/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120918.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 18, 2012, Vol. 16, No. 260 Headlines 44 CP: Parkway Bank Wants Chapter 11 Bankruptcy Case Dismissed 2655 BUSH: Court Dismisses Chapter 11 Bankruptcy Case A&S GROUP: Sec. 341 Creditors' Meeting Set for Oct. 17 ADS WASTE: Moody's Assigns 'B2' Corp. Family Rating AIRTOUCH COMMUNICATIONS: Had $2.9-Mil. Net Loss in Second Quarter ALFRED SCIUBBA: Meeting to Form Creditors' Panel on Sept. 27 AMERICAN AIRLINES: Proposes Claims Objection Procedures AMERICAN AIRLINES: Wins OK to Buy One Boeing 737-823 Plane AMERICAN AIRLINES: Haynes to Represent in Port Authority Dispute AMERICAN AIRLINES: Committee to Review 'Whistleblower' Claims AMERICAN AIRLINES: To Pay for SolomonEdwards' Fees AMERICAN AIRLINES: $48.2 Million in Fees Negotiated Down by 3% AMERICAN GILSONITE: $10MM Add-On Won't Impact Moody's 'B3' CFR AMERICAN GILSONITE: S&P Keeps 'B' Rating on $270MM Senior Notes AMTRUST FINANCIAL: 6th Cir. Finds Cease-And-Desist Order Ambiguous ANTS SOFTWARE: CEO Receives 408,868 Common Shares for Licenses APOLLO MEDICAL: Had $3.2-Mil. Net Loss in July 31 Quarter ATP OIL: S&P Withdraws 'D' Corporate Credit Rating BEECHWOOD CHEESE: In Receivership, Owes Nearly $1.2 Million BEHRINGER HARVARD: Wants Plan Filing Period Extended Until Jan. 9 BEHRINGER HARVARD: Has OK to Hire FTI as Financial Advisor BEHRINGER HARVARD: Has OK to Hire McRoberts for Appraisal Services BELLWEST HOLDINGS: Chapter 11 Status Hearing Set for Oct. 11 BERKELEY COFFEE: Had $73,700 Net Loss in July 31 Quarter BERNARD L. MADOFF: Trustee Asks Rakoff to Change Mind on 16 Suits BIG SKY FARMS: In Chapter 15, Canadian Insolvency Proceedings BIG SKY FARMS: Chapter 15 Case Summary BIOMARIN PHARMACEUTICAL: S&P Withdraws 'B' Corp. Credit Rating BIONEUTRAL GROUP: Had $642,100 Net Loss in July 31 Quarter BLITZ USA: Court Approves $9.5 Million Asset Sale to Scepter BLUEGREEN CORP: Completes $100 Million Term Securitization BONDS.COM GROUP: Director Steps Down, Citing Career Change BROADWAY FINANCIAL: 2011 Report Restated; Losses Hiked to $14.3MM CABLEVISION SYSTEMS: Fitch Rates New Sr. Unsecured $500MM Notes B- CABLEVISION SYSTEMS: Moody's Rates $500-Mil. Bond Issuance 'B1' CABLEVISION SYSTEMS: S&P Keeps 'B+' Rating on $750MM Senior Notes CBS I LLC: Has Nod to Employ Marquis Aurbach as Attorneys CBS I LLC: Dmitri Dalacas Continues as Attorney for State Suits CBS I LLC: U.S. Trustee Unable to Form Creditors' Committee CHAMPION INDUSTRIES: Incurs $593,000 Net Loss in July 31 Quarter CITIZENS CORP: Lowery Gets Judge's Approval to Pursue Claim CITIZENS REPUBLIC: Moody's Reviews Ratings for Upgrade CLARE OAKS: Bondholders Recovering 45% Under Plan CLEAR CHANNEL: Bank Debt Trades at 19% Off in Secondary Market CLEARWIRE CORP: Intel Owns 14.3% of Class A Shares as of Aug. 29 CLEARWIRE CORP: Sprint Nextel Owns 54.3% of Class A Shares CLINICA REAL: Files for Chapter 11 Amid Dispute With State Farm COCOPAH NURSERIES: Latin Lady Leaves Creditors' Committee COCOPAH NURSERIES: Creditors' Panel Can Hire Allen Sala as Counsel COCOPAH NURSERIES: Can Hire Focus Management as Financial Advisor COCOPAH NURSERIES: Has Nod to Hire Squire Sanders as Attorneys COLONIAL REALTY: Moody's Raises Sr. Unsecured Rating From 'Ba1' COMARCO INC: Reports $151,000 Net Income in July 31 Quarter COMMUNITY TOWERS: Has OK to Expand Murray's Scope of Employment CONVERTED ORGANICS: Has 469.9 Million Outstanding Common Shares COOPERATIVE COMMS: Settles Dispute With Verizon Communications COPYTELE INC: Had $629,100 Net Loss in July 31 Quarter CORELOGIC INC: Moody's Affirms 'Ba2' Corp. Family Rating DELPHI CORP: Moody's Says New Share Repurchase Credit Negative DETROIT, MI: Governor Wants to Put Belle Isle Under State Control DEX MEDIA WEST: Bank Debt Trades at 36% Off in Secondary Market DIALOGIC INC: Effects a 5-for-1 Reverse Stock Split DIGITAL DOMAIN: Lands $11.8 Million Loan From Noteholders DISTHENE GROUP: Fights Order Putting Firm in Receivership DOLE FOOD: Possible Business Sale No Impact on Moody's 'B1' CFR EASTGATE TOWER: Final Cash Collateral Hearing on Oct. 3 EASTGATE TOWER: Files Schedules of Assets and Liabilities EASTMAN KODAK: Says It May Retain Technology Rather Than Sell ENCOMPASS DIGITAL: Moody's Lifts Credit Facilities Rating to B2 ENCOMPASS DIGITAL: S&P Rates Proposed $16.5MM Term Loan 'B+' ESSAR STEEL: Moody's Confirms 'Caa1' CFR/PDR; Outlook Negative ESSAR STEEL: S&P Raises CCR to 'CCC+' on Term Loan Negotiation FIRST DATA: Plans to Offer $250 Million Senior Secured Notes FOXCO ACQUISITION: S&P Keeps 'B+' Rating on $765MM Credit Facility FTS INTERNATIONAL: Moody's Confirms 'B2' CFR; Outlook Negative FTS INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating GEOMET INC: Hein & Associates Succeeds Deloitte as Accountant GLOBAL TECHNOVATIONS: 6th Cir. Affirms Ruling Over Onkyo Deal GREYSTONE LOGISTICS: Swings to $2.5MM Net Income in Fiscal 2012 HARMAN INT'L: Moody's Reviews 'Ba1' Rating for Possible Upgrade HAWKER BEECHCRAFT: Bank Debt Trades at 27% Off in Secondary Market HENRY VOGT: Files for Chapter 11 Bankruptcy in Kentucky HERON LAKE: Had $379,300 Net Loss in July 31 Quarter HOSTESS BRANDS: Teamsters Vote to Ratify Changes to CBA IDEARC INC: Dallas Judge Trims Suit Against Verizon Over Spinoff IMAGING3 INC: Files for Chapter 11 Amid Shareholder Dispute INOVA TECHNOLOGY: Delays Form 10-Q for July 31 Quarter ISLE OF CAPRI CASINOS: S&P Raises Rating on $300MM Notes to 'B' JARDEN CORP: Moody's Rates $450-Mil. Sr. Subordinated Notes 'B2' JAMMIN JAVA: Had $986,200 Net Loss in July 31 Quarter JEFFERSON COUNTY, AL: No Deadline to File Debt Plan K-V PHARMACEUTICAL: 3 Senior Noteholders Have Power on Plan K2 PURE: Moody's Withdraws 'Caa1' Rating on $122-Mil. Term Loan LADDER CAPITAL: Moody's Assigns 'Ba3' Sr. Unsecured Debt Rating LADDER CAPITAL: S&P Gives 'BB-' Rating on $300M Unsecured Notes LAMKIN PRODUCTION: Seeks Appointment of Receiver LEHMAN BROTHERS: To Sell Real Estate Assets LEHMAN BROTHERS: BNY Mellon Fails to End Securities Lawsuit LEHMAN BROTHERS: Trustee Balks at Elliot Bid for Quick Liquidation LEHMAN BROTHERS: Officemax Has Deal to Extinguish Notes Liability LODGENET INTERACTIVE: Mark Cuban Lowers Equity Stake to 7.8% LSP ENERGY: Wins Plan Exclusivity Extension MANOMAY LLC: Files for Chapter 11 Bankruptcy Protection MARITIMES & NORTHEAST: Moody's Corrects August 28 Rating Release MARQUETTE TRANSPORTATION: Moody's Affirms 'B2' CFR; Outlook Neg. MARSICO HOLDINGS: Moody's Cuts Corporate Family Rating to 'Ca' MASQUERADE WINE: Court Confirms Plan That Pays 100% to Unsecureds MEDICAL DEVELOPMENT: Wells Fargo Gets Receiver, $30MM Judgment MERIDIAN MORTGAGE: Singer, Booking Agent Face Clawback Suit MERRIMACK PHARMACEUTICALS: Board Approves 2012 Bonus Program MGM RESORTS: Fitch Rates Proposed Sr. Unsec. Notes Due 2020 'B-' MGM RESORTS: Moody's Rates $700-Mil. Senior Unsecured Notes 'B3' MGM RESORTS: Prices $1 Billion in Unsecured Debt at Par MICHIGAN HIGHER: Moody's Cuts Ratings on Six Bond Classes to Ba3 NATURAL PORK: AgStar Pushes for Expedited Sale NEW BREED HOLDING: S&P Assigns 'B' Corporate Credit Rating NORTHAMPTON GENERATING: Seeks Fifth Exclusivity Extension OLLIE'S HOLDINGS: Moody's Assigns 'B2' CFR; Outlook Stable OLLIE'S HOLDINGS: S&P Assigns 'B' Corporate Credit Rating OMNICARE INC: S&P Affirms 'BB' Corp. Credit Rating; Outlook Stable PATRIOT COAL: U.S. Trustee Lobbies Against Equity Committee PEAK RESORTS: Wins Approval of Financing from FDIC PCS EDVENTURES!.COM: Had $355,800 Net Loss in June 30 Quarter PEREGRINE FINANCIAL: Wasendorf Admits Stealing at Least $100-Mil. PICCADILLY RESTAURANTS: Status Conference Set for Jan. 29 PINNACLE AIRLINES: Union-Busting Motions Filed under Seal PINNACLE AIRLINES: Pilots Say Rejection an Ill-Advised Distraction PURATONE: Manitoba Pork Producer Files for Bankruptcy REALOGY CORP: Extends Employment of Chairman & CEO Until 2016 RESIDENTIAL CAPITAL: $15-Mil. Sale Considered De Minimis RESIDENTIAL CAPITAL: Committee Proposes Info Sharing Protocol RESIDENTIAL CAPITAL: Examiner Wins OK for Mesirow as Advisor RESIDENTIAL CAPITAL: Committee Retains EPIQ as Info Agent RESIDENTIAL CAPITAL: Plan Filing Exclusivity Extended to Dec. 20 RESIDENTIAL CAPITAL: Lease Decision Deadline Moved to Dec. 10 REVEL ENTERTAINMENT: Bank Debt Trades at 21% Off REYNOLDS GROUP: Moody's Rates New $2.5BB Sr. Secured Loans 'B1' REYNOLDS GROUP: S&P Gives 'B+' Rating on Secured Notes Due 2020 RG STEEL: Hilco & CDC JV Closes Purchase of Baltimore Mill ROTECH HEALTHCARE: Borrows $10-Mil. Under Credit Suisse Facility SAMSON RESOURCES: S&P Affirms 'B+' CCR; Outlook Revised to Neg SBA COMMUNICATIONS: S&P Rates $300MM Term Loan 'BB' SEARS HOLDINGS: Contributes $203 Million to Pension Plan SP NEWSPRINT: Sold, Converted to Chapter 7 Liquidation SPRINT NEXTEL: Owns 54.3% Class A Shares of Clearwire STAFFORD RHODES: Lenders Move to Dismiss Bankruptcy Cases TESORO CORP: Moody's Rates $925-Mil. Sr. Unsecured Notes 'Ba1' TITAN PHARMACEUTICALS: Inks Option Pact to License Probuphine TRAINOR GLASS: Wants Plan Filing Period Extended to Nov. 9 TRIBUNE CO: Bank Debt Trades at 24% Off in Secondary Market TRI-VALLEY CORP: U.S. Trustee Appoints 3-Member Committee TRUMAN BANK: Closed; Simmons First National Bank Assumes Deposits TUTOR PERINI: Moody's Cuts Corporate Family Rating to 'Ba3' UNITEK GLOBAL: S&P Keeps 'B' Rating on $135MM Term Loan Facility UNIVISION COMMUNICATIONS: Moody's Rates $300MM 1st Lien Notes B2 UNIVISION COMMUNICATIONS: S&P Keeps 'B+' Rating on $925MM Notes US XPRESS: Moody's Rates $230-Mil. Sr. Secured Facilities 'B2' VALEANT PHARMACEUTICALS: Moody's Confirms Ba3 CFR; Outlook Neg. VALENCE TECHNOLOGY: Eyes Ch.11 Exit This Year; $10MM Loan Okayed WATERWAYS OF MUSKOKA: In Receivership After Running Out Money WPCS INTERNATIONAL: Reports $993,700 Net Income in July 31 Quarter WYLDFIRE ENERGY: Has Court's Nod to Hire Ron L. Yandell as Counsel WYLDFIRE ENERGY: Files Schedules of Assets and Liabilities * Chelsea Targets Two More Properties With Receivership Program * Resort Moves to Resolve Clash Over Arizona Biltmore Villas * Moody's Says US Pharma Research Companies' Profits Will Lag * Moody's Updates Study of Default Rates by Regional Governments * Moody's Says Debt Ratio Tests Have Unequal Investor Protection * Moody's Changes US Life Insurance Outlook to Negative * Moody's Says Export Growth Won't Offset Domestic Declines * First Circuit Appoints Diane Finkle as R.I. Bankruptcy Judge * Large Companies With Insolvent Balance Sheets ********* 44 CP: Parkway Bank Wants Chapter 11 Bankruptcy Case Dismissed -------------------------------------------------------------- Parkway Bank and Trust, Company, asks the U.S. Bankruptcy Court for the District of Arizona to dismiss the bankruptcy case of 44 CP I Loan, LLC, and 44 CP II Loan, LLC, or, in the alternative, to lift the automatic stay. Parkway claims that both Chapter 11 bankruptcies were filed in bad faith in order to frustrate the bank's rights and ability to foreclose on the 44th & Camelback real estate. Parkway says that it is not a creditor of the 44 CP entities. It loaned funds to 44th & Camelback Property, LLC, which is secured by a first deed of trust in the real estate commonly known as 44th & Camelback. The Borrower continues to owe a debt to the 44 CP Entities. Parkway states that prior to the bankruptcy of Mortgages, Ltd., and prior to the Parkway loan, Mortgages made certain loans to the Borrower secured by a deed of trust on the Property. The proceeds of the Parkway loan were remitted to Mortgages to reduce the then outstanding balance of the debt owed by Borrower to Mortgages. As the agent for certain specified beneficiaries, Mortgages entered into a subordination agreement with Parkway on March 12, 2008, whereby the lien of Mortgages was expressly subordinated to the lien of Parkway, resulting in Parkway having a properly perfected first lien on the Property. Parkway would not have made the loan to the Borrower without the express subordination of the then existing Mortgages deed of trust. According to Parkway, the Borrower executed a Promissory Note in favor of Parkway in the original principal amount of $18,500,000 as of Feb. 22, 2008. Contemporaneous with the execution of the Note, the Borrower signed a Deed of Trust granting a lien on the Property in favor of Parkway. "There is no dispute that Parkway holds a properly perfected first lien on the Property. There also is no dispute as to the validity and effectiveness of the Subordination Agreement," Parkway says. Parkway had scheduled a trustee's sale of the Property to occur on July 11, 2012. According to the Motion to Transfer Case Assignment filed by the 44 CP Entities, on July 9, 2012, the ML Manager LLC caused the 44 CP Entities to each file separate petitions for relief under Chapter 11. "It appears as though the bankruptcy petitions were filed by or on behalf of the 44 CP Entities in order to prevent Parkway from concluding its trustee's sale of the Property. In fact, a lawyer representing the 44 CP Entities stated his clients would 'allow' Parkway to foreclose on the Property if the 44 CP Entities would receive 10% of the 'net sale proceeds' from the deed of trust sale or a subsequent sale of the Property by Parkway. The message was clear: pay us something, even though we are a junior lender not entitled to receive anything until you are paid in full, or we will file Chapter 11 for the 44 CP Entities," Parkway alleges. On July 23, 2012, the 44 CP Entities each filed their Schedules & Statements of Financial Affairs with the Court. 44 CP I reports that it owns no real property, no personal property except a 77.005% interest in the Note and Deed of Trust secured by real property located at 44th Street and Camelback Road in Phoenix, Arizona, and no executory contracts or unexpired leases. In its Schedules, 44 CP II states that it owns no real property, no personal property but a 92.324% interest in the Note and Deed of Trust secured by real property located at 44th Street and Camelback Road in Phoenix, Arizona, and no executory contracts or unexpired leases. In their Schedules, both 44 CP Entities report only two alleged creditors: the Maricopa County Treasurer and Parkway. In their Statement of Financial Affairs, both 44 CP Entities report that they have had no real business operations. Both admit that, among other things, they have had no income, never made any payments to creditors, there have been no suits, administrative proceedings, executions, garnishments or attachments against to them. "The value of the Property is substantially less than the $21,251,444.46 due and owing to Parkway as of the date of the filing of the bankruptcy petitions by the 44 CP Entities. Based on a cursory review of their Schedules, neither 44 CP Entity has any means to maintain or satisfy a Chapter 11 Plan, Parkway claims. Parkway is represented by: TIFFANY & BOSCO, P.A. Christopher R. Kaup J. Daryl Dorsey Third Floor Camelback Esplanade II 2525 East Camelback Road Phoenix, Arizona 85016-4237 E-mail: crk@tblaw.com jdd@tblaw.com About 44 CP I & II 44 CP I Loan LLC and 44 CP II Loan LLC filed bare-bones Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-15286 and 12-15287) in Phoenix on July 9, 2012. The Debtors each estimated assets and debts of $10 million to $50 million. Judge Eileen W. Hollowell oversees the case. Mark Winkleman, as chief operating officer, signed the Chapter 11 petition. The Debtors are represented by Cathy L. Reece, Esq., at Fennemore Craig, P.C. 2655 BUSH: Court Dismisses Chapter 11 Bankruptcy Case ----------------------------------------------------- The Hon. Thomas E. Carlson of the U.S. Bankruptcy Court has dismissed 2655 Bush LLC's Chapter 11 bankruptcy case. The Debtor sought the dismissal of its Chapter 11 case. The Debtor, a single asset real estate, completed the sale of its real property commonly known as 2655 Bush Street, San Francisco, California. The sale closed Aug. 16, 2012. Through orders entered on Aug. 13, 2012, the Court authorized the sale of the Debtor's asset and disbursement of the proceeds of sale in the satisfaction of all secured and unsecured claims against the Debtor's estate. About 2655 Bush San Francisco, California-based 2655 Bush LLC owns a building and associated parking garage located at 2655 Bush Street, at the intersection of Divisadero Street, in San Francisco, California. 2655 Bush LLC filed for Chapter 11 (Bankr. N.D. Calif. Case No. 12-30388) on Feb. 8, 2012. Judge Thomas E. Carlson presides over the case. The company disclosed assets of $15.04 million and liabilities of $12.4 million. A&S GROUP: Sec. 341 Creditors' Meeting Set for Oct. 17 ------------------------------------------------------ The U.S. Trustee for the Northern District of Georgia in Atlanta will hold a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of A&S Group, Inc., on Oct. 17, 2012, at 4:00 p.m. at Hearing Room 367, Atlanta. Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12- 72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Sami Durukan, president. ADS WASTE: Moody's Assigns 'B2' Corp. Family Rating --------------------------------------------------- Moody's Investors Service assigned ratings, including a B2 Corporate Family Rating, to ADS Waste Holdings, Inc. ("ADS"), the entity through which Veolia ES Solid Waste, Inc. will be acquired in a leveraged transaction and combined with Advanced Disposal Services, Inc. (Ba3, rating under review) and Interstate Waste Services (unrated). The transaction's initial financial leverage (debt to EBITDA mid 6x range, Moody's adjusted) is high for the rating but should decline as synergies from the business combination permit earnings growth and debt reduction. The rating outlook is stable. Ratings assigned: Corporate Family, B2 Probability of Default, B2 $300 million first lien revolver due 2017, assigned at B1, LGD3, 33% $1,650 million first lien term loan due 2019, assigned at B1, LGD3, 33% $800 million senior unsecured notes due 2020, assigned at Caa1, LGD5, 86% Rating Outlook, Stable Ratings Rationale The B2 Corporate Family Rating balances high financial leverage and execution risk stemming from the planned integration of the three businesses against the non-discretionary nature of solid waste demand, the planned organization's good scale and margin potential, and a flexible financial position afforded from the large revolving credit line planned. Continued modest improvement of the U.S. economy should yield a reasonably supportive, though not robust, operating environment for undertaking the business combination. Breadth of the resulting solid waste network should permit route consolidation while elimination of duplicative administrative staff should yield better overhead efficiencies. A particularly important aspect of the restructuring plan will be ADS' plan to address weak performance levels at Interstate Waste Services, where a competitive market environment has historically generated sub par EBITDA margins. If successful in the restructuring, EBITDA margin growth versus trailing performance of the individual entities in the 200 bps to 300 bps range seems probable. A pre-funded $53 million restructuring cost reserve, the initial revolver borrowing availability of about $220 million (after letters of credit) and ample covenant headroom should offer enough financial flexibility to focus on the near-term operational undertakings. Geographic diversity across the U.S. South, Northeast and Midwest helps minimize impact from regional weakness on the overall company. However, room for executional error will be low because if ADS cannot achieve the planned cost synergies or if revenue targets prove to be optimistic, interest costs and capital maintenance spending will likely constrain free cash flow to levels that permit only a minimal level of debt reduction, which would be inconsistent with the leverage reduction envisioned by the B2 CFR. The stable rating outlook considers an adequate liquidity profile, an operational depth of the planned management team that supports integration prospects, and scheduled near-term debt amortizations of only about $17 million. The outlook anticipates the ratio of debt to EBITDA declining to the mid 5x range by mid 2014. Beyond the expected earnings driven debt prepayments anticipated, ability to alternatively address the performance drag of Interstate Waste Services' historically lower margin levels through divestiture of underperforming non-core markets factors into the outlook. Upward rating momentum would depend on debt to EBITDA sustained in the mid-4x range with EBITDA to interest approaching 3x. Downward rating pressure would develop with failure to demonstrate operating performance that enables leverage reductions. Specifically, if the prospect of debt to EBITDA below the mid 5x range by mid 2014 seems unlikely or if EBITDA to interest remains below 2x a downgrade of the rating could occur. A weakened liquidity profile, such as from tightening covenant compliance headroom or sustained dependence on the revolver, would also negatively pressure the rating. The transaction will result in the payout of all the existing rated debt of Advanced Disposal Services, Inc. Following close of the transaction Moody's expects to withdraw all the ratings of Advanced Disposal Services, Inc. The principal methodology used in rating ADS Waste Holdings, Inc. was the Solid Waste Management Industry Methodology published in February 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ADS Waste Holdings, Inc. will be a vertically integrated provider of non-hazardous solid waste disposal, transfer, recycling and collection services to commercial, industrial, municipal and residential customers in the Northeast, Southeast and Midwest regions of the United States. Revenues over the last twelve months ended June 30, 2012 of the combined entities were about $1.4 billion. The company will be owned by entities of financial sponsor Highstar Capital. AIRTOUCH COMMUNICATIONS: Had $2.9-Mil. Net Loss in Second Quarter ----------------------------------------------------------------- Airtouch Communications, Inc., formerly Waxess Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.9 million on $545,444 of net revenue for the three months ended June 30, 2012, compared with a net loss of $2.0 million on $250,499 of net revenue for the same period during the prior year. The Company reported a net loss of $5.0 million on $773,667 of net revenue for the six months ended June 30, 2012, compared with a net loss of $4.3 million on $477,217 of net revenue for the same period a year ago. For the six months ended June 30, 2012, net cash used from operations was $4.8 million [2011 - $2.8 million]. The use was primarily due to net operating losses attributable to AirTouch Communications, Inc., of $5.1 million. The Company's balance sheet at June 30, 2012, showed $4.7 million in total assets, $1.9 million in total liabilities and stockholders' equity of $2.8 million. A copy of the Form 10-Q is available for free at: http://is.gd/sY8our AirTouch Communications, Inc., formerly Waxess Holdings, Inc., is a technology firm, located in Newport Beach, Calif., that was incorporated in 2008 and designs innovative and state-of-the-art wireless routers, stationary signal-enhanced cell phones, and ?Triple Play' (Voice/Data/Video over IP) portals. The Company offers its HomeConneX (R) products through the dealer network of a major wireless carrier and its SmartLinX TM products through various distributors in the US and Mexico. * * * As reported in the TCR on March 26, 2012, Anton & Chia, LLP, in Irvine, California, expressed substantial doubt about Waxess Holdings' 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 sustained accumulated losses from operations totaling $16 million at Dec. 31, 2011. ALFRED SCIUBBA: Meeting to Form Creditors' Panel on Sept. 27 ------------------------------------------------------------ Roberta A. DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting on Sept. 27, 2012, at 2:45 p.m. in the bankruptcy case of Alfred Sciubba, 3rd, and Cheryl Sciubba. The meeting will be held at: United States Trustee's Hearing Room Bridge View 800-840 Cooper Street, Suite 102 Camden, NJ 08102 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Alfred Sciubba, 3rd, and Cheryl Sciubba filed a chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 12-30952) on Aug. 23, 2012. AMERICAN AIRLINES: Proposes Claims Objection Procedures ------------------------------------------------------- AMR Corp. asked the U.S. Bankruptcy Court for the Southern District of New York to approve a process for filing omnibus objections to claims. Approximately 13,000 proofs of claim have been filed by claimants to recover as much as $292 billion from AMR and its affiliated debtors. The company plans to file omnibus objections to many of those claims and start the claims reconciliation process so that it can finally propose a Chapter 11 plan. Under the proposed procedures, AMR will file omnibus objections to no more than 100 claims at a time. The company will also serve a notice of the omnibus objection on each of the affected claimants, or a complete copy of it upon the request of a claimant. The notice would include a description of the basis of the objection, identification of the claims that are the subject of the objection and other information. The procedures are detailed in a proposed order, which can be accessed for free at http://is.gd/gp12mz A court hearing to consider approval of the procedures is scheduled for September 20. Objections are due by September 13. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wins OK to Buy One Boeing 737-823 Plane ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York issued an order authorizing American Airlines Inc. to purchase from The Boeing Company a Boeing 737-823 aircraft bearing U.S. Registration No. N901NN. The court order also authorized the airline to enter into agreements with International Lease Finance Corp. in connection with the sale and leaseback of the aircraft. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Haynes to Represent in Port Authority Dispute ---------------------------------------------------------------- AMR Corp. has filed a motion seeking the revision of Judge Sean Lane's order, which approved the hiring of Haynes and Boone LLP. The company seeks to include in the order the firm's ordinary course representation of American Airlines, Inc. in the defense of a cross-claim filed by the Port Authority of New York and New Jersey in Bronx County, New York. The proposed revision, if approved, would allow AMR to compensate the firm for the services it provided in connection with the lawsuit. A court hearing is scheduled for September 20. Objections are due by September 13. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Committee to Review 'Whistleblower' Claims ------------------------------------------------------------- The committee of AMR Corp.'s unsecured creditors seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to review a letter from a certain Brian McDaniel. Mr. McDaniel submitted the letter to the bankruptcy court on July 12 requesting that it review the Internal Revenue Service's denial of his request for turnover of documents related to AMR. In the letter, Mr. McDaniel identifies himself as a whistleblower. The letter, which reportedly contains confidential information, was filed under seal. John Wm. Butler Jr., Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York, said the committee needs a copy of the letter to investigate the "acts and conduct" of AMR and its affiliated debtors. "The fact that McDaniel sent a letter to this court identifying himself as a whistleblower implies that McDaniel has made allegations of wrongdoing by the debtors or their agents," Mr. Butler said in a court filing. A court hearing is scheduled for September 20. Objections are due by September 13. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: To Pay for SolomonEdwards' Fees -------------------------------------------------- AMR Corp. asked Judge Sean Lane to revise his order which approved the hiring of Deloitte Financial Advisory Services LLP as its consultant. The company proposed to revise the order dated April 25, 2012, to provide that Deloitte FAS will pass through SolomonEdwards' fees and expenses to AMR through July 31, 2012. The services provided by the subcontractor for AMR are akin to those rendered by "ordinary course" temporary staffing employees, which do not require a separate employment application, according to AMR lawyer, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in New York. A court hearing is scheduled for September 20. Objections are due by September 13. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: $48.2 Million in Fees Negotiated Down by 3% -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that at the AMR Corp. hearing in bankruptcy court on Sept. 20, 19 professional firms will be asking the bankruptcy judge in New York to approve $47 million in fees for four months of work spanning the period from Nov. 29 when the case began through the end of March. According to the report, the fee examiner appointed by the bankruptcy court reviewed the fee requests and negotiated 3% in reductions from the combined original requests of $48.2 million. The agreed reductions total $1.47 million. The largest fee request of $15.3 million was lodged by Weil Gotshal & Manges LLP, the airline's chief lawyers. Mr. Weil agreed to reduce fees by 3.3% or $498,000. AMR, the parent of American Airlines Inc., is closing a call center this month in Tucson, Arizona. No longer needing the 85,000 square-foot building, AMR signed Freeport-McMoRan Corp. to buy the facility for $5.1 million. The report relates there will be a hearing in bankruptcy court on Oct. 9 for approval of the sale. 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 GILSONITE: $10MM Add-On Won't Impact Moody's 'B3' CFR -------------------------------------------------------------- Moody's Investors Service said that the $10 million add-on to American Gilsonite Holding Company's 11.5% Senior Secured Notes due 2017 will not affect the rating on the notes or the company's Corporate Family Rating (CFR). As reported by the Troubled Company Reporter on Aug. 17, 2012, Moody's assigned a B3 Corporate Family Rating (CFR) to American Gilsonite Holding Company (American Gilsonite) and assigned a B3 rating to its proposed $260 million senior secured notes due 2017. The notes and existing balance sheet cash will be used to refinance the firm's existing debt and fund a special dividend to shareholders and pay transaction fees. The company is also establishing a new $25 million revolving credit facility (unrated) that will be undrawn after the completion of the transactions. The rating outlook is stable. American Gilsonite is a miner, processor and seller of Gilsonite, its brand name of the mineral uintaite. Markets for Gilsonite include oil & gas drilling (approximately 75% of revenues), asphalt, inks and paints and foundry applications. American Gilsonite is wholly owned by a fund managed by affiliates of private equity firm Palladium Equity Partners, LLC. The firm had revenues of $90 million for the twelve months ended June 30, 2012. AMERICAN GILSONITE: S&P Keeps 'B' Rating on $270MM Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said its 'B' issue rating and '4' recovery rating on Bonanza, Utah-based American Gilsonite Co.'s senior secured notes due 2017 remain unchanged after the company announced it will seek to add $10 million to its existing $260 million senior secured notes due 2017, bringing the total issue amount to $270 million. American Gilsonite is a specialty miner and the only producer of Gilsonite in the U.S. The company will use the proceeds from the additional issuance to fund a dividend to its owners. "The '4' recovery rating indicates our expectation of average (30% to 50%) recovery for lenders in the event of a payment default," S&P said. "The 'B' corporate credit rating takes into account American Gilsonite's relatively small size, scope, and reliance on a single end market; though the company is the only producer of Gilsonite in the U.S. and has consistently generated positive cash flow. We view the company's business risk profile as 'vulnerable', reflecting our opinion of the company's lack of diversity given its single product and mine complex, dependence on the volatile oil and gas industry, and the threat that a substitute option for Gilsonite in drilling fluids could be developed. Our financial risk profile score of 'aggressive' reflects American Gilsonite's small size (with 2012 anticipated revenues of around $100 million), as well as its financial policy, which incorporates our perspective that the company will likely use excess cash flow to pay dividends to its private equity ownership. These factors are balanced by American Gilsonite's history of generating positive free cash flow and our assessment of adequate liquidity, stemming primarily from availability under the revolving credit facility given that the company holds minimal cash balances. American Gilsonite mines uintaite, or Gilsonite, a naturally occurring asphalt whose resin-like properties are used as a stabilizing agent in oil and gas drilling fluids, as a binding element in inks and paints, and in a variety of asphalt and foundry-related applications," S&P said. RATINGS LIST American Gilsonite Co. Corporate credit rating B/Stable/-- $270 mil sr secured notes due 2017 B Recovery rating 4 AMTRUST FINANCIAL: 6th Cir. Finds Cease-And-Desist Order Ambiguous ------------------------------------------------------------------ When AmTrust Financial Corp. filed for bankruptcy in late 2009, the Federal Deposit Insurance Corporation was appointed receiver for AFC's subsidiary, AmTrust Bank. In that capacity, the FDIC sought payment from AFC under 11 U.S.C. Sec. 365(o), which requires that a party seeking Chapter-11 bankruptcy fulfill "any commitment . . . to maintain the capital of an insured depository institution." The FDIC argued that AFC made such a commitment by agreeing to entry of a cease-and-desist order requiring AFC's board to "ensure that [the Bank] complies" with the Bank's own obligation to "have and maintain" capital ratios of 7% (Tier 1) and 12% (total). AFC's capital-raising plan fell through, and it did not contribute an expected $240 million to the Bank. The district court first denied the parties' cross-motions for summary judgment, finding that the cease-and-desist order was ambiguous, and then, after an advisory-jury trial, found that the order was not a capital-maintenance commitment under section 365(o). The FDIC appeals both rulings. In a Sept. 14 Opinion, the U.S. Court of Appeals for the Sixth Circuit affirmed the district court, both in its ruling that the cease-and-desist order is ambiguous and in its ultimate finding that the order does not contain a capital-maintenance commitment. The case is Federal Deposit Insurance Corporation, Appellant, v. Amtrust Financial Corporation, Appellee, No. 11-3677 (6th Cir.). The Honorable Paul Lewis Maloney, Chief United States District Judge for the Western District of Michigan, sitting by designation, wrote the Sixth Circuit's opinion, a copy of which is available at http://is.gd/JUAbdvfrom Leagle.com. About AmTrust Financial AmTrust Financial Corp. was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor subsidiaries include AmFin Real Estate Investments, Inc., formerly AmTrust Real Estate Investments, Inc. (Case No. 09-21328). G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, served as counsel to the Debtors. Kurtzman Carson Consultants served as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management estimated $100 million to $500 million in assets and debts in its Chapter 11 petition. AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4, 2009, AmTrust Bank was closed by regulators and the Federal Deposit Insurance Corporation was named receiver. New York Community Bank, in Westbury, New York, assumed all of the deposits of AmTrust Bank pursuant to a deal with the FDIC. AmTrust, nka AmFin Financial Corp., obtained confirmation of its Amended Joint Plan of Reorganization on Nov. 3, 2011. The plan was declared effective in December. ANTS SOFTWARE: CEO Receives 408,868 Common Shares for Licenses -------------------------------------------------------------- On Aug. 29, 2012, Dr. Frank N. Kautzmann, III, ANTs Software Inc.'s CEO, Chairman and President received 408,868 shares of the common stock par value of $0.0001 as partial consideration of non- exclusive licenses of Intellectual Property. About Ants Software ANTs Software inc (OTC BB: ANTS) -- http://www.ants.com/-- has developed a software solution, ACS, to help customers reduce IT costs by consolidating hardware and software infrastructure and eliminating cost inefficiencies. ACS is an innovative middleware solution that accelerates database consolidation between database vendors, enabling application portability. ANTs has not filed financial statements with the Securities and Exchange Commission since May 2011, when it disclosed that it had a net loss of $27.01 million in three months ended March 31, 2011, compared with a net loss of $20.7 million in the same period in 2010. The Company's balance sheet at March 31, 2011, showed $27.2 million in total assets, $52.3 million in total liabilities, and a stockholders' deficit of $25.1 million. As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New York, expressed substantial doubt about ANTs software's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred significant recurring operating losses, decreasing liquidity, and negative cash flows from operations. The Company reported a net loss of $42.4 million for 2010, following a net loss of $23.3 million in 2009. APOLLO MEDICAL: Had $3.2-Mil. Net Loss in July 31 Quarter --------------------------------------------------------- Apollo Medical Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.2 million on $1.6 million of revenues for the three months ended July 31, 2012, compared with a net loss of $122,833 on $1.1 million of revenues for the three months ended July 31, 2011. Loss from operations was $63,026 for the three months ended July 31, 2012, compared to a loss from operations of $83,339 in the same period in 2011. Loss on change in fair value of warrant and derivative liabilities was $2.9 million for three months ended July 31, 2012, and reflects the change in the fair value of the Company's warrant and derivative liabilities from April 30, 2012, to July 31, 2012. For the six months ended July 31, 2012, the Company had a net loss of $3.4 million on $3.3 million of revenues, compared with a net loss of $351,764 on $2.1 million of revenues for the same period of the prior fiscal year. The Company's balance sheet at July 31, 2012, showed $1.5 million in total assets, $5.1 million in total liabilities, and a stockholders' deficit of $3.6 million. As of July 31, 2012, the Company has an accumulated deficit of $5.5 million. "The current operating plan indicates that losses from operations may be incurred for all of fiscal 2013, the maturing of $270,000 of Senior Secured Notes on Sept. 15, 2012, and Oct. 15, 2012, and the maturing of $1,250,000 in 10% Senior Subordinated Convertible Notes on Jan. 31, 2013. Consequently, we may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that we will be able to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/M5VywY About Apollo Medical Glendale, Calif.