total members' deficit. Bankruptcy Warning Sally Holdings' ability to comply with the covenants and restrictions contained in the senior credit facilities and the indentures for the Notes may be affected by economic, financial and industry conditions beyond the Company's control. The breach of any of these covenants and restrictions could result in a default under either the senior credit facilities or the indentures that would permit the applicable lenders or note holders, as the case may be, to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. If the Company is unable to repay debt, lenders having secured obligations, such as the lenders under the senior credit facilities, could proceed against the collateral securing the debt. In any such case, the Company may be unable to borrow under the senior credit facilities and may not be able to repay the amounts due under the Term Loans and the Notes. This could have serious consequences to the Company's financial condition and results of operations and could cause the Company to become bankrupt or insolvent. * * * As reported by the TCR on Nov. 7, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Sally Holdings LLC to 'BB+' from 'BB'. The rating outlook is positive. "Standard & Poor's Rating Services' rating reflects our view that Sally Holdings, which is an indirect wholly owned subsidiary of Sally Beauty Holdings Inc., will continue its positive momentum with organic sales growth of 5% to 7%, positive comparable-store sales, modest gross margin improvement, and continued debt reduction, resulting in improving credit protection measures over the next 12 months," said Standard & Poor's credit analyst Jayne Ross. It has 'B2' corporate family and probability of default ratings from Moody's. SAN BERNARDINO, CA: Council Cuts Deficit by Two-Thirds ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the San Bernardino, California, city council adopted cuts reducing the budget deficit by two-thirds, from $45.8 million to $16.4 million. About San Bernardino San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joins two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. SANOHO DEVELOPMENT: Can Use FCB Cash Collateral Until Oct. 31 ------------------------------------------------------------- Sanoho Development, LLC, received approval from the bankruptcy judge to use First Commercial Bank (USA)'s cash collateral until Oct. 31, 2012. The Debtor is required to conform with a May 7, 2012 stipulation on the use of cash collateral and granting adequate protection to the lender. A hearing to consider full use of FCB's cash collateral is set for Oct. 31, 2012, at 10:00 a.m. FCB has claims against the Debtor secured by the Debtor's property in Huston Street, North Hollywood, California. In a filing in July, IMH Special Asset NT 222, LLC, a secured creditor of Sanoho Development, served a notice of its non-consent to the Debtor's use of its cash collateral. IMH also demanded that the Debtor account for and segregate the cash collateral from the Petition Date. Pre-bankruptcy, IMH provided loans to the Debtor to fund the construction of a 28-condominium complex located at 5232 Satsuma Avenue in North Hollywood, California. In a Court filing dated July 24, IMH said that despite its repeated requests, the Debtor has failed to account for the rents generated by the real property that constitute IMH's cash collateral. IMH said that to the extent the Debtor is using IMH's cash collateral, it is doing so in violation of 11 U.S.C. Sec. 363(c)(2) given that IMH has not consented to use of its cash collateral and given that the Court has not entered an order authorizing such use. Despite IMH's repeated requests, the Debtor has failed to account for IMH's cash collateral, rendering it impossible for IMH to tell whether its cash collateral is being used in violation of the Bankruptcy Code. The Debtor's continued failure to account for cash collateral or its unauthorized use of cash collateral may be grounds to convert this case to a Chapter 7 or to appoint a Chapter 11 trustee, counsel to IMH said. IMH is represented by at Christopher H. Bayley, Esq., and Jasmin Yang, Esq., at Snell & Wilmer L.L.P. About Sanoho Development Sanoho Development, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-13701) in San Fernando Valley, California, on April 20, 2012. The Debtor, a developer of condominium buildings, disclosed assets of $14.8 million and debts of $16.4 million as of bankruptcy filing date. The Debtor has $10.0 million of secured debt. The Debtor owns (i) 14 units of a 28-unit condominium building located at 4232 N. Satsuma Ave., North Hollywood, California, which property is worth $5.4 million, and (ii) a condominium building located at 11312 Huston Street, North Hollywood, California, consisting of 14 units, which property is worth $5.4 million. In its schedules, the Debtor says that it has a claim, worth $4 million, on account of a lender liability against IMH Secured Loan Fund, LLC, and its successors. The Debtor is represented by Jerome Bennett Friedman, Esq., at Friedman Law Group, P.C., in Los Angeles. SEACOR HOLDINGS: S&P Cuts Corp. Credit Rating to 'BB'; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on New York City-based SEACOR Holdings Inc. (SEACOR) to 'BB' from 'BB+'. The outlook is negative. "At the same time, we lowered the issue rating on SEACOR's senior unsecured debt to 'BB' (the same as the corporate credit rating) from 'BB+'. The recovery rating on this debt remains '3', indicating our expectation of meaningful (50% to 70%) recovery in the event of a default," S&P said. "The downgrade reflects our view that the weaker-than-expected operating performance will continue for at least several quarters, despite rebounding activity in the Gulf of Mexico," said Standard & Poor's credit analyst Marc D. Bromberg. "SEACOR's last 12 month (LTM) leverage as of June 30, 2012, was high at 3.9x. Although we expect to see improvement going forward, annualized leverage, inclusive of recent acquisitions, for the second quarter ended June 30, 2012 was a very aggressive 5.5x." "Performance in the company's core Offshore Marine Services segment (OMS) was very soft in the second quarter, with overall day rates (excluding newly acquired wind farm utility and liftboats) down nearly 15% from the first quarter and essentially unchanged from the prior year. Without the contribution from the recent liftboat acquisition, overall pretax income (which includes gains on asset sales), would have been negative $11 million. This performance contrasts with rated peers, such as Gulfmark and Hornbeck, who are benefiting from the recovery in the Gulf of Mexico (GoM). SEACOR's anchor handling and towing division was weak in the second quarter, and we think performance will remain soft in the second half of the year, given our expectation that rig movements within the GoM are unlikely to increase until at least 2013. Drought in the Midwest has also exacerbated recent weak financial performance, affecting tonnage shipped for its Inland River Services division," S&P said. "The ratings on SEACOR reflect our view of the company's 'fair' business risk and 'intermediate' financial risk. The ratings also incorporate the company's diversified business profile as an operator of marine and aviation vessels serving the offshore oil and gas exploration and production (E&P) and oilfield services industries, its position in dry bulk inland barges, and its 'strong' liquidity position. The ratings also reflect the company's currently aggressive leverage measures and its exposure to the volatile marine services business," S&P said. "SEACOR has several lines of business that are less correlated with oil and gas prices, although they are relatively modest contributors to earnings and cash flows. Its inland barge segment, which has historically represented roughly 15% of EBITDA, tends to experience boom-and-bust cycles but correlates more closely with grain and coal transportation. Performance in this segment in 2012 has suffered due to drought conditions in much of the mid- west, resulting in poor river conditions to transport barge freight. SEACOR also has a trading operation in which it arranges for physical delivery of various commodities. Nevertheless, profitability in this business has been fairly modest to this point, and we do not think that it will drive profitability or credit measures going forward," S&P said. "The negative outlook reflects the potential that we could lower ratings if SEACOR's run-rate leverage is likely to exceed 3.75x, a level that we believe could occur if OMS EBITDA margins fail to increase above 25%. We could foresee this scenario if rig movements into