-based Apollo Medical Holdings, Inc., provides hospital-based services in Los Angeles, California and Central California. * * * As reported in the TCR on May 21, 2012, Kabani & Company, Inc., in Los Angeles, California, expressed substantial doubt about Apollo Medical's ability to continue as a going concern in its report on the Company's financial position and results of operations for the fiscal year ended Jan. 31, 2012, saying that the Company has accumulated deficit of $2,117,708 as of Jan. 31, 2012, negative working capital of $266,044 and cash flows used in operating activities of $385,455. ATP OIL: S&P Withdraws 'D' Corporate Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'D' corporate credit rating on U.S. oil and natural gas exploration and production company ATP Oil & Gas. "We also withdrew our ratings on the company's debt," S&P said. "The ratings withdrawal reflects the lack of sufficient and timely information necessary for us to maintain surveillance on the ratings on ATP," S&P said. BEECHWOOD CHEESE: In Receivership, Owes Nearly $1.2 Million ----------------------------------------------------------- Josh Lintereur at Sheboygan Press reports that financial troubles have led a small-batch, specialty cheese maker in southwestern Sheboygan County, Wisconsin, to file for receivership. Beechwood Cheese Co. made the filing last month, with the company and a related firm reporting debts of nearly $1.2 million, and combined assets worth less than that, though an estimated fair market value of those assets wasn't disclosed. Beechwood officials said that the company's cheese factory and retail store remain open, according to the report. Seth Dizard, a Milwaukee lawyer, is the court-appointed receiver in the case. Beechwood Cheese manufactures and distributes a wide range of specialty cheeses to grocers throughout southeastern Wisconsin, including Piggly Wiggly and Sendik's. The company now has approximately 25 full and part-time employees. BEHRINGER HARVARD: Wants Plan Filing Period Extended Until Jan. 9 ----------------------------------------------------------------- BHFS I, LLC, et al., ask the Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas to extend the exclusive periods within which the Debtors can file a plan through and including Jan. 9, 2013, and solicit acceptances for that plan until March 11, 2013. Exclusivity is presently set to expire on Oct. 11, 2012. The Debtors request an approximate 90-day extension of this deadline. According to the Debtors, their bankruptcy case is fairly large and complex. They have numerous creditors, over thirty-seven acres of office, retail, and multifamily development, and there are multiple critical issues yet to be resolved in the Bankruptcy Case. The Debtors say that a critical factor that will govern the formulation of the plan is the value of the development, and both the lenders and the Debtors have retained professional appraisers to opine on such value, without which it is not meaningfully possible to propose a realistic plan, but which process should be completed by the end of August 2012. "The bar dates have yet to pass in the bankruptcy case, and knowing which creditors will file which claims, and in what amounts, is important to the formulation of a plan. The Debtors have been busy postpetition in litigation with the their lenders and the City of Frisco, including a contested cash collateral hearing and an adversary proceeding to determine the extent and priority of the City of Frisco's liens that involve complex issues, substantial research, briefing, and discovery, all of which, together with the retention of various professionals and increased business and reporting duties as a result of Chapter 11, has diverted the Debtors' resources to some extent," the Debtors state. The Debtors assure the Court that their business has improved and continues to improve on a daily basis, and that the Debtors are cash flow positive. They are able to pay all postpetition obligations current and will have funds with which to fund a plan, and that no party will be prejudiced from an extension of Exclusivity. The Debtors are current on their postpetition obligations to their general unsecured creditors. "The Debtors are engaged in ongoing good-faith negotiations with multiple parties, the results of which, along with the Court's resolution of the adversary proceeding commenced by the City of Frisco, will affect the formation of a Chapter 11 plan. The Debtors have nonetheless commenced the plan formulation stage of the bankruptcy case, and they continue to work on a potential plan structure," the Debtors state. About BHFS Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13 in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. In its schedules, BHFS I LLC disclosed $28,947,198 in total assets and $13,742,348 in total liabilities. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BEHRINGER HARVARD: Has OK to Hire FTI as Financial Advisor ---------------------------------------------------------- BHFS I, LLC, et al., sought and obtained permission from the Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas to employ FTI Consulting, Inc., as the financial advisor. FTI Consulting will, among other things: a. provide financial advisory services in connection with the Debtors' preparation of their Chapter 11 plan; b. evaluate the Debtors' projections and assumptions; c. analyze the feasibility of the Debtors' Chapter 11 plan; d. provide expert witness testimony, including the preparation and delivery of a comprehensive written analysis and expert report; and f. review, analyze, and rebut opposing parties' expert witness reports, exhibits and information. FTI Consulting will be paid at these hourly rates: Senior Managing Directors $780 to $895 Directors/Managing Directors $560 to $745 Consultants/Senior Consultants $280 to $530 Administrative/Paraprofessionals $115 to $230 To the best of the Debtors' knowledge, FTI Consulting is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About BHFS Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13 in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. In its schedules, BHFS I LLC disclosed $28,947,198 in total assets and $13,742,348 in total liabilities. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BEHRINGER HARVARD: Has OK to Hire McRoberts for Appraisal Services ------------------------------------------------------------------ BHFS I, LLC, et al., obtained authorization from the Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas to employ McRoberts & Company of Texas, LP, as appraiser. As reported by the Troubled Company Reporter on Aug. 15, 2012, the value of the Debtors' real property and improvements is disputed and is an important issue in many aspects of the bankruptcy case. The value is important to the Court's consideration of the Debtors' requested usage of cash collateral on a final basis. The Debtors' lender has retained its expert appraiser and, unless the Debtors and the Estates have an expert appraiser of their own, the Debtors, the Estates, and unsecured creditors could be severely prejudiced. Having an accurate and expert opinion on the value of the Debtors' property will enable the Debtors to move forwards towards a plan, and will provide important information to all creditors and parties-in-interest. McRoberts will, among other things, collect and analyze data related to the Debtors' real property and improvements, and conduct onsite inspections of the property and comparable developments. About BHFS Addison, Texas-based BHFS I LLC and its affiliates, owners of the Frisco Square master-planned development in the Dallas suburb of Frisco, filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 12-41581 to 12-41585) on June 13 in Sherman. The affiliates are Behringer Harvard Frisco Square LP, BHFS II LLC, BHFS III LLC, BHFS IV LLC, and BHFS Theater LLC. BHFS I and BHFS II each estimated assets and debts of $10 million to $50 million. In its schedules, BHFS I LLC disclosed $28,947,198 in total assets and $13,742,348 in total liabilities. The Debtors own and operate substantial office, retail, and residential rental space at the highly regarded project known as "Frisco Square," in Frisco, Texas. The project has 103,120 square feet of rentable office space in three buildings, 110,395 square feet of retail space in six buildings, including a 12-screen, 41,464 square-foot Cinemark theater, and 114 high-end multifamily rental units in two buildings, all built between 2000 and 2010. Occupancy rates are more than 85% for the office and retail space and almost 95% for multifamily space. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' counsel. The petition was signed by Michael J. O'Hanlon, president. George H. Barber, Esq., and David D. Ritter, Esq., at Kane Russell Coleman & Logan PC, represent Regions Bank. Bank of America, N.A., is represented by Keith M. Aurzada, Esq., and John Leininger at Bryan Cave. BELLWEST HOLDINGS: Chapter 11 Status Hearing Set for Oct. 11 ------------------------------------------------------------ The Bankruptcy Court will hold a Chapter 11 Status Hearing in Bellwest Holdings LLC's case on Oct. 11, 2012, at 10:00 a.m. at 38 S. Scott Avenue, Courtroom 446, in Tucson, Arizona. There's a meeting of creditors under 11 U.S.C. Sec. 341(a) scheduled for Oct. 11, 2012, at 1:00 p.m. Bellwest Holdings LLC, owner of a property in Surprise, Arizona, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-20126) on Sept. 10, 2012, in Tucson. The Debtor, a single asset real estate under 11 U.S.C. Sec. 101 (51B), estimated assets and debts of $10 million to $50 million in the petition. Bankruptcy Judge Eileen W. Hollowell presides over the case. Eric Slocum Sparks, Esq., at Eric Slocum Sparks PC, serves as counsel. BERKELEY COFFEE: Had $73,700 Net Loss in July 31 Quarter -------------------------------------------------------- Berkeley Coffee & Tea, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $73,743 on $56,172 of revenue for the three months ended July 31, 2012, compared with net income of $10,979 on $49,030 of revenue for the same period of the prior fiscal year. The Company's balance sheet at July 31, 2012, showed $4.68 million in total assets, $4.72 million in total liabilities, and a shareholders' deficit of $39,087. As reported in the TCR on Aug. 14, 2012, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Berkeley Coffee & Tea Inc.'s ability to continue as a going concern, following the Company's results for the fiscal year ended April 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations. A copy of the Form 10-Q is available at http://is.gd/ZQtj5D Shanghai, China-based Berkeley Coffee & Tea Inc. was incorporated on March 27, 2009, in the State of Nevada. Berkeley Coffee expects to generate revenue from the marketing and sale of green coffee beans from Yunnan, China, into the United States. It plans to sell green bean coffee grown in China directly to coffee wholesalers, coffee brokers and coffee roasters in the United States. BERNARD L. MADOFF: Trustee Asks Rakoff to Change Mind on 16 Suits ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating Bernard L. Madoff Investment Securities LLC filed a 39-page brief seeking to persuade U.S. District Judge Jed Rakoff not to dismiss another 16 lawsuits on grounds where Judge Rakoff previously ruled that suits don't hold water. According to the report, in a suit against HSBC Holdings Plc, Judge Rakoff ruled last year that Madoff trustee Irving Picard can't bring cases based on common law in the face of a defense known as in pari delicto rule. Judge Rakoff also ruled that the federal Securities Litigation Uniform Standards Act bars some of the claims Mr. Picard filed against customers who allegedly received stolen property. The HSBC appeal is pending in the U.S. Court of Appeals in Manhattan. The briefs have been filed. Mr. Picard's papers on Sept. 14 argued Judge Rakoff was wrong in his earlier dismissal of similar suits. The defendants in the suits will file another brief on Oct. 5. The dispute is scheduled for hearing in Judge Rakoff's court on Oct. 15. The report relates that Judge Rakoff previously said the defendants believe it makes sense to wait for a ruling from the Court of Appeals before deciding whether to dismiss the additional suits. Mr. Picard has several appeals pending in the Court of Appeals. Among them, one seeks to revive $10 billion in lawsuits against 635 customers where Judge Rakoff ruled that Mr. Picard can sue to recover stolen money only going back two years before bankruptcy, not six. From 1,000 lawsuits Mr. Picard filed, Judge Rakoff's ruling meant the trustee would lose on $11.1 billion in claims against customers. Judge Rakoff left Mr. Picard the ability to sue for two-year profits totaling about $8 billion. The report notes that despite the adverse rulings, more than $11 billion has been collected from settlements, recoveries by the trustee, and forfeitures to the U.S. government. Customer claims aggregate about $17 billion. Mr. Picard disclosed last week that customers will be receiving a distribution of an additional 33.5% of their approved claims on Sept. 21. The new distribution will bring customers' recovery to 38.1%. The dispute over common claims is part of Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 12-00115, U.S. District Court, Southern District New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BIG SKY FARMS: In Chapter 15, Canadian Insolvency Proceedings ------------------------------------------------------------- Ernst & Young Inc., the receiver for Big Sky Farms Inc., filed a Chapter 15 petition (Bankr. N.D. Iowa Case No. 12-01711) in the U.S. for Canada's second-biggest hog producer. E&Y is seeking the U.S. court's recognition of the proceedings commenced in the Court of Queen's Bench for Saskatchewan, Judicial Centre of Saskatoon under the Bankruptcy Insolvency Act as the "foreign main proceeding." According to E&Y, the Canadian proceeding contemplates a proposed plan of arrangement for the creditors of the Debtor in the same manner as a case under Chapter 11 of the Bankruptcy Code. The Bank of Nova Scotia, as agent for lenders of Big Sky, sought the receivership. The receiver is seeking immediate imposition of the automatic stay in order to protect all of Big Sky's assets in Iowa, including substantial nursery, wean-to-finish pigs, and contract finisher pigs in the possession of various contract growers located in Northwest Iowa and pork processing plants located in Marshalltown and Sioux Center, Iowa, and Worthington, Minnesota. The Chapter 15 petition filed in Cedar Rapids, Iowa, estimated US$50 million to US$100 million in assets and liabilities. BIG SKY FARMS: Chapter 15 Case Summary -------------------------------------- Chapter 15 Petitioner: Kevin Blair Brennan Senior VP, Ernst & Young, Inc. Receiver Chapter 15 Debtor: Big Sky Farms Inc. by Ernst & Young Inc. as Receiver 10333 8th Avenue Humboldt, Saskatchewan Canada Tel: (515) 288-2500 Chapter 15 Case No.: 12-01711 Type of Business: The Debtor is the largest hog production company in Saskatchewan, Canada, and the second largest in Canada. Chapter 15 Petition Date: September 12, 2012 Court: U. S. Bankruptcy Court Northern District of Iowa (Cedar Rapids) Debtor?s Counsel: Julie Johnson McLean, Esq. DAVIS, BROWN, KOEHN, SHORS & ROBERTS, P.C. 215 10th Street, Suite 1300 Des Moines, IA 50309-3993 Tel: (515) 288-2500 Fax: (515) 243-0654 E-mail: JulieMcLean@davisbrownlaw.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The Company did not file a list of creditors together with its petition. BIOMARIN PHARMACEUTICAL: S&P Withdraws 'B' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its unsolicited ratings on BioMarin Pharmaceutical Inc., including the 'B' corporate credit rating, due to the lack of market interest. "At the same time, we withdrew our unsolicited 'B' issue-level and '4' recovery ratings on BioMarin's $172.5 million 2.5% senior subordinated convertible notes due March 29, 2013, and $325 million 1.875% senior subordinated convertible notes due April 23, 2017," S&P said. BIONEUTRAL GROUP: Had $642,100 Net Loss in July 31 Quarter ---------------------------------------------------------- BioNeutral Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $642,073 on $888 of revenues for the three months ended July 31, 2012, compared with a net loss of $698,557 on $32,986 of revenues for the three months ended July 31, 2011. For the nine months ended April 30, 2012, the Company had a net loss of $2.0 million on $2,390 of revenues, compared with a net loss of $2.3 million on $50,912 of revenues for the nine months ended July 31, 2011. The Company's balance sheet at July 31, 2012, showed $10.2 million in total assets, $2.1 million in total liabilities, and stockholders' equity of $8.1 million. A copy of the Form 10-Q is available at http://is.gd/piNWbd Morristown, N.J.-based BioNeutral Group, Inc. is a life science specialty technology corporation that has developed a novel combinational chemistry-based technology which the Company believes can, in certain circumstances, neutralize harmful environmental contaminants, toxins and dangerous micro-organisms including bacteria, viruses and spores. The Company is focused on developing and commercializing two classes of product formulations: (1) antimicrobials, which are formulations designed to kill certain harmful microscopic living organisms, and (2) bioneutralizers, which are formulations designed to destroy certain agents that are noxious and harmful to health and/or the environment. The Company has not marketed any of its products and has not generated any meaningful product revenue to date. * * * Marcum, LLP, in New York City, expressed substantial doubt about BioNeutral Group's ability to continue as a going concern, following the Company's results for the fiscal year ended Oct. 31, 2011. The independent auditors noted that the Company has recurring losses, had a working capital deficiency of $2.9 million and an accumulated deficit of $53 million as of Oct. 31, 2011. BLITZ USA: Court Approves $9.5 Million Asset Sale to Scepter ------------------------------------------------------------ Sheila Stogsdill at Tulsa World reports the U.S. Bankruptcy Court in Wilmington, Delaware, approved a $9.5 million offer from Toronto, Canada-based Scepter Corporation to purchase Blitz USA, according to Philip Monckton, Scepter's vice president of sales and marketing. The report notes Scepter bought land, equipment and other assets. Scepter supplies about 20% of the USA market with gas cans. The report says the sale will become final on Sept. 28, 2012. About Blitz U.S.A. Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. SSG Capital Advisors LLC serves as investment banker. Lowenstein Sandler PC from Roseland, New Jersey, represents the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. In April 2012, Hopkins Manufacturing Corp. acquired the assets of Blitz USA's unit, F3 Brands LLC, a major manufacturer of oil drains, drain pans, lifting aids and automotive ramps. Blitz USA said in court documents the sale netted the Debtors $14.6 million, which was applied against secured debt. Blitz announced in June it would abandon its efforts to reorganize and instead to shut down operations by the end of July. BLUEGREEN CORP: Completes $100 Million Term Securitization ---------------------------------------------------------- Bluegreen Corporation completed a private offering and sale of $100 million of investment-grade, timeshare loan-backed notes. The 2012-A Term Securitization consisted of the issuance of two tranches of timeshare-loan backed notes: $79.05 million of Class A and $20.95 million of Class B notes with note interest rates of 2.66% and 3.99%, respectively, which blended to a weighted average note interest rate of 2.94%. The gross advance rate for this transaction was 89.5%. BB&T Capital Markets acted as the bookrunner, structuring agent and co-lead manager and RBS Securities Inc. acted as co-lead manager. Both BB&T Capital Markets and RBS Securities Inc. acted as initial purchasers. The amount of the timeshare receivables sold was approximately $112 million, approximately $102 million of which was provided at closing and approximately $10 million is expected to be provided prior to Dec. 13, 2012. The gross proceeds of $100 million were used to: -- repay Branch Banking and Trust Company approximately $40 million, representing all amounts currently outstanding under the Company's existing purchase facility with BB&T; -- repay Liberty Bank approximately $35 million, under the Company's 2008 Liberty Bank Facility; -- capitalize a reserve fund; and -- pay fees and expenses associated with the transaction. The remainder of the proceeds, approximately $22 million, will be used for general corporate purposes. While ownership of the timeshare receivables included in the 2012- A Term Securitization is transferred and sold for legal purposes, the transfer of these timeshare receivables will be accounted for as a secured borrowing for financial accounting purposes. About Bluegreen Corp. Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides places to live and play through its resorts and residential community businesses. The Company reported a net loss of $17.25 million in 2011, compared with a net loss of $43.96 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.04 billion in total assets, $716.94 million in total liabilities, and $325.75 million in total shareholders' equity. * * * In December 2010, Standard & Poor's Rating Services raised its corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'. BONDS.COM GROUP: Director Steps Down, Citing Career Change ---------------------------------------------------------- Marwan Khoueiri resigned from the Board of Directors of Bonds.com Group, Inc., effective Sept. 10, 2012. Mr. Khoueiri informed the Company that due to a career change he will not be able to continue as a director. About Bonds.com Group Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG) -- http://www.bonds.com/-- through its subsidiary Bonds.com, Inc., serves institutional fixed income investors by providing a comprehensive zero subscription fee online trading platform. The Company designed the BondStation and BondStationPro platforms to provide liquidity and competitive pricing to the fragmented Over- The-Counter Fixed Income marketplace. The Company differentiates itself by offering through Bonds.com, Inc., an inventory of more than 35,000 fixed income securities from more than 175 competing sources. Asset classes currently offered on BondStation and BondStationPro, the Company's fixed income trading platforms, include municipal bonds, corporate bonds, agency bonds, certificates of deposit, emerging market debt, structured products and U.S. Treasuries. The Company reported a net loss of $14.45 million in 2011, compared with a net loss of $12.51 million in 2010. The Company's balance sheet at June 30, 2012, showed $10.87 million in total assets, $14.25 million in total liabilities, and a $3.38 million total stockholders' deficit. Daszkal Bolton LLP, in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses and negative cash flows from operations that raise substantial doubt about the Company's ability to continue as a going concern. BROADWAY FINANCIAL: 2011 Report Restated; Losses Hiked to $14.3MM ----------------------------------------------------------------- Broadway Financial Corporation has filed an amended Form 10-K for 2011 to restate the consolidated financial statements that the Company had previously issued in its annual report on for the year ended Dec. 31, 2011, that was filed with the SEC on March 30, 2012. The restatement relates to corrections of errors made in determining the appropriate provisions for losses and charge-offs for 2011. The errors resulted from failure to obtain and take into account certain appraisals of the values of properties securing impaired loans that had been ordered and received by Broadway Federal Bank, f.s.b. prior to the issuance date of the Company's financial statements and failure to follow the appropriate method for calculating expected future payments on loans in connection with the Company's discounted cash flow analysis for measuring impairment of loans deemed to be troubled debt restructurings. In addition, certain appraisals received after year-end 2011 indicated that impairment losses that had been determined using values based on broker provided opinions of value (BPOs) understated the losses inherent in those loans. The Company has discontinued its former practice of obtaining and relying upon BPOs in connection with valuing properties securing its loans. The amended Form 10-K included a revised discussion of results of operations and financial condition for the year ended Dec. 31, 2011, and revised discussion of and management's report on the Company's internal control over financial reporting. In connection with the restatement of results for 2011, the results of the first quarter ended March 31, 2012, which the Company previously announced, will also be revised. The amended statement of operations reflects a net loss of $14.25 million on $25.11 million of total interest income for the year ended Dec. 31, 2011. The Company previously reported a net loss of $9.51 million on $25.11 million of total interest income in 2011. The Company's restated balance sheet at Dec. 31, 2011, showed $413.73 million in total assets, $395.46 million in total liabilities, and $18.27 million in total stockholders' equity. The Company originally reported $418.47 million in total assets, $395.46 million in total liabilities, and stockholders' equity of $23.01 million. In the auditors' report on the consolidated financial statements for the year ended Dec. 31, 2011, Crowe Horwath LLP, in Costa Mesa, California, raised substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a tax sharing liability to its consolidated subsidiary that exceeds its available cash. The liability will be settled pursuant to the tax sharing agreement on or before April 2, 2012, at which point the Company will run out of operating cash. "In addition, the Company is in default under the terms of a $5 million line of credit with another financial institution lender. Finally, the Company has sustained recurring operating losses mainly caused by elevated levels of loan losses, and the Company and its Bank subsidiary, Broadway Federal Bank are both under formal regulatory agreements." A copy of the Form 10-K/A is available for free at: http://is.gd/V1sxFs About Broadway Financial Los Angeles, Calif.-based Broadway Financial Corporation was incorporated under Delaware law in 1995 for the purpose of acquiring and holding all of the outstanding capital stock of Broadway Federal Savings and Loan Association as part of the Bank's conversion from a federally chartered mutual savings association to a federally chartered stock savings bank. In connection with the conversion, the Bank's name was changed to Broadway Federal Bank, f.s.b. The conversion was completed, and the Bank became a wholly owned subsidiary of the Company, in January 1996. The Company is currently regulated by the Board of Governors of the Federal Reserve System ("FRB"). The Bank is currently regulated by the Office of the Comptroller of the Currency ("OCC") and the Federal Deposit Insurance Corporation ("FDIC"). The Company's balance sheet at March 31, 2012, showed $413.38 million in total assets, $390.59 million in total liabilities and $22.79 million in total stockholders' equity. CABLEVISION SYSTEMS: Fitch Rates New Sr. Unsecured $500MM Notes B- ------------------------------------------------------------------ Fitch Ratings has assigned a 'B-' rating to Cablevision System Corporation's (Cablevision; CVC) proposed $500 million issuance of senior unsecured notes due 2022. Proceeds generated from the issuance are expected to be invested in CSC Holdings LLC (CSCH) to fund the $400 million cash tender offer for CSCH's 8.5% senior notes due 2014 ($575.6 million outstanding) and its 8.5% senior notes due 2015 ($120.5 million outstanding). Additionally Fitch expects the proceeds will also be used to repay $100 million of CSCH's term loan B-2. CSCH is a wholly owned subsidiary of Cablevision and each have a Fitch Issuer Default Rating of 'BB-'. As of June 30, 2012, CVC had approximately $11.1 billion of debt outstanding. Fitch believes the issuance is in line with Cablevision's overall financial strategy and is modestly positive for the company's credit profile. The issuance and the tender improve overall financial flexibility and address the refinancing risk associated with its 2014 scheduled maturities (totaling $861 million) and its 2015 maturities (totaling $272 million). Besides the extension of the company's maturity profile, Cablevision's credit profile has not substantially changed. Fitch believes that CVC has sufficient capacity within the current ratings to accommodate management's decision to increase capital expenditures and to refrain from increasing prices during 2012. These decisions are viewed within the context of the company's capital allocation strategy which continues to favor shareholders. The increased level of investment, while prudent from a competitive standpoint, will constrain free cash flow (FCF) generation, pressure EBITDA margin, and limit overall financial flexibility resulting in a weaker credit profile. However, Fitch anticipates that capital spending and operating margin will revert to levels closer to historical performance during 2013 and 2014, which will drive FCF generation and position the company's credit profile more in line with the current ratings. Fitch expects a modest increase of CVC's leverage metric during 2012. Fitch anticipates Cablevision's consolidated leverage to increase to 5.3x by the end of 2012 and strengthen to below 4.9x by year-end 2013. CVC's leverage was 5.0x as of the latest 12- month (LTM) period ended June 20, 2012, which was in line with leverage as of year-end 2011. Fitch expects CVC management will maintain the company's leverage between its target of 4x to 5x. The target is somewhat more aggressive than CVC's investment-grade rated cable multiple system operator peers. Fitch does not anticipate CVC will increase leverage beyond its target in order to support its share repurchase program. The decision not to increase pricing coupled with ongoing programming expense inflation will depress EBITDA margin during 2012. During the second quarter of 2012, CVC's telecommunication segment margin declined nearly 320 basis points relative to the second quarter of 2011 to 36.4%. Fitch anticipates similar margin performance during the remainder of 2012 before margins rebound somewhat during 2013. Notwithstanding the lower FCF generation, Fitch expects the focus on shareholder returns (dividends and share repurchases) will continue during the ratings horizon. Fitch believes that CVC will maintain an appropriate balance between investing in its business during 2012 and repurchasing shares. Fitch acknowledges that CVC's share repurchase authorization represents a significant potential use of cash; however, the agency believes that the company would reduce the level of share repurchases should the operating environment materially change in order to maximize flexibility. Free cash flow generation (defined as cash flow from operations less capital expenditures and dividends) from continuing operations declined significantly to approximately $137.7 million during the LTM period ended June 30, 2012. After considering increased capital expenditures and EBITDA margin pressure Fitch estimates CVC's FCF generation will range between $200 million and $250 million during 2012. Going forward Fitch believes FCF generation will approximate 7% of consolidated revenues. Fitch considers CVC's liquidity position and overall financial flexibility to be adequate within the current ratings. The company's liquidity position is supported by cash on hand and available borrowing capacity from CSCH's $1.2 billion revolver (expiring March 2015). Nearly $1.2 billion of borrowing capacity was available from the revolver as of June 30, 2012. Going forward, Fitch expects that scheduled credit facility amortization will be repaid with existing cash, while maturities of senior notes are expected to be refinanced. Scheduled maturities total approximately $105 million for the remainder of 2012 (including $50 million of collateralized indebtedness) and nearly $1.1 billion during 2013 (including $307.7 million of collateralized indebtedness). Overall Fitch's affirmation of CVC's ratings incorporates the solid operating profile and competitive strength of CVC's core cable business. In Fitch's opinion, the operating profile of CVC's cable segment is an industry leader and has proven to be resilient to persistent competitive pressures and weak housing and employment markets. CVC's cable business consistently produces industry-leading service penetration levels, average revenue per unit (ARPU), ARPU growth rates, and operating margins in an increasingly competitive operating environment. Outside of the company adopting a more aggressive financial or acquisition strategy, which is expected to remain a key rating consideration, the weakening of CVC's competitive position presents the greatest concern within the company's credit profile. The competitive pressure associated with the service overlap among the different telecommunications service providers, while intense, is not expected to materially change during the ratings horizon. Innovative service offerings such as the company's deployment of a WI-FI broadband wireless network, the introduction of a remote storage digital video recorder service, and the emergence of video-over-IP applications enhance the company's competitive position. These factors have translated into sustainable strong operating performance and FCF growth. The Stable Outlook reflects Fitch's expectation that the company's operating profile will strengthen during 2013 and 2014 producing revenue growth rates, EBITDA margins, and FCF more in line with historical performance. Further, the Stable Outlook considers the company accommodating non-core acquisitions, and investments in a credit neutral manner and the absence of other leveraging transactions. Rating Triggers Key considerations that can lead to positive rating actions include: -- Further strengthening of the company's credit profile and reduction of leverage to levels approaching 4x; -- CVC demonstrating that its operating profile will not materially decline in the face of competition and the poor housing and employment environment. Negative ratings actions would likely coincide with: -- The company's inability to strengthen its operating profile following its decision to increase capital expenditures and not take any price increase during 2012. Specifically, Fitch will be looking for mid-single-digit ARPU growth, operating margins returning to the high 30% range and FCF generation in excess of $400 million; -- A management decision to increase leverage greater than 6x to repurchase shares, fund a large dividend, or fund a non-core investment or acquisition in the absence of a clear path to de-lever the company to within its current leverage target will likely spur a negative rating action. CABLEVISION SYSTEMS: Moody's Rates $500-Mil. Bond Issuance 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $500 million bond issuance of Cablevision Systems Corporation (Cablevision). The company expects to use proceeds primarily to repay existing debt. Moody's also affirmed the Ba2 corporate family and probability of default ratings. A summary of the action follows. Cablevision Systems Corporation Affirmed Ba2 Corporate Family Rating Affirmed Ba2 Probability of Default Rating Senior Unsecured Bonds, Assigned B1, LGD5, 89% 8% Senior Unsecured Bonds due April 2020, Affirmed B1, LGD adjusted to LGD5, 89% from LGD6, 91% 8.625% Senior Unsecured Bonds due Sept 2017, Affirmed B1, LGD adjusted to LGD5, 89% from LGD6, 91% 7.75% Senior Unsecured Bonds due April 2018, Affirmed B1, LGD adjusted to LGD5, 89% from LGD6, 91% Affirmed SGL-2 Speculative Grade Liquidity Rating Outlook, Stable CSC Holdings, LLC Senior Secured Bank Credit Facility, Affirmed Baa3, LGD adjusted to LGD2, 19% from LGD2, 18% 6.75% bonds due Nov 2021, Affirmed Ba3, LGD4, 63% 8.5% bonds due April 2014, Affirmed Ba3, LGD adjusted to LGD4, 63% from LGD4, 66% 8.5% bonds due June 2015, Affirmed Ba3, LGD adjusted to LGD4, 63% from LGD4, 66% 7.875% bonds due Feb 2018, Affirmed Ba3, LGD adjusted to LGD4, 63% from LGD4, 66% 7.625% bonds due July 2018, Affirmed Ba3, LGD adjusted to LGD4, 63% from LGD4, 66% 8.625% bonds due Feb 2019, Affirmed Ba3, LGD adjusted to LGD4, 63% from LGD4, 66% Outlook, Stable Newsday LLC Senior Secured Bank Credit Facility, Affirmed Ba3, LGD adjusted to LGD4, 63% from LGD4, 66% Outlook, Stable Ratings Rationale Moody's expects the transaction to provide cost effective capital to address upcoming debt maturities, improving the liquidity profile. Depending on timing of debt repayment with proceeds from the issuance, gross debt may rise temporarily, but Moody's expects the bulk of the proceeds to eventually reduce debt. Moody's expects Cablevision's credit metrics to continue to deteriorate over the next year due to its strategy of increased investment and more aggressive pricing, elevating credit risk and positioning the company weakly within its Ba2 CFR. However, the affirmation of the Ba2 CFR and stable outlook incorporate expectations that as the benefits of the strategy take hold and some of the necessary spending wanes, the credit profile will begin to improve in late 2013. Furthermore, Moody's affirmed the SGL-2 speculative grade liquidity rating and believes Cablevision's good liquidity affords it the time and flexibility for this investment. Moody's expects Cablevision to maintain its industry leading revenue per homes passed and penetration across video, data and voice products despite the intense competition from Verizon FiOS, which supports asset value and the Ba2 corporate family rating. The sizeable customer base also provides a reasonably stable stream of cash flow. However, Moody's expects free cash flow to deteriorate over the next year as Cablevision spends heavily to enhance its competitive position, which elevates credit risk and positions the rating weakly. Despite expectations for only neutral to marginally positive free cash flow in 2012, Cablevision maintains good liquidity from balance sheet cash and its revolving credit facility, affording the company with time for benefits of its strategy to take hold. Management's track record of shareholder oriented activity and investments in risky, non-core assets continues to constrain the rating, but Moody's expects management to moderate this activity as it focuses on adding innovative products and services and improving its competitive position in its core cable business. Also, Cablevision's non-cable segments, including Newsday, have been consuming less cash in the last few quarters, and cost efficiencies and the potential sale of Clearview Cinemas could further stem the cash burn of these operations and improve the consolidated credit profile. The stable outlook incorporates expectations that credit metrics will improve in 2013 such that leverage falls below 5 times debt- to-EBITDA and free cash flow increases from expected 2012 levels of less than $50 million. The stable outlook also assumes maintenance of good liquidity and strong operating metrics, including a triple play equivalent ratio of around 50% and annual revenue per homes passed of over $1100. Moody's would consider a negative outlook or downgrade based on expectations for leverage to remain at or above 5 times debt-to- EBITDA beyond 2013 or for lack of improvement in free cash flow or deterioration of the liquidity profile. Evidence of weakening subscriber trends or inability to improve margins from currently depressed levels of the first half 2012 could also have negative ratings implications. The weak credit metrics and management's track record of shareholder oriented activity and risky investments constrain the rating. Upward momentum is highly unlikely absent management commitment to a more conservative profile and expectations for leverage sustained around 4 times debt-to-EBITDA and free cash flow to debt in the high single digits. An upgrade would also require evidence of resilience of the operations to competition. The principal methodology used in rating Cablevision Systems Corporation was the Global Cable Television Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Bethpage, New York, Cablevision Systems Corporation serves approximately 3 million video customers, 2.8 million high speed data customers, and 2.3 million voice customers in and around the New York metropolitan area, as well as about 300 thousand video, 275 thousand high speed data, and 165 thousand voice customers in Montana, Wyoming, Colorado and Utah following its acquisition of Bresnan Broadband Holdings LLC in December 2010. Cablevision is the direct parent of CSC Holdings, Inc, which also owns Newsday LLC, the publisher of Newsday and other niche publications. CABLEVISION SYSTEMS: S&P Keeps 'B+' Rating on $750MM Senior Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said Cablevision Systems Corp.'s upsizing of its senior notes due 2022 to $750 million from $500 million does not affect its 'B+' issue rating or '6' recovery rating on that debt. "We did, however, raise our issue-level rating to 'BB+' from 'BB' on an aggregate of approximately $3 billion of senior unsecured debt at Cablevision unit CSC Holdings LLC and on $650 million of secured debt at Newsday LLC. That upgrade reflects our revision of the recovery rating on that debt to '2' from '3'. The upgrade on the Newsday LLC loan reflects that the primary source of recovery for those creditors would come through the unsecured guarantee provided by CSC Holdings LLC. The '2' recovery rating indicates our expectation of substantial (70% to 90%) recovery of principal in the event of a payment default. The improved recovery prospects are a direct result of the new $750 million of Cablevision notes. The company intends to use the proceeds to repay debt at the CSC Holdings LLC level; specifically, issue proceeds will repay approximately $600 million (in aggregate) of two unsecured notes issues and $150 million of bank debt," S&P said. "Other ratings on Cablevision and subsidiaries, including its 'BB' corporate credit rating, are not affected by the debt issuance. The outlook remains stable," S&P said. RATINGS LIST Cablevision Systems Corp. Corporate Credit Rating BB/Stable/-- $750 mil. senior nts due 2022 B+ Recovery Rating 6 Upgraded; Recovery Rating Revised To From CSC Holdings LLC Senior Unsecured BB+ BB Recovery Rating 2 3 Newsday LLC Senior Secured BB+ BB Recovery Rating 2 3 CBS I LLC: Has Nod to Employ Marquis Aurbach as Attorneys --------------------------------------------------------- CBS I, LLC, obtained permission from the U.S. Bankruptcy Court for the District of Nevada to employ Marquis Aurbach Coffing as its attorneys. As reported by the Troubled Company Reporter on July 4, 2012, Marquis Aurbach will, among other things, advise the Debtor of its rights and obligations and performance of its duties during administration of the Chapter 11 case, and assist the Debtor in formulating a plan of reorganization and disclosure statements and to obtain approval and confirmation thereof. About CBS I CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. The bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24, 2012, in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. CBS I LLC: Dmitri Dalacas Continues as Attorney for State Suits --------------------------------------------------------------- CBS I, LLC, obtained authorization from the U.S. Bankruptcy Court for the District of Nevada to employ Flangas McMillan Law Group as its special counsel to allow Dmitri Dalacas, a member of the firm, to continue his representation of the Debtor. Mr. Dalacas has previously represented the Debtor in prepetition state court action, as well as its counsel on corporate and landlord/tenant related matters. Mr. Dalacas has also represented the Debtors' members in other litigation and transactional matters, but will not be representing these members in their personal capacities in this case. Mr. Dalacas will, among other things, advise the Debtor of its state court rights and obligations, if any, and performance of its duties during the administration of the bankruptcy cases. About CBS I CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. The bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24, 2012, in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. CBS I LLC: U.S. Trustee Unable to Form Creditors' Committee ----------------------------------------------------------- August B. Landis, Acting U.S. Trustee for Region 17, informs the U.S. Bankruptcy Court for the District of Nevada that he is unable to appoint a committee of creditors holding unsecured claims against CBS I, LLC. The Acting U.S. Trustee has solicited the eligible creditors listed by the Debtor, but there was an insufficient response to the solicitation to form a committee. About CBS I CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. The bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24, 2012, in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. CHAMPION INDUSTRIES: Incurs $593,000 Net Loss in July 31 Quarter ---------------------------------------------------------------- Champion Industries, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $592,960 on $26.34 million of total revenues for the three months ended July 31, 2012, compared with net income of $876,477 on $25.59 million of total revenues for the same period during the prior year. The Company reported a net loss of $21.69 million on $80.15 million of total revenues for the nine months ended July 31, 2012, compared with net income of $1.44 million on $76.60 million of total revenues for the same period a year ago. The Company's balance sheet at July 31, 2012, showed $51.21 million in total assets, $51.98 million in total liabilities, and a $767,157 total shareholders' deficit. Marshall T. Reynolds, chairman of the board and chief executive officer of Champion, said, "Our first nine months of 2012 were negatively impacted by two charges associated with certain non- cash events. When we step back and look at the fundamental operations of the Company we have grown sales for the year to date period to $80.2 million from $76.6 million in the previous year or 4.6% and when we look at the third quarter of 2012 compared to the prior year we have grown sales 2.9%. We believe this is indicative of our ability to successfully operate our businesses while devoting substantial efforts, funds and resources to identify an appropriate deleveraging path with our secured lenders. As a result of these actions we incurred approximately $1.4 million in increased non-legal professional fees primarily associated with actions associated with our credit facilities. The Company continues to work diligently to implement a restructuring plan submitted to our secured lenders and we believe certain facets of this plan will improve overall productivity and efficiency of the Company while assisting in addressing credit challenges to assist in a refinancing. The Company continues to remain focused on our customer base and is cognizant of the need to allocate resources to assure we are serving the needs of our customers. We also must address our secured lenders concerns and identify a path to refinancing our credit which will be beneficial for all stakeholders." A copy of the Form 10-Q is available for free at: http://is.gd/tUMNBr About Champion Industries Champion Industries, Inc., is a commercial printer, business forms manufacturer and office products and office furniture supplier in regional markets in the United States. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, WV. The Company's sales force sells printing services, business forms management services, office products, office furniture and newspaper advertising. Its subsidiaries include Interform Corporation, Blue Ridge, Champion Publishing, Inc., The Dallas Printing, The Bourque Printing, The Capitol, and The Herald- Dispatch. The Company reported a net loss of $3.97 million for the year ended Oct. 31, 2011, compared with net income of $488,134 during the prior year. CITIZENS CORP: Lowery Gets Judge's Approval to Pursue Claim ----------------------------------------------------------- Brian Reisinger, senior staff reporter at Nashville Business Journal, reports that Ed Lowery, the chairman of Citizens Corp., was granted Bankruptcy Court authority to pursue claims that Legends Bank damaged his personal financial situation when it and a group of lenders attempted to exercise control over Citizens subsidiary Financial Data Technology Corp. Bankruptcy Judge Marian Harrison granted Mr. Lowery relief from the automatic stay, in part, to pursue that claim, but denied his request to go after FiData head Jean Ramsey. According to Nashville Business Journal, Mr. Lowery's attorney Nader Baydoun, Esq., at Baydoun & Knight in Nashville said: "There are two positives: One, we can pursue the claim against Legends Bank now . . . Secondly, even with a stay applying to Jean Ramsey, the bankruptcy proceeding will come to an end reasonably soon." The report relates the lender group -- originally led by Tennessee Commerce Bank in Franklin before it failed in January -- has won repeated victories in its argument that Mr. Lowery can't be trusted to settle Citizens' debts. Judge Harrison has appointed Gary Murphey to oversee Citizens, and his plan to sell FiData has received approval and was due to close Sept. 14, according to the report. The report adds Mr. Lowery is also under siege by a range of banks and former business associates suing him for business deals gone bad. Beyond that, his dealings are part of a federal investigation probing whether any fraudulent activity was involved in his unraveling or relationship with banks. The report notes permission to pursue Legends -- opponents had contended that would interfere with Mr. Murphey's ability to resolve the Citizens morass -- is a watershed. But it remains to be seen whether Mr. Lowery will get any traction in that case in Chancery Court. About Citizens Corp. Franklin, Tennessee-based Citizens Corp. operates a mortgage brokerage business. Citizens Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011. Judge George C. Paine, II, presides over the case. The Debtor employed Robert J. Mendes, Esq., at MGLAW, PLLC, as its counsel. Citizens listed assets and liabilities showing property worth $40.1 million and debt of $17.8 million. Lenders Tennessee Commerce Bank is represented by David W. Houston, IV, Esq., at Burr & Forman LLP. Citizens filed a reorganization plan offering to pay all creditors in full over time, including Tennessee Commerce Bank and other secured lenders owed $17.3 million. Unsecured creditors, owed a combined $81,000, would be paid off in equal installments over five years. On Feb. 27, 2012, the Court granted the request of lender Legends Bank for appointment of a Chapter 11 trustee. The Court held that an independent person must review many of the transactions involving CEO Ed Lowery, and its wholly owned subsidiary, Financial Data Technology Corporation. Marion Ed Lowery, a former owner of Peoples State Bank of Commerce of Nolensville and various other entities, is the subject of federal investigation and his ventures have ties throughout the Middle Tennessee banking community. He signed the Chapter 11 petition. CITIZENS REPUBLIC: Moody's Reviews Ratings for Upgrade ------------------------------------------------------ Moody's Investors Service placed the ratings of FirstMerit Bank (FirstMerit) on review for downgrade. FirstMerit has a standalone bank financial strength rating (BFSR)/baseline credit assessment (BCA) of B-/a1 and deposit ratings of A1/Prime-1. FirstMerit's holding company, FirstMerit Corporation, is unrated. In a related action, Moody's placed the ratings of Citizens Republic Bancorp, Inc. (Citizens) and its subsidiaries on review for upgrade. Citizens' lead bank, Citizens Bank, Michigan, has a standalone BFSR/BCA of D-/ba3 and deposit ratings of Ba3/Not Prime. Its holding company's issuer rating is B2. Ratings Rationale The rating reviews follow the announcement that FirstMerit has entered into a definitive agreement to acquire Citizens in an all- stock transaction valued at $912 million. The transaction is expected to close in Q2 2013. Moody's said the review of FirstMerit will focus on the challenges associated with integrating a comparatively large and weak bank that will also extend its franchise into new markets, specifically Michigan and Wisconsin. Citizens is FirstMerit's largest acquisition to date at approximately $10 billion in assets or 65% of FirstMerit's balance sheet. Citizens' weak credit profile reflects the severe asset quality deterioration that it experienced during the financial crisis and the negative effect that had on its capital position. Although Citizens executed an aggressive and successful strategy to reduce its problem assets in 2010-11, the depth of its credit problems constrained its ability to invest in its franchise, which is concentrated in the challenged Michigan market. Because of its capital strength, Moody's believes FirstMerit is better positioned to deal with Citizens' challenges. However, it faces significant integration risk from this transaction while it continues to expand in the competitive Chicago market. Moody's said the review for upgrade on Citizens' ratings will focus on the likelihood of completion of the transaction with FirstMerit. If the transaction is completed as planned, Moody's expects that Citizens' ratings will match those of FirstMerit. Moody's expects to complete its review upon completion of the transaction. The principal methodology used in these ratings was Moody's Consolidated Global Bank Rating Methodology published in June 2012. FirstMerit Corporation is headquartered in Akron, Ohio and reported assets of $14.6 billion at June 30, 2012. Citizens Republic Bancorp, Inc. is headquartered in Flint, Michigan and reported assets of $9.6 billion at June 30, 2012. CLARE OAKS: Bondholders Recovering 45% Under Plan ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Clare Oaks is on track to emerge from the Chapter 11 reorganization begun in December under a reorganization plan sponsored by secured bondholders owed $95.8 million. According to the report, an attempt at selling the facility generated an offer of $16 million which the bondholders found insufficient since it would have generated only $10 million for them after paying expenses and the loan financing the bankruptcy. The bondholders submitted their own plan. The report relates that the bankruptcy court in Chicago approved the explanatory disclosure statement last week. A confirmation hearing for approval of the plan is set for Oct. 25. Bondholders are settling aside some cash that could pay as much as 2.7% on $1.9 million in unsecured debt. For a projected 45% recovery, bondholders will receive $40 million in new second-lien bonds that will pay interest only at 4% for 15 years. The report notes that emergence from Chapter 11 will be financed by a $12 million first-lien secured loan provided by some of the bondholders. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. The Debtor intends to sell its Clare Oaks Campus to ER Propco Co, LLC aka Evergreen for $16,000,000, subject to higher and better offers. CLEAR CHANNEL: Bank Debt Trades at 19% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 81.16 cents-on-the-dollar during the week ended Friday, Sept. 14, an increase of 3.63 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and Standard & Poor's 'CCC+' rating. The loan is one of the biggest gainers and losers among 169 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. For the six months ended June 30, 2012, the Company reported a net loss attributable to the Company of $182.65 million on $2.96 billion of revenue. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEARWIRE CORP: Intel Owns 14.3% of Class A Shares as of Aug. 29 ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Intel Corporation disclosed that as of Aug. 29, 2012, it beneficially owns 94,076,878 share of Class A Common Stock of Clearwire Corporation representing 14.3% of the shares outstanding. Intel previously reported beneficial ownership of 94,076,878 Class A shares as of June 8, 2012. A copy of the amended filing is available for free at http://is.gd/ccJFws About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss attributable to the Company of $717.33 million in 2011, a net loss attributable to the Company of $487.43 million in 2010, and a net loss attributable to the Company of $325.58 million in 2009. The Company's balance sheet at June 30, 2012, showed $8.43 billion in total assets, $5.65 billion in total liabilities, and $2.78 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. The ratings on Clearwire continue to reflect its "highly leveraged" financial risk profile based on its high debt burden and "weak" liquidity (both terms as defined in S&P's criteria). "The ratings also reflect our view that Clearwire has a vulnerable business position as a developmental-stage company with significant competition from better capitalized wireless carriers, including AT&T Mobility and Verizon Wireless, which are deploying their own 4G wireless services," S&P said in January 2012. "We believe that the company would likely run out of cash in the late 2012 to early 2013 time frame absent significant asset sales, since we view the terms in the December 2011 wholesale agreement with Sprint Nextel as unfavorable in the near term and will likely constrain cash inflows in 2012 to 2013. We have not assumed spectrum sales in our liquidity assessment because of the uncertainty involved in finding a buyer, as well as timing. However, if the company could secure sufficient funding for operations through 2013, we could raise the ratings," S&P also stated. CLEARWIRE CORP: Sprint Nextel Owns 54.3% of Class A Shares ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Sprint Nextel Corporation and its affiliates disclosed that, as of Aug. 29, 2012, they beneficially own 705,359,348 shares of Class A Common Stock of Clearwire Corporation representing 54.3% of the shares outstanding. Sprint Nextel previously reported beneficial ownership of 57% of class A shares as of June 8, 2012. A copy of the amended filing is available for free at http://is.gd/isLi5M About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss attributable to the Company of $717.33 million in 2011, a net loss attributable to the Company of $487.43 million in 2010, and a net loss attributable to the Company of $325.58 million in 2009. The Company's balance sheet at June 30, 2012, showed $8.43 billion in total assets, $5.65 billion in total liabilities, and $2.78 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. The ratings on Clearwire continue to reflect its "highly leveraged" financial risk profile based on its high debt burden and "weak" liquidity (both terms as defined in S&P's criteria). "The ratings also reflect our view that Clearwire has a vulnerable business position as a developmental-stage company with significant competition from better capitalized wireless carriers, including AT&T Mobility and Verizon Wireless, which are deploying their own 4G wireless services," S&P said in January 2012. "We believe that the company would likely run out of cash in the late 2012 to early 2013 time frame absent significant asset sales, since we view the terms in the December 2011 wholesale agreement with Sprint Nextel as unfavorable in the near term and will likely constrain cash inflows in 2012 to 2013. We have not assumed spectrum sales in our liquidity assessment because of the uncertainty involved in finding a buyer, as well as timing. However, if the company could secure sufficient funding for operations through 2013, we could raise the ratings," S&P also stated. CLINICA REAL: Files for Chapter 11 Amid Dispute With State Farm --------------------------------------------------------------- Clinica Real, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-20451) in Phoenix, Arizona, on Sept. 13. Clinica Real, doing business as Clinica Real Rehabilitation & Chiropractic, disclosed $10.5 million in assets and $29.8 million in liabilities. The Debtor has no real property. Its largest asset is an unliquidated claim against State Farm Mutual Automobile Insurance Co. and State Farm Fire & Casualty Co., which the Debtor valued at $9.75 million. Most of the claims against the Debtor are unsecured. State Farm has an unsecured claim of $29 million, which the Debtor says is disputed. A copy of the Debtor's schedules is available at: http://bankrupt.com/misc/azb12-20451.pdf A meeting of creditors is scheduled for Oct. 16, 2012, at 10:00 a.m. COCOPAH NURSERIES: Latin Lady Leaves Creditors' Committee --------------------------------------------------------- Ilene J. Lashinsky, the U.S. Trustee for Region 14, has dropped Latin Lady Ranch LLC from the Official Committee of Unsecured Creditors in the Cocopah Nurseries of Arizona, Inc. bankruptcy case. The Committee now consists of: 1. JENSEN FAMILY TRUST/OASIS RANCH MANAGEMENT, INC. Attn: Dennis J. Jensen P.O. Box 818 Coachella CA 92236 Tel: 760-398-8850 Fax: 760-398-8851 E-mail: dennis@seaviewsales.com 2. FOSTER-GARDNER, INC. Attn: Mitch Moldenhauer 1517 First Street Coachella CA 92236 Tel: 760-398-6151 E-mail: mitch@foster-gardner.com 3. COACHELLA VALLEY WATER DISTRICT Attn: Kay Godey or Roger Galli 85-995 Avenue 52 Coachella CA 92236 Tel: 760-398-2661 Fax: 760-568-1784 E-mail: kgodbey@cvwd.org rgalli@cvwd.org 4. TURCO FARMS/TURCO DESERT COMPANY INC. ATTN: John E. Turco P.O. Box 2437 San Jose CA 95109 Phone: 408-297-2026 Fax: 408-297-4825 5. MCKEEVER WATERWELL & PUMP SERVICE, INC. Attn: Jesse McKeever 49024 Croquet Court Indio CA 92201 Phone: 760-399-4237 Fax: 760-399-4239 E-mail: mckeeverwaterwell@msn.com 6. KENNY STRICKLAND, INC. Attn: Kenny Strickland PO Box 998 Coachella CA 92236 Phone: 760-398-2031 Fax: 760-398-1921 E-mail: lourdes@kennystrickland.com About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. The Official Committee of Unsecured Creditors is represented by Allen, Sala & Bayne, PLC. COCOPAH NURSERIES: Creditors' Panel Can Hire Allen Sala as Counsel ------------------------------------------------------------------ The Official Joint Committee of Unsecured Creditors of Cocopah Nurseries of Arizona, Inc., et al., sought and obtained authorization from the U.S. Bankruptcy Court for the District of Arizona to retain Allen, Sala & Bayne, PLC, as attorney. ASB will: a. provide legal advice to the Committee on any issues in these cases, including, without limitation, issues relating to its rights and responsibilities in these cases, asset valuations, asset sales, contracts, financing, leases, litigation, Plans of Reorganization and Disclosure Statements; b. represent the Committee at hearings set by the Court in the bankruptcy cases; and c. prepare necessary applications, motions, complaints, answers, orders, reports or other legal papers for filing with the Court. ASB will be paid at these hourly rates: Members $305-$375 Associates $175-$255 Legal Assistants & Law Clerks $115-$135 To the best of the Committee's knowledge, ASB is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COCOPAH NURSERIES: Can Hire Focus Management as Financial Advisor ----------------------------------------------------------------- Cocopah Nurseries of Arizona, Inc., et al., obtained permission from the Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona to employ Focus Management Group USA, Inc., as financial advisor. Focus Management will, among other things, assist in connection with the Debtors' Chapter 11 filing including preparation of cash forecasts, budgets, projections, and filing documents. About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COCOPAH NURSERIES: Has Nod to Hire Squire Sanders as Attorneys -------------------------------------------------------------- Cocopah Nurseries of Arizona, Inc., et al., obtained permission from the Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona to employ Squire Sanders (US) LLP as counsel. Squire Sanders will, among other things, advise the Debtors with respect to their powers and duties as debtors-in- possession in the continued management and operation of their business and property. About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COLONIAL REALTY: Moody's Raises Sr. Unsecured Rating From 'Ba1' --------------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured rating of Colonial Realty Limited Partnership to Baa3 from Ba1. The outlook is stable. Ratings Rationale The rating action reflects Colonial's success in executing on its plan to improve its balance sheet and simplify its business structure in recent years. Effective leverage has decreased to 45.2% at 2Q12 from 50.6% in 2Q10 through issuances of common stock, sales of non-core assets and repurchases of senior notes and preferred stock. Reduced effective leverage, in concert with strong multifamily market fundamentals, has benefited CLP's net debt to EBITDA and fixed charge coverage. Net debt to EBITDA has improved to 8.6X at 2Q12 (6 months annualized EBITDA) from 9.4X at 2Q10 and fixed charge coverage increased to 2.2X from 1.7X over the same period. Moody's expected net debt to EBITDA to fall below 8.0X over the near-term. Importantly, Colonial Properties has exited most of its joint ventures, supporting the simplification of its business model. Colonial Properties liquidity is solid and the REIT has a very manageable debt maturity schedule. Debt maturities through 2014 can be covered with current (as of 2Q12) bank line availability and cash on hand. Moody's also indicated that the REIT's credit profile benefits from a healthy and high-quality pool of unencumbered assets and a low FFO payout ratio. These positive factors are offset by the company's still high net debt to EBITDA and low fixed charge coverage, though these metrics are improving with the strength in multifamily fundamentals. The rating also accounts for Colonial's moderate development appetite through business cycles. Moody's stated that an upgrade would be predicated upon the following: (1) a reduction in leveragewith net debt to recurring EBITDA approaching 7.0X, while maintaining effective leverage below 45%; (2) fixed charge coverage at or over 2.5X on a sustained basis; (3) secured debt less than 15% of gross assets; and, (4) development remaining less than 10% of gross assets. A downgrade could result should the following occur: (1) net debt to recurring EBITDA above 9.0X on a sustained basis, (2) effective leverage over 50%; (3) fixed charge coverage at or below 2.0X on a sustained basis; and, (4) development above 15% of gross assets. The following ratings were upgraded with a stable outlook: Colonial Properties Trust -- preferred stock shelf to (P) Ba1 from (P) Ba2 Colonial Realty Limited Partnership -- senior unsecured debt to Baa3 from Ba1 and senior unsecured debt shelf to (P) Baa3 from (P) Ba1 Moody's last rating action with respect to Colonial Properties was on September 6, 2011 when Moody's affirmed the ratings of Colonial and revised the outlook to positive from stable. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. Colonial Properties Trust is a REIT based in Birmingham, Alabama, USA, that owns, operates and develops multifamily assets, and manages and develops select commercial assets in the Sunbelt region of the United States. As of June 30, 2012, the REIT had $3.3 billion in book assets and $1.2 billion in book equity. COMARCO INC: Reports $151,000 Net Income in July 31 Quarter ----------------------------------------------------------- Comarco, Inc., filed its quarterly report on Form 10-Q, reporting net income of $151,000 on $1.7 million of revenue for the three months ended July 31, 2012, compared with a net loss of $1.9 million on $1.9 million of revenue for the three months ended July 31, 2011. For the six months ended July 31, 2012, the Company had a net loss of $561,000 on $3.9 million of revenue, compared with a net loss of $3.2 million on $4.9 million of revenue for the six months ended July 31, 2011. The Company's balance sheet at July 31, 2012, showed $5.2 million in total assets, $7.0 million in total liabilities, and a stockholders' deficit of $1.8 million. As of July 31, 2012, the Company had negative working capital of approximately $2.0 million. In order for the Company to continue its operations for the next twelve months and to be able to discharge its liabilities and commitments in the normal course of business, it must increase sales, reduce operating expenses, and potentially raise additional funds, through either debt and/or equity financing to meet its cash requirements during the next twelve months. "No assurance can be given, however, that will be successful in meeting those cash requirements." A copy of the Form 10-Q is available at http://is.gd/FkQeFl About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO.PK) -- http://www.comarco.com/-- is a designer, developer, and provider of innovative mobile power solutions through its ChargeSource(R) line of multi-function universal power products. * * * As reported in the TCR on May 3, 2012, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about 's ability to continue as a going concern, following the Company's results for the fiscal year ended Jan. 31, 2012. The independent auditors noted that the Company has suffered recurring losses and negative cash flow from operations, has had declining working capital and uncertainties surrounding the Company's ability to raise additional funds. COMMUNITY TOWERS: Has OK to Expand Murray's Scope of Employment --------------------------------------------------------------- The Hon. Stephen L. Johnson of the U.S. Bankruptcy Court for the Northern District of California has amended, at the behest of Community Towers I, LLC, et al., the order authorizing employment of bankruptcy counsel Murray & Murray, A Professional Corporation to broaden the authorized scope of employment as counsel. Murray & Murray is now representing the Debtors in negotiations and proceedings involving bankruptcy cases of third parties, including counseling the Debtors and pursuing affirmative relief in the cases to protect and enforce the Debtors' rights. The Debtor in October 2011 obtained approval to hire Murray as bankruptcy counsel. About Community Towers I Community Towers I LLC is a real estate investment company. Community Towers I LLC and various affiliates -- Community Towers II, LLC, Community Towers III, LLC, Community Towers IV, LLC -- filed a Chapter 11 petition (Bankr. N.D. Calif. Lead Case No. 11-58944) on Sept. 26, 2011, in San Jose, California. Community Towers I disclosed $51,939,720 in assets and $39,479,784 in liabilities as of the Chapter 11 filing. CONVERTED ORGANICS: Has 469.9 Million Outstanding Common Shares --------------------------------------------------------------- On Jan. 3, 2012, Converted Organics entered into an agreement with an institutional investor whereby the Company agreed to sell to the investor twelve senior secured convertible notes. The initial January Note was issued on Jan. 3, 2012, in an original principal amount of $247,500. The remaining eleven January Notes will each have an original principal amount of up to $237,600. Each January Note matures eight months after issuance. The total face value of the twelve notes under this agreement will be $2,861,100, assuming each note is sold for the full face value, to the investor, of which there is no assurance. The January Notes are convertible into shares of the Company's common stock at a conversion price equal to 80% of lowest bid price of the Company's common stock on the date of conversion. Also, as previously reported on March 12, 2012, the Company entered into an agreement with two investors, pursuant to which the Company agreed to effect an additional closing under the Jan. 12, 2012, convertible note in which the Company issued the buyers new notes having an aggregate original principal amount of $550,000. As of Sept. 7, 2012, the total principal outstanding on these notes was $1,671,560. As of Sept. 14, 2012, the principal amount of the Notes is $1,541,960. From Sept. 10, 2012, until Sept. 14, 2012, a total of $129,600 in principal had been converted into 101,694,892 shares of common stock. Since the issuance of the Original Note and the additional closing, a total of $575,100 in principal has been converted into 289,460,889 shares of common stock (after effect of the November 2011 and March 2012 reverse stock splits). The Note holders are accredited investors and the shares of common stock were issued in reliance on Section 3(a)(9) under the Securities Act of 1933, as amended. As of Sept. 14,2012 the Company had 469,991,361 shares of common stock outstanding. About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. After auditing the 2011 results, Moody, Famiglietti & Andronico, LLP, noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. Converted Organics reported a net loss of $17.98 million in 2011, compared with a net loss of $47.81 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.05 million in total assets, $6.91 million in total liabilities and $140,006 in total stockholders' equity. COOPERATIVE COMMS: Settles Dispute With Verizon Communications -------------------------------------------------------------- Linda Moss at The (N.J.) Record reports that Louis Lombardi, Jr., the chief operating officer of Cooperative Communications, said the company has settled with its vendors, including the biggest, Verizon Communications, whom Cooperative blamed for forcing it to file for bankruptcy. "It was a dispute with Verizon that we thought we had resolved, and at the last minute we couldn't resolve it," the report quotes Mr. Lombardi as saying. "So we filed to take advantage of the automatic stay provision of the bankruptcy. It wasn't a financial issue." The report notes Lee Gierczynski represents Verizon. The report relates the Company is in the process of crafting its reorganization plan, which hasn't been filed yet. "We finalized our administrative paperwork just recently, and right now we're focused on swiftly emerging from Chapter 11," Mr. Lombardi said. Based Lyndhurst, New Jersey, Cooperative Communications Inc. filed for Chapter 11 protection on July 10, 2012 (Bankr. D. N.J. Case No. 12-27319). Judge Novalyn L. Winfield presides over the case. Ilana Volkov, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Debtor. The Debtor both estimated assets and debts of between $1 million and $10 million. COPYTELE INC: Had $629,100 Net Loss in July 31 Quarter ------------------------------------------------------ CopyTele, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $629,102 on $249,470 of net revenue for the three months ended July 31, 2012, compared with a net loss of $1.8 million on $450,360 of net revenue for the three months ended July 31, 2011. For the nine months ended July 31, 2012, the Company had a net loss of $2.4 million on $946,735 of net revenue, compared with a net loss of $4.6 million on $554,233 of net revenue for the nine months ended July 31, 2011. The Company's balance sheet at July 31, 2012, showed $5.9 million in total assets, $6.8 million in total liabilities, and a shareholders' deficit of $893,071. According to the regulatory filing, based on information presently available, the Company does not believe that its existing cash, cash equivalents, and investments in certificates of deposit, together with cash flows from expected sales of its encryption products and revenue relating to its display technologies, and other potential sources of cash flows or necessary expense reductions including employee compensation, will be sufficient to enable it to continue its marketing, production, and research and development activities for 12 months from the end of this reporting period. "Accordingly, there is substantial doubt about our ability to continue as a going concern.: A copy of the Form 10-Q is available at http://is.gd/fYg76V Melville, N.Y.