and around the GoM do not improve in 2013, if newer supply vessels entering the GoM result in lower day rates and utilization for SEACOR's vessels, or if SEACOR experiences higher operating expenses and is unable to pass through these costs to customers. A revision to stable will require run rate leverage of at least 3.75x, which we believe could occur if OMS margins are likely to exceed 25%. We expect that we will either stabilize the rating or lower the rating within the next year," S&P said. SEARCHMEDIA HOLDINGS: Appoints New COO for China Operations ----------------------------------------------------------- SearchMedia Holdings Limited has appointed Mr. Stephen Zhu as the Chief Operating Officer of its China operations, effective Aug. 20, 2012, and has also divested its subsidiary Qingdao Kaixiang Advertising Co. Ltd. in order to further its planned minimization of the Company's outstanding earnout liability. Mr. Zhu joins SearchMedia from Symbol Media, an integrated outdoor advertising company he founded in 2009, whose client base includes well-recognized brands such as KFC, Puma, Coca-Cola, Volkswagen, AIA, Samsung, Canon, Ikea, Land Rover and covered many industry sectors including finance, auto, retail and electronics. Symbol Media is the Company's partner for its previously announced Luxury Mall LCD Joint Venture. Mr. Zhu has now joined SearchMedia full- time as its Chief Operating Officer of China Operations. Through his ten years of experience in the out-of-home advertising industry, Mr. Zhu has developed deep relationships with the major advertising agencies in China, including Kinetic, Zenith, Optimum, Carat, McCann and Dentsu. Mr. Zhu has also been a market leader developing 3D advertising platforms within China. As part of its previously announced Integration Program and based on an analysis of the recent performance and projections of Qingdao, the Company has agreed to divest Qingdao back to its previous owners and eliminate the related earnout liability of $4.1 million. Beginning Aug. 31, 2012, Qingdao's operating results will no longer be part of the Company's consolidated financial statements. The Company believes that the cost savings from not carrying out the remaining earnout obligations pursuant to the acquisition agreement for Qingdao frees up the Company's resources for use in other more promising opportunities. Through the divestiture of Qingdao, the Company has materially reduced its outstanding earnout obligations by 41% from $10.1 million to $6.0 million. Peter W.H. Tan, chief executive officer of SearchMedia, remarked, "We are thrilled to have Stephen Zhu join as Chief Operating Officer of our China operations. I have known Stephen for over five years and have previously invested in some of his proprietary concessions. Stephen has a great reputation in the China out-of- home advertising industry and he will be an important catalyst in the sales effort with our recently announced major concessions with Home Inns & Hotel Management Inc. and our Luxury Mall LCD Joint Venture. Furthermore, his strong government relations and managerial and business development experience will enhance our growth objectives and help us execute our new strategic initiatives. Stephen will be joined by one of the most talented sales and media development teams in Shanghai. On the decision to divest Qingdao, Tan added, "It is never an easy decision to dispose of an operating subsidiary that has been with the Group from the outset, but we feel that given the significant and persistent declining sales and profitability trend of Qingdao over the last four years, in order to preserve shareholder value and allow the Company to pursue additional accretive concessions, it is in the best interests of the Group to enter into a separation agreement with Qingdao. It is, of course, beneficial as a whole to be able to eliminate from our balance sheet outstanding earnout and tax liabilities in the aggregate amount of $6.8 million. Qingdao represented only 5% of our Group revenue in 2011 and we believe that this divestiture will have a minimal impact on our future financial performance." Peter Chan, Interim Chief Financial Officer of SearchMedia, added, "After a thorough analysis, we have concluded that it is in the Company's best interest to divest Qingdao back to its ex-owners in exchange for the cancellation of the $4.1 million cash earnout due and elimination of $2.7 million tax liabilities and $1.9 million inter-company liabilities. With the Qingdao divestment, we expect a non-cash disposal loss of $3.2 million against our year-to-date June 30, 2012 net income of $9.8 million. We believe the Qingdao divestment will result in a large cash savings and the elimination of certain liabilities would improve the Company liquidity and bolster its balance sheet allowing it to pursue other concessions with better returns." About SearchMedia SearchMedia is a leading nationwide multi-platform media company and one of the largest operators of integrated outdoor billboard and in-elevator advertising networks in China. SearchMedia operates a network of high-impact billboards and one of China's largest networks of in-elevator advertisement panels in 50 cities throughout China. Additionally, SearchMedia operates a network of large-format light boxes in concourses of eleven major subway lines in Shanghai. SearchMedia's core outdoor billboard and in- elevator platforms are complemented by its subway advertising platform, which together enable it to provide a multi-platform, "one-stop shop" services for its local, national and international advertising clients. Marcum Bernstein & Pinchuk LLP, in New York, issued a "going concern" qualification on the consolidated financials statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses and has a working capital deficiency of approximately $31,000,000 at Dec. 31, 2011, which raises substantial doubt about its ability to continue as a going concern. Searchmedia Holdings reported a net loss of $13.45 million in 2011, a net loss of $46.63 million in 2010, and a net loss of $22.64 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $50.45 million in total assets, $63.90 million in total liabilities and a $13.45 million total shareholders' deficit. SEQUOIA PARTNERS: Reorganization Case Converted to Chapter 7 ------------------------------------------------------------- The Hon. Frank R. Alley of the U.S. Bankruptcy Court for the District of Oregon converted the Chapter 11 case of Sequoia Partners, LLC and Sequoia Village, LLC to that under Chapter 7 of the Bankruptcy Code. The Court also ordered that Daniel Charbonneau, who represents the Debtor in the capacity of member, is designated, pursuant to Fed. Rule of Bankruptcy Procedure 9001(5), to perform the duties imposed upon the Debtor. The Debtors, in their motion, stated that the subsequent pull out of development funding, and other significant hurdles, they are not able to propose a viable chapter 11 plan. The Debtors added that it is in the best interest of creditors for the case to be converted, a chapter 7 Trustee appointed, and the appraisal of the Paradise Ranch Resort to continue. About Sequoia Partners Grants Pass, Oregon-based Sequoia Partners, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-67547) on Dec. 29, 2010. Tara J. Schleicher, Esq., at Farleigh Wada Witt Attorneys, served as the Debtor's bankruptcy counsel. Beowulf Consulting, LLC, served as accountant. CPM Real Estate Services, Inc., served as loan broker. The Debtor estimated assets at $50 million to $100 million and debts at $10 million to $50 million. Robert D. Miller, Jr., U.S. Trustee for Region 18, appointed five members to the official committee of unsecured creditors. The Committee tapped Douglas R. Schultz and Cassie K. Jones and the law firm of Gleaves Swearingen Potter & Scott LLP as its counsel. The Debtor's Plan proposes to sell the property and the goodwill of the Debtor to US Capital or the highest bidder and distribute the proceeds to secured and unsecured creditors. SIX3 SYSTEMS: S&P Assigns 'B+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to McLean, Va.