-based CopyTele, Inc.'s principal operations include the development, production and marketing of thin flat display technologies, including low-voltage phosphor color displays and low-power passive E-Paper(R) displays, and the development, production and marketing of multi-functional encryption products that provide information security for domestic and international users over several communications media. CORELOGIC INC: Moody's Affirms 'Ba2' Corp. Family Rating -------------------------------------------------------- Moody's Investors Service affirmed CoreLogic, Inc.'s Ba2 corporate family rating (CFR) and probability of default rating (PDR). Moody's also raised CoreLogic's speculative grade liquidity rating to SGL-1 from SGL-2 and changed its ratings outlook to stable from negative. Ratings Rationale The outlook revision to stable reflects Moody's expectation that CoreLogic's profits and cash flows will continue to improve through 2013 and that financial policies will remain disciplined. Despite the potential for a 25% decline in 2013 mortgage originations due to waning refinancing activity and the prolonged foreclosure moratoriums imposed by many of the leading banks, Moody's expects CoreLogic to continue to improve its overall operating performance. The decrease in mortgage origination services will likely be more than offset by the increased demand for risk and fraud analytics by lenders and ongoing market share shifts from in-house processors. In addition, CoreLogic is benefiting from well-executed cost reduction strategies. Moody's anticipates operating margins to be sustained in the high teens percentage through 2013. CoreLogic also has relatively modest leverage (adjusted debt to EBITDA of 2.5 times by the end of 2012) and very good liquidity (including cash of over $250 million and Moody's expectation of annual free cash flow of about $200 million). This provides CoreLogic with a buffer to withstand weak market conditions, which are likely to persist through 2013. The stable outlook also reflects Moody's view that the uncertainty regarding future financial policies has been mitigated by the recovery in the business, which reduces the likelihood of event risk in the near-term. While a significant activist shareholder appears to have been appeased for now, it remains to be seen to what extent CoreLogic will engage in shareholder friendly actions in the future. CoreLogic's Ba2 CFR reflects the company's strong market position within the mortgage settlement services market built on long- standing relationships with several of the largest financial institutions. This profile leads to generally predictable revenue and cash flow, as reflected by solid financial performance through the last economic cycle. However, adverse market conditions (e.g., weak housing market, regulatory scrutiny, foreclosure moratorium, etc.) will continue to challenge operating results as originations and default services will likely be down in 2013. Nevertheless, Moody's projects slight revenue growth (low single digits on a year-over-year basis) through 2013 due primarily to the strength of CoreLogic's data analytics business (nearly 40% of total revenue), which has benefited from increased credit and risk management-related activity during the housing downturn. The Ba2 rating could be upgraded if CoreLogic demonstrates organic revenue and earnings growth while improving leverage such that free cash flow to debt exceeds 15% and debt to EBITDA improves to the low 2 times level on a sustained basis. The ratings could be downgraded if CoreLogic engages in significant share buyback or acquisition activity or experiences a decline in profitability such that adjusted debt to EBITDA exceeds mid 3x, or free cash flow to debt decreases to less than 10% for an extended period of time. Ratings affirmed (assessments revised): Corporate Family Rating -- Ba2 Probability of Default Rating -- Ba2 $550 Million Senior Secured Revolving Credit Facility due 2016 -- Baa3, (LGD 2, 20% from 19%) $350 Million Senior Secured Term Loan due 2016 -- Baa3, (LGD 2, 20% from 19%) $400 million Senior Notes due 2021 -- Ba3, (LGD 5, 80% from 79%) Rating revised: Speculative Grade Liquidity Rating -- SGL-1 from SGL-2 The rating outlook is stable. The principal methodology used in rating CoreLogic was Global Business & Consumer Service Industry Rating Methodology rating methodology published in October 2010. CoreLogic, Inc., with about $1.5 billion of projected annual revenues, is a leading provider of property and mortgage data and analytics products and solutions. The company provides mortgage risk tools and other analytical products; property and credit information; and outsourcing solutions for lenders, employers and other business clients. DELPHI CORP: Moody's Says New Share Repurchase Credit Negative -------------------------------------------------------------- The announcement by Delphi Automotive Plc (the parent company of Delphi Corporation) of a new share repurchase program is a negative credit development as it will divert available funds from the business and consume some of the company's liquidity. As Delphi is expected to execute the repurchases over time and will not incur debt to fund the repurchases, the development does not affect the company's ratings, Corporate Family Rating (CFR) at Ba1, Speculative Grade Liquidity Rating at SGL-2, or the stable rating outlook. The last rating action for Delphi Corporation was on March 20, 2012 when the Corporate Family Rating was raised to Ba1 with a stable rating outlook. The principal methodologies used in rating Delphi Corporation were the Global Automotive Supplier Industry published in January 2009, and the Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's Web site. Delphi Automotive, PLC is a supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. Delphi operates globally and has a diverse customer base, including every major vehicle manufacturer. Revenues in 2011 were approximately $16 billion. Delphi Corporation is the U.S. based subsidiary of Delphi Automotive PLC (Delphi). DETROIT, MI: Governor Wants to Put Belle Isle Under State Control ----------------------------------------------------------------- Chris Christoff, writing for Bloomberg News, reported that Michigan Governor Rick Snyder has proposed to place Detroit's Belle Isle park under state control. According to Bloomberg, Gov. Snyder wants to place the 983-acre island under state control, charge an entry fee and create a lure for young people to move into a city that's lost one-fourth of its population since 2000. According to Bloomberg, Gov. Snyder's plan embodies a larger conflict over control of a mostly black, Democratic city that's resisted takeover by a state government dominated by white Republicans like Snyder. The governor has said he would rather not appoint an emergency manager, and that the city's salvation lies with attracting tax-paying residents and businesses. The report noted that some say an entry fee would shut out low- income Detroiters who've always had free access to the island nestled between their city and Canada. The report related that an agreement approved by the city in April meant to avert a takeover of municipal finances or bankruptcy called for a long-term lease of Belle Isle to the state. A state proposal for a 99-year lease prompted a protest march last month led by three members of the City Council, which must approve a plan. On Sept. 12, the report said, Gov. Snyder and Mayor Dave Bing said they have agreed on a no-rent, 30-year deal beginning Oct. 1. Mayor Bing said that would save Detroit $275 million over 30 years and could be renewed for two more 30-year terms. Gov. Snyder said the state would issue bonds to pay for some restorations. Bloomberg said admission would be a $10 annual parks sticker Michigan motorists can buy when they renew their license plates. It allows unlimited use, although entry would be free by foot, bicycle or public transportation. "This isn't Detroit versus Michigan," Gov. Snyder said at a press conference at City Hall with Mayor Bing, according to Bloomberg. "This is Detroit, Michigan." Belle Isle Park was designed in 1883 by Frederick Law Olmsted, co-creator of New York's Central Park, and is reachable only by a half-mile bridge from the city or by boat. About 2 million vehicles are expected to make the drive this year, according to Brad Dick, director of the city's general services department. DEX MEDIA WEST: Bank Debt Trades at 36% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 64.43 cents-on- the-dollar during the week ended Friday, Sept. 14, a drop of 0.65 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Moody's Caa3 rating and Standard & Poor's D rating. The loan is one of the biggest gainers and losers among 169 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. * * * In early April 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). The rating outlook is negative. "At the same time, we affirmed our issue-level rating on Dex Media East Inc.'s $672 million outstanding term loan, Dex Media West Inc.'s $594 million outstanding term loan, and R.H. Donnelley Inc.'s $866 million outstanding term loan due 2014 at 'D'. The recovery rating on these loans remains at '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default," S&P said. "The company's March 9, 2012 amendment allows for ongoing subpar repurchases of its term debt until 2013, as long as certain conditions are met. Additionally, on March 22, 2012, the company announced the commencement of a cash tender offer to purchase a portion of its senior subordinated notes due in 2017 below par. The term loan and subordinated notes are trading at a significant discount to their par values, providing the company an economic incentive to pursue a subpar buyback. We believe that these circumstances suggest a high probability of future subpar buybacks, which are tantamount to default under our criteria," S&P said. "The 'CCC' corporate credit rating reflects our view that Dex One's business will remain under pressure given the unfavorable outlook for print directory advertising. We view the company's rising debt leverage, low debt trading levels, weak operating outlook, and steadily declining discretionary cash flow as indications of financial distress. As such, we continue to assess the company's financial risk profile as 'highly leveraged,' based on our criteria. We regard the company's business risk profile as 'vulnerable,' based on significant risks of continued structural and cyclical decline in the print directory sector. Structural risks include increased competition from online and other distribution channels as small business advertising expands across a greater number of marketing channels," S&P said. DIALOGIC INC: Effects a 5-for-1 Reverse Stock Split --------------------------------------------------- Dialogic Inc. filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, to effect a 5-for-1 reverse stock split of the Company's issued and outstanding common stock, $0.001 par value per share. The Reverse Stock Split became effective at 5:00 pm EDT on Sept. 14, 2012. The Charter Amendment was approved by the Company's stockholders at a special meeting held on Sept. 14, 2012. As a result of the Reverse Stock Split, each five shares of the Company's issued and outstanding Common Stock has been automatically combined and converted into one issued and outstanding share of Common Stock, $0.001 par value per share. The Reverse Stock Split has affected all issued and outstanding shares of Common Stock, as well as Common Stock underlying stock options and warrants outstanding immediately prior to the effectiveness of the Reverse Stock Split. The Reverse Stock Split has reduced the number of outstanding shares of the Common Stock outstanding prior to the Reverse Stock Split from 71,999,489 shares to approximately 14,399,897 shares. The number of authorized shares of Common Stock or Preferred Stock was not affected by the Reverse Stock Split. The Reverse Stock Split did not alter the par value of the Common Stock or modify any voting rights or other terms of the Common Stock. The Common Stock will begin to trade on The NASDAQ Global Market on a post-split basis on Sept. 17, 2012, with the new CUSIP number 25250T 209. The stockholders also approved the proposed stock option exchange program that will permit eligible employees, officers and directors to surrender certain outstanding stock options for cancellation in exchange for new stock options. About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. The Company's balance sheet at June 30, 2012, showed $140.76 million in total assets, $188 million in total liabilities and a $47.23 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. DIGITAL DOMAIN: Lands $11.8 Million Loan From Noteholders --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Digital Domain Media Group Inc., a provider of visual effects for the movie industry, said late Sept. 13 that senior noteholders agreed to provide $11.8 million in financing for the bankruptcy reorganization. The bankruptcy court gave the company authority on Sept. 12 to borrow $4.14 million to cover last week's payroll. According to the report, the day after bankruptcy, the bankruptcy judge reluctantly gave Digital Domain permission to hold an auction on Sept. 21 testing whether the $15 million bid from Searchlight Capital Partners LP is the best offer for the business. Competing offers are due Sept. 20. A hearing to approve the sale is scheduled for Sept. 24. The report relates that the bankruptcy judge said he might delay the auction if creditors object to the speed of the sale. The company urged the judge to hold the sale quickly because movie producers were threatening to pull out their projects. About Digital Domain Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/ -- engages in the creation of original content animation feature films, and development of computer-generated imagery for feature films and transmedia advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11 to sell its business for $15 million to Searchlight Capital Partners LP. The Debtors have also sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. Port St. Lucie, Florida-based Digital Domain disclosed assets of $205 million and liabilities totaling $214 million. DDMG also announced that it has entered into a purchase agreement with Searchlight Capital Partners L.P. to acquire Digital Domain Productions Inc. and its operating subsidiaries in the United States and Canada, including Mothership Media, subject to the receipt of higher and better offers and Court approval. DDPI and Mothership, with studios in California and Vancouver, are focused on creating digital visual effects, CG animation and digital production for the entertainment and advertising industries and are led by recently promoted Chief Executive Officer Ed Ulbrich. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. DISTHENE GROUP: Fights Order Putting Firm in Receivership --------------------------------------------------------- The Associated Press reports that a multimillion-dollar family- owned enterprise in Buckingham County, Virginia, is fighting a judge's order forcing it into receivership. The Richmond Times-Dispatch reported that The Disthene Group Inc. asked the Virginia Supreme Court last week to block Fairfax County Circuit Court Judge Marum Roush's order, according to Associated Press. The report relates that the company said the order requires a receiver to begin liquidating assets -- that would make an appeal meaningless. In the motion, Associated Press notes that the company claims Roush misconstrued Virginia's laws pertaining to business judgment and misinterpreted the nature of key business dealings. The report says that Roush's order stems from a long-running legal battle among members of the Dixon family over Disthene's operation. The report relates that the holding company controls the family's properties, including Kyanite Mining. Roush said mismanagement and oppression of minority stockholders clouded Disthene's operations for years, the report notes. DOLE FOOD: Possible Business Sale No Impact on Moody's 'B1' CFR --------------------------------------------------------------- Moody's Investors Service said that Dole's announcement that it is in advanced negotiations with Itochu Corporation of Japan (rated Baa1,stable) for a possible sale of its Packaged Foods and Asia Fresh businesses does not change its B1 Corporate Family Rating or the developing outlook that was put in place when Dole first announced that it was considering strategic options in May. A rating action or review of ratings would likely result from a firm announcement of a deal. However it is currently unclear if a sale, should it occur, would be a credit positive or negative for Dole. A material reduction in debt as a result of a sale could dramatically lower leverage for the remaining business, which would be a credit positive. However such leverage reduction would have to be considered in the context of the cash flow, asset base, diversification and relative stability/predictability of the remaining business. A smaller, less diversified business with more concentration on the volatile, commodity- dependent fresh produce side of the business could be a credit negative even with reduced leverage. Furthermore, it is not clear if such a transaction would conclude the strategic review, or if additional sales or other changes would ensue. Dole's B1 corporate family rating incorporates the company's earnings and cash flow volatility from its exposure to commodity markets as well as the impact of such uncontrollable factors as weather or political regulations on key products. Nonetheless, Dole enjoys a leadership position in its industry segment and has good geographic diversity. Credit metrics, which had been strengthening from improved profit margins and debt reductions as a result of the sale of non-core assets as well as the IPO, softened somewhat over the past year, with leverage in the mid- to high 5 times range up from 4.9 times in 2010. On an existing entity basis and excluding any strategic transaction discussed above, ratings could be upgraded if Dole achieves material and sustained improvement in operating margins and is able to reduce leverage such that debt to EBITDA is sustained below 4 times. Upward rating momentum would also require maintenance of a strong liquidity profile. Based on the existing corporate and business structure and excluding any strategic transaction discussed above, ratings could be downgraded if continued operating softness or an aggressive financial policy causes debt/EBITDA to be sustained at or above 5.5 times. The principal methodology used in rating Dole was the Global Food - Protein and Agriculture published in 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Westlake Village, California, Dole Food Company, Inc. is the world's largest producer of fresh fruit, fresh vegetables and value-added fruits and vegetables. Sales for fiscal 2011 were approximately $7.2 billion. EASTGATE TOWER: Final Cash Collateral Hearing on Oct. 3 ------------------------------------------------------- Eastgate Tower Hotel Associates, L.P., will return to the Bankruptcy Court for the Southern District of New York on Oct. 3, 2012, at 2:00 p.m. (Eastern Time) before the Hon. Shelley C. Chapman for a final hearing on its request to use cash tied to its pre-bankruptcy mortgage debt. At the final hearing, the Court will also consider the Debtor's request to provide adequate protection to Hotel Debt (Eastgate), LLC, the mortgage lender, for any diminution in value of the lender's interests. The Debtor has prepared a six-month budget through February 2013. On Oct. 25, 2006, the Debtor entered into three loan agreements with Irish Bank Resolution Corporation Limited (f/k/a Anglo Irish Bank Corporation Limited f/k/a Anglo Irish Bank Corporation plc) for the purpose of financing the acquisition and development of, and construction on, the Mortgaged Property: (i) an acquisition loan in the initial principal amount of $56,500,036, (ii) a renovation loan in the initial principal amount of $11,416,821 and (iii) a related costs loan in the initial principal amount of $3,144,074. LSREF2 Clover, LLC, a Delaware limited liability company, became the successor-in-interest to the Original Lender. On July 14, 2012, Hotel Debt (Eastgate), a Delaware limited liability company, purchased the Mortgage Loan from LSREF2 Clover. The total amount outstanding under the Mortgage Loans is $69,027,164 in the aggregate as of Aug. 15, 2012. The Debtor is in default of its debts and obligations under the Mortgage Loan Documents. In an Aug. 20 order, the Debtor received interim authority to use the Mortgage Lender's Cash Collateral through the final hearing. Prior to the Petition Date, the Debtor engaged Steven A. Carlson as the Debtor's Chief Restructuring Officer to oversee all aspects of the Debtor's business and operations. As a requirement for the Debtor's use of cash collateral, and as a component of Mortgage Lender's adequate protection, the CRO shall continue to manage the Debtor on a postpetition basis pursuant to the terms of the Employment Agreement. As adequate protection against any diminution in value of the Mortgage Lender's interest in the prepetition collateral, the Mortgage Lender is granted a valid and perfected replacement security interest in, and lien on, all of the Debtor's assets postpetition. However, the Collateral will not include the Debtor's claims and causes of action under section 544, 545, 547, 548, 549 or 550 of the Bankruptcy Code. The Debtor reserves the right to grant the Mortgage Lender an Adequate Protection Lien on the proceeds of the Avoidance Actions in connection with the Final Order. The Debtor's use of Cash Collateral is conditioned on, among others, the entry of a Final Cash Collateral Order by the Court on or before the earlier of the date of confirmation of the Debtor's prepackaged liquidating chapter 11 plan or Oct. 31, 2012; and the entry of the confirmation order for the Plan on or before Oct. 31, 2012. The Adequate Protection Liens and the Adequate Protection Superpriority Claims granted to the Mortgage Lender will be ubordinate to (i) fees pursuant to 28 U.S.C. Sec. 1930(a)(6); (ii) fees payable to the clerk of the Bankruptcy Court and any agent thereof; and (iii) pursuant to section 726(b) of the Bankruptcy Code, reasonable fees and expenses of a trustee that are incurred after the conversion of the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code, in an amount not to exceed $50,000; (v) professional fees and expenses incurred by professionals retained pursuant to sections 327(a) and 1103 of the Bankruptcy Code by the Debtor and the Creditors' Committee (if such committee should be appointed). About Eastgate Tower Eastgate Tower Hotel Associates, L.P., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13539) on Aug. 17, 2012, with a prepackaged plan of reorganization. Judge Shelley C. Chapman oversees the case. Lloyd A. Palans, Esq., at Bryan Cave LLP, in New York, serves as counsel to the Debtor. The Debtor owns property at 222 East 39th Street commonly known as the Eastgate Hotel. In its petition, the Debtor listed $50 million to $100 million in both assets and debts. A preliminary appraisal pegs the value of the Mortgaged Property at $62,000,000. The Debtor owes $69.02 million in mortgage loans. The Debtor defaulted on the mortgage loans in December 2011. In April 2012, Atlas Capital Group LLC and Rockpoint Group, owner of membership interests of the mortgage lender, proposed a prepackaged consensual Chapter 11 plan of liquidation. Under the Prepack Plan submitted by the Debtor, Hotel Debt (Eastgate), LLC, the mortgage lender, would have an 89.82% recovery. Unsecured creditors owed a total of $154,000 would recover 100% and are unimpaired. The mortgage lender has agreed to reduce the claim to $50 million and will accept title to the Debtor's property in full satisfaction of its claims. The Debtor will retain cash necessary to pay off administrative claims and unsecured claims. Peninsula Real Estate Fund (owner of 99% limited partnership interest) and Eastgate Hotel Associates GP, LLC (owner of 1%) would have their interest cancelled. Peninsula though will retain "profits participation rights" upon confirmation of the Plan. On Aug. 21, 2012, the Bankruptcy Court approved a plan support agreement under which the hotel's lender promised to cover the expenses that Eastgate Tower can't pay during its Chapter 11 case. Hotel Debt (Eastgate), LLC, is represented by John H. Bae, Esq., and Denise J. Penn, Esq., at Greenberg Traurig, LLP. Counsel to the Limited Partner are Patrick J. Dooley, Esq., and Lisa Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP. EASTGATE TOWER: Files Schedules of Assets and Liabilities --------------------------------------------------------- Eastgate Tower Hotel Associates, L.P., has filed with the Bankruptcy Court its schedules of assets and liabilities and statement of financial affairs. In its schedules, the Debtor disclosed: Name of Schedule Assets Liabilities ---------------- ------ ----------- A - Real Property $62,000,000 B - Personal Property $2,265,447 C - Property Claimed as Exempt D - Creditors Holding Secured Claims $69,027,164 E - Creditors Holding Unsecured Priority Claims $0 F - Creditors Holding Unsecured Nonpriority Claims $154,020 ----------- ----------- Total $64,265,447 $69,181,185 About Eastgate Tower Eastgate Tower Hotel Associates, L.P., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13539) on Aug. 17, 2012, with a prepackaged plan of reorganization. Judge Shelley C. Chapman oversees the case. Lloyd A. Palans, Esq., at Bryan Cave LLP, in New York, serves as counsel to the Debtor. The Debtor owns property at 222 East 39th Street commonly known as the Eastgate Hotel. In its petition, the Debtor listed $50 million to $100 million in both assets and debts. A preliminary appraisal pegs the value of the Mortgaged Property at $62,000,000. The Debtor owes $69.02 million in mortgage loans. The Debtor defaulted on the mortgage loans in December 2011. In April 2012, Atlas Capital Group LLC and Rockpoint Group, owner of membership interests of the mortgage lender, proposed a prepackaged consensual Chapter 11 plan of liquidation. Under the Prepack Plan submitted by the Debtor, Hotel Debt (Eastgate), LLC, the mortgage lender, would have an 89.82% recovery. Unsecured creditors owed a total of $154,000 would recover 100% and are unimpaired. The mortgage lender has agreed to reduce the claim to $50 million and will accept title to the Debtor's property in full satisfaction of its claims. The Debtor will retain cash necessary to pay off administrative claims and unsecured claims. Peninsula Real Estate Fund (owner of 99% limited partnership interest) and Eastgate Hotel Associates GP, LLC (owner of 1%) would have their interest cancelled. Peninsula though will retain "profits participation rights" upon confirmation of the Plan. On Aug. 21, 2012, the Bankruptcy Court approved a plan support agreement under which the hotel's lender promised to cover the expenses that Eastgate Tower can't pay during its Chapter 11 case. Hotel Debt (Eastgate), LLC, is represented by John H. Bae, Esq., and Denise J. Penn, Esq., at Greenberg Traurig, LLP. Counsel to the Limited Partner are Patrick J. Dooley, Esq., and Lisa Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP. EASTMAN KODAK: Says It May Retain Technology Rather Than Sell ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co. won't be selling digital imaging technology this month. The company said in a Sept. 14 court filing that it's "exploring alternatives," including retention of the patents to generate licensing revenue for payment of creditor claims. According to the report, the company told creditors in the filing that "it may not reach acceptable terms with parties via the auction process." The bankruptcy court in New York had approved sale procedures that were to have culminated in an Aug. 20 hearing to approve sale. Rather than conduct an open auction on a specified day with bids submitted one after another, Kodak believed the price would be higher by requiring the submission of bids and negotiating privately with potential purchasers until arriving at the highest bid in consultation with creditors. The report relates that Kodak pushed back the sale-approval hearing three times, most recently to Sept. 19. If an acceptable offer is found, Kodak said it will file a new set of papers in bankruptcy court setting up a hearing to approve sale. Kodak's $400 million in 7% convertible notes due in 2017, which sold for 21.055 cents on the dollar on Aug. 9, traded at 10:34 a.m. on Sept. 14 for 13.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The price decline occurred after Kodak announced the first postponement of the technology sale. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. As of July 31, 2012, the Company had total assets of $3.93 billion, total liabilities of $5.32 billion and total stockholders' deficit of $1.39 billion. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. ENCOMPASS DIGITAL: Moody's Lifts Credit Facilities Rating to B2 --------------------------------------------------------------- Moody's Investors Service upgraded the ratings on Encompass Digital Media, Inc.'s First-Lien Senior Secured Credit Facilities to B2 from B3 following the company's announcement that it intends to insert $31.5 million of new subordinated unsecured debt in the capital structure and increase the size of the existing $250 million First Lien Senior Secured Term Loan B tranche by $16.5 million (the upsizing is also associated with a new amendment that relaxes certain covenants in the credit agreement). In addition, Moody's affirmed EDM's Corporate Family Rating (CFR) at B3 and upgraded the Probability of Default Rating (PDR) to B3 from Caa1 to reflect the new capital structure, which will now include mezzanine debt instead of the previous all-bank loan structure. The rating outlook is stable. The one-notch upgrade on the credit facilities results from the addition of subordinated debt in the capital structure, which will now absorb more of the losses in a distressed scenario under Moody's Loss Given Default Methodology. The credit facilities were put in place in January 2012 to partially fund equity sponsor Court Square Capital Partners' $475 million LBO of an 80% ownership stake in Encompass. EDM will use proceeds from the Term Loan B upsizing together with: (i) a new $31.5 million 10% senior subordinated seven-year loan (unrated) provided by Macquarie Capital; (ii) $15 million of existing financing arrangements; and (iii) $22 million of new equity from Court Square, Macquarie and management rollover equity to acquire a Latin American competitor for $100 million ($80 million at closing and $20 million payout over the succeeding two years) plus a $7.4 million contingent payment subject to the acquisition's future operating performance. Pro forma for the incremental debt, Moody's expects EDM's leverage to increase to about 7x total debt to EBITDA on a Moody's adjusted basis. The transaction results in delayed deleveraging, with adjusted leverage that is temporarily outside the B3 rating range and higher than what Moody's contemplated when ratings were assigned earlier this year. However, Moody's anticipates Encompass will reduce adjusted leverage to around 5.6x to 5.8x over the next 18 months, which is comparable to the median leverage for B3 rated global cross industry peers. This will be driven by additional EBITDA and revenue synergies from the acquisition as well as core EBITDA expansion from the: (i) increase in television signals as a result of the ongoing transition to and rising demand for High Definition/3-D content; (ii) proliferation of channels being distributed overseas resulting in higher channel growth in Europe, Asia and Latin America; and (iii) increased outsourcing of upgraded content. To the extent Encompass further delays deleveraging such that Moody's expects total debt to EBITDA to be sustained above 6x (Moody's adjusted), ratings would likely be downgraded. Overall deleveraging is mitigated by Moody's expectation that Encompass will continue to pursue debt-funded acquisitions over the intermediate term to enhance scale, given the track record of its equity sponsor for leveraged portfolio investments to boost equity returns to limited partners. Ratings Rationale The B3 Corporate Family Rating reflects EDM's high pro forma leverage of about 7x total debt to EBITDA (Moody's adjusted) following the debt-financed purchase of a Latin American competitor only seven months after the company's leveraged buyout transaction by Court Square Capital Partners. Encompass also has limited ability to reduce debt as a result of the large interest burden. Moody's expects free cash flow to be negative in FY13 (ending March 31, 2013), largely due to one-time working capital adjustments incurred in the first half of the fiscal year and elevated capital expenditures. Moody's anticipates free cash flow will turn positive in the second half of FY13 and into FY14 resulting in Moody's adjusted free cash flow to debt in the low- to-mid single digit range. Ratings are constrained by the company's small scale and the need to fund incremental capital expenditures as new contracts are awarded or as the majority of existing contracts are expanded. Ratings are supported by the contractual or recurring nature of 75% of EDM's annual revenue, as estimated by management, and the pro forma $538 million revenue backlog which will contribute more than 60% of the combined company's revenue over the rating horizon. Further ratings support is derived from EDM's long- standing customer/vendor relationships, high contract renewal rates exceeding 90% and good geographic diversification. Given the maturation of cable channel proliferation in the US, incremental demand for third-party origination and distribution services is expected to be driven largely by the outsourcing of upgraded content management in High Definition/3-D versus Standard Definition, proliferation of multiple file formats, increased video content consumption, growth in overseas markets and potential demand for disaster recovery services. Encompass maintains adequate liquidity given the modest balance sheet cash ($3 to $5 million expected), positive free cash flow of $5 million to $10 million anticipated over the coming twelve months and approximately $20 to $25 million of expected revolver availability. However, to the extent Encompass chooses to increase capital spending above the current plan, improvements in the liquidity profile would be delayed or could potentially weaken. Given ownership by a financial sponsor, ratings are constrained by the potential for shareholder-friendly actions including additional debt-financed acquisitions and/or dividend payments. Rating Outlook The stable rating outlook reflects Moody's view that following the debt-financed Latin American acquisition, total debt to EBITDA will decline to under 5.8x (including Moody's standard adjustments) over the rating horizon and EDM's multi-year backlog will continue to support consistent revenue performance. The outlook also incorporates Moody's expectation that EDM's liquidity will be adequate, reported EBITDA margins will remain above 22% and management will be able to restrain capital expenditures to forecasted levels, assuming no significant acquisitions. What Could Change the Rating - DOWN Ratings could be downgraded if revenue or EBITDA fall short of management's plan due to a decline in contract renewals or an inability to develop new business resulting in delayed deleveraging and prospective total debt to EBITDA sustained above 6x on a Moody's adjusted basis. A decrease in backlog or margin erosion resulting in weakened liquidity including deterioration in EBITDA cushion relative to financial maintenance covenant requirements would likely create downward rating pressure. Sizable debt-financed acquisitions and/or dividend payments could also result in a downgrade. What Could Change the Rating - UP Ratings could be upgraded if total debt to EBITDA is sustained comfortably below 3.75x (Moody's adjusted) and free cash flow to debt greater than 10% (Moody's adjusted), reflecting organic growth across all operating segments and improved EBITDA margins, together with an expanded revenue backlog. Ratings Upgraded: Probability of Default Rating to B3 from Caa1 $30 Million First Lien Senior Secured Revolver due 2017 to B2 (LGD-3, 42%) from B3 (LGD-3, 31%) $266 Million (previously $250 Million) First Lien Senior Secured Term Loan B due 2017 to B2 (LGD-3, 42%) from B3 (LGD-3, 31%) Ratings Affirmed: Corporate Family Rating -- B3 The upgraded ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Encompass Digital Media, Inc.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Encompass Digital Media, Inc.'s core industry and believes Encompass Digital Media, Inc.'s ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Los Angeles, CA, Encompass Digital Media, Inc., is a leading provider of outsourced network origination and transmission services to broadcasters, cable channels and other media companies. Having acquired the satellite services businesses of Crawford Communications in January 2010, the content distribution businesses of Ascent Media in February 2011 and a Latin American competitor expected to close in September 2012, Encompass will operate in the US, Europe, Asia and Latin America. Presently, 58% of revenue is derived from network origination, 27% from occasional-use services and 15% from government services, digital media and other services. Revenue for twelve months ended June 2012 totaled approximately $214 million. ENCOMPASS DIGITAL: S&P Rates Proposed $16.5MM Term Loan 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '2' recovery rating to Los Angeles-based Encompass Digital Media Inc.'s proposed $16.5 million incremental term loan B. "In addition, we raised our issue-level rating on the company's existing senior secured debt to 'B+' from 'B', and revised the recovery rating on this debt to '2' from '3'. The '2' recovery rating indicates our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The revision of the recovery rating on the secured debt is a result of a higher enterprise value under our hypothetical default analysis due to the acquisition, in conjunction with only a modest increase in secured debt," S&P said. "We also affirmed our 'B' corporate credit rating on the company. The outlook is stable," S&P said. "We expect Encompass to use proceeds of the incremental term loan, along with a new $31.5 million subordinated loan (unrated), $22 million in new equity, and roughly $15 million in rollover debt to fund the required $80 million upfront payment for the acquisition. We also expect the remaining $20 million in acquisition consideration to be payable in two equal installments in 12 months and 24 months of the transaction closing, respectively. In addition, there is a $7.4 million deferred payment contingent upon the acquired company achieving a certain profitability target over two years," S&P said. "Despite the modest increase in pro forma fully adjusted leverage to 6.6x (including deferred acquisition and earn-out payments) from 6.1x as of June 30, 2012," said Standard & Poor's credit analyst Michael Altberg, "in our view, the acquisition increases Encompass' presence in the growing Latin America market and strengthens its relationship with certain large media companies and satellite operators.' In addition, the company's contracted revenue backlog increases by over 30%, improving its revenue visibility." "As a result, we have a marginally better view of the company's business risk profile and future growth prospects," added Mr. Altberg. "Nevertheless, we have not revised our 'weak' business risk assessment due to the company's limited operating history in its present size and scope, its still high customer concentration, its focus on a niche market dominated by the in-house operations of large media companies, and its elevated capital spending requirements when adding new customers or providing new services. These business risks more than offset such positive factors as its multiyear fixed contracts, strong barriers to entry for new competitors in the form of upfront infrastructure costs, and our expectation that the trend of media companies outsourcing noncore functions will continue, albeit slowly." "Our stable rating outlook reflects our belief that leverage will begin to decline over the next 12 months, and that liquidity should be sufficient to fund the company's growth spending plans until FOCF turns positive in fiscal 2014. We could raise our ratings if the company continued its momentum with new contract wins while keeping existing customer renewal rates high, resulting in a reduction of adjusted leverage under 5x on a sustained basis. An upgrade would also require the company to be in a position to generate at least $25 million of FOCF on an ongoing basis, despite capital spending requirements on new contract wins. This could occur because of strong demand for channels in the Asian and Latin American markets, and additional outsourcing from U.S. and European content providers," S&P said. "Conversely, we could lower the rating if pro forma EBITDA declines by roughly 15% from trailing-12-month levels, resulting in leverage increasing to roughly 7x on a sustained basis. This could occur if Encompass fails to renew current customer contracts as they expire, although we believe this is more of an intermediate-term risk and unlikely in the next few years due to the strong backlog of contracted revenue already in place," S&P said. ESSAR STEEL: Moody's Confirms 'Caa1' CFR/PDR; Outlook Negative -------------------------------------------------------------- Moody's Investors Service confirmed Essar Steel Algoma Inc.'s (ESA) Caa1 Corporate family and Probability of Default Ratings, the B3 senior secured global notes rating and the Caa2 senior unsecured notes rating. At the same time, Moody's assigned a B1 rating to the company's proposed up to $350 million senior secured asset-based term loan. The B1 rating on the proposed term loan assumes that the transaction will close along the terms provided to Moody's. The company's speculative grade liquidity rating remains at SGL-4. The rating outlook is negative. This action concludes the rating review for possible downgrade which began on May 3, 2012. Proceeds from the term loan issuance will be used to repay outstanding balances under the company's asset backed revolving credit facility (ABL), which has an expiry date of September 20, 2012 following an extension from the original June 20, 2012 expiry date, and increase cash balances. The ABL will be terminated upon repayment. Assignments: Issuer: Essar Steel Algoma Inc. Senior Secured Bank Credit Facility, B1, LGD1, 6% Outlook Actions: Issuer: Essar Steel Algoma Inc. Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Essar Steel Algoma Inc. Probability of Default Rating, Confirmed at Caa1 Corporate Family Rating, Confirmed at Caa1 Senior Secured Regular Bond/Debenture, Confirmed at B3 Senior Unsecured Regular Bond/Debenture, Confirmed at Caa2 Ratings Rationale The confirmation of the Caa1 Corporate Family rating reflects the fact that the term loan will provide necessary liquidity to support the company's operating and working capital requirements, concern over which was a key factor in the ratings review. The negative outlook incorporates Moody's expectation for continued headwinds on steel pricing and demand and the potential for weaker operating performance and cash flow generation over the next twelve to eighteen months. Given these challenges and the company's relatively limited product diversity, the ability to improve performance and metrics could be challenging. The steel industry continues to face challenges such as industry-wide sheet production overcapacity, still-unstable end-market demand as evidenced by the frail recovery in the U.S., the sovereign debt crisis in Europe and the slowing economic growth in China, volatility in the price of key inputs such as metallurgical coal and iron ore, and the risk of further market dislocation from increasing imports. Should prices exhibit a declining trend on a sustained basis, Moody's believes that debt-to-EBITDA could exceed 8x and (cash flow from operations minus dividends)-to-debt could trend below 7% - levels that meet Moody's threshold for a rating downgrade -- over the next 12 to 18 months. ESA's Caa1 corporate family rating reflects its very high leverage, single-site location, modest scale, and vulnerability to volatile prices for steel and key inputs such as iron ore. The company is dependent predominantly on commodity grades of sheet steel, where it competes with much larger and better capitalized companies that have relatively lower retiree liabilities. Moody's believes that the company has a high degree of operating leverage, which makes it vulnerable to soft demand and price declines. The rating anticipates that, given the current challenges facing the steel industry, ESA's profitability will be breakeven to slightly negative while cash flow will be weaker than 2012 levels over the next 12 to 18 months although the company is likely to derive some benefit during this time frame from the decline in iron ore and met coal prices; however Moody's expects that meaningful improvement in debt coverage ratios will be protracted. Under Moody's loss given default methodology, the B1 rating on the ABL term loan reflects its superior position in the capital structure and the expectation of significant recovery given the first priority backing of the company's current assets. The B3 rating on the senior secured notes reflect the weaker security package of this instruments to the ABL term loan. Both the ABL term loan and secured notes benefit from the loss absorption capacity of ESA's unsecured debt, pension obligations and accounts payable. The Caa2 rating on the senior unsecured notes reflects the subordination of these instruments to a considerable amount of secured debt and the expectation of a considerable loss in value in a default scenario. The ratings could be downgraded should liquidity weaken further, the company incur operating losses on a sustainable basis and if over a prolonged period (operating cash flow less any dividends)- to-debt be less than 7.5% or debt-to-EBITDA continue to exceed 5.5 times. Factors that could lead to upward momentum with ESA's ratings include an overall trend of improving operating performance, positive cash flow generation, significant debt reduction, and maintenance of sufficient liquidity. Specifically, should the company be able to achieve, on a sustainable basis, cash flow from (operations less any dividends)-to-debt of at least 10%, EBIT-to- interest of at least 1.5 times and debt-to-EBITDA of no greater than 5.0 times, an upgrade could be considered. The principal methodology used in rating Essar Steel Algoma Inc. was the Global Steel Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Essar Steel Algoma Inc. is an integrated steel producer headquartered in Sault Ste. Marie, Ontario. Approximately 80% to 85% of ESA's sales are sheet products, with plate products accounting for the balance. The company's products are sold primarily in North America with roughly 60% going to steel service centers and the balance to customers in the automotive, construction, energy, manufacturing, pipe and tube industries. For the 12 months ending June 30, 2012, ESA generated revenues of approximately C$2.1 billion. ESSAR STEEL: S&P Raises CCR to 'CCC+' on Term Loan Negotiation -------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on Sault Ste. Marie, Ont.-based Essar Steel Algoma Inc. (ESA) to 'CCC+' from 'CCC'. The ratings remain on CreditWatch, where they were placed with developing implications April 5, 2012. "CreditWatch with developing implications means we could raise, lower, or affirm the ratings," S&P said. "We also raised our issue-level rating on the company's senior secured notes to 'B' from 'B-'. The '1' recovery rating on the debt is unchanged. In addition, we raised our issue-level rating on the company's senior unsecured notes to 'CCC' from 'CCC-'. The '5' recovery rating on this debt is unchanged," S&P said. "The upgrade reflects our view of ESA's announced negotiation of a two-year US$350 million senior secured term loan, proceeds of which would be used to alleviate liquidity pressures caused by the looming maturity of the company's senior secured revolving credit facility," said Standard & Poor's credit analyst Donald Marleau. As a result, Standard & Poor's assigned its 'B' issue-level rating and '1' recovery rating to ESA's proposed US$350 senior secured asset-based term loan. "Standard & Poor's believes that the proposed two-year term loan improves ESA's financial flexibility, at least through 2013, and clarifies any of the potential adverse consequences that might occur from a Supreme Court of Canada decision in the Indalex Limited court case. As a result, we expect that ESA should be able to sustain a sources-to-uses liquidity ratio above 1.2x in the next 12 months, but our less-than-adequate liquidity assessment incorporates ESA's weak standing in the credit markets and aggressive financial risk management highlighted by recent last- minute financings to extend rapidly approaching debt maturities," S&P said. "Although we believe that ESA's proposed financing package alleviates the liquidity pressure of the past year, we view this change as a 12-to-18-month respite before potentially larger refinancing challenges emerge when all of the company's debt matures between September 2014 and June 2015. In the absence of a sustained improvement in the global steel industry, ESA's relatively weaker standing in the credit markets exposes it to uncertain capital-market conditions," S&P said. "We will resolve the CreditWatch when ESA executes the proposed senior secured term loan and uses the proceeds to fund maturing amounts on its existing revolving credit facility. Conversely, we would likely lower the ratings by at least one notch if ESA's proposed term loan financing fails or is meaningfully delayed, thereby straining financial flexibility ahead of a Sept. 20, 2012, maturity on its existing revolving credit facility," S&P said. FIRST DATA: Plans to Offer $250 Million Senior Secured Notes ------------------------------------------------------------ First Data Corporation intends to offer $250 million aggregate principal amount of 6 3/4% senior secured notes due 2020. The Notes will be issued under the same indenture and will be the same series as the $1.3 billion aggregate principal amount of 6 3/4% senior secured notes due 2020 that were offered on Aug. 2, 2012. In accordance with the terms of its senior secured credit facilities, First Data will use the proceeds from the offering to repay a portion of its outstanding senior secured term loans. The Notes have not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. About First Data Based in Atlanta, Georgia, First Data Corporation, with over $10 billion of revenue for the 12 months ended June 30, 2010, provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. The Company reported a net loss of $336.10 million in 2011, a net loss of $846.90 million in 2010, and a net loss of $1.01 billion on $9.31 million in 2009. The Company's balance sheet at June 30, 2012, showed $40.65 billion in total assets, $37.62 billion in total liabilities, $67 million in redeemable non-controlling interest and $2.96 billion in total equity. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FOXCO ACQUISITION: S&P Keeps 'B+' Rating on $765MM Credit Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings on Newport, Ky.-based media company FoxCo Acquisition Sub LLC's proposed amended-and-extended senior secured credit facilities remain unchanged following the company's $50 million increase, bringing the total amount of the proposed term loan to $765 million. "Our issue-level rating on the proposed bank debt remains 'B+' (the same as our 'B+' corporate credit rating on the company) and the recovery rating remains at '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. The net proceeds of the amended and extended term loan will be used to repay its senior notes due 2015 and to pay a dividend," S&P said. "The company's pro forma debt to average trailing-eight-quarter EBITDA, at 6.2x based on June 30, 2012 EBITDA, is above our 6x leverage target for the rating. We expect leverage will moderate back under our target over the near term. If we become convinced that leverage will remain above 6x we could revise the outlook to negative or lower the rating," S&P said. RATINGS LIST FoxCo Acquisition LLC FoxCo Acquisition Sub LLC Corporate credit rating B+/Stable/-- FoxCo Acquisition Sub LLC $765 mil. Extended Term Loan B due 2017 B+ Recovery rating 3 FTS INTERNATIONAL: Moody's Confirms 'B2' CFR; Outlook Negative -------------------------------------------------------------- Moody's Investors Service confirmed the B2 Corporate Family Rating (CFR) at FTS International, Inc. (FTSI) and the B3 FTSI term loan facility. Moody's also confirmed the Ba3 rating on FTS International Services, LLC's (FTSI Services) $550mm senior notes due 2018. The outlook is negative. This action concludes the rating under review for downgrade that was announced on July 13, 2012. Issuer: FTS International Inc. Outlook Actions: Outlook, Changed To Negative From Rating Under Review Confirmations: Probability of Default Rating, Confirmed at B2 Corporate Family Rating, Confirmed at B2 US$1500M Senior Secured Bank Credit Facility, Confirmed at B3 Issuer: FTS International Services, LLC Outlook Actions: Outlook, Changed To Negative From Rating Under Review Confirmations: US$550M 7.125% Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3 Ratings Rationale "The ratings were confirmed reflective of FTSI's equity capital raise providing for debt reduction and enhanced financial flexibility, conditioned on the amendment of its secured term loan facility," stated Michael Somogyi -- Vice President and Senior Analyst. As of June 30, 2012, FTSI was not initially in compliance with the maximum 3.00 : 1.00 leverage covenant ratio under its $1.5 billion senior secured term loan facility. On August 14, 2012, FTSI exercised its equity cure option to resolve this noncompliance with a $10 million equity offering to existing stockholders. Reflective of the continued challenging operating environment, Moody's does not expect FTSI to be in compliance with this leverage covenant ratio as of September 30, 2012. Following discussions around various financing strategies, FTSI has received an additional $350 million commitment of new equity capital from its existing stockholders to provide for debt reduction and covenant relief for its term loan facility. FTSI will raise the $350 million of new equity capital through an offering of convertible preferred stock to its existing shareholders. Proceeds from this equity offering will be used to pay-down $200 million under its term loan facility and redeem up to $150 million of senior unsecured notes at FTS International Services, LLC. Conditioned on the $200 million repayment of the term loan facility, the term loan agreement will be amended to provide for covenant relief, inclusive of a debt / EBITDA covenant leverage waiver until third quarter 2014. FTSI operates in a highly cyclical industry with the level of drilling activity by E&P companies being the key driver influencing demand for fracturing services. Level of capital expenditures by E&Ps, in turn, depend largely on current and anticipated future crude oil and natural gas prices and production depletion rates. Since late 2011, low natural gas prices, the resulting shift by E&P companies from natural gas to oil and liquids rich plays and an increase in the supply of hydraulic fracturing equipment have all combined to reduce the prices for hydraulic fracturing services. Additionally, the fracturing services industry has experienced a sharp increase in costs associated with certain materials used in the hydraulic fracturing process and logistics and mobilization costs to relocate equipment from natural gas plays to oil and liquids plays. FTSI's B2 CFR is reflective of weaker profitability and resulting higher leverage profile. FTSI's senior secured term loan rating of B3 is reflective of its structural subordination to the senior notes at FTSI Services as expressed under Moody's Loss Given Default Methodology. The $1.5 billion term loan is secured by the equity ownership in FTSI Services and matures in May 2016. FTSI Services' $550mm senior notes due 2018 are rated Ba3, two notches above FTSI's B2 CFR. The senior notes are unsecured but have a structurally superior claim to the company's assets compared to the term loan as expressed under Moody's Loss Given Default Methodology. The negative outlook incorporates expectations of continued earnings and cash flow volatility over the next 18 months. The ratings could be stabilized if EBITDA improves as anticipated in the second half of 2012, and if the higher EBITDA levels appear sustainable through 2013 providing for lower leverage profile. The ratings could be downgraded if earnings were to decline to levels that resulted in leverage to be sustained above 5x. FTS International, Inc. is a privately held oilfield services company formed by an investor group led by a subsidiary of Temasek Holdings Limited (Private) to acquire the majority shareholder of FTS International Services, LLC. The acquisition was funded through a combination of cash equity provided by the investor group and $1.5 billion term loan. FTS International, Inc. is currently owned by Temasek (40%), Senja (11%), Other Investors (18%), Chesapeake (30%) with Management retaining 1% ownership. FTS International, Inc. is headquartered in Fort Worth, Texas. FTS INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on FTS International Services LLC. The outlook is negative. "At the same time, we raised our issue-level rating on the term loan held at parent company FTS International Inc. (FTI) to 'B' from 'B-' on the proposed debt reduction plan. The recovery rating on this loan is '4', indicating our expectation of average (30% to 50%) recovery in the event of a payment default. The term loan is structurally subordinate to the 2018 notes held at FTS," S&P said. "We also affirmed our 'BB-' issue-level rating on the company's existing $550 million senior notes due 2018 (a portion of which we also expect to be repaid). The recovery rating on these notes is '1', indicating our expectation for very high (90% to 100%) recovery in the event of a payment default," S&P said. "FTS' parent company FTI announced that it is planning to raise $350 million through an offering of convertible preferred stock to its existing equity holders (led by Temasek and RRJ Capital). It will use the proceeds from the offering to pay down $200 million of the $1.375 billion term loan held at FTI and $150 million of the $550 million senior notes due 2018 held at FTS. FTI is also seeking amendments on its term loan to, among other changes, loosen the covenants, allow a portion of the preferred equity proceeds to be utilized to 'cure' any EBITDA shortfalls under the new covenants, increase FTS' ability to enter into joint ventures, and increase FTS' ability to fund the redemption of up to 35% of its senior notes under the equity claw feature," S&P said. "The ratings on FTS reflect our view of the company's 'weak' business risk profile, 'highly leveraged' financial risk profile, and 'adequate' liquidity," said Standard & Poor's credit analyst Carin Dehne-Kiley. "The negative outlook reflects our expectation that debt-to-EBITDA may not return to levels that are appropriate for the rating category over the next 12 months. Last year's aggressive buyout financing left the company with an above-average debt load relative to the extreme volatility of EBITDA and cash flows in the fracture stimulation industry. Although we estimate debt to EBITDA will approach our downgrade trigger at the end of 2012, we expect margins to increase next year such that leverage improves to a more appropriate level by year-end. We could downgrade the company if we no longer expect leverage to fall back below 6.0x by the end of 2013--a scenario we think could occur if U.S. market fundamentals continue to weaken or costs remain high and the company is unsuccessful in either expanding internationally or raising additional equity," S&P said. "We could revise the outlook to stable if U.S. market conditions improve above our current expectations and we believe these conditions will be sustainable. We could also revise the outlook to stable if the company is successful in meaningfully reducing its debt, potentially through an IPO or strategic investor. We could stabilize the rating if debt to EBITDA falls back to the 5.0x area, and we expect it will remain at or below this level for a sustained period," S&P said. GEOMET INC: Hein & Associates Succeeds Deloitte as Accountant ------------------------------------------------------------- GeoMet, Inc., dismissed Deloitte & Touche LLP as the independent registered public accounting firm for the Company and its subsidiaries, which was approved by the audit committee of the Company's board of directors. On Sept. 11, 2012, the Company engaged Hein & Associates LLP as its independent registered public accounting firm, which was approved by the audit committee of the Company's board of directors. Deloitte's reports on the Company's financial statements for the fiscal years ended Dec. 31, 2011, and 2010 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle. During the years ended Dec. 31, 2011, and 2010 and for the period from Jan. 1, 2012, through Sept. 10, 2012, neither the Company nor anyone on its behalf consulted Hein regarding (i) the application of accounting principles to a specific completed or contemplated transaction, (ii) the type of audit opinion that might be rendered on the Company's financial statements, or (iii) any matter that was the subject of a disagreement or event identified in response to Item 304(a)(1) of Regulation S-K. About Geomet Inc. Houston, Texas-based GeoMet, Inc., is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams ("coalbed methane" or "CBM") and non-conventional shallow gas. It was originally founded as a consulting company to the coalbed methane industry in 1985 and has been active as an operator, developer and producer of coalbed methane properties since 1993. Its principal operations and producing properties are located in the Cahaba and Black Warrior Basins in Alabama and the central Appalachian Basin in Virginia and West Virginia. It also owns additional coalbed methane and oil and gas development rights, principally in Alabama, Virginia, West Virginia, and British Columbia. As of March 31, 2012, it owns a total of approximately 192,000 net acres of coalbed methane and oil and gas development rights. "As of May 11, 2012, we had $148.6 million outstanding under our Fifth Amended and Restated Credit Agreement," the Company said in its quarterly report for the period ending March 31, 2012. "As of March 31, 2012, we were in compliance with all of the covenants in our Credit Agreement. The Credit Agreement provides, however, that if the amount outstanding at any time exceeds the "borrowing base", we must provide additional collateral to the lenders or repay the excess as provided in the Credit Agreement. The borrowing base is set in the sole discretion of our lenders in June and December of each year based, in part, on the value of our estimated reserves as determined by the lenders using natural gas prices forecasted by the lenders." "Due to the decline in the bank group's price projections, we expect our outstanding loan balance at the June determination date will exceed the new borrowing base, resulting in a borrowing base deficiency. We do not have additional collateral to provide to the lenders and we expect that our operating cash flows would be insufficient to repay the expected borrowing base deficiency, as required under the Credit Agreement. As such, unless we amend the Credit Agreement, we may be in default under the agreement when the borrowing base is determined in June 2012. In addition, the elimination of the unused availability under the borrowing base, which is a factor in our working capital covenant, may result in a future default of that covenant under the Credit Agreement. We have begun discussions with our bank group; however, until the borrowing base for June 2012 has been determined, we will not know the amount of the deficiency. As of March 31, 2012, the debt is classified as long-term as we are not in violation of any debt covenants. Should we be in violation of any covenants which have not been waived or have a borrowing base deficiency as of June 30, 2012, some or all of the debt will be reclassified to current. There are no assurances that we will be able to amend our Credit Agreement or obtain a waiver. If we do obtain a waiver or an amendment, there can be no assurance as to the cost or terms of such an amendment." "These conditions raise substantial doubt about our ability to continue as a going concern for the next twelve months." The Company's balance sheet at June 30, 2012, showed $144.47 million in total assets, $173.55 million in total liabilities, $32.17 million in series A convertible redeemable preferred stock, and a $61.25 million total stockholders' deficit. GLOBAL TECHNOVATIONS: 6th Cir. Affirms Ruling Over Onkyo Deal ------------------------------------------------------------- Global Technovations Incorporated went bankrupt after it purchased Onkyo America Incorporated, an Indiana-based supplier of car- stereo equipment and a subsidiary of Onkyo Corporation. GTI had purchased OAI for $13 million in cash and $12 million in three- year promissory notes. Onkyo attempted to recover the remainder of the purchase price from GTI's bankruptcy estate by filing a proof of claim for $12 million. GTI responded by suing Onkyo under the theory that the OAI purchase was a fraudulent, voidable transaction. The bankruptcy court agreed, finding that OAI was worth $6.9 million at the time of the transaction, not $25 million. As a result, the bankruptcy court voided GTI's obligation to pay the remainder of the purchase price. It also ordered Onkyo to repay GTI $6.1 million -- the difference between the $13 million GTI had paid and the $6.9 million the bankruptcy court determined that OAI was worth. As reported by the Troubled Company Reporter on April 4, 2011, District Judge Marianne O. Battani of the United States District Court for the Eastern District of Michigan affirmed the bankruptcy court's decision. After wrestling with a debate about the extent of the bankruptcy court's jurisdiction to order relief, the United States Court of Appeals for the Sixth Circuit also affirmed. A three-judge panel of the Sixth Circuit held the bankruptcy court had jurisdiction under the Supreme Court's recent holdings in Stern v. Marshall, 131 S.Ct. 2594 (2011), to enter this judgment. A copy of the Sixth Circuit's Sept. 13 Opinion is available at http://is.gd/U5r5O7from Leagle.com. About Global Technovations Global Technovations, Inc., developed, manufactured, and sold On-Site Oil Analzers), a motor oil diagnostic and preventative maintenance program used to diagnose the condition of vehicles. On Dec. 18, 2001, GTI and its affiliates filed voluntary chapter 11 petitions (Bankr. E.D. Mich. Case No. 01-64771). Onkyo America, Inc., filed for bankruptcy the next day. On Feb. 21, 2003, the bankruptcy court entered an order confirming GTI's plan of reorganization. Kenneth Nathan was appointed liquidating agent for Onkyo America. GREYSTONE LOGISTICS: Swings to $2.5MM Net Income in Fiscal 2012 --------------------------------------------------------------- Greystone Logistics, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $2.49 million on $24.15 million of sales for the year ended May 31, 2012, compared with a net loss of $847,204 on $20.50 million of sales during the prior fiscal year. The Company's balance sheet at May 31, 2012, showed $12.38 million in total assets, $18.83 million in total liabilities and a $6.45 million total deficit. A copy of the Form 10-K is available for free at: http://is.gd/GPMUr2 About Greystone Logistics Tulsa, Okla.-based Greystone Logistics, Inc. (OTC BB: GLGI.OB - News) -- http://www.greystonelogistics.com/-- manufactures and sells plastic pallets through its wholly owned subsidiary, Greystone Manufacturing, LLC. Greystone sells its pallets through direct sales and a network of independent contractor distributors. Greystone also sells its pallets and pallet leasing services to certain large customers direct through its President, Senior Vice President of Sales and Marketing and other employees. As reported by the TCR on Sept. 20, 2011, HoganTaylor LLP, in Tulsa, Oklahoma, said Company has a working capital deficit of $5,141,078, stockholders' deficit of $14,206,077 and total deficit of $9,704,991. The independent auditors noted that these deficits raise substantial doubt about the Company's ability to continue as a going concern. HARMAN INT'L: Moody's Reviews 'Ba1' Rating for Possible Upgrade --------------------------------------------------------------- Moody's Investors Service placed the ratings of Harman International Industries, Inc., Corporate Family Rating at Ba1, under review for possible upgrade. The Speculative Grade Liquidity Rating also was affirmed at SGL-1. Ratings under review: Corporate Family Rating, at Ba1; Probability of Default Rating, at Ba1; $550 million senior secured multi-currency revolving credit facility due December 2015, Baa2 (LGD2, 16%); Ratings unaffected: Speculative Grade Liquidity Rating, at SGL-1 Rating Rationale Harman maintains a strong competitive position in the infotainment segment of the automotive parts supplier industry and has demonstrated revenue growth that has outperformed the recovery in global automotive industry volume over recent years. The company remains susceptible to macroeconomic pressures on automotive demand, and derives about 40% of its revenue from European markets, where automotive demand is expected to weaken over the next 18 months. Nevertheless, the company's strong $16.1 billion business backlog and operating flexibility should support profit and cash flow improvement over the near-term. For the LTM period ended June 30, 2012, Harman's Debt/EBITDA was 1.8x and EBIT/Interest was 6.2x (using Moody's standard adjustments). The rating review will focus on the outlook for Harman's business, including the effect which any erosion of automotive demand could have on future earnings and profits. The review will also consider the company's free cash flow generation and its ability to sustain needed investments to adapt to technology changes in the infotainment market. Moreover, the review will assess the company's capital structure and financial policies, particularly with respect to shareholder return initiatives. Moody's notes that Harman's $820 million of cash, cash equivalents and short-term investments as of June 30, 2012 provides a strong liquidity profile even as the company faces an October 2012 scheduled maturity of its $400 convertible notes, the only funded debt in its capital structure. To avoid an underlevered capital structure, the company may well refinance at least some portion of that maturity. As such, Moody's review will assess the development of Harman's capital structure, including the magnitude of and priority of claim of any refinancing debt that may be issued. Moody's notes that if Harman were to be upgraded to investment grade the impetus for further up-notching of the existing bank credit facility would be diminished as the Loss Given Default Methodology for speculative grade companies would likely no longer apply. Harman's SGL-1 Speculative Grade Liquidity Rating reflects Moody's expectation of a very good liquidity profile over the near-term supported by substantial cash balances and anticipated free cash flow generation. As of June 30, 2012, the company maintained approximately $820 million of cash, cash equivalents and short- term investments. Harman is expected to generate positive free cash flow over the near-term after higher working capital needs to support sales growth. As of June 30, 2012, the company's existing $550 million multi-currency revolving credit facility was undrawn with about $8.7 million of letters of credit outstanding. Harman is expected to operate with ample headroom under the bank facility's financial covenants over the near-term. The principal methodology used in rating Harman was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Harman International Industries, Incorporated, headquartered in Stamford, Conn., is a leading manufacturer of high quality, high fidelity audio products and electronic systems for the consumer, automotive, and professional markets. Revenues for fiscal year 2012 were approximately $4.4 billion. HAWKER BEECHCRAFT: Bank Debt Trades at 27% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 72.89 cents-on- the-dollar during the week ended Friday, Sept. 14, an increase of 0.76 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014. The loan is one of the biggest gainers and losers among 169 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (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 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'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. HENRY VOGT: Files for Chapter 11 Bankruptcy in Kentucky ------------------------------------------------------- David A. Mann, writing for Business First, reports that Henry Vogt Machine Co. has filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Western District of Kentucky, listing both assets and liabilities between $1 million and $10 million. According to the report, the company has between 50 and 99 creditors, the company's 20 largest unsecured creditors include 16 legal services firms from across the country. Utilities, such as Louisville Gas & Electric Co. and the Louisville Water Co., are listed among major unsecured creditors. The filing shows the company had $8 million in income from the operation of its business and the sale of assets during the last three years. The report relates the company's property on Ormsby Avenue is valued at $6.5 million but there is an $8.3 million secured claim against the land from CF One LLC. The report, citing a news release from Wyatt, Tarrant & Combs LLP, says the company has had to defend "tens of thousands of asbestos- related lawsuits across a majority of states, coming from its history of manufacturing boilers and valves." It currently has about 10,000 asbestos claims. The report adds that, as a result, company officials came "to the painful recognition that it cannot go on in this way any longer." According to the report, Henry Vogt sold its four principal product manufacturing divisions in the 1990s. Since then, the company's operations have been leasing its former manufacturing facilities and providing retiree benefits for its former work force. The report, citing court documents, says Henry V. Heuser Jr. has stepped down as president, chairman and director of the company, which was founded by his great-grandfather in 1880. The report says decisions about Henry Vogt and its assets, including its 