-based Six3 Systems Inc. The outlook is stable. "We also assigned 'B+' issue-level and '3' recovery ratings to Six3 Systems' proposed $310 million senior secured credit facilities, which consist of a $50 million revolving credit facility due 2017 and a $260 million term loan due 2019. The '3' recovery rating indicates our expectations for meaningful (50%- 70%) recovery in the event of payment default," S&P said. Ratings are based on preliminary documentation and are subject to review of final documents. "The company intends to use proceeds of the debt issuance to redeem its existing preferred equity, including accrued payment- in-kind (PIK) interest, and to repay existing debt outstanding," S&P said. "The rating on Six3 Systems reflects the company's 'aggressive' financial risk profile, customer concentration risk, and small scale relative to its peers," said Standard & Poor's credit analyst David Tsui. "Still, we expect its entrenched position within its customer base, and capabilities in the growth areas of intelligence, surveillance and reconnaissance (ISR) and cyber- security ('cyber') will result in consistent profitability and improving cash flow generation." "The outlook is stable, reflecting Six3 Systems' established customer relationships, and highly recurring revenue and stable cash flow characteristics from its long-term contracts. An ownership structure that we believe precludes material and sustained debt reduction currently limits the potential for an upgrade," S&P said. "We could lower the rating if the company experiences increased competition that results in major contract losses or adjusted EBITDA margin declining to below 13%, leading to sustained leverage above the mid-5x area. We could also lower the rating if the company demonstrates more aggressive financial policies, including a debt-financed acquisition, leading to the same leverage threshold," S&P said. SOLYNDRA LLC: Workers' WARN Settlement Initially Approved --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Solyndra LLC, the liquidated solar panel maker partly funded by the U.S. Energy Department, received preliminary approval Sept. 6 for a $3.5 million settlement with 858 workers who were fired without the 60 days' notice required under federal law known as the WARN Act. The report recounts that the company halted operations and fired most workers in August 2011, followed by a Chapter 11 filing in September. After bankruptcy, class-action suits were filed on behalf of the workers. If the workers were to win, their lost wages could have been entitled to priority and possibly paid in full under a Chapter 11 plan. The settlement preliminarily approved last week by the U.S. bankruptcy judge in Delaware will have Solyndra pay $3.5 million when damages could have been $15 million. Lawyers for the workers will get about one-third of the settlement fund. The report relates that workers will be paid only after the settlement and Solyndra's Chapter 11 plan are both approved by the bankruptcy judge. Workers will be given notice of the settlement and an opportunity to object. There will be a second hearing on Oct. 17, called a fairness hearing, for final approval of the settlement. Workers can opt out and pursue claims on their own. The report notes that Solyndra was scheduled in bankruptcy court Sept. 7 in pursuit of approval of disclosure materials explaining the company's Chapter 11 plan. Once the disclosure statement receives the court's imprimatur, creditors can begin voting on the plan. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. SOUTHFIELD OFFICE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Southfield Office Building 11, LP c/o Southfield Office Building GP 11 LLC Attention: Renee J. Fischman 7712 Tomlinson Avenue Cabin John, MD 20818 Bankruptcy Case No.: 12-12503 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Brendan Linehan Shannon Debtor's Counsel: Thomas Joseph Francella, Jr., Esq. WHITEFORD TAYLOR PRESTON LLC The Renaissance Centre, Suite 500 405 North King Street Wilmington, DE 19801 Tel: (302) 357-3252 Fax: (302) 357-3272 E-mail: tfrancella@wtplaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/deb12-12503.pdf The petition was signed by Renee J. Fischman, member. Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Southfield Office Building 15, LP 12-12504 Southfield Office Building 17, LP 12-12505 Southfield Office Building 16, LP 12-12508 Southfield Office Building 12, LP 12-12509 Southfield Office Building 6, LP 12-12510 Southfield Office Building 18, LP 12-12512 SUNVALLEY SOLAR: Issues 950,000 Convertible Preferred Stock ----------------------------------------------------------- Sunvalley Solar, Inc., issued a total of 950,000 shares of its newly designated Class A Convertible Preferred Stock to a total of seven individuals. These shares were issued as incentive compensation to certain officers, directors, and key employees, and the issuance to each individual is governed by a restricted stock award agreement. Under the relevant award agreements, the shares issued will be subject to forfeiture in event of the recipient's resignation or dismissal within the next two years. Prior to vesting, the shares issued may not be transferred or encumbered. This issuance was exempt under Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. On Aug. 28, 2012, pursuant to Article Fourteen of the Company's Articles of Incorporation, the Company's Board of Directors voted to designate a class of preferred stock entitled Class A Convertible Preferred Stock, consisting of up to 1,000,000 shares, par value $0.001. The rights of the holders of Class A Convertible Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State. Under the Certificate of Designation, holders of Class A Convertible Preferred Stock will participate on an equal basis per-share with holders of the Company's common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Class A Convertible Preferred Stock are entitled to vote together with the holders of the Company's common stock on all matters submitted to shareholders at a rate of 100 votes for each share held. Holders of Class A Convertible Preferred Stock are also entitled, at their option, to convert their shares into shares of the Company's common stock on a 1 for 1 basis. On Aug. 29, 2012, a majority of the Company's shareholders and the Company's board of directors approved an amendment to Article 4 of the Company's Articles of Incorporation to decrease the Company's total authorized common stock from 7,500,000,000 shares to 90,000,000 shares. The Company filed a Certificate of Amendment with the Nevada Secretary of State to record the amendment. About Sunvalley Solar Sunvalley Solar, Inc., is a California-based solar power technology and system integration company. Since the inception of its business in 2007, the company has focused on developing its expertise and proprietary technology to install residential, commercial and governmental solar power systems. Sunvalley Solar reported a net loss of $398,866 in 2011, compared with a net loss of $375,839 in 2010. In its audit report for the 2011 results, Sadler, Gibb & Associates, LLC, in Salt Lake City, UT, noted that the Company had losses from operations of $104,000 and accumulated deficit of $1.36 million, which raises substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at June 30, 2012, showed $6 million in total assets, $5.43 million in total liabilities and $567,993 in total stockholders' equity. T BANCSHARES: OCC Terminates Regulatory Agreement with Bank ----------------------------------------------------------- T Bancshares, Inc., announced that T Bank N.A., its wholly-owned subsidiary, received written notification of termination of the Formal Agreement dated April 15, 2010, with its primary regulator, the Office of the Comptroller of the Currency. Patrick Howard, president & CEO of TBNC and T Bank stated, "The directors of the Bank and every member of our professional, dedicated staff have worked very hard and very long to achieve this goal. The result of those efforts is really much more than the termination of our Agreement with the Comptroller. While gratifying, the real reward is the sound, efficient, customer focused banking and trust services platform that is now in place to support the future growth of the Bank. With the recent infusion of new capital into the Bank, we believe that we are poised to meet the needs of current and prospective customers and we relish that opportunity." Chairman of the Board Danny Basso commented, "We believe the Comptroller's decision to terminate the Agreement validates our belief in the constructive partnership we have developed with our regulator. With our regulatory matters effectively dealt with and behind us, our Company can direct more of our energies toward building shareholder value. However, the core principals which brought the Bank into compliance with regulatory concerns will not be diminished." In 2010, the Bank was informed by the Office of the Comptroller of the Currency that the Comptroller intended to institute an enforcement action for alleged violations of the Federal Trade Commission Act in connection with certain merchants and a payment processor that were Bank customers between Sept. 1, 2006, and