32-acre manufacturing site in the Park Hill area of Louisville, will be made subject to U.S. Bankruptcy Court approval for the benefit of its creditors. The report relates Robert J. Brown, the company's attorney, said a hearing has not been set on the bankruptcy case. He expects a date to be set by the court this week. HERON LAKE: Had $379,300 Net Loss in July 31 Quarter ---------------------------------------------------- Heron Lake BioEnergy, LLC, filed its quarterly report on Form 10-Q, reporting a net loss of $379,283 on $41.0 million of revenues for the three months ended July 31, 2012, compared with a net loss of $742,737 on $43.0 million of revenues for the same period of the prior fiscal year. For the nine months ended July 31, 2012, the Company had a net loss of $2.9 million on $121.0 million of revenues, compared with net income of $1.4 million on $120.2 million of revenues for the nine months ended July 31, 2011. The Company's balance sheet at July 31, 2012, showed $94.1 million in total assets, $47.1 million in total liabilities, and members' equity of $47.0 million. A copy of the Form 10-Q is available at http://is.gd/xKKjFc Heron Lake, Minnesota-based Heron Lake BioEnergy, LLC, owns and operates a dry mill corn-based, natural gas fired ethanol plant near Heron Lake, Minnesota. The plant has a stated capacity to produce 50 million gallons of denatured fuel grade ethanol and 160,000 tons of dried distillers' grains (DDGS) per year. * * * As reported in the Troubled Company Reporter on Feb. 7, 2012, Boulay, Heutmaker, Zibell & Co. P.L.L.P., in Minneapolis, Minn., expressed substantial doubt about Heron Lake BioEnergy's ability to continue as a going concern, following the Company's results for the fiscal year ended Oct. 31, 2011. The independent auditors noted that the Company previously incurred operating losses related to difficult market conditions and operating performance. The Company was previously out of compliance with its master loan agreement and had a lower level of working capital than was desired. HOSTESS BRANDS: Teamsters Vote to Ratify Changes to CBA ------------------------------------------------------- Teamsters working for Hostess Brands Inc. narrowly approved contract modifications that Hostess management and lenders required as a condition to bring the company out of bankruptcy again, the International Brotherhood of Teamsters discloses. Employee members of the International Brotherhood of Teamsters (IBT) voted to ratify changes to their bargaining agreement that, if implemented throughout the Company, will enable Hostess to continue operating. "We are very grateful to the IBT-represented employees for ratifying our final offer," said Hostess Brands Chief Executive Officer Gregory F. Rayburn. "We know it was a difficult decision for them, but one that we believe is in the long-term best interests of the entire Company and its 18,500 employees." "This was a difficult decision," said Teamsters General Secretary- Treasurer Ken Hall. "Our members are frustrated at being in the position to bail out the company again, but overall were willing to accept modifications with the hope that Hostess will recover and be in a better position in the years to come. At the end of the day, our members recognized that they can't replace their pay and benefits in the non-union sector." More than 4,400 Teamsters voted in a national mail ballot referendum, with 2,357 voting to approve and 2,043 voting to reject. Ballots were mailed out on Aug. 25 and were tabulated today by an independent election firm, Hartfield Resolution Group. According to the Teamsters, Hostess executives now must decide what to do based on September 14 vote results and those of its other unionized workers, which are expected in the coming days. "This has been a very difficult and trying year for our members at Hostess and, should the restructuring go forward, we pledge to push and hold Hostess management accountable to create a successful business that provides greater job security for our members," Hall said. Since the Chapter 11 filing, the Company has been pursuing new collective bargaining agreements with all of its union employees to give Hostess Brands a chance to thrive again with more flexibility to match its competitors. Under the Company's current proposal, all Hostess employees, including management and non- union workers, will have their compensation adjusted by an equivalent percentage. Hostess Teamsters have already endured two previous rounds of concessions to help bolster the company, which is currently in its second bankruptcy. Same Changes to BCTGM Hostess Brands also disclosed that it intends to file a motion under Section 1113 and 1114 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in White Plains, NY, to impose the same changes ratified by the IBT on employees represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) who voted to reject them. If granted, the relief, along with similar relief requested of the Company's other, smaller unions, will enable the Company and its employees to avoid liquidation and successfully emerge from Chapter 11. The Company has already made its final offer to the BCTGM. Mr. Rayburn added that the BCTGM's membership may have voted against the final offer because their union leadership incorrectly informed members that a white knight would step in to buy the Company and save their jobs, or that Hostess would return with a better offer. "It has been suggested to our BCTGM-represented employees by their union leaders that unidentified parties may be prepared to invest in or purchase Hostess or a significant portion of its baking facilities if the Company's proposal was rejected," he said. "This is not true. There is no white knight. There is no better offer. Our only option to save Hostess, preserve jobs and avoid liquidation is to amend our labor agreements." The Company plans to seek approval of its 1113 motion at a hearing to be held on Oct. 3, 2012. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee.a IDEARC INC: Dallas Judge Trims Suit Against Verizon Over Spinoff ---------------------------------------------------------------- Senior District Judge A. Joe Fish in Dallas granted, in part, and denied, part, the motions for summary judgment filed by Verizon Communications Inc., GTE Corporation, John W. Diercksen, and Verizon Financial Services, LLC, the defendants in a lawsuit filed by U.S. Bank National Association over the 2006 spinoff of Idearc Inc. On Sept. 15, 2010, U.S. Bank, as trustee of the litigation trust created by Idearc's plan of reorganization, filed the lawsuit to prosecute the rights assigned to it under the plan. In its complaint, U.S. Bank asserted causes of action against the defendants for fraudulent transfer, breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, unlawful dividend, promoter liability, unjust enrichment, and alter ego. The court has already decided two motions to dismiss in the suit, decisions which dismissed parts of the plaintiff's complaint. The parties agree that Idearc was encumbered with $9.1 billion in debt at the time of the spin-off. To determine whether Idearc was solvent at the time of the spin-off, the court must make a determination of the fair valuation of Idearc's assets on Nov. 17, 2006. On that date, Idearc's assets were the Verizon domestic directories business. The Verizon defendants provide a number of arguments tending to show that Idearc was worth far more than $9.1 billion on Nov. 17, 2006. The plaintiff, by contrast, maintains that Idearc was worth far less than $9.1 billion. The plaintiff notes that Verizon's own internal analysis (before the spin-off) suggested that if the directories business continued to decline at its current rate, an independent Idearc would be worth only $6.5 billion. In its Sept. 14, 2012 Memorandum Opinion and Order, the District Court ruled that: -- the defendants' motion for summary judgment on the solvency of Idearc on November 16, 2006 is denied. -- For Counts 1 and 2, Verizon and VFS' motion for summary judgment is granted on the plaintiff's fraudulent transfer claims on the $2.4 billion cash transfer. -- For Count 3, Mr. Diercksen's motion for summary judgment on the breach of fiduciary duty claim is denied on all grounds, except it is granted on any claim brought in excess of the applicable insurance coverage. The plaintiff's motion for summary judgment on the fiduciary duty claim is denied. -- For Count 4, Verizon and VFS' motion for summary judgment on aiding and abetting the breach of fiduciary duty claim is denied. -- For Count 5, Verizon and VFS' motion for summary judgment on the fraudulent transfer claim arising out of an IMC loan is denied. -- For Count 6, GTE and Verizon's motion for summary judgment on the fraudulent transfer claim arising out of the transfer of the international directories business is denied. -- For Count 7, Verizon's motion for summary judgment on the fraudulent transfer claim on the interest payments is granted. -- For Count 8, Mr. Diercksen's and Verizon's motion for summary judgment on the unlawful dividend claim is granted on the cash transfer, and denied on the issuance of debt. The plaintiff's motion for summary judgment is denied. -- For Count 9, Mr. Diercksen's and Verizon's motion for summary judgment on the promoter liability and breach of fiduciary duty claim is denied, except their motions are granted on the plaintiff's claims against M. Diercksen and Verizon for participating in certain lawyers' alleged breaches of fiduciary duties, and on the plaintiff's ability to recover of punitive damages. -- For Counts 10 and 11, the defendants' motions for summary judgment on the unjust enrichment claim and alter ego claim are denied as moot. Under the plan, Idearc's creditors (who held $9.7 billion in secured and unsecured bank debt and notes) recovered $270 million in cash, $2.75 billion in new secured bank debt, and new equity interests in the reorganized Idearc, now known as Supermedia. The plan valued the reorganized Idearc business at $2.8 billion. In addition, Idearc's creditors were also given the right to receive the proceeds of litigation brought by a litigation trust, which was assigned certain causes of action, including Idearc's claims against Verizon and former officers and directors of Verizon. The case is U.S. Bank National Association, Litigation Trustee of the Idearc Inc. et al. Litigation Trust, Civil Action No., Plaintiff, v. Verizon Communications Inc., et al., Defendants, No. 3:10-CV-1842-G (N.D. Tex.). About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. IMAGING3 INC: Files for Chapter 11 Amid Shareholder Dispute ----------------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that medical-imaging supply and technology company Imaging3 Inc. filed for Chapter 11 bankruptcy Sept. 13 amid a fight with shareholders who are trying to unseat the chief executive for allegedly illegally diluting their shares, according to a complaint. Imaging3 is represented by: Brian L Davidoff, Esq. GREENBERG GLUSKER 1900 Ave of the Stars 21st Fl Los Angeles, CA 90067 Tel: 310-201-7530 Fax: 310-402-5026 E-mail: bdavidoff@greenbergglusker.com INOVA TECHNOLOGY: Delays Form 10-Q for July 31 Quarter ------------------------------------------------------ Inova Technology, Inc., was not able to file its Form 10-Q for the quarter ended July 31, 2012, by the Sept. 14, 2012, due date. The Company expects that the Form 10-Q will be completed and filed on or before the amended due date of Sept. 19, 2012. About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $1.24 million for the year ended April 30, 2012, compared with a net loss of $3.35 million during the prior year. The Company's balance sheet at April 30, 2012, showed $8.67 million in total assets, $19.81 million in total liabilities, and a $11.14 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. ISLE OF CAPRI CASINOS: S&P Raises Rating on $300MM Notes to 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Isle of Capri Casino Inc.'s $300 million 7.75% senior notes due 2019 to '4' (expectation of 30% to 50% recovery) from '5' (10% to 30% recovery) and raised its issue-level rating on the notes to 'B' from 'B-', in accordance with its notching criteria for a recovery rating of '4'. The issue-level rating was removed from CreditWatch, where it was placed with positive implications on July 24, 2012. "The rating revisions reflect the closing of the company's $350 million 8.875% senior subordinated notes due 2020, proceeds of which were used to help repay the 7% senior subordinated notes due 2014 ($357 million outstanding). This scenario and potential rating outcome were previously discussed in our research update on Isle of Capri, July 24, 2012. The repayment of the 7% subordinated notes resulted in an extension of the maturity dates on the company's revolving credit facility and term loan to March 2016 and 2017, respectively, from November 2013. With the extended maturities, the default year under our simulated default scenario has been pushed out compared with our previous analysis, resulting in a lower level of secured debt outstanding and improved recovery prospects for the senior notes," S&P said. RATINGS LIST Isle of Capri Casino Inc. Corporate credit rating B/Stable/-- Rating Revised; Off CreditWatch To From $300 mil senior notes B B-/Watch Pos Recovery rating 4 5/Watch Pos JARDEN CORP: Moody's Rates $450-Mil. Sr. Subordinated Notes 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Jarden's proposed $450 million senior subordinated convertible notes. At the same time, Moody's affirmed all of Jarden's other ratings, including its Ba3 Corporate Family Rating and SGL-1 Speculative Grade Liquidity rating. The ratings outlook is stable. Proceeds from the convertible notes will be used to finance a $100 million share repurchase and for general corporate purposes. Moody's expects the company to ultimately use the remaining proceeds to either refinance high coupon debt at a later time or for strategic acquisitions. The company also announced that its board has increased its authorized share repurchase program to $250 million. "While another debt financed share repurchase just seven months after the last one is credit negative, we think Jarden will generate enough free cash flow and earnings to keep leverage, measured as debt to EBITDA, at about 5 times," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Ratings assigned: Senior subordinated convertible notes due September 2018 at B2 (LGD 5, 81%); Ratings affirmed /LGD assessments revised: Corporate family rating at Ba3; Probability of default rating at Ba3; $675 million Term Loan A due March 2016 at Ba1 (LGD 2, 17% from 22%); $650 million Term Loan B due March 2018 at Ba1 (LGD 2, 17% from 22%); $250 million revolving credit facility due March 2016 at Ba1 (LGD 2, 17% from 22%); $300 million senior unsecured notes due March 2016 at Ba3 (LGD 3, 48% from LGD 4, 59%); $300 million senior unsecured notes due November 2022 Ba3 (LGD 3, 48% from LGD 4, 59%); $650 million senior subordinated notes due May 2017 at B2 (LGD 5, 81% from 85%); $458 million senior subordinated notes due January 2020 at B2 (LGD 5, 81% from 85%); and Speculative grade liquidity rating at SGL-1 Rating Rationale The Ba3 Corporate Family Rating reflects Jarden's significant and increasing scale, its leading market position in various niche branded consumer products, diverse product portfolio, broad and expanding geographic diversification, and its strong liquidity profile. The Corporate Family Rating also reflects the acquisitive nature of the company and its propensity to increase shareholder returns despite having relatively high financial leverage at around 5 times. The rating is further constrained by the uncertainty in discretionary consumer spending, especially for low and middle income consumers, high raw material prices and by Jarden's significant exposure to Europe where just under 20% of revenue is generated. The stable outlook reflects Moody's view that Jarden will maintain a strong liquidity profile and sustain financial leverage, measured as debt to EBITDA, around 5 times or lower. A material debt funded acquisition/shareholder return combined with the following credit metrics could prompt a downgrade: 1) debt to EBITDA sustained around 5.5 times (currently around 5 times), 2) mid single digit EBITA margins (presently just over 10%), or 3) low single digit free cash flow to adjusted debt (now around 8%). An upgrade is not likely in the near term based on Jarden's aggressive financial policies. Over the long term, an upgrade could occur if Jarden moderates its shareholder oriented strategy and its credit metrics significantly improve from their current levels. For example, debt to EBITDA would need to be maintained under 4 times and EBITA margins sustained in the double digits. The principal methodology used in rating Jarden was Moody's Global Consumer Durables rating methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Jarden Corporation is a manufacturer and distributor of niche consumer products used in and around the home. The company's primary segment include Consumer Solutions (which distributes kitchen appliances, and home vacuum packaging systems), Branded Consumables (which distributes playing cards, arts and crafts, plastic cutlery and firelogs), and Outdoor solutions (which distributes a variety of outdoor leisure products under the K2, PureFishing, Coleman and Campingaz brands). The company reported net sales of approximately $6.7 billion for the twelve months ended June 30, 2012. JAMMIN JAVA: Had $986,200 Net Loss in July 31 Quarter ----------------------------------------------------- Jammin Java Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $986,232 on $559,485 of revenue for the three months ended July 31, 2012, compared with a net loss of $484,160 on $43,742 of revenue for the three months ended July 31, 2011. For the six months ended July 31, 2012, the Company had a net loss of $1.9 million on $869,099 of revenue, compared with a net loss of $665,211 on $71,697 of revenue for the same period of the prior fiscal year. The Company's balance sheet at July 31, 2012, showed $1.8 million in total assets, $933,897 in total current liabilities, and stockholders' equity of $860,136. The Company has an accumulated deficit of $4.9 million as of July 31, 2012. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about Jammin Java's ability to continue as a going concern, following the Company's results for the fiscal year ended Jan. 31, 2012. The independent auditors noted that as of Jan. 31, 2012, the Company has incurred operating losses from inception and has only recently generated revenues from its principal operations. A copy of the Form 10-Q is available at http://is.gd/hfI0He Beverly Hills, Calif.-based Jammin Java Corp., doing business as Marley Coffee, provides sustainably grown, ethically farmed and artisan roasted gourmet coffee through multiple U.S. and international distribution channels, using the Marley Coffee brand name. JEFFERSON COUNTY, AL: No Deadline to File Debt Plan --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jefferson County, Alabama, won't have a deadline for filing a debt-adjustment plan, as a result of a ruling in court Sept. 13 by the U.S. bankruptcy judge in Birmingham. According to the report, bond insurer Assured Guaranty Municipal Corp. filed papers in July asking the judge to impose a Sept. 28 deadline for filing a debt-adjustment plan, else the Chapter 9 municipal bankruptcy begun in November be dismissed. The judge said Sept. 13 that a deadline would be "premature." The Bloomberg report discloses that Assured Guaranty, which guaranteed some of the county's sewer bonds, said the county had "not taken any concrete steps toward proposing a plan." 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: 3 Senior Noteholders Have Power on Plan ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that three senior noteholders of K-V Pharmaceutical Co. have the power to control the direction of the Chapter 11 reorganization that began on Aug. 4 in New York. According to the report, Silver Point Capital LP, Whitebox Advisors LLC and Pioneer Investment Management Inc. among themselves own $152 million of the $225 million in senior secured notes, according to a court filing by their lawyers on Sept. 14. The report relates that approval of a reorganization plan will require that two thirds in amount of senior noteholders vote "yes." The three investors by themselves have 67.6% of the debt, or enough to assure that the class accepts a plan assuming half of holders by number agree. The three investors also own $8.9 million of the convertible subordinated notes, the court filing said. The three noteholders previously had said they held at least a majority of the senior notes. The first-lien notes traded on Aug. 8 for 31 cents on the dollar, a 36% decline since July 11, according to Trace, the bondprice reporting system of the Financial Industry Regulatory Authority. There is $200 million owing on 2.5% contingent convertible subordinated notes due 2033. The notes traded on Aug. 29 for 1.9 cents on the dollar, a 47% decline since Aug. 13, Trace said. 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 Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. K2 PURE: Moody's Withdraws 'Caa1' Rating on $122-Mil. Term Loan --------------------------------------------------------------- Moody's Investors Service has withdrawn the Caa1 rating on K2 Pure Solutions NoCal LP's $122 million term loan. Ratings Rationale Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. K2 Pittsburg owns and operates a chlor-alkali project located in Pittsburg, CA and is designed to produce up to 296.5 tons per day of ECU's and up to 200 tons per day of bleach. The Project sells approximately half its output to Dow Chemical Company under a 20- year agreement and the remaining half of the output will be sold into the wholesale market as bleach, hydrochloric acid and caustic. The project is indirectly owned by K2 Pure Solutions (K2 Solutions). K2 Solutions is indirectly owned by K2 Solution's management and Centre Capital Investors IV LP and related parties. LADDER CAPITAL: Moody's Assigns 'Ba3' Sr. Unsecured Debt Rating --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 corporate family rating to Ladder Capital Finance Holdings LLLP and a Ba3 senior unsecured debt rating to the proposed bond offering to be co-issued by Ladder Capital Finance Holdings LLLP and Ladder Capital Finance Corporation. These are the first ratings Moody's has assigned to the New York City based commercial real estate finance company. Ratings Rationale The ratings reflect Ladder's moderate leverage level, high-quality assets, and strong profitability in recent years. Additional credit strengths include Ladder's disciplined risk management culture as well as its highly-experienced and well-regarded management team. The company's key business lines include commercial real estate loan originations and investments in highly-rated commercial real estate and U.S. Agency securities. In Moody's view, these businesses tend to be countercyclical which should mitigate earnings volatility (to a degree) through economic and credit cycles. The company has multiple funding sources to support its operations, and the proposed bond offering will expand its access to capital. Moody's expects that the diversity and reliability of Ladder's funding sources will continue to improve over the intermediate term. Moody's ratings also reflect that Ladder is a mono-line finance company which could limit upward ratings momentum over the intermediate-term. As a non-bank finance company, Ladder relies on confidence-sensitive, wholesale funding. In addition, Ladder's maturity schedule is lumpy and short-dated; however, Moody's expects the debt maturity schedule to smooth out over time. This assumption is incorporated into the ratings. In Moody's view, Ladder's conservative risk culture and capital structure is a direct reflection of its current ownership. Ladder is a privately-owned company and Moody's believes that the current owners drive the conservative origination and investment philosophy. A change to Ladder's ownership structure might challenge this culture. The stable rating outlook reflects Moody's expectation that over the next 18-24 months Ladder's solid operating performance will continue, leverage will increase (after the proposed bond offering) but remain consistent with its asset composition, and liquidity will improve through diversity of funding sources and continued efforts to ladder its debt maturity schedule. The outlook also reflects that the balance of other credit risks will continue to support the Ba2 corporate family and the Ba3 bond rating. Moody's notes that the leadership of Brian Harris, CEO, and the current ownership structure are important factors in the ratings. Any material changes could lead to negative ratings implications. Moody's indicated that the rating could be upgraded if Ladder (1) improves its liquidity runway by lengthening and laddering its debt maturities (2) further expands its funding diversification and efficiency, with less reliance on wholesale funding markets; (3) demonstrates greater predictability of earnings and asset quality over a sustained period of time, while maintaining strong capital levels; and (4) strengthens its franchise positioning. A downgrade could occur if Ladder experiences (1) a decrease in liquidity runway, (2) an increase in leverage beyond 2.0-3.0X, on a consistent basis, (3) a deterioration in asset quality that is not commensurate with overall leverage, and (4) a decrease in profitability resulting in fixed charge coverage closer to 1.5X. Moody's notes that leverage is expected to fluctuate as Ladder's asset composition changes. A portfolio composed largely of investment grade securities might result in higher leverage. Alternatively, a portfolio comprised largely of originated loans should result in lower leverage. The following ratings were assigned with a stable outlook: Ladder Capital Finance Holdings LLLP -- Ba2 corporate family rating; Ba3 senior unsecured debt rating. Ladder Capital Finance Corporation -- Ba3 senior unsecured debt rating Ladder Capital Finance Holdings LLLP is a commercial real estate finance company headquartered in New York, New York. The company has two primary business lines: (1) commercial real estate lending and (2) commercial real estate securities investments. The principal methodology used for this rating was the Finance Company Global Rating Methodology published on March 19, 2012. LADDER CAPITAL: S&P Gives 'BB-' Rating on $300M Unsecured Notes --------------------------------------------------------------- Standard & Poor's Ratings Services is assigning a 'BB-' issuer credit rating to Ladder Capital Finance Holdings LLLP. The outlook on the ratings is stable. "At the same time, we are assigning a 'B+' rating to the company's proposed issuance of $300 million in senior unsecured notes," S&P said. "Our ratings on Ladder Capital reflect its concentration in commercial real estate, or CRE, its reliance on secured funding lines with the potential for margin calls, its relatively short operating history, and key-man risk," said Standard & Poor's credit analyst Brendan Browne. "The company's conservative leverage, liquidity management, and access to borrowings from the Federal Home Loan Bank (FHLB) system help reduce these risks and are positive factors." "Ladder's focus on CRE exposes it to the cyclicality and volatility that these markets have historically demonstrated," said Mr. Browne. Deterioration in prices or confidence in CRE markets could lead to loan losses for Ladder, a reduction in its funding, and stress on liquidity and earnings. Ladder also takes material credit risk by making CRE bridge loans that some banks avoid because they can be difficult to securitize. "The company's short operating history and key-man risk are negative ratings factors. Ladder has not yet established a track record through a full CRE cycle, and we believe that Brian Harris and Michael Mazzei, the chief executive officer and president, respectively, are 'key' figures at the company. The departure of either could affect the rating given the experience they bring to Ladder in CRE," S&P said. "The rating outlook is stable. We expect Ladder to grow quickly over the next two years, perhaps adding more than $2 billion in assets, but to maintain its conservative capital, liquidity, and underwriting standards. We could lower the rating if the company's debt-to-equity ratio rose close to or exceeded 3.0x, particularly if it took on greater credit risk in the process. We could also lower the ratings if the excess capacity on the company's funding facilities contracted materially--either intraperiod or at quarter end. For instance, as of June 30, 2012, Ladder's borrowings against its conduit loans were equal to only 50% of the value of those loans--lower than the 75% maximum advance rate. Its borrowings on balance sheet loans were equal to 9% of their value, versus a 47% maximum advance rate. A material rise in those rates would increase the probability of margin calls and would limit the rating," S&P said. "We could raise the rating if the company improved its funding profile and established a longer track record of profitability, strong credit quality, liquidity, and capital. The rating could benefit from new sources of funding without the potential for margin calls and a less-encumbered balance sheet," S&P said. LAMKIN PRODUCTION: Seeks Appointment of Receiver ------------------------------------------------ magnoliareporter.com reports that according to recent filings in Columbia County Civil Court, Lamkin Production Company is asking the court to appoint a receiver to negotiate an oil and gas lease on the Leo McDowell et al, defendants, behalf for 23.92 acres in the McDowell Lease in SE/4 NW4, Section 10, Township 15S Range 20 West, according to the report. The case is Cv2012 167-6. Lamkin Production Company v. Leo McDowell et al. and whom it may concern. LEHMAN BROTHERS: To Sell Real Estate Assets ------------------------------------------- Lehman Brothers Holdings Inc., which continues to control more than $10 billion of real estate assets, plans to wait for better days in the real estate markets and eventually sell everything at prices unattainable in the financial crisis, Economic Times reported. In Manhattan alone, Lehman owns several prominent properties. Its other assets, more than 250 positions in all, range from small vacant lots to the scenic Moonlight Basin ski resort in Big Sky, Montana, and hotels and condominium projects in Miami, New York and Hawaii. The company's biggest property holding is the Colorado-based apartment owner Archstone, whose asset value totals $16 billion to $17 billion including about $10 billion of debt. Last month, Lehman filed to raise $100 million in an initial public offering of Archstone. "It's not universally known that we still have a very active portfolio that we're managing," Economic Times quoted Jeff Fitts, head of real estate for Lehman, as saying. Mr. Fitts said the company has also reinvested $7 billion into the real estate portfolio since its bankruptcy filing to increase its creditors' ultimate return. Separately, Lehman is looking to get out of its investment in Austin, Texas. The company is negotiating to sell the portfolio of eight office buildings to one of its existing partners in the deal, Thomas Properties Group Inc., The Wall Street Journal reported, citing the office landlord's securities filing last month as its source. Lehman owns a 50% stake in the portfolio while Thomas owns a 25% stake as a venture with the California teachers' pension fund. Rick Whiteley, a partner at Austin-based real-estate services firm Oxford Commercial, said that while Austin values still are far from their peak levels, they have been steadily rising, The Journal reported. "Austin from an investment sales perspective has been doing better and better," The Journal quoted Mr. Whiteley as saying. Meanwhile, in Detroit, Lehman is willing to accept less than 10 cents on the dollar to get out while it can, according to a September 5 report by Bloomberg News. Lehman had $260 million in outstanding senior loans secured by Detroit-area property at the time of its September 2008 demise in addition to $13.2 million in mezzanine or junior loans, the report said. The company extended some of the loans as part of a joint venture with affiliates of developer Kojaian Management Co. The partnership was dissolved a year after the bankruptcy and Lehman took title to 15 properties in lieu of foreclosure, Bloomberg News reported. Kimberly Macleod, a Lehman spokeswoman, declined to comment on the firm's Detroit holdings, Bloomberg said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEHMAN BROTHERS: BNY Mellon Fails to End Securities Lawsuit ----------------------------------------------------------- Bank of New York Mellon Corp lost a bid to dismiss a lawsuit by securities lending clients who lost more than $1 billion after the bank invested their collateral in Lehman Brothers Holdings Inc. debt, according to a September 10 report by Reuters. BNY Mellon was sued for allegedly not taking action to protect $1.9 billion of investments it had made on the clients' behalf in Lehman floating-rate notes despite amid growing concerns about the company's stability. U.S. District Judge Richard Sullivan in Manhattan refused to dismiss a breach of contract claim while dismissing other claims over whether the bank breached fiduciary duties or acted in bad faith, Reuters reported. In letting the breach of contract claim go forward, the judge said it is unclear whether the securities lending agreements forbade BNY Mellon from acting negligently, as the plaintiffs argued, or simply set forth a more general standard of care. Judge Sullivan said the claim could go forward because the Detroit funds alleged more than $36 million of losses as a result of the bank having "acted negligently in wielding its considerable discretion" under the securities lending agreements, according to the report. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEHMAN BROTHERS: Trustee Balks at Elliot Bid for Quick Liquidation ------------------------------------------------------------------ The trustee liquidating Lehman Brothers Inc. asked Judge James Peck to deny Elliott Management Corp.'s motion for an immediate liquidation of customer securities. Elliot Management suggested that the Securities Investor Protection Act's goal of returning securities to customers must be abandoned, and proposed for the immediate liquidation of those securities. It also demanded that the trustee make an initial payment of $3.2 billion to creditors. Lawyer for the trustee, David Wiltenburg, Esq., at Hughes Hubbard & Reed LLP, in New York, said the request is "inconsistent with SIPA which reserves such decisions for the trustee." "The motion thus seeks to impose a duty on the trustee that SIPA expressly disavows," he said in a court filing. Mr. Wiltenburg also said that the liquidation proposal "has the potential to substitute one set of problems for another without corresponding benefit to customers." "When it comes to the complex process of distributing LBI customer property, there is no magic bullet," he said. Elliot's liquidation proposal also drew flak from the Securities Investor Protection Corp. and other creditors including Joy Global Inc., PricewaterhouseCoopers AG, Belmont Insurance Co., SL Green Realty Corp., Teva Pharmaceutical, LibertyView, Goldman Sachs Investment, PEP Credit Investor LP, and the administrators of Lehman Brothers Holdings Inc.'s European unit. Meanwhile, a Lehman lawyer suggested the trustee should pay full attention and resources to finalizing the claims of LBI's significant creditors and the allocation of the brokerage's assets between customer property and the general estate. "Any determination of the appropriate form and manner of distribution of customer property should be deferred until such time that these issues are fully or, at least, substantially resolved," Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York, said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LEHMAN BROTHERS: Officemax Has Deal to Extinguish Notes Liability ----------------------------------------------------------------- OfficeMax (R) Incorporated disclosed that its agreement to extinguish the non-recourse liability related to the Lehman-backed timber notes is now effective as the result of the entry of a final order by the U.S. Bankruptcy Court resolving certain claims against Lehman Brothers based on the notes. As a result, OfficeMax will recognize a non-cash, pre-tax gain of $671.1 million in the third quarter of this year. In the fourth quarter, OfficeMax anticipates that it will make a cash payment in the amount of approximately $15 million, representing the accelerated tax liability on approximately one half of the gain on the 2004 timberlands sale transaction, mostly offset by alternative minimum tax credits. OfficeMax anticipates using available cash to fund the tax payment. President and Chief Executive Officer Ravi Saligram said, "We are very pleased to resolve this matter. We anticipate that extinguishment of the Lehman non-recourse liability will help to create greater clarity for our investors, as our efforts to simplify the balance sheet continue. As shared previously, we also continue to explore ways to enhance our capital structure and drive shareholder value." OfficeMax received an $817.5-million Lehman-backed note in connection with a 2004 timberlands sale. Also in 2004, OfficeMax monetized the note by issuing securitization notes through a special purpose entity. Payment of these securitization notes was guaranteed by Lehman and was non-recourse to OfficeMax. Lehman's bankruptcy filing on Sept. 15, 2008 constituted an event of default under the note. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. LODGENET INTERACTIVE: Mark Cuban Lowers Equity Stake to 7.8% ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Mark Cuban disclosed that as of Sept. 13, 2012, he beneficially owns 1,997,768 shares of common stock of LodgeNet Interactive Corporation representing 7.8% of the shares outstanding. Mr. Cuban previously reported beneficial ownership of 2,399,985 common shares or a 9.5% equity stake as of Dec. 15, 2011. Between Aug. 17, 2012, and September 14, Mr. Cuban sold an aggregate of 402,217 common shares. A copy of the amended filing is available for free at: http://is.gd/E3sDhY About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at June 30, 2012, showed $283.34 million in total assets, $439.32 million in total liabilities and a $155.98 million total stockholders' deficiency. * * * As reported by the TCR on Aug. 7, 2012, Moody's Investors Services downgraded LodgeNet Interactive Corp.'s Corporate Family Rating (CFR) to Caa1 from B3 and changed the Probability of Default Rating (PDR) to Caa2 from Caa1. The reason for the downgrade is due to poor first and second quarter financial results and Moody's expectations that they will not improve in the near term. In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on U.S. in-room entertainment and data services provider LodgeNet Interactive Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak second-quarter operating performance resulting from a sharp reduction in its room base, which we expect will continue over the near term," said Standard & Poor's credit analyst Hal Diamond. LSP ENERGY: Wins Plan Exclusivity Extension ------------------------------------------- Katy Stech at Dow Jones' DBR Small Cap reports that Mississippi power-plant operator LSP Energy pushed back a deadline that would expose its Chapter 11 case to rival bankruptcy-exit plans until after a judge reviews its proposal to sell its breakdown-plagued facility for $285.9 million. About LSP Energy LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville Holding, LLC, and LSP Batesville Funding Corporation filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-10460) on Feb. 10, 2012. LSP owns and operates an electric generation facility located in Batesville, Mississippi. The Facility consists of three gas-fired combined cycle electric generators with a total generating capacity of roughly 837 megawatts and is electrically interconnected into the Entergy and Tennessee Valley Authority transmission systems. LSP's principal assets are the Facility and the 58-acre parcel of real property on which it is located, as well as its rights under a tolling agreements. LSP filed bankruptcy to complete an orderly sale of its assets or the ownership interests of LSP Holding in LSP, LSP Energy and LSP Funding for the benefit of all stakeholders. The remaining three Debtors filed bankruptcy due to their relationship as affiliates of LSP and their ultimate obligations on a significant portion of LSP's secured bond debt. The Debtors also suffered losses due to a mechanical failure of a combustion turbine at their facility and resultant business interruption. LSP Energy is the general partner of LSP. LSP Holding is the limited partner of LSP and the 100% equity holder of LSP Energy and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond debt, and each of LSP Energy and LSP Holding has pledged their equity interests in LSP and LSP Funding as collateral for the bond debt. No statutorily authorized creditors' committee has yet been appointed in the Debtors' cases by the United States Trustee. Judge Mary F. Walrath oversees the case. Lawyers at Whiteford Taylor & Preston LLC serve as the Debtors' counsel. MANOMAY LLC: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- The Orlando Sentinel reports that Manomay LLC located at 230 W. State Road 436, Altamonte Springs, Orlando, filed on Sept. 7, 2012, for Chapter 11 protection, listing both assets and liabilities of between $1 million to $10 million. The report notes a list of major creditors is not available. MARITIMES & NORTHEAST: Moody's Corrects August 28 Rating Release ---------------------------------------------------------------- Moody's Investors Service issued a correction to the Aug. 28 rating release of & Northeast Pipeline, LLC. Moody's Investors Service has downgraded Maritimes & Northeast Pipeline, LLC's ("MNE LLC") senior unsecured rating to Ba1 from Baa3 and assigned a Ba1 corporate family rating (CFR). The outlook is negative. This action concludes the review for downgrade initiated by Moody's on April 20, 2012. The downgrade and outlook is primarily the result of the recent downgrade and negative outlook assigned to Repsol S.A., which guarantees 88% of MNE LLC's capacity usage. Ratings Rationale MNE's Ba1 Corporate Family Rating primarily reflects the Baa3 rating of Repsol S.A., which guarantees 88% of the MNE LLC's capacity usage, a likely end to gas production offshore Nova Scotia which feeds MNE LLC, usual contract risk associated with Repsol's guarantee, an uncertain future ownership for the Repsol- controlled LNG import terminal that also partially feeds MNE LLC, and a possible pipeline expansion to transport Marcellus gas into the Boston market. Repsol, through its guarantee of the contract of its subsidiary, Repsol Energy North America ("RENA"), is ultimately committed for approximately 88% of MNE LLC's pipeline capacity through 2034 and responsible for approximately 86% of MNE LLC's annual revenue. In addition, one of the pipeline's two main supply sources for natural gas comes through the Canaport LNG facility which is owned 75% by Repsol. The one notch lower rating for MNE LLC is attributable to general contract risk, Repsol's outlook and overall concern about developing weakness in the underlying Maritimes & Northeast Pipeline system fundamentals related to its historical sources of supply of natural gas and the expected changes in supply sources for the northeast United States market. It has been reported that Repsol is considering the sale of its global LNG business to generate funds to reduce overall indebtedness. Moody's expects that such a sale would include Repsol's majority interest in the Canaport LNG facility and might involve an attempt to renegotiate or mitigate Repsol's long term exposure to MNE LLC. The outcome for MNE LLC could potentially be credit positive or credit negative depending on the ultimate counterparty risk. At the same time, the underlying pipeline fundamentals for the full Maritimes & Northeast Pipeline system are weakening, causing Moody's to place much greater reliance on the strength of counterparties and related contractual commitments and support agreements. The initial pipeline was developed as a project financing with multiple levels of support provided through contractual agreements with investment grade sponsors and counterparties. As the primary source of natural gas supply, the Sable Offshore Energy Project, nears the end of its economic life earlier than originally expected without certainty as to replacement supply and the system's primary Boston/New England market looks vulnerable as early as 2016 with the possible expansion of the Algonquin Pipeline System to move Marcellus shale gas into the Boston area; MNE LLC's ability to maintain cash flow and coverage ratios falls to the pipeline's contractual underpinnings currently with mainly investment grade counterparties. Outlook The outlook is negative, given the negative outlook assigned to Repsol S.A. What Could Change The Rating UP The rating could be upgraded if the primary contracting party, either Repsol or another firm, were to be rated Baa2 or better, accompanied by greater clarity regarding the pipeline's future utility. What Could Change The Rating DOWN Alone or in combination, the following would put downward pressure on the rating: Any further material deterioration in the credit quality of Repsol as guarantor of RENA's contractual obligations or any material change to the Firm Service Agreement that is detrimental to MNE LLC. A material increase in operating expenses that squeeze operating margins and reduces coverage ratios. Principal Methodology The principal methodology used in this rating was Natural Gas Pipelines published in December 2009. Maritimes & Northeast Pipeline is a natural gas pipeline system primarily owned by Spectra Energy (78%). MNE LLC operates the US portion which runs from Maine to Massachusetts. The Canadian portion is operated by MNE LP and runs from Nova Scotia to Maine. The pipeline's original purpose was to transport natural gas from offshore Nova Scotia to markets in Atlantic Canada and the northeast US. The US portion also benefits from LNG supply from the Canaport Terminal near St John, New Brunswick. Canaport is owned 75% by Repsol S.A. The US and Canadian portions have capacity of 833,000 Dth/day and 550,000 Dth/day, respectively. MARQUETTE TRANSPORTATION: Moody's Affirms 'B2' CFR; Outlook Neg. ---------------------------------------------------------------- Moody's Investors Service affirmed its debt ratings of Marquette Transportation Company, LLC; Corporate Family and Probability of Default each of B2; senior secured second lien notes of B3. The rating outlook was revised to stable from negative. Ratings Rationale The B2 Corporate Family Rating ("CFR") considers Marquette's leading market position and long operating history as an independent provider of horsepower to inland river barge freight companies. Moody's believes that as a provider of power to barge freight operators, Marquette's operating model is less risky than that of the broader river barge freight transportation sector, which is more competitive and has more volatile pricing. Long-term relationships with major blue-chip customers and somewhat high barriers to entry help mitigate significant customer concentration, which results from a relatively small addressable market for the company's services. A significant component of revenues is sourced from ton-mile contracts. Moody's understands that these agreements do not contain minimum usage levels so revenues remain exposed to fluctuating demand over economic cycles. Increasing charter business helps to further mitigate some of the cyclical demand risk. The stable outlook considers Marquette's demonstrated ability to maintain its financial profile and adequate liquidity since the acquisition of certain assets from Alter Marine, Inc. on September 30, 2011. Leverage and interest coverage metrics at June 30, 2012 remain at levels supportive of the B2 rating category. Moody's believes that earnings and metrics could face modest pressure in the second half of 2012 because of low water conditions on the lower Mississippi and expected lower crop yields because of the recent drought. These two factors will likely pressure towing volumes in the second half of the year. However, credit metrics should not meaningfully weaken. The change in the outlook also reflects Moody's belief that improving fundamentals, such as increased demand for liquid barge freight, some shortage of inland-river boat capacity and the high construction cost of high horsepower push boats that handle large tows on the lower Mississippi River should support demand for Marquette's services. The ratings could be downgraded if one of Marquette's four largest customers ceases its relationship with it or if it was to unexpectedly execute a sizeable debt-funded acquisition that leads to sustained weaker credit metrics. Expansion of the barge or boat fleet that increases debt (whether funded or by operating leases) and prevents de-levering of the capital structure could also pressure the ratings. Debt to EBITDA sustained above 6.0 times, FFO + Interest to Interest that remains below 2.3 times or Retained Cash Flow to Net Debt that is sustained below 10% could lead to a downgrade. A positive rating action could follow if Marquette is able to organically grow its revenue base towards $500 million while maintaining its EBITDA margin above 25%. At its current revenue base, Debt to EBITDA sustained below 4.7 times and FFO + Interest to Interest sustained above 3.0 times could also lead to a positive rating action as could Retained Cash Flow to Net Debt of above 15%. The principal methodology used in rating Marquette was the Global Shipping Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Marquette Transportation Company, LLC, headquartered in Paducah, Kentucky, is a leading provider of outsourced power to the inland and offshore barge freight shipping sectors. MARSICO HOLDINGS: Moody's Cuts Corporate Family Rating to 'Ca' -------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating (CFR) and the rating on the senior secured bank facility of Marsico Holdings, LLC to Ca as a result of a debt restructuring, which Moody's views as a distressed exchange. Subsequently, both ratings will be raised to Caa3 to reflect the improved financial flexibility of the firm following the closing of the debt restructuring. The outlook on both ratings is negative reflecting the continued outflow of assets under management (AUM) which has continued this year, as well as Marsico's investor concentration and the weak performance of its flagship strategies. The following ratings were impacted: Marsico Holdings, LLC: Downgraded CFR to Ca from Caa3 (stable outlook), will be upgraded to Caa3 (negative outlook) after completion of restructuring Downgraded $977 million senior secured bank facility rating to Ca from Caa2 (stable outlook), will upgrade $500 million senior secured bank facility rating to Caa3 (negative outlook) after completion of restructuring Transaction Detail Under the debt restructuring, which was executed on September 10, 2012, Marsico amended the terms of its first lien senior bank term loan facility with 100% lender approval reducing the principal amount of the loan from $977 million to $500 million and staggering and extending the maturity with 90% of its principal maturing in 2022. In addition, Marsico gained greater flexibility to make interest and principal payments in-kind if revenues drop sharply. Marsico also exchanged its senior subordinated unsecured notes (unrated) aggregating $604 million due in 2020 for new notes with a face amount of $200 million maturing in 2022. In consideration for the principal reduction, the senior bank term loan lenders received a 25% position in Marsico's equity, while management's equity stake was diluted to 38% and note holder's equity stake was diluted to 37%. Management retains 100% voting control. This restructuring follows a similar transaction in November 2010, where Marsico converted $1.06 billion in junior notes to equity and amended some terms on its bank credit facility and subordinated notes. Ratings Rationale In Moody's opinion, the debt restructuring and the exchange offer is intended to avoid default on Marsico's senior bank term loan and subordinated notes, which Moody's views as a distressed exchange. In downgrading the rating on its senior bank term loan and CFR to Ca, Moody's took into account the loss severity suffered by the term loan holders of 49%. In subsequently upgrading the CFR and rating on its senior bank term loan to Caa3 post restructuring, Moody's recognizes Marsico's improved financial flexibility resulting from its restructuring due to reduced overall debt levels, cash interest, and bank loan amortization requirements. As a result, the financial flexibility of the firm has improved with debt/EBITDA declining to 5.1x from 11.4x on a pro-forma basis and the EBITDA to interest coverage improving to 2.2 from 1.0 times. The negative outlook on Marsico's ratings reflects the challenges the firm faces in stemming persistent net outflows, which have resulted from the average to subpar relative investment performance of its flagship products during the 3-5 year period, the concentration of its investor base, a general outflow from its equity mutual funds, and continuing concerns about Marsico's high leverage. While the restructuring addresses the latter concern. Moody's remains concerned that absent a sustained improvement in its funds' investment performance, there exists a real possibility that the company may lose sub-advisory and institutional relationships which account for a majority of the firm's revenues. Moody's views the undiversified nature of Marsico's business model as a growth stock asset manager, its significant reliance on a couple of sub-advisory relationships, as well as the key man risk with Tom Marsico being CEO, chief investment officer and co portfolio manger as continuing concerns. Marsico Holdings, LLC is the parent of Marsico Capital Management, LLC and Marsico Fund Advisors, LLC. Marsico Capital Management is a Denver-based asset management firm offering investment services to institutional and retail investors The principal methodology used in rating Marsico was "Moody's Global Rating Methodology for Asset Management Firms" published in October 2007. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's Web site. MASQUERADE WINE: Court Confirms Plan That Pays 100% to Unsecureds ----------------------------------------------------------------- Bankruptcy Judge Frank L. Kurtz confirmed Masquerade Wine Company, LLC's Chapter 11 Plan of Reorganization that provides full payment to unsecured creditors. The Court also approved, on a final basis, the Disclosure Statement explaining the Plan. The plan outline was conditionally approved on July 17, 2012. The Plan proposes three classes of Creditors: a. Class I consists of the impaired claim of Red Mountain Properties, LLC, d/b/a Monte Scarlatto Vineyard and Joel Mackay. Treatment of Red Mountains claim will be dictated by the settlement agreement between it and the Debtor upon final court approval. Red Mountain's claim will be paid in full under the terms of that Settlement Agreement. b. Class II consists of the impaired claims of the General Unsecured Creditors of the Debtor, which will be paid in full under the Plan. Class II includes creditor Telquist Ziobro & McMillen, PLLC, which has a claim constituting 81.27% of the class. Telquist Ziobro & McMillen, PLLC filed a ballot accepting the Debtor's Plan on Aug. 21, 2012. With the exception of the $275,000 unsecured claim owed to William Kimmerly, the Debtor's owner, the general unsecured creditors will receive monthly pro-rata distributions from the available revenue of the Debtor during the term of the Plan after the case is closed and after payments of the fee owed to the U.S. Trustee under 28 U.S.C. Sec. 1930. After the allowed claims of general Unsecured creditors other than Mr. Kimmerly are paid in full, the Debtor will commence payment to Mr. Kimmerly. c. Class III consists of the unimpaired Equity Interests of William and Jennifer Kimmerly. The Plan states they will retain their interest through the effective date of the Plan. Under the Plan, the allowed administrative expense claim of Hames, Anderson, Whitlow & O'Leary, P.S., will be paid under such terms agreed to by the Debtor and its legal counsel. On Aug. 22, 2012, Gamache Vintners LLC filed an Objection to the Debtor's Plan of Reorganization. On Aug. 31, Gamache filed a Motion for Allowance of Administrative Expenses. On Aug. 29, 2012, the Court conducted a status conference on Confirmation, and scheduled the final hearing for resolution of Gamache's Objection to Debtor's Plan of Reorganization, Motion for Allowance of Administrative Expenses, Confirmation of Debtor's Plan of Reorganization and final approval of the Debtor's Disclosure Statement, in open court, on Sept. 7, 2012. At the hearing the Court continued the confirmation hearing to Sept. 14, 2012, and requested the Debtor bring its Monthly Operating Reports up to date, and demonstrate the ability, and a proposal for payment of administrative claims. The court also entered an Order awarding Gamache an administrative claim totaling $10,857. Under th Plan, Gamache Vintners' allowed administrative expense claim will be paid in four equal quarterly payments of $2,714. The first payment will be made upon confirmation. The second payment will be made on or before Dec. 31, 2012. The third payment will be made on or before March 31, 2013. The fourth and final payment will be made on or before June 30, 2013. Gamache will release the wine and any of the Debtor's equipment in its possession upon confirmation. The Debtor grants Gamache a first position security interest in the Debtor's equipment: 1994 Hyster SS Forklift, 2200 liter stainless steel fermenters (2), Destemmer-crusher, Glycol chiller unit, Wine pump, Analytical wine tasting equipment, Barrels and Barrel rack, Polyethylene cage tanks, Stainless steel kegs, Pallet Jack, Commercial Dishwasher, Three compartment stainless steel sink, and Refrigerator. A copy of the Court's Sept. 14, 2012 Findings of Fact and Conclusions of Law is available at http://is.gd/pwQogKfrom Leagle.com. Masquerade Wine Company, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-03909) on Aug. 8, 2011, listing under $1 million in both assets and debts. John W. O'Leary, Esq., at Hames, Anderson, Whitlow & O'Leary, serves as the Debtor's counsel. MEDICAL DEVELOPMENT: Wells Fargo Gets Receiver, $30MM Judgment -------------------------------------------------------------- Phil Milford and Dawn McCarty at Bloomberg New report that Wells Fargo & Co., the fourth- largest U.S. bank by assets, won a $30 million judgment and the appointment of a permanent receiver in its lawsuit against prison-service provider Medical Development International Ltd. over the repayment of loans. Wells Fargo sued Ponte Vedra, Florida-based MDI in March in Delaware Chancery Court, alleging it defaulted on loans used for executive borrowing, a working farm, a biographical screenplay about Chief Executive Officer Richard Willich and payments for a Tesla Roadster, according to Bloomberg News. Bloomberg News notes that the receiver, Ronald Winters of Alvarez & Marsal Healthcare Industry Group LLC, is authorized "to do any and all acts necessary for the proper and lawful conduct" of company affairs, lawyers for both sides said in a stipulation approved Sept. 7 by Judge Samuel Glasscock III. Bloomberg News discloses that MDI was in a deteriorated financial condition and wasn't being operated in the best interests of stakeholders, the bank contended in the complaint. MDI officials sued in state court in St. Johns County, Florida, saying Wells Fargo "abandoned its traditional role as lender and took up the role of corporate raider" to divert company assets, Bloomberg News relates. Bloomberg News says that the parties agreed to pay Willich about $33,000 as a September salary, and $15,000 a month through Dec. 31, as a temporary consultant, court papers show. Winters will also have the right to make any decisions for the company, including "the authority to file for bankruptcy," according to court papers obtained by Bloomberg News. In its complaint, Bloomberg News notes that Wells Fargo lawyers said MDI was at risk of not obtaining renewal of "a key contract with a federal prison," which accounted for 35 percent of its revenue, because of "MDI's failure to pay approximately $8.3 million" to a service provider. Bloomberg News says that attached to court papers is an article from the Florida Times-Union newspaper of Jacksonville that identifies the prison as Butner Federal Correctional Complex near Durham, North Carolina and the provider as Durham Regional Hospital, affiliated with Duke University. The case file includes a Feb. 17 letter to Charles E. Samuels Jr., director of the Federal Bureau of Prisons, from U.S. Representatives David Price, Howard Coble and Melvin Watt, all of North Carolina, asking about MDI's debt to the Duke medical system and questioning the bureau's management practices at Butner. The Delaware case is Wells Fargo Bank v. Medical Development International Ltd., CA7352, Delaware Chancery Court (Wilmington). The Florida case is MDI v. Wells Fargo Bank, CA12- 0570, Florida Circuit Court, Seventh Judicial Circuit (St. Johns County). MERIDIAN MORTGAGE: Singer, Booking Agent Face Clawback Suit ----------------------------------------------------------- Jacqueline Palank, writing for Dow Jones Daily Bankruptcy Review, reported that singer and song-writer John Mayer and his booking agent, Grabow & Associates, are the target of a bankruptcy clawback lawsuit that alleges they received at least $465,000 of investors' funds from convicted Ponzi schemer Frederick Darren Berg and his Meridian Mortgage Investors funds between October 2007 and January 2008. The lawsuit was filed in the U.S. Bankruptcy Court in Seattle on July 20, and seeks to recoup those payments for the benefit of Mr. Berg's creditors. According to DBR, a lawyer for Mr. Mayer told TMZ, which first reported the lawsuit, that the singer performed for Mr. Berg at a corporate event in 2008. DBR also related that Grabow's Bob Grabow elaborated in an interview with E! News, stating that Mr. Mayer "did a fabulous job" performing at the January 2008 gig: "a private event at Paul Allen's place" that "was a very successful event for meeting planners in Seattle." Mr. Grabow, who said he "never even knew anything" about Mr. Berg's fraud, added that "there is no merit" to the lawsuit. About Meridian Mortgage In November 2010, a federal grand jury in Seattle has indicted Frederick Darren Berg on 12 counts of wire fraud, money laundering and bankruptcy fraud in connection with the demise of his Meridian Group of investment funds. Prosecutors believe Mr. Berg took in more than $280 million, with the losses attributed to the ponzi scheme estimated to be roughly $100 million. Hundreds of victims have lost money in the scheme between 2001 and 2010. Mr. Berg commenced a personal Chapter 11 case on July 27, 2010 (Bankr. W.D. Wash. Case No. 10-18668), estimating assets of more than $10 million and liabilities between $1 million and $10 million. The filing came after lawyers for one group of investors, armed with a court order and accompanied by sheriff's deputies, began seizing personal possessions at Mr. Berg's Mercer Island home and downtown Seattle condo. Diana K. Carey, trustee for Mr. Berg's estate, filed on Jan. 27, 2011, voluntary Chapter 11 petitions for Mortgage Investors Fund I LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up to $50,000 and debts of up to $50 million and Meridian Mortgage Investors Fund III LLC (Case No. 11-10833), estimating up to $50,000 in assets and up to $100 million in liabilities. Michael J. Gearin, Esq., at K&L Gates LLP, in Seattle, serves as counsel to the Debtors. Creditors filed an involuntary Chapter 11 petition for Meridian Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No. 10-17976) on July 9, 2010. The petitioners are represented by Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle. Creditors filed involuntary Chapter 11 petitions for Meridian Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No. 10-17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D. Wash. Case No. 10-17952) on July 9, 2010. The petitioners are represented by John T. Mellen, Esq., at Keller Rohrback LLP, in Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow Drumheller PS, in Bellevue, represent the petitioners. In February 2012, Mr. Berg was sentenced to 18 years in prison after being convicted of defrauding investors. MERRIMACK PHARMACEUTICALS: Board Approves 2012 Bonus Program ------------------------------------------------------------ The Organization and Compensation Committee of the Board of Directors of Merrimack Pharmaceuticals, Inc., approved the annual performance-based cash bonus program for 2012 for the Company's named executive officers. The 2012 Bonus Program is comprised of three elements, each of which accounts for one-third of the annual cash bonus for each named executive officer: (1) the achievement of specified annual corporate objectives; (2) the achievement of specified annual individual performance objectives; and (3) the support of the overall management of the Company and the creation of long-term value for the Company's stockholders, which are referred to as the general management contribution. The corporate objectives for 2012 generally focus on the advancement of the Company's product candidates in preclinical and clinical development, the pursuit of various internal initiatives and ensuring the adequate funding of the Company. The individual performance objectives for 2012 for each named executive officer generally relate to the following: * for Robert J. Mulroy, the Company's President and Chief Executive Officer, transitioning the Company to a public company and advancing the Company's corporate objectives; * for William A. Sullivan, the Company's Chief Financial Officer and Treasurer, transitioning the Company to a public company and developing the Company's operating plan; * for Fazal R. Khan, the Company's Senior Vice President of Manufacturing, meeting the Company's manufacturing needs for its preclinical and clinical product candidates and preparing the Company for commercial manufacturing; * for Ulrik B. Nielsen, the Company's Senior Vice President and Chief Scientific Officer, advancing the Company's preclinical and early stage clinical product candidates; and * for Clet M. Niyikiza, the Company's Executive Vice President of Development, advancing MM-398 and MM-121 in clinical development and promoting the Company's clinical strategy. The general management contribution of each named executive officer will be evaluated retrospectively and will focus more broadly on overall contributions during the year to the improvement of processes and efficiency, the development of human and scientific capacity and the development and management of stakeholders, including partners, collaborators, investigators, stockholders and licensees, rather than on specific, pre- determined criteria. Each named executive officer is eligible to receive an annual cash bonus under the 2012 Bonus Program up to a fixed percentage of his base salary, with the foregoing elements determining the percentage of the annual cash bonus that the named executive officer will receive. For 2012, Mr. Mulroy is eligible to receive an annual cash bonus of up to 50% of his 2012 base salary and each of Mr. Sullivan, Dr. Khan, Dr. Nielsen and Dr. Niyikiza are eligible to receive annual cash bonuses of up to 40% of their 2012 base salaries. Notwithstanding the foregoing, the Committee has the authority to, in its sole discretion, adjust the bonus percentage in connection with its review of the named executive officer's performance and to modify the amount of the annual cash bonus above or below the amount calculated. About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. The Company's balance sheet at June 30, 2012, showed $138.70 million in total assets, $105.62 million in total liabilities, $343,000 in non-controlling interest and $32.74 million in total stockholders' equity. As reported in the TCR on April 9, 2012, PricewaterhouseCoopers LLP, in Boston, Massachusetts, expressed substantial doubt about Merrimack Pharmaceuticals' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has insufficient capital resources available as of Dec. 31, 2011, to fund planned operations through 2012. MGM RESORTS: Fitch Rates Proposed Sr. Unsec. Notes Due 2020 'B-' ---------------------------------------------------------------- Fitch Ratings assigns a 'B-/RR4' rating to MGM Resort International's (MGM) proposed senior unsecured notes due 2020. The Rating Outlook is Stable. The proceeds from the proposed issuance will be used to refinance existing debt and is the third-sizable unsecured issuance this year (issued $1.85 billion prior to this). Upon the closing of this transaction MGM should be able to address its maturities through all of 2013 and part of 2014. Fitch views these transactions plus MGM's improving free cash flow (FCF) prospects favorably, which may lead to positive rating action within the near term. Pro forma for repayment of the 6.75% notes that mature September 2012 and the proposed issuance MGM has $1.7 billion in liquidity ($1.5 billion excluding non-extended revolver availability). MGM has $1.4 billion of maturities in 2013, including $750 million in 13% secured notes (secured by New York-New York and has pro rata security in Bellagio, MGM Grand and Mirage). There is $1.3 billion of debt maturing in 2014, half of which is comprised of 10.375% secured notes (Bellagio and Mirage). MGM's refinancing transactions have been largely interest expense neutral to date. The notes issued previously in 2012 have a weighted average coupon of 8.15% and were used to refinance notes and loans with interest of around 7%. This negative differential was offset by MGM extending a large portion of its credit facility (about $1.1 billion extended that is outstanding) with interest 200 basis points lower relative to the non-extended facility. In 2013, MGM's 13% secured notes mature in November and 11.125% secured notes due 2017 become callable in May at 105.563. Fitch estimates that MGM can save $60 million-$70 million by refinancing these notes not counting savings MGM can realize by pledging additional assets to the credit facility (pricing is based on collateral coverage). Fitch expects that core domestic operations will also continue to drive improvements in FCF, which is approximately $50 million for the latest 12-month (LTM) period ending June 30, 2012 for the domestic group. Las Vegas Strip represents 78% of MGM's wholly- owned property EBITDA for the LTM period ending June 30, 2012. Fitch believes the fundamental outlook for the LV Strip remains among the safest markets in the U.S. for the balance of 2012 and 2013, supported by minimal supply growth. Fitch is maintaining its outlook for 2% visitation growth this year, but revising its LV Strip gaming revenue outlook to +2-3%. Fitch currently expects visitation and revenue growth in 2013 to be similar to 2012. The Las Vegas Strip recovery trajectory slowed materially in second-quarter and forward trends softened, as the shorter-term group/business segment (i.e. in the year, for the year) weakened. Visitation is up 1.9% year-to-date through July, in line with Fitch's initial forecast of +2%, while gaming revenues are up 3.2% on the LV Strip, slightly below our forecast of a 5% increase. Any upcoming decision by Fitch to take positive rating action would hinge on the Las Vegas recovery remaining in line with Fitch's base case scenario outlined above. Fitch will also factor in MGM's expansion plans in Massachusetts, Maryland, Ontario and Macau when considering positive action. MGM announced development plans at National Harbor (right outside Washington DC) and in Springfield, MA with each development budgeted at $800 million. These projects are subject to MGM being awarded a license through a competitive bidding process in each market and the Maryland license needs to pass a referendum in November. In Toronto, MGM is proposing a $2 billion - $6 billion casino resort. However, Ontario Lottery and Gaming Corp's plans to revamp the province's gaming regulation, which may allow a casino in the Toronto area, are not yet finalized. MGM also has plans to develop a $2.5 billion casino resort on Cotai through its 51% owned MGM China. Fitch believes that the Cotai project has a high probability of moving forward but the other three mentioned may or may not occur. When considering an upgrade, Fitch will try to assess the probability of these projects moving forward and will look for more clarity on MGM's funding plans for each. A heavy project pipeline that relies on considerable capital contributions from MGM's main restricted group would be viewed negatively and may forestall the positive rating momentum. Credit concerns that will somewhat constrain upward potential in the ratings include MGM's high leverage, weak albeit improving FCF, and thin covenant cushion. These negative considerations leave MGM susceptible to a downturn on the Las Vegas Strip although with a 'B-' IDR there is some cushion for mild declines that are seen as temporary by Fitch. The domestic group's leverage as of June 30, 2012 is high at approximately 11x. Reported covenant EBITDA for LTM period ending June 30, 2012 is $1.3 billion relative to a covenant threshold of $1.20 for the period. The covenant steps up to $1.25 billion in March 2013 and $1.30 billion in June 2013. The Macau dividend received by the domestic group is counted in the covenant EBITDA, providing MGM a degree of flexibility with respect to the covenant. Fitch currently rates MGM as follows: -- IDR 'B-'; -- Senior secured notes due 2013, 2014, 2017, and 2020 'BB-/RR1'; -- Senior credit facility 'B/RR3'; -- Senior unsecured notes 'B-/RR4'; -- Convertible senior notes due 2015 'B-/RR4'; -- Senior subordinated notes 'CCC/RR6'. MGM RESORTS: Moody's Rates $700-Mil. Senior Unsecured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to MGM Resorts International's proposed $700 million senior unsecured notes due 2020. Moody's affirmed the company's B2 Corporate Family and Probability of Default ratings, Ba2 senior secured ratings, B3 senior unsecured ratings, and Caa1 senior subordinated ratings. MGM has an SGL-3 Speculative Grade Liquidity rating and a stable rating outlook. "MGM's proposed note offering is another positive step towards refinancing its considerable debt maturities in the next two years," stated Peggy Holloway, Vice President and Senior Credit Officer. MGM intends to use the net proceeds from the proposed offering to repay debt, which may include outstanding revolving credit loans to free up capacity for near term debt maturities. Assuming the proposed transaction occurs, Moody's estimates MGM will have adequate liquidity to support operations and all 2013 debt maturities of approximately $1.3 billion. Ratings assigned: MGM Resorts International Proposed approximate $700 million senior unsecured notes due 2020 at B3 (LGD 4, 69%) Rating affirmed and LGD assessments revised where applicable: MGM Resorts International Corporate Family Rating at B2 Probability of Default Rating at B2 Senior secured notes at Ba2 (LGD 2, 13% from LGD 2, 14%) Senior unsecured notes at B3 (LGD 4, 69% from LGD 5, 70%) Senior unsecured shelf at (P)B3 Senior subordinated shelf at (P)Caa1 Subordinated shelf at (P)Caa1 Speculative Grade Liquidity at SGL-3 Mandalay Resort Group Senior unsecured notes at B3 (LGD 4, 69% from LGD 5, 70%) Senior subordinated notes at Caa1 (LGD 6, 96%) Ratings Rationale The affirmation of MGM's B2 Corporate Family Rating reflects MGM's improving liquidity position and Moody's view that slowly improving trends in visitation, room rates, and gaming in Las Vegas will continue into 2013 and help