Aug. 27, 2007. The Comptroller proposed that the Bank enter into a formal agreement with the Comptroller. To avoid the expense, delay, and uncertainty related to potential litigation with its primary regulator, the Bank negotiated a settlement with the Comptroller. Accordingly, on April 15, 2010, the Bank executed the Agreement, neither admitting nor denying the Comptroller's findings, which among other provisions required the Bank to reimburse eligible consumers for charges made by the merchants to the eligible consumers. On Oct. 28, 2011, the Comptroller concurred that the Bank had fulfilled this obligation. The Bank submitted required capital, liquidity enhancement, and profit plans, as well as a written program to reduce criticized assets to the Comptroller in accordance with the requirements of the Agreement. Although the Comptroller believed the plans were reasonable and did not object to the plans and program as submitted, there is no assurance that the Bank will be able to comply with all of the remaining requirements of the Agreement. Although as of June 30, 2012, the Bank's capital ratios exceeded the requirements set forth in the Agreement, there is no assurance the Bank will continue to meet those requirements in the future. To be categorized as well capitalized under prompt corrective action provisions, the Bank must maintain minimum total risk- based, tier 1 risk-based, and tier 1 leverage ratios. However, regardless of the Bank's capital position, the requirement in the Agreement to meet and maintain a specific capital level means that the Bank may not be deemed to be well capitalized under regulatory requirements as of June 30, 2012. The capital ratios required by the Agreement are 11.5% total capital to risk weighted assets and 9.00% tier 1 capital to average assets. As of June 30, 2012, the Bank's total capital to risk weighted assets ratio was 17.89%. The Bank's tier 1 capital to average assets ratio was 14.63%. Both ratios exceed the requirements set forth in the Agreement. About T Bancshares, Inc. T Bancshares, Inc., is a bank holding company headquartered in Dallas, Texas, offering a broad array of banking services through T Bank, N.A. The Company's principal markets include North Dallas, Addison, Plano, Frisco, Southlake and the neighboring Texas communities. The Company's balance sheet at June 30, 2012, showed $118.0 million in total assets, $102.2 million in total liabilities, and stockholders' equity of $15.8 million. TDCS LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: TDCS LLC aka Medwell RX 13831 Chalco Valley Pky, Ste 101 Omaha, NE 68138 Bankruptcy Case No.: 12-81988 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court District of Nebraska (Omaha Office) Debtor's Counsel: Robert F. Craig, Esq. CRAIG/BEDNAR LAW 14301 FNB Parkway Suite 203 Omaha, NE 68154 Tel: (402) 408-6000 Fax: (402) 408-6001 E-mail: robert@craiglawpc.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 Timothy Decker, managing member. TELL TALE: Case Summary & 4 Unsecured Creditors ----------------------------------------------- Debtor: Tell Tale Heart, LLC 37588 Grand Oak Drive Prairieville, LA 70769 Bankruptcy Case No.: 12-11266 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) Debtor's Counsel: Gary K. McKenzie, Esq. STEFFES, VINGIELLO & MCKENZIE, LLC 13702 Coursey Boulevard Building 3 Baton Rouge, LA 70817 Tel: (225) 751-1751 Fax: (225) 751-1998 E-mail: gmckenzie@steffeslaw.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 four largest unsecured creditors is available for free at http://bankrupt.com/misc/lamb12-11266.pdf The petition was signed by James Matthew Keith, managing member. THREE ON TWO: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Three on Two Fourteen, LLC P.O. Box 1225 Seaford, NY 11783 Bankruptcy Case No.: 12-46404 Chapter 11 Petition Date: September 4, 2012 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Jonathan S. Pasternak, Esq. RATTET PASTERNAK, LLP 550 Mamaroneck Avenue Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 E-mail: jsp@rattetlaw.com Scheduled Assets: $4,603,000 Scheduled Liabilities: $6,637,544 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/nyeb12-46404.pdf The petition was signed by John Ruha, managing member. TRAFFIC CONTROL: Wants Until Nov. 16 to Propose Chapter 11 Plan --------------------------------------------------------------- Traffic Control and Safety Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Nov. 16, 2012, and Jan. 15, 2013, respectively. In this connection, the Debtors, the Official committee of Unsecured Creditors, Fifth Street Finance Corp., and Marwit Capital Partners II, L.P., have reached a tentative global settlement scheduled for a Sept. 18 hearing. The Debtors say that the global settlement will pave way for -- and be incorporated into -- an uncontested, joint plan of liquidation proposed by the Debtors and the Committee. A hearing on Sept. 18, 2012, as 4 p.m., has been set. About Traffic Control Traffic Control and Safety Corporation and six subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on April 20, 2012. TCSC is the largest independent provider of safety services and products in California and Hawaii. Formed by Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full- time employees and serves state and local agencies, public works organizations, general contractors, the motion picture industry, and provide services at special events. TCSC estimated assets of up to $50 million and debts of up to $100 million as of the Chapter 11 filing. Toomey Industries, Inc. disclosed $10,322,077 in assets and $67,844,144 in liabilities as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. Latham & Watkins LLP serves as the Debtors' bankruptcy counsel and Young Conaway Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC serves as financial advisors, and Epiq Bankruptcy Solutions LLC as the claims and notice agent. The Debtors are authorized to i) use cash collateral in which the First Lien Lender has an interest, (ii) obtain postpetition financing from Fifth Street Finance Corp. and other entities in the maximum amount of $12,775,000. The Debtors canceled auction with only its biggest lender bidding for the assets. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed five unsecured creditors to the Official Committee of Unsecured Creditors. The Committee tapped Potter Anderson & Corroon LLP as its counsel and GlassRatner Advisory & Capital Group LLP as its financial advisor. TRANS ENERGY: Opportune Partner Named to Board of Directors ----------------------------------------------------------- Trans Energy, Inc., appointed Josh Sherman to the company's Board of Directors. Mr. Sherman will serve as an independent director for Trans Energy and lead the company's audit committee. He will also serve as a board member of Trans Energy's wholly-owned subsidiary, American Shale Development, Inc. "We welcome Josh to our company's Board of Directors," said John Corp, President of Trans Energy. "Josh's experience in the oil and natural gas industry, coupled with his in-depth knowledge and understanding of complex financial transactions, is particularly important as we grow our company's core position in the liquid- rich Marcellus Shale. His expertise with SEC reporting practices will further help us explore a potential listing on the NASDAQ or NYSE, as well as, work on any capital initiatives that may be required in the future." Mr. Sherman has more than 14 years of experience in the oil and gas industry, with an emphasis on financial reporting. He is currently a partner at the energy focused consulting firm, Opportune, LLP, where he leads the firm's complex financial reporting practice. Mr. Sherman further served as Chairman of the Audit Committee of Voyager Oil and Gas, serving from November 2010 until that company's merger in July of this year. In addition, Trans Energy has announced the resignation of Dr. Benjamin H. Thomas from the Board of Directors of the Company and of its wholly-owned subsidiary, American Shale Development, Inc. Dr. Thomas's desire to dedicate more time to his full-time teaching and consulting activities prompted his decision to resign. Stephen Lucado, Director at Trans Energy said, "Ben's dedication and counsel to Trans Energy has been extremely helpful as we have worked to grow and develop our more than 62,000 gross acres in the core of the Marcellus. We now have more than 400 potential drilling locations in Marshall, Wetzel, Tyler and Marion counties, 122 of which need only permits to drill thanks to hard working people at Trans Energy like Ben. We thank Ben for his hard work and wish him well in his endeavors." About Trans Energy St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. In its audit report on the Company's 2011 results, Maloney + Novotny, LLC, in Cleveland, Ohio, noted that the Company has generated significant losses from operations and has a working capital deficit of $18.37 million at Dec. 31, 2011, which together raises substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at June 30, 2012, showed $77.01 million in total assets, $50.76 million in total liabilities and $26.24 million in total stockholders' equity. TRI-VALLEY CORP: To Auction Oil and Gas Assets by December ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Tri-Valley Corp. will sell its assets at auctions on Oct. 17 and Dec. 5 under procedures approved on Sept. 5 by the U.S. Bankruptcy Court in Delaware. The company filed for Chapter 11 protection in early July, promising to sell the assets promptly. According to the report, bids are due by Oct. 10 or Oct 17, depending on which package of assets a bidder hopes to buy. A hearing to approve the sales is set for Dec. 6. Buyers aren't under contract as of yet. 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. The Debtor disclosed assets of $17.6 million and liabilities totaling $14.1 million. Former Chairman G. Thomas Gamble, who is financing the bankruptcy case, is owed $7.2 million on several secured notes. There is an unsecured note for $528,000 and $9.4 million in unsecured debt owing to suppliers. TRIDENT MICROSYSTEMS: Commissioner Named to Lead Deposition ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware appointed Alexander Blumrosen of Bernard-Hertz-Bejot to supervise the deposition of Philippe Geyres in France in connection with the Chapter 11 cases of Trident Microsystems, Inc., et al. In a separate filing, the Court has asked the Ministry of Justice of the Republic of France to permit the deposition of Phillipe Geyres in connection with the Debtor's Chapter 11 case, which will take place under the supervision of a person commissioned by the U.S. Court pursuant to the consensual procedures of the Hague Convention on the taking of evidence abroad in civil and commercial matters and in conformity with the reservations and declarations issued by the Republic of France in connection therewith. The deposition testimony will commence at Sept. 13, 2012, at 9:30 a.m. The parties' agreement to use the voluntary commissioner procedure of the Hague Convention is without prejudice to (i) the Statutory Committee of Equity Security Holders's ability to seek discovery via the Federal Rules of Bankruptcy Procedure and Federal Rules of Civil Procedure, Chapter I of the Hague Convention, or any other available method of discovery; (ii) Trident, NXP B.V., NXP Semiconductors Netherlands B.V, and Mr. Geyres' rights to resist or seek to limit the discovery requests. The Court also ordered that Mr. Geyres will be available for deposition, subject to the reservation of rights by Trident, NXP, and Mr. Geyres to object to the deposition. 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. TRILLIUM CIRCLE: Combined Plan/Disclosure Statement Due Sept. 26 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan, according to Trillium Circle, LLC's case docket, directed the Debtor to file a combined plan and disclosure statement by Sept. 26, 2012. The Court also set this schedule in connection with the plan: ballots accepting or rejecting the Plan are due Nov. 12; and the confirmation hearing will be held on Nov. 19, at 11 a.m. Birmingham, Michigan-based Trillium Circle, LLC filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-55532) on June 28, 2012. Bankruptcy Judge Phillip J. Shefferly presides over the case. Elias Xenos, Esq., at The Xenos Law Firm, PLC represents the Debtor in its restructuring efforts. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Neal Porter, managing member. TROCK, L.P.: Case Summary & Largest Unsecured Creditor ------------------------------------------------------ Debtor: TRock, L.P. 1411 S. Goliad Rockwall, TX 75087 Tel: (972) 722-7586 Bankruptcy Case No.: 12-35785 Chapter 11 Petition Date: September 3, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Mohammad S. Khaleel, Esq. KHALEEL & ASSOCIATES, PC 9401 LBJ Freeway, Suite 400 Dallas, TX 75243 Tel: (972) 808-0777 Fax: (972) 808-9777 E-mail: skhaleel@khaleellaw.com Scheduled Assets: $1,310,000 Scheduled Liabilities: $1,135,000 The petition was signed by Tony Arterburn, Sr., president and director. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bayview Loan Servicing, LLC Bank Loan $1,135,000 4425 Ponce de Leon Boulevard Coral Gables, FL 33146 UNIVERSITY GENERAL: Picked as Rice Athletics Official Caterer ------------------------------------------------------------- University General Health System, Inc., announced the execution of an agreement between its wholly-owned subsidiary, Sybaris Group, Inc., and Rice University Athletics, whereby Sybaris has been selected as the official catering company for Rice Athletics. "We are very pleased that our Support Services subsidiary, Sybaris Group, has been named the official caterer for the Athletics Department of such a respected and historic institution of higher learning as Rice University," stated Hassan Chahadeh, MD, Chairman and chief executive officer of University General Health System, Inc. "Sybaris Group has been aggressively expanding its business model, and the outstanding food service provided by Sybaris is consistent with our commitment to the highest level of patient care throughout our expanding health care delivery system. Our relationship with Rice University will allow us to leverage the operating infrastructure that Sybaris has developed in the Houston metropolitan area." About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operateS one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC, in Winter Park, Florida, expressed substantial doubt about University General's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative operating cash flows, and has negative working capital. University General reported a net loss of $2.38 million in 2011, following a net loss of $1.71 million in 2010. The Company's balance sheet at June 30, 2012, showed $127.52 million in total assets, $113.46 million in total liabilities and $14.05 million in total equity. UTSTARCOM HOLDINGS: Closes Divestiture of IPTV Business ------------------------------------------------------- UTStarcom Holdings Corp. successfully closed the divestiture of its IPTV business on Aug. 31, 2012. UTStarcom announced its intention to divest its IPTV equipment business on July 27, 2012, as part of a Board plan to transition the Company into higher growth, more profitable areas that the Board believes will enhance the value of the business. With the closure of the divestiture, the IPTV equipment business has become a privately-held, standalone company. Upon meeting the requirements for discontinued operations, UTStarcom will report results from the IPTV division separately as discontinued operations in the third quarter of 2012 and for all comparable periods. Also, Mr. Jack Lu has left UTStarcom as planned in order to lead the IPTV equipment business. Mr. Lu has also resigned from the Company's Board of Directors. Simultaneous with the closing, Mr. William Wong has assumed the positions of UTStarcom's Chief Executive Officer and director on the Board of Directors. In addition, Mr. Xiaoping Li, lead independent director, has been elected as Chairman of the Board by the directors of the Company. Mr. Wong brings more than 25 years of technology sector experience and has served in many executive positions, including as Chief Executive Officer of Borqs International, which produces software platforms for mobile operators and chip manufacturers. He also served on UTStarcom's Board from September 2010 until December 2011. "The completion of this transaction is a significant milestone for UTStarcom," said Mr. Xiaoping Li, Chairman of the Board. "It is an important step in streamlining the Company's product portfolio in favor of a dynamic set of businesses. We are pleased to complete it according to the timeline we originally envisioned, and to move on to the next phase of the Company's transformation." "We welcome Mr. Wong as UTStarcom's new CEO," continued Mr. Li. "He has been instrumental in developing the strategic initiatives we have taken to date, and has demonstrated long-term thinking that will be invaluable in leading UTStarcom to new levels of success. Also, we thank Mr. Lu for his leadership and wish him every success in developing the IPTV business into a market leading technology and service provider." Mr. William Wong, UTStarcom's new CEO, stated, "I am honored and excited