improve MGM's leverage and coverage metrics, albeit modestly. Despite MGM's success at improving its debt maturity profile, the B2 Corporate Family Rating acknowledges that approximately $2.52 billion of the company's fixed-rate bonds matures between 2013 and 2014. MGM has bond debt of approximately $1.36 billion (including a high coupon 13% $750 million secured bond) maturing in 2013 and about $1.1 billion in 2014. Also of concern is the company's high leverage and thin interest coverage. Debt/EBITDA for the 12-month period ended June 30, 2012 (excluding the Macau joint venture) was 11 times and EBITDA coverage of interest was only slightly above one time. Additionally, a significant portion of MGM's revenue and earnings comes from only one gaming market -- the Las Vegas Strip. The stable rating outlook reflects Moody's view that MGM will continue to execute transactions that will improve its liquidity profile. Additionally, Moody's expects rising visitation to the Las Vegas Strip will improve MGM's earnings and improve the company's debt/EBITDA (excluding the Macau joint venture) to below 10 times by year-end 2012. Given MGM's high leverage, Moody's does not expect upward rating momentum. However, MGM's ratings could be raised if the Las Vegas Strip's recovery gains greater momentum -- particularly sustained growth in gaming revenue, and if the company can improve its debt maturity profile. The ratings could be downgraded if improving operating conditions in Las Vegas stall or MGM is unable to further improve its liquidity profile. The principal methodology used in rating MGM Resorts International was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MGM Resorts International owns and operates 14 wholly-owned properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. MGM has a 51% interest in MGM Grand Macau, a hotel- casino resort in Macau S.A.R. and a 50% interest in CityCenter, a multi-use resort in Las Vegas, Nevada. MGM generates annual net revenue of approximately $9.0 billion on a consolidated basis and approximately $6.2 billion excluding Macau. MGM RESORTS: Prices $1 Billion in Unsecured Debt at Par ------------------------------------------------------- MGM Resorts International has priced $1 billion in aggregate principal amount of 6.75% senior notes due 2020 at par. In a press release dated Sept. 14, 2012, MGM Resorts said it plans to offer $700 million in aggregate principal amount of senior notes. Later in the day, the Company issued another press release increasing the figure by $300 million. The transaction is expected to close on Sept. 19, 2012. The Company plans to use the net proceeds to repay a portion of its indebtedness, which may include indebtedness under its senior credit facility or outstanding debt securities. The notes will be general unsecured senior obligations of the Company, guaranteed by substantially all of the Company's wholly owned domestic subsidiaries which guarantee the Company's other senior indebtedness, and equal in right of payment with, or senior to, all existing or future unsecured indebtedness of the Company and each guarantor. About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.23 billion in 2011 and a net loss of $1.43 billion in 2010. The Company's balance sheet at June 30, 2012, showed $27.26 billion in total assets, $17.85 billion in total liabilities and $9.41 billion in total stockholders' equity. Bankruptcy Warning In the Form 10-K for the year ended Dec. 31, 2011, the Company said that any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. MICHIGAN HIGHER: Moody's Cuts Ratings on Six Bond Classes to Ba3 ---------------------------------------------------------------- Moody's Investors Service has downgraded six classes of student loan revenue bonds, issued by Michigan Finance Authority, previously known as Michigan Higher Education Student Loan Authority. The downgrades conclude Moody's review of the bonds initiated in April 2012 following the implementation of "Moody's Approach to Rating Securities Backed by FFELP Student Loans" methodology. The underlying collateral consists of a pool of Federal Family Education Loan Program (FFELP) student loans that are guaranteed by the Department of Education for a minimum of 97% of defaulted principal and accrued interest. Ratings Rationale The ratings were downgraded as a result of the increased expected defaults Moody's observed in the FFELP loan pools during the recent years. Moody's updated cash flow assumptions it uses to rate FFELP securitizations reflect this trend. In addition, interest rates on the outstanding tax-exempt bonds in this transaction are calculated as a product of an interest rate index and a multiple that depends on the ratings of the bonds, i.e., the lower the rating the higher the multiple. When the ratings on the bonds are less than investment grade, the multiple increases from 2.0 to 2.65, which causes a negative excess spread in some high interest rate cash flow scenarios. This, in turn, erodes collateral base of the transaction. Principal Methodology The principal methodology used in this rating was Moody's Approach to Rating Securities Backed by FFELP Student Loan published in April 2012. The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics. The ratings on the bonds would not be upgraded if spread between LIBOR index on the liability side and the one- month LIBOR index on the asset side is 10 bps lower, or downgraded if the spread is 10 bps higher. To assess rating implications of the higher expected losses, each individual transaction was run through a variety of stress scenarios using the Structured Finance Workstation(R) (SFW), a cash flow model developed by Moody's Wall Street Analytics. The complete rating actions are as follows: Issuer: Michigan Higher Education Student Loan Authority (Series XII) 96 Ser. XII-N, Downgraded to Ba3 (sf); previously on Apr 2, 2012 A3 (sf) Placed Under Review for Possible Downgrade 99 Ser. XII-R-1, Downgraded to Ba3 (sf); previously on Apr 2, 2012 A3 (sf) Placed Under Review for Possible Downgrade 99 Ser. XII-R-2, Downgraded to Ba3 (sf); previously on Apr 2, 2012 A3 (sf) Placed Under Review for Possible Downgrade 00 Ser. XII-U, Downgraded to Ba3 (sf); previously on Apr 2, 2012 A3 (sf) Placed Under Review for Possible Downgrade 03 Ser. XII-Z2, Downgraded to Ba3 (sf); previously on Apr 2, 2012 A3 (sf) Placed Under Review for Possible Downgrade 03 Ser. XII-Z3, Downgraded to Ba3 (sf); previously on Apr 2, 2012 A3 (sf) Placed Under Review for Possible Downgrade NATURAL PORK: AgStar Pushes for Expedited Sale ---------------------------------------------- AgStar Financial Services, ACA and AgStar Financial Services, FLCA, object to the request of Natural Pork Production II, LLP, for interim use of cash tied to the Company's pre-bankruptcy loan obligations. A group, called IC Committee, which purports to represent persons who dissociated from the Debtor, also objects to the Debtor's request to use cash collateral. AgStar asserts a $3,816,457 claim secured by, among other things, real property, equipment and fixtures in Indiana. Prior to the bankruptcy filing, AgStar was advised that the Debtor had negotiated the sale of various properties in the States of Iowa and Indiana. Based on the representations made to AgStar, and on AgStar's knowledge and belief, AgStar was under the understanding that management for the Debtor intended to consummate sale transactions whereby the majority of the operating assets of the Debtor would be liquidated and proceeds paid, at least in part, to satisfy the claims of certain secured creditors. The bankruptcy case was filed two days before a duly scheduled state court hearing on an application for appointment of receivership of the Debtor. AgStar says it has no interest in those state court proceedings, but the dispute appears to be between holders of debt arising on account of their disassociation from the Debtor partnership as opposed to the conflicting financial interest of the remaining equity holder of the Debtor partnership. AgStar says the dispute should not be permitted to become a basis for delay of the asset sales. AgStar asserts that without the court's direction with respect to the treatment and potential consummation of sales of assets, the asset sales may not be timely closed. While AgStar does not have cash collateral as that term is defined at 11 U.S.C. Sec. 363(A), AgStar contends it does have an interest in property, pursuant to 11 U.S.C. Sec. 363(E) that is deserving of protection with respect to any order entered into by the court which permits the use of cash collateral. AgStar requests that any authority on the part of the Debtor to use cash collateral be conditioned on "the right, in the event of default of payments to AgStar, to obtain relief from the automatic stay upon application to the court and without hearing, the only defense being that payment was in fact made, so that it may proceed to foreclose on its mortgages and/or security interests in accordance with state law." AgStar also requests that any authority to use cash collateral should be conditioned upon the court ordering and directing that, upon application of AgStar and/or other secured creditors, the Debtor's representative appear at an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure for purposes of producing all purchase and sale agreements with respect to the Debtor's assets, which were entered into prepetition. The IC Committee objects to the use of cash collateral to the extent the Debtor seeks to use cash or receivables from South Harlan LLC, North Harlan LLC, Brayton LLC, Crawfordsville LLC, and Onyx Partners LLC as these entities are not debtors. The IC Committee also objects to the proposed carveout for attorney fees to the extent the Debtor wants to pay these from cash and receivable of any of the non-debtor affiliates. About Natural Pork Production II Hog raiser Natural Pork Production II, LLP filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. The Company formerly did business as Natural Pork Production, LLC. It does business as Crawfordsville, LLC, Brayton, LLC, South Harlan, LLC, and North Harlan, LLC. The Debtor disclosed $31.9 million in asset and $27.9 million in liabilities, including $7.49 million of secured debt in its schedules. Bankruptcy Judge Anita L. Shodeen oversees the case. The Debtor has tapped Person Jeffrey D. Goetz, Esq. and Bradshaw, Fowler, Proctor & Fairgrave, P.C., as general reorganization counsel; Person Falck and Associates, as consultants; and Person Davis, Brown, Koehn, Shors & Roberts, P.C., as attorneys. Attorneys for AgStar Financial Services, ACA, and and AgStar Financial Services, FLCA, are: Gary W. Koch, Esq. Michael S. Dove, Esq. 2700 South Broadway P. O. Box 458 New Ulm, MN 56073-0458 Tel: 507-354-3111 Fax: 507-354-8447 The IC Committee, which purports to represent persons who dissociated from the Debtor, is represented by: Michael P. Mallaney, Esq. HUDSON MALLANEY SCHINDLER & ANDERSON PC 5015 Grand Ridge Drive, Suite 100 West Des Moines, IA 50265-5749 Tel: 515-223-4567 Fax: 515-223-8887 NEW BREED HOLDING: S&P Assigns 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to High Point, N.C.-based New Breed Holding Co. "We also assigned a 'B' issue rating to the company's proposed $300 million term loan B and $50 million revolving credit facility. New Breed Inc., a subsidiary of New Breed Holding Co., is a co- borrower. We assigned a recovery rating of '3' to both the term loan and revolving credit facility, indicating our expectation that lenders would receive a meaningful recovery (50%-70%) in the event of a payment default," S&P said. "Our ratings on New Breed reflect its highly leveraged capital structure, customer and industry concentration, and very aggressive financial policy. Offsetting these risks to some extent is its contracted revenue base and the favorable growth prospects of the outsourced logistics industry. We characterize the company's business risk profile as 'weak' and its financial risk profile as 'aggressive,'" S&P said. "New Breed provides a variety of logistics services to its customers, including order fulfillment, manufacturing support, returns processing, and distribution of service parts. Its customer base primarily consists of companies in the wireless, technology, aerospace and defense, and retail sectors," S&P said. "New Breed has significant customer concentration," said Standard & Poor's credit analyst Lisa Jenkins. "While this risk is mitigated somewhat by the contractual nature of its business and the staggered maturity schedule of its contracts, the impact of the loss of one of its larger customers would be material." "New Breed is entering into a new credit facility in order to fund an equityholder distribution and refinance existing debt. Following completion of the deal, the company will be highly leveraged, with a ratio of debt to EBITDA (adjusted for operating leases) projected to be in the 4.5x-5.0x area this year. (Privately held New Breed does not disclose financial information Publicly,)" S&P said. "The outlook is stable. We expect the company to generate positive free cash flow over the next two years, assuming that it continues to pursue a disciplined growth strategy. However, we also believe the company will continue to make distributions to equityholders from time to time as it has in the past," S&P said. NORTHAMPTON GENERATING: Seeks Fifth Exclusivity Extension --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Northampton Generating Co. LP has been receiving extensions of exclusive plan-filing rights in one month increments from the U.S. Bankruptcy Court in Charlotte, North Carolina. According to the report, undeterred, the company filed papers last week for an 11-week enlargement of so-called exclusivity. If approved by the judge at an Oct. 9 hearing, the deadline would be pushed out to Dec. 28. The new exclusivity motion was Northampton's fifth. The company again said it's analyzing options with regard to a reorganization plan. About Northampton Generating Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor disclosed $205,049,256 in assets and $121,515,045 in liabilities as of the Chapter 11 filing. No request for the appointment of a trustee or examiner has been made, and no statutory committee or trustee has been appointed in the case. OLLIE'S HOLDINGS: Moody's Assigns 'B2' CFR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service assigned first-time Corporate Family and Probability of Default Ratings of B2 to Ollie's Holdings, Inc. Moody's also assigned a B2 (LGD 4, 57%) rating to the company's proposed $225 million senior secured term loan B due 2019. The rating outlook is stable. The ratings assigned are subject to receipt and review of final documentation. Proceeds from the proposed secured term loan, as well as drawings under the company's (unrated) $75 million asset-based revolver and equity will be used to acquire Ollie's from its existing owners in an LBO transaction sponsored by CCMP Capital Advisors and management. The following ratings were assigned: Ollie's Holdings, Inc. Corporate Family Rating of B2 Probability of Default Rating of B2 $225 million senior secured term loan B due 2019 at B2 (LGD 4, 57%) Ratings Rationale Ollie's B2 Corporate Family Rating reflects the company's high financial leverage -- debt/EBITDA (incorporating Moody's standard analytical adjustments) is expected to be in the high five times range -- following its acquisition. Ratings also reflect the company's limited scale with LTM sales of around $430 million, and its narrow geographic focus with 122 stores across 13 states primarily in the eastern United States. The rating takes into consideration the consistent organic revenue growth of the company, primarily through new store openings, and consistent double-digit EBITDA margins. The ratings also reflect Moody's expectations the company will be able to maintain a good overall liquidity profile, which will enable it to continue to invest in continued store growth. The B2 rating assigned to the company's secured term loan B reflects its first lien position on substantially all assets of the company and its second-lien position on the company's accounts receivable and inventories (which are pledged on a first-lien basis to the company' $75 million asset based revolver). The stable outlook reflects Moody's expectations that Ollie's financial leverage will remain high as it invests free cash flow primarily into expansion of its new store base at a pace consistent with historical trends. Ratings could be upgraded if the company were to continue to profitably expand its store base over time while also seeing improvement in credit metrics. Quantitatively, ratings could be upgraded if the company demonstrated the ability and willingness for debt/EBITDA to be sustained in the high four times range while also maintaining a good overall liquidity profile. Ratings could be downgraded if the company's store expansion was not executed well, or if as a result of this expansion there was a significant degree of cannibalization of sales of existing stores. Ratings could also be downgraded if the company's good liquidity profile were to erode. Quantitatively, ratings could be lowered if debt/EBITDA was sustained above 6 times or interest coverage approached 1.5 times. The principal methodology used in rating Ollie's Holdings, Inc. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Harrisburg, PA, Ollie's Holdings, Inc. operates 122 stores across 13 states under the "Ollie's Bargain Outlet" brand. LTM sales are approximately $430 million. OLLIE'S HOLDINGS: S&P Assigns 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Ollie's Holdings Inc., the parent company of Ollie's Bargain Outlet Inc., and issuer of its $225 million term loan. The outlook is stable. "At the same time, we assigned a 'B' issue-level rating with a '4' recovery rating to the company's $225 million term loan due 2019. The '4' recovery rating indicates our expectation for modest (30% to 50%) recovery of principal in the event of a payment default," S&P said. "According to the company, it will use the proceeds from the $225 million term loan and $25 million drawn under the unrated $75 million revolving credit facility, as well as about $465 million of equity, to fund the acquisition of Ollie's Bargain Outlet in a transaction value at $700 million," S&P said. "The speculative-grade rating on Ollie's Bargain Outlet reflects a 'weak' business risk profile and a 'highly leveraged' financial risk profile. The business risk profile is based on Standard & Poor's opinion that the company is a smaller regional player in a highly competitive and fragmented close-out industry," S&P said. "We also expect that the company will pursue a high-growth strategy over the next year, but should maintain good profitability," said Standard & Poor's credit analyst Ana Lai. The financial risk profile is likely to remain highly leveraged due to the significant amount of debt incurred to fund the buyout, with total debt to EBITDA reaching 5.8x in fiscal 2012 but declining toward the 5.0x area in 2013 given expected debt reduction using free cash flow and EBITDA growth. "The stable outlook reflects our expectations for continued positive operating momentum with solid revenue growth driven by store expansion, while maintaining good profitability. We expect Ollie's credit measure to improve modestly as it uses a portion of its free cash flow to reduce debt and demonstrate EBITDA gains," S&P said. "We could consider a lower rating if sales momentum decelerates from softer-than-expected sales from new stores and operating expenses outpaces sales growth such that total debt to EBITDA exceeds 6.5x. This could occur if sales growth decelerates to 15% while SG&A grows 18%," S&P said. "A higher rating is possible if Ollie's performs above our expectations due to stronger-than-expected comparable-store sales and better-than-expected sales leverage, such that total debt to EBITDA declines below 5x. This could occur if sales growth is 22%, outpacing SG&A growth of 14%," S&P said. OMNICARE INC: S&P Affirms 'BB' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Rating Services assigned its 'BBB-' senior unsecured debt rating and '1' recovery rating to Cincinnati-based Omnicare Inc.'s amended-and-extended credit facility, consisting of a $300 million revolver and a $425 million term loan A, both maturing in 2017. "The '1' recovery rating indicates our expectation for very high (90%-100%) recovery in the event of a default. We also affirmed our existing ratings on the company, including our 'BB' corporate credit rating. The rating outlook is stable," S&P said. "The amendment will lower interest rates on borrowed debt under the facility by an estimated 50 basis points (bps), push out maturities by one year, and reduce the term loan A balance by only about $8 million; while positive, these changes are not significant enough to alter our view on the company's ratings or outlook," said Standard & Poor's credit analyst Jesse Juliano. "We rate Omnicare's existing senior unsecured credit facility 'BBB-' (two notches above the corporate credit rating) with a recovery rating of '1', indicating our expectation for very high (90%-100%) recovery in the event of default. We rate the company's subordinate debt 'BB' with a recovery rating of '4', indicating our expectation for average (30%-50%) recovery in the event of default. In addition, we rate the senior unsecured 3.25% convertible debt 'B+' (two notches lower than the corporate credit rating) with a '6' recovery rating, indicating our expectation for negligible (0%-10%) recovery in the event of default," S&P said. PATRIOT COAL: U.S. Trustee Lobbies Against Equity Committee ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the United States Trustee contends the Patriot Coal Corp. shareholders aren't entitled to have a judge decide in advance of a Sept. 24 hearing if equity can have representatives whose fees would be paid by the company. According to the report, the Justice Department's bankruptcy watchdog recited in her Sept. 14 papers how shareholders carry a "heavy burden" of showing a "substantial likelihood" that equity will have a "meaningful distribution." The U.S. Trustee pointed to the July 31 balance sheet where shareholders' equity was 1.6% of book assets. Given that shareholders' equity plunged more than $530 million in the first half of 2012, the U.S. Trustee said the equity holders haven't sustained their burden of showing a respectable possibility of solvency. The report relates that the bond market implies that Patriot is far short of solvent. The $200 million in 3.25% senior convertible notes due 2013 traded at 9:49 a.m. on Sept. 14 for 11 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $250 million in 8.25% senior unsecured notes due 2018 traded on 2:54 p.m. on Sept. 14 for 45 cents on the dollar. Supporting an argument for solvency, the shareholders said that Patriot has $1.4 billion in tax loss carry forwards not carried as an asset on balance sheet. The Bloomberg report discloses that shareholders seeking a committee include CompassPoint Partners LP. The report notes that the bankruptcy judge in New York may never decide whether there should be an equity committee. The judge has heard argument from the U.S. Trustee on a motion to transfer the case out of New York. The judge said she would issue a ruling later. If she sends the case away before ruling on the committee question, the new judge will decide on an equity committee. Members of the United Mine Workers of America are among those rallying to move the Patriot Coal case to the bankruptcy court in Charleston. "We did not go looking for this fight. But if a fight is what they want they came to the right place," a WSAZ.com report last week quoted a rally speaker as saying. "Now we got a bunch of corporate greedy executives in New York that want to take our healthcare and our pensions away that you worked for, that you earned and you deserve -- I say no." According to WSAZ.com, the UMWA said the bankruptcy could take health benefits and pensions away from former and current employees. The report quoted Joe Carter with UMWA District 17 as saying: "This affects a lot of people. There's over 12,000 retirees and there's 2,000 active workers, and actually it affects about 22,000 people." About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The case has been assigned to Judge Shelley C. Chapman. The U.S. Trustee appointed a seven-member creditors committee. PEAK RESORTS: Wins Approval of Financing from FDIC -------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that upstate New York ski resort Greek Peak received the bankruptcy court's approval to access bankruptcy financing being provided by the Federal Deposit Insurance Corp., a situation the agency called "unprecedented" in court documents. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four-season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. PCS EDVENTURES!.COM: Had $355,800 Net Loss in June 30 Quarter ------------------------------------------------------------- PCS Edventures!.com, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $355,818 on $565,032 of revenues for the fiscal quarter ended March 31, 2012, compared with a net loss of $607,120 on $563,790 of revenues for the same period of the prior fiscal year. The Company's balance sheet at June 30, 2012, showed $532,652 in total assets, $1.5 million in total liabilities, and a stockholders' deficit of $995,978. "Cash provided by operations for Q1 was $32,199 compared to cash used by operations of ($69,017) in the same period last year. The Company ended the first quarter of FY 2013 with $24,678 in cash, total current assets of $458,088 and total current liabilities of $1,503,630, resulting in a working capital deficit of $1,045,542 compared to a working capital deficit of $317,623 for the quarter ended June 30, 2011. The Company had a current ratio at June 30, 2012, and 2011, of 0.30 and 0.69, respectively. This decrease in liquidity was due primarily to continuing net losses which were partially financed through short term debt and minimal equity financing. We have an accumulated deficit of ($36,902,324) and shareholders' equity of ($995,978)." A copy of the Form 10-Q is available at http://is.gd/s9ARom About PCS Edventures.com! Boise, Idaho-based PCS Edventures.com!, Inc., is engaged in the business of developing, marketing, and distributing educational products and services for the PreK-16 market that are implemented in PCS private learning centers and sold to public and private schools and institutions. These products include professional development, proprietary hardware and software, curriculum, and comprehensive learning labs bundled with related technologies and programs. Its products and technologies target public and private school classrooms for pre-kindergarten through college, as well as the afterschool market that includes YMCAs, Boys and Girls Clubs, and 21st Century Learning Centers. * * * M&K CPAS, PLLC, in Houston, in its report of the Company's financial position and results of operations for the fiscal year ended March 31, 2012, said the Company has suffered reoccurring losses and negative cash flow from operations, both of which raise substantial doubt about its ability to continue as a going concern. PEREGRINE FINANCIAL: Wasendorf Admits Stealing at Least $100-Mil. ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Russell R. Wasendorf Sr., the former chief executive officer of liquidating commodity broker Peregrine Financial Group Inc., will plead guilty on Sept. 17 to four charges of mail fraud, embezzlement and making false statements. He will be released and confined to his pastor's home with his location monitored by a global-positioning device. According to the report, U.S. Magistrate Judge Jon Stuart Scoles said in a filing Sept. 13 in federal court in Cedar Rapids, Iowa, that Mr. Wasendorf is no longer a suicide threat and isn't likely to flee. The charges against Mr. Wasendorf by themselves don't justify holding him in jail without bail or other conditions of release, Judge Scoles said in his ruling. Mr. Wasendorf has been jailed since his arrest on July 13. He hadn't requested bail and has been cooperating with authorities, as described in Judge Scoles's ruling. Mr. Wasendorf admitted the fraud began in the early 1990s and that he misappropriated more than $100 million in customers' funds. The charges to which Mr. Wasendorf will plead guilty carry a maximum of 50 years imprisonment, Judge Scoles said. The judge will set other terms of release at the Sept. 17 hearing. 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. PICCADILLY RESTAURANTS: Status Conference Set for Jan. 29 --------------------------------------------------------- The Bankruptcy Court scheduled a Status Conference Hearing in the Chapter 11 cases of Piccadilly Restaurants, LLC, Piccadilly Food Service, LLC, and Piccadilly Investments, LLC, to be held Jan. 29, 2013, at 10:00 a.m. at Courtroom, Lafayette. Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. In the 2012 petition, Piccadilly Restaurants estimated under $50 million in total assets and liabilities. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Gordon, Arata, McCollam, Duplantis & Eagan, LLC, serve as the 2012 Debtors' counsel. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtorrs' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. PINNACLE AIRLINES: Union-Busting Motions Filed under Seal --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pinnacle Airlines Corp., a feeder airline, began the process last week of having the bankruptcy court revise contracts with unions representing pilots and flight attendants. According to the report, both motions are under seal, so the economic basis for the desire to modify the contracts wasn't disclosed publicly. Pinnacle's brief explaining the legal rationale for modifying the contracts is also entirely under seal. The report relates that when American Airlines Inc. sought court authorization to modify union contracts, the papers were filed publicly, with redactions of sensitive information that would be harmful if known by competitors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. 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. PINNACLE AIRLINES: Pilots Say Rejection an Ill-Advised Distraction ------------------------------------------------------------------ Capt. Tom Wychor, Chairman of the Pinnacle Airlines arm of the Air Line Pilots Association, Int'l (ALPA), released the following statement regarding the Section 1113 filing by Pinnacle Corporation. "Late last night Pinnacle filed a motion in the U.S. Bankruptcy Court for the Southern District of New York to reject the pilots' collective bargaining agreement. While this filing was expected, we do not think that it was necessary for Pinnacle to take this step so shortly after contract negotiations resumed. We believe the filing is an ill-advised distraction from the real work of negotiating a consensual agreement that maintains industry standard pay, work rules and benefits and can garner pilot support to help Pinnacle move through this difficult period. "We acknowledge that concessions are necessary to allow Pinnacle to successfully reorganize. The extraordinary level of concessions sought by Pinnacle, however, would set a new floor for pilot contracts within the regional airline industry. The bottom line is this: in the five months since company executives filed for bankruptcy, they have not been able to justify the level of concessions they are seeking. Rather than solving its problems, Pinnacle executives are attempting to use the bankruptcy process to gain an overwhelming and unfair competitive advantage in the industry. We firmly believe that if the bankruptcy court allows Pinnacle to implement steep reductions in our wages, work rules and benefits that it is proposing, the cost of pilot attrition and inability to hire new pilots in the future would vastly outweigh the assumed short-term benefits of the imposed cuts. "We encourage our management to bring to the bargaining table the same energy they have used to run to the courtroom. We must find enough common ground to form the basis for a new agreement, one that provides a future for both Pinnacle Airlines and its pilots." Founded in 1931, ALPA is the world's largest pilot union, representing more than 52,000 pilots at 36 airlines in the United States and Canada, including more than 2,700 pilots at Pinnacle Airlines. 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. PURATONE: Manitoba Pork Producer Files for Bankruptcy ----------------------------------------------------- Phil Franz-Warkentin at Dow Jones' DBR Small Cap reports that Puratone, one of the three largest hog producers in Manitoba, has filed for creditor protection, making it the second major hog company in western Canada to run into problems this week, following Big Sky Farms in Saskatchewan. REALOGY CORP: Extends Employment of Chairman & CEO Until 2016 ------------------------------------------------------------- Realogy Corporation amended its employment agreement with Richard A. Smith, the Company's Chairman, chief executive officer and president. The amendment provides for an extended term ending on April 9, 2016. Mr. Smith replaced Henry R. Silverman as Chairman on Feb. 27, 2012. A copy of the employment agreement, as amended, is available for free at http://is.gd/AFe2p1 About Realogy Corp. Realogy Corp. -- http://www.realogy.com/-- a global provider of real estate and relocation services with a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have around 15,000 offices and 270,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. The Company reported a net loss of $439 million in 2011, a net loss of $97 million in 2010, and a net loss of $260 million in 2009. The Company's balance sheet at June 30, 2012, showed $7.82 billion in total assets, $9.54 billion in total liabilities, and a $1.72 billion total deficit. * * * Realogy has 'Caa2' corporate family rating and 'Caa3' probability of default rating, with positive outlook, from Moody's. The rating outlook is positive. Moody's said in January 2011 that the 'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative free cash flow and uncertainty regarding the timing and strength of a recovery of the residential housing market in the U.S. Moody's expects Debt to EBITDA of about 14 times for the 2010 calendar year. Despite the recently completed and proposed improvements to the debt maturity profile, the Caa2 CFR continues to reflect Moody's view that current debt levels are unsustainable and that a substantial reduction in debt levels will be required to stabilize the capital structure. In February, Standard & Poor's Ratings Services raised its corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The rating outlook is positive. RESIDENTIAL CAPITAL: $15-Mil. Sale Considered De Minimis -------------------------------------------------------- Residential Capital LLC and its affiliates are charged with winding down the Chapter 11 cases to maximize the value of the estates' assets for the benefit of creditors. As part of that duty, the Debtors must sell their remaining assets, some of which will constitute de minimis asset sales, to generate the maximum recovery. The Debtors accordingly sought and obtained authorization to sell de minimis assets, establish procedures for the sale or disposal of de minimis assets, and pay fees and expenses related to the disposal of those assets. De minimis assets are those with sale price of less than or equal to $2.5 million or sale price greater than $2.5 million but less than or equal to $15 million. Prior to entry of the Court order, Wendy Alison Nora, a claimant, objected to the de minimis asset sale procedures and asked for specific notice of any attempt to sell her home located in Madison, Wisconsin, so she may seek injunctive relief against any proposed sale of her home. In response to Ms. Nora's objection, the Debtors said they do not currently intend to sell any real estate owned property pursuant to the de minimis asset sale procedures and if they do intend to sell Ms. Nora's property, they will provide Ms. Nora with notice in accordance with the de minimis asset sale procedures. The Debtors added that they also negotiated the terms of the de minimis asset sale procedures with various parties-in-interest who filed informal objections. The Debtors and the informal objectors agreed that: (a) A de minimis asset sale may not proceed absent written agreement between the Debtors and any objecting party resolving an objection, or entry of an order by the Court specifically approving the de minimis sale. (b) The Debtors will not sell prepetition "MSR Collateral" (as the term is defined in the Final Cash Collateral Order) pursuant to the de minimis asset sale procedures. (c) The Debtors will segregate cash generated from any de minimis asset sale in accordance with the Cash Management Order, including segregating cash generated from any de minimis sale of collateral securing any of the Debtors' financing facilities into the specific bank accounts established for the benefit of the lenders under those financing facilities. 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). RESIDENTIAL CAPITAL: Committee Proposes Info Sharing Protocol ------------------------------------------------------------- The Official Committee of Unsecured Creditors in Residential Capital's Chapter 11 cases seeks the Court's authority to establish and implement procedures for information sharing in order to facilitate its duties under Section 1102(b)(3) of the Bankruptcy Code to provide general unsecured creditors with access to information related to the Chapter 11 cases. The Information Sharing Procedures establish a framework so that the Committee can provide general unsecured creditors with access to information through, without limitation, (i) the establishment and maintenance of a Web site; (ii) the establishment and maintenance of a designated telephone hotline and e-mail address for general unsecured creditors to contact the Committee on matters related to the Chapter 11 Cases; and (iii) procedures for general unsecured creditors to make information requests directly from the Committee. A general unsecured creditor may make