to lead UTStarcom through its business transformation and build a more growth oriented business. We have taken an important step in closing the IPTV divestiture, but it is only the first step. I look forward to working with the Board and management team to find new ways of providing value to our customers and generating returns for our shareholders." About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. The Company's balance sheet at June 30, 2012, showed $538.42 million in total assets, $285.15 million in total liabilities and $253.27 million in total equity. VALENCE TECHNOLOGY: Amends List of Largest Unsecured Creditors -------------------------------------------------------------- Valence Technology, Inc., filed with the U.S. Bankruptcy Court for the Western District of Texas amended list of 20 largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Amount ---------------- --------------- ------ Tianjin Lishen Battery Joint-Stock Trade Debt $4,685,281 Co., Ltd. 6 Lanyuan Road Huayuan Hi-tech Industry park Tianjin 300384, PR China Carl Warden Loan $3,016,875 1516 Country Club Drive Los Altos, CA 94024 Krieg, Keller, Sloan & Reilly Professional Fees $661,229 555 Montgomery Street, 17the Floor San Francisco, CA 94111 Amperex Technology Ltd. Trade Debt $127,938 Kuehne & Nagel Logistics NV Trade Debt $95,802 Kuehne & Nagel, Inc. Trade Debt $88,929 PMB Helin Donovan, LLP Professional Fees $66,445 Krause & Weisert Professional Fees $34,811 Insight Direct Trade Debt $29,396 Next Innovation, Inc. Trade Debt $27,103 Ghedi International, Inc. Trade Debt $25,675 National Depo Litigation $22,539 McGinnis Lochridge & Kilgore, LLP Professional Fees $19,666 Host Analytics, Inc. Trade Debt $17,325 Pope, Shamsie & Dooley, LLP Professional Fees $14,533 Metal Conversion Tech, LLC Trade Debt $13,315 Kim & Chang Professional Fees $12,799 McFadden, Fincham Professional Fees $11,518 Techipower, Inc. Trade Debt $10,808 UNISITI-Shanghai Symphony Trade Debt $9,200 Telecom Co., Ltd. The amendment reflects changes to the amounts of the creditors' claims. 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. VISUALANT INC: Extends Expiration of Conv. Debentures to 2013 ------------------------------------------------------------- Visualant, Inc., entered into a Securities Purchase Agreement with Gemini Master Fund, Ltd., and Ascendiant Capital Partners, LLC, pursuant to which the Company agreed to issue $1.2 million of 10% convertible debentures due May 1, 2012. The Company received $1.0 million in cash related to the Agreement. Under the terms of the Agreement, the convertible debentures have a floor conversion price of $0.35 per share and include warrants totaling 2.4 million shares that are exercisable at a price of $0.50 per share for five years. All per share prices are subject to adjustment. On Aug. 16, 2012, the Company and Investors entered into Second Amendment to Securities Purchase Agreement and Debentures. The Amendment extended the maturity date of the convertible debentures from Sept. 30, 2012, to Sept. 30, 2013. In addition, the additional investment and participation rights as defined in the Agreement were extended from Sept. 30, 2012, to Sept. 30, 2013. On Aug. 28, 2012, the Company entered into a Warrant Purchase Agreement with Gemini Master Fund Limited and acquired the Gemini Warrant totaling 1.8 million shares, subject to adjustment, by paying $250,000 on Aug. 28, 2012, and agreeing to pay $250,000 on or before Nov. 30, 2012. About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on October 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million during the previous year. The Company's balance sheet at June 30, 2012, showed $6.84 million in total assets, $7.03 million in total liabilities, $28,350 in noncontrolling iterest, and a $220,669 total stockholders' deficit. The Company anticipates that it will record losses from operations for the foreseeable future. As of June 30, 2012, the Company's accumulated deficit was $13.1 million. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to the Company's financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to its financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Securities Purchase Agreement dated June 17, 2011, with Ascendiant Capital Partners, LLC, will terminate if the Company's common stock is not listed on one of several specified trading markets (which include the OTCBB and Pink Sheets, among others), if the Company files protection from its creditors, or if a Registration Statement on Form S-1 or S-3 is not effective. If the price or the trading volume of the Company's common stock does not reach certain levels, the Company will be unable to draw down all or substantially all of its $3,000,000 equity line of credit with Ascendiant. The maximum draw down amount every 8 trading days under the Company's equity line of credit facility is the lesser of $100,000 or 20% of the total trading volume of the Company's common stock for the 10-trading-day period prior to the draw down multiplied by the volume-weighted average price of the Company's common stock for that period. If the Company stock price and trading volume decline from current levels, the Company will not be able to draw down all $3,000,000 available under the equity line of credit. "If we are not able to draw down all $3,000,000 available under the equity line of credit or if the Securities Purchase Agreement is terminated, we may need to restructure our operations, divest all or a portion of our business, or file for bankruptcy," the Company said in its quarterly report for the period ended June 30, 2012. VYCOR MEDICAL: Extends 93.6-Mil. Shares Offering Until June 2013 ---------------------------------------------------------------- Vycor Medical, Inc., filed with the U.S. Securities and Exchange Commission a post-effective amendment no. 1 to the Registration Statement on Sept. 7, 2011, on Form S-1, which was declared effective Nov. 10, 2011, relating to the offering by selling shareholders of 93,602,221 shares of common stock par value $0.0001. The amendment was being filed to (1) extend the Company's offering date until June 30, 2013, and (2) include the audited financial statements for the years ended Dec. 31, 2011, and Dec. 31, 2010, and unaudited financial statements for the interim period ended June 30, 2012, and June 30, 2011. A copy of the amendment is available for free at: http://is.gd/PO8owI About Vycor Medical Boca Raton, Fla.-based Vycor Medical, Inc. (OTC BB: VYCO) -- http://www.VycorMedical.com/-- is a medical device company committed to making neurological brain, spinal and other surgical procedures safer and more effective. The Company's flagship, Patent Pending ViewSite(TM) Surgical Access Systems represent an exciting new minimally invasive access and retraction system that holds the potential for speedier, safer and more economical brain, spinal and other surgeries and a quicker patient discharge. Vycor's innovative medical instruments are designed to optimize neurosurgical site access, reduce patient risk, accelerate recovery, and add tangible value to the professional medical community. The Company reported a net loss of $4.77 millionin 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.41 million in total assets, $3.03 million in total liabilities, all current, and $383,410 in stockholders' equity. Paritz & Company, P.A., in Hackensack, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 annual results. The independent auditors noted that the Company has incurred a loss since inception, has a net accumulated deficit and may be unable to raise further equity. WARNER MUSIC: Units Enter Into Letter Agreements with Cinram ------------------------------------------------------------ On Aug. 31, 2012, Warner-Elektra-Atlantic Corporation and WEA International, Inc., each a wholly-owned subsidiary of Warner Music Group Corp., entered into letter agreements in connection with the US/Canada Manufacturing and PP&S Agreement, effective as of July 1, 2010, as amended, by and among WEA and Cinram International Inc., Cinram Manufacturing LLC and Cinram Distribution LLC and the International Manufacturing and the PP&S Agreement, effective as of July 1, 2010, as amended, by and among WEA International and Cinram International Inc., Cinram GmbH and Cinram Operation UK Limited, respectively. In June 2012, WEA and WEA International exercised their rights to terminate the Cinram Agreements. As a result of the termination of the Cinram Agreements, the terms of the US/Canada Transition Agreement, effective as of July 1, 2010, by and among WEA and Cinram International Inc., Cinram Manufacturing LLC and Cinram Distribution LLC and the International Transition Agreement, effective as of July 1, 2010, by and among WEA International and Cinram International Inc., Cinram GmbH and Cinram Operation UK Limited became operative and WEA, WEA International and Cinram were bound by the terms of those Transition Agreements. Pursuant to the Asset Purchase Agreement dated June 22, 2012, Cinram Group, Inc. (formerly Cinram Acquisition, Inc.), agreed to acquire substantially all of the assets used in the core businesses carried on by Cinram International Inc. and its affiliates in North America and Europe. In connection with the Sale Transaction, pursuant to the Letter Agreements and subject to consummation of the US Sale Transaction prior to Sept. 14, 2012, and the other terms and conditions set forth therein, WEA and WEA International agreed to consent to the Sale Transaction, rescind the earlier termination of the Cinram Agreements and reinstate the Cinram Agreements effective as of June 22, 2012. Upon reinstatement of the Cinram Agreements, the Cinram Agreements will be restored to their original terms and the Transition Agreements will no longer be operative at this time. Notwithstanding that reinstatement, if the European Sale Transaction has not been consummated by Dec. 31, 2012, WEA International will be entitled to terminate the International Agreement at that time. In addition, pursuant to the Letter Agreement, WEA agreed, upon the closing of the US Sale Transaction and the assumption and assignment of the US/Canada Agreement and the US/Canada Transition Agreement, to discuss in good faith with CGI a potential increase in certain fees under the US/Canada Agreement or potential changes in CGI's operations under the US/Canada Agreement that would lead to increased efficiencies and cost reductions for CGI. WEA and CGI agreed to endeavor in good faith to complete such discussions within 30 days of the closing of the Sale Transaction. Under the Cinram Agreements, Cinram supplies the Company with manufacturing and pick/pack/ship services in the United States, Canada and Central Europe. Copies of the Letter Agreements are available for free at: http://is.gd/IzcxSD http://is.gd/tNjV6i About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. On July 20, 2011, the Company notified the New York Stock Exchange, Inc., of its intent to remove the Company's common stock from listing on the NYSE and requested that the NYSE file with the SEC an application on Form 25 to report the delisting of the Company's common stock from the NYSE. On July 21, 2011, in accordance with the Company's request, the NYSE filed the Form 25 with the SEC in order to provide notification of that delisting and to effect the deregistration of the Company's common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. On August 2, 2011, the Company filed a Form 15 with the SEC in order to provide notification of a suspension of its duty to file reports under Section 15(d) of the Exchange Act. The Company continues to file reports with the SEC pursuant to the Exchange Act in accordance with certain covenants contained in the instruments governing the Company's outstanding indebtedness. The Company reported a net loss of $60 million on $1.40 billion of revenue for the six months ended March 31, 2012. The Company reported a net loss of $206 million on $2.86 billion of revenue for the combined 12 months ended Sept. 30, 2011, following a net loss of $145 million on $2.98 billion of revenue for the fiscal year ended Sept. 30, 2010. The Company's balance sheet at June 30, 2012, showed $5.16 billion in total assets, $4.20 billion in total liabilities and $961 million in total equity. WARNER SPRINGS: Case Conversion Hearing Set for Sept. 13 -------------------------------------------------------- There's a hearing scheduled Sept. 13, 2012, to consider a motion to convert the Chapter 11 case of Warner Springs Ranchowners Association to Chapter 7 liquidation or, in the alternative, appoint a Chapter 11 trustee. The motion was filed by the Pala Band of Mission Indians. According to Pala, among other things: a) there is a substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation; b) there is gross mismanagement of the estate; c) the Debtor failed to comply with orders and rules of the court; and d) there is unexcused failure to satisfy timely any filing or reporting requirement established by this title or by any rule applicable to the case. As reported by the Troubled Company Reporter on July 31, the Debtor filed an opposition to Pala's request. The Debtor claims that Pala's allegations are combination of biased, incorrect, misplaced and exaggerated statements. According to the Debtor, it has been in chapter 11 barely four months and, contrary to Pala's allegations, has been moving diligently forward to sell its valuable co-owned property consisting of more than 2,300 acres of unencumbered rural land. The Debtor explains the bankruptcy was filed to facilitate a sale of the co-owned property. Despite best efforts, and despite being under contract with Pala for over two years, the Debtor was not able to sell its co-owned property and close escrow pre-petition due, in part, to Pala's failure to cooperate with resolution of several contractual issues. The Debtor believes Pala's motivation in seeking conversion is simply to chill the market value of the property and potential interest from third parties in the hope that Pala will be able to acquire the property for something less than the pre-petition contract price. About Warner Springs Warner Springs Ranchowners Association, a California non-profit mutual benefit corporation, filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Daniel Silva, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. On July 19, 2012, the Bankruptcy Court entered an amended order approving the Debtor's application to employ Andersen Hilbert & Parker LLP as special counsel. The Debtor's schedules disclosed $14,079,894 in assets and $1,466,076 in liabilities as of the Chapter 11 filing. Warner Springs Ranchowners Association manages and co-owns 2,300 acres of unencumbered rural land known as the Warner Springs Ranch in San Diego County, California. The property has a 150-acre golf course, natural hot springs, 250 cottage style hotel rooms, tennis courts, swimming pools and a private airport. The Debtor co-owns the property with over 1,200 other individuals and entities. The Debtor has 54% of the undivided tenancy-in-common fee interests in the property. WARNER SPRINGS: UDI Owners Want to Sit on Official Committee ------------------------------------------------------------ The Ad Hoc Committee of UDI Owners/Creditors in the bankruptcy case of Warner Springs Ranchowners Association asks the U.S. Bankruptcy Court to order the appointment of a committee of creditors holding unsecured claims and consider UDI Owners for potential membership on the Official Committee. The Ad Hoc Committee consists of individuals who purchased undivided tenancy-in-common interests (UDIs) in the Warner Springs Ranch. The Debtor has characterized UDI Owners as equity security holders. According to the Debtor's schedules, the value of the UDIs held by the Debtor is approximately $11.275 million. The Ad Hoc Committee learned that the U.S. Trustee has decided not to consider or solicit any UDI Owners to sit on any committee, because, in the U.S. Trustee's belief, the UDI Owners are neither creditors nor equity security holders and, in any event, are adequately represented by the Debtor's board of directors. The Ad Hoc Committee claims that due to the factual circumstances of the case, all UDI Owners hold prepetition contingent unliquidated claims arising from those ownership rights. As such, the UDI Owners, especially those who have expressed a keen interest in serving on the Official Committee and economically have the most at stake in this bankruptcy case, are eligible to serve and should be considered and solicited by the U.S. Trustee for service on the Official Committee. Under the declaration of covenants, conditions, and restrictions for Warner Springs, each UDI Owner "shall have the right to use and occupy the [Ranch] at all times, subject only to the limitations upon such use and occupancy set forth in[,]" inter alia, the CC&Rs. There is no provision in the CC&Rs that implicitly or explicitly authorizes the Debtor or its board of directors -- with or without UDI Owners' consent -- to completely shut down all operations of the Ranch and restrict all access to the Ranch to UDI Owners. Prepetition the Debtor closed the physical operations of the Ranch to, not only the public, but to UDI Owners as well. According to the Debtor, the reason for the closure was to "prepar[e] for the close of escrow" in connection with the proposed sale of the Ranch to Pala Band of Mission Indians for $20.5 million. Pala owns 184 of the 984 UDIs held by UDI Owners. The Debtor did not seek consent of other UDI Owners to close the Ranch. The UDI Owners are represented by: Ali M.M. Mojdehi, Esq. Brian W. Byun, Esq. COOLEY LLP 4401 Eastgate Mall San Diego, CA 92121 Telephone: (858) 550-6000 Facsimile: (858) 550-6420 E-mail: amojdehi@cooley.com bbyun@cooley.com About Warner Springs Warner Springs Ranchowners Association, a California non-profit mutual benefit corporation, filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Daniel Silva, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as special counsel. The Debtor's schedules disclosed $14,079,894 in assets and $1,466,076 in liabilities as of the Chapter 11 filing. Warner Springs Ranchowners Association manages and co-owns 2,300 acres of unencumbered rural land known as the Warner Springs Ranch in San Diego County, California. The property has a 150-acre golf course, natural hot springs, 250 cottage style hotel rooms, tennis courts, swimming pools and a private airport. The Debtor co-owns the property with over 1,200 other individuals and entities. The Debtor has 54% of the undivided tenancy-in-common fee interests in the property. WOLFGANG CANDY: To Work Out Details on Asset Sale ------------------------------------------------- Brent Burkey at Central Penn Business Journal reports that the counsel representing Wolfgang Candy Co. In. in bankruptcy proceedings said the court-approved sale of assets of Wolfgang Candy has been delayed as the sides continue to work out details related to the transaction. The report notes, in August, a bankruptcy court approved a plan for the sale of company assets and a lease agreement for Wolfgang real property. There was some initial expectation the deal with Alabama-based Divine Serendipity LLC would close quickly after the court approval, but it did not. The report says the sides now anticipate the settlement will happen some time this month, said Wolfgang's counsel, Larry Young of York-based CGA Law Firm. Based in York, Pennsylvania, Wolfgang Candy Co., Inc., filed for Chapter 11 bankruptcy protection on March 13, 2012 (Bankr. M.D. Penn. Case No. 12-01427). Judge Mary D. France presides over the case. Lawrence V. Young, Esq., at CGA Law Firm, represents the Debtor. The Debtor listed assets of less than $50,000, and estimated debts of between $1 million and $10 million. WPCS INTERNATIONAL: Inks 2nd Amendment to Sovereign Credit Pact --------------------------------------------------------------- WPCS International Incorporated and its United States based subsidiaries entered into a second amendment to loan and security agreement with Sovereign Bank, N.A., pursuant to which the loan and security agreement, dated as of Jan. 27, 2012, by and among Sovereign, the Company and the Company's Subsidiaries, as amended pursuant to that first amendment to loan and security agreement dated May 3, 2012, was further amended. Pursuant to the Amendment, the Company and Sovereign agreed that: 1. The maximum available funds pursuant to the revolving line of credit was reduced from $6.5 million to $2 million; 2. The maximum available funds for letters of credit pursuant to the revolving line of credit was reduced from $2 million to $200,000; 3. The borrowing base under the Credit Agreement was amended to remove the greater of $750,000 or 40% of eligible inventory as a basis for borrowing; and 4. The Company reimbursed Sovereign for costs and expenses incurred as a result of the Amendment. A copy of the Second Amendment is available for free at: http://is.gd/zW0Mbb About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at April 30, 2012, showed $35.79 million in total assets, $29.91 million in total liabilities, and stockholders' equity of $5.88 million. WPCS reported a net loss attributable to the Company of $20.54 million for the year ended April 30, 2012, compared to a net loss attributable to the Company of $36.83 million during the prior fiscal year. * Bankruptcies Decline 14% in August, Commercial Cases Off More --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that bankruptcy filings in the U.S. during August were 13.7% fewer than the same month in 2011 and 26.7% below the identical period in 2010. According to the report, the 104,300 bankruptcies of all types last month put the country on track to record 1.25 million for 2012, or 9% fewer than 2011's total. Bankruptcies in August were the second-fewest this year. Filings have declined month by month since February, according to data compiled from court records by Epiq Systems Inc. The report relates that commercial bankruptcies declined at an even faster pace. Last month, commercial filings were 26% fewer than the same month in 2011 and the fewest since January 2008. Chapter 11 filings, where larger companies reorganize or sell assets, are set to number about 8,000 this year, or about 7% below 2011 and a 25% drop from 2010. The report notes that this year to date, filings are down in 49 states. States with the most filings per capita are Tennessee, Nevada and Georgia. Last year's 1.38 million bankruptcies were 11.7% fewer than the 1.56 million in 2010, which recorded the most bankruptcies since the record of 2.1 million set in 2005. The Bloomberg report recounts that in 2005, Americans filed for bankruptcy in advance of new laws making it more difficult for individuals to cancel debt. In the two weeks before the law changed, 630,000 American sought bankruptcy protection. * BOND PRICING -- For Week From Aug. 27 to 31, 2012 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AES EASTERN ENER 9.000 1/2/2017 15.500 AES EASTERN ENER 9.670 1/2/2029 9.500 AGY HOLDING COR 11.000 11/15/2014 47.000 AHERN RENTALS 9.250 8/15/2013 55.022 ALION SCIENCE 10.250 2/1/2015 61.925 AMBAC INC 6.150 2/7/2087 1.500 ATK-CALL09/12 6.750 4/1/2016 102.500 ATP OIL & GAS 11.875 5/1/2015 27.330 ATP OIL & GAS 11.875 5/1/2015 26.500 ATP OIL & GAS 11.875 5/1/2015 26.500 BAC-CALL09/12 6.000 9/15/2026 100.000 BAC-CALL09/12 6.250 9/15/2036 100.150 BDC-CALL09/12 7.000 3/15/2017 103.850 BETHEL BAPTIST 7.900 7/21/2026 11.000 BUFFALO THUNDER 9.375 12/15/2014 35.000 DIRECTBUY HLDG 12.000 2/1/2017 20.375 DIRECTBUY HLDG 12.000 2/1/2017 20.375 EASTMAN KODAK CO 7.000 4/1/2017 14.375 EASTMAN KODAK CO 7.250 11/15/2013 15.500 EASTMAN KODAK CO 9.200 6/1/2021 9.100 EASTMAN KODAK CO 9.950 7/1/2018 23.354 EDISON MISSION 7.500 6/15/2013 54.000 ENERGY CONVERS 3.000 6/15/2013 46.000 GEOKINETICS HLDG 9.750 12/15/2014 39.950 GLB AVTN HLDG IN 14.000 8/15/2013 30.000 GLOBALSTAR INC 5.750 4/1/2028 42.563 GMX RESOURCES 4.500 5/1/2015 42.450 GMX RESOURCES 5.000 2/1/2013 70.000 HAWKER BEECHCRAF 8.500 4/1/2015 15.750 HAWKER BEECHCRAF 8.875 4/1/2015 17.250 HAWKER BEECHCRAF 9.750 4/1/2017 0.875 HFC-CALL09/12 8.500 9/15/2016 104.395 KV PHARM 12.000 3/15/2015 31.000 KV PHARMA 2.500 5/16/2033 1.900 KV PHARMA 2.500 5/16/2033 2.875 LEHMAN BROS HLDG 0.250 12/12/2013 21.875 LEHMAN BROS HLDG 0.250 1/26/2014 21.875 LEHMAN BROS HLDG 1.000 10/17/2013 21.875 LEHMAN BROS HLDG 1.000 3/29/2014 21.875 LEHMAN BROS HLDG 1.000 8/17/2014 23.875 LEHMAN BROS HLDG 1.000 8/17/2014 21.875 LEHMAN BROS HLDG 1.250 2/6/2014 21.875 LEHMAN BROS HLDG 1.500 3/29/2013 21.875 LEHMAN BROS INC 7.500 8/1/2026 7.550 LIFECARE HOLDING 9.250 8/15/2013 42.750 MANNKIND CORP 3.750 12/15/2013 62.000 MASHANTUCKET PEQ 8.500 11/15/2015 10.171 MASHANTUCKET PEQ 8.500 11/15/2015 9.250 MASHANTUCKET TRB 5.912 9/1/2021 9.250 MF GLOBAL LTD 9.000 6/20/2038 39.900 MGIC INVT CORP 9.000 4/1/2063 21.843 NEWPAGE CORP 10.000 5/1/2012 4.000 NGC CORP CAP TR 8.316 6/1/2027 14.000 PATRIOT COAL 3.250 5/31/2013 12.500 PENSON WORLDWIDE 8.000 6/1/2014 37.215 PLATINUM ENERGY 14.250 3/1/2015 50.000 PMI CAPITAL I 8.309 2/1/2027 0.500 PMI GROUP INC 6.000 9/15/2016 21.660 POWERWAVE TECH 3.875 10/1/2027 7.487 POWERWAVE TECH 3.875 10/1/2027 7.750 REAL MEX RESTAUR 14.000 1/1/2013 46.450 RESIDENTIAL CAP 6.500 4/17/2013 24.250 RESIDENTIAL CAP 6.875 6/30/2015 20.500 SAVIENT PHARMA 4.750 2/1/2018 25.000 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 10.250 11/1/2015 28.306 TEXAS COMP/TCEH 10.250 11/1/2015 28.125 TEXAS COMP/TCEH 10.250 11/1/2015 28.270 TEXAS COMP/TCEH 15.000 4/1/2021 37.500 TEXAS COMP/TCEH 15.000 4/1/2021 35.125 THQ INC 5.000 8/15/2014 58.500 TIMES MIRROR CO 7.250 3/1/2013 32.500 TRAVELPORT LLC 11.875 9/1/2016 38.750 TRAVELPORT LLC 11.875 9/1/2016 37.000 TRIBUNE CO 5.250 8/15/2015 34.000 USEC INC 3.000 10/1/2014 37.900 WCI COMMUNITIES 4.000 8/5/2023 0.125 WCI COMMUNITIES 4.000 8/5/2023 0.125 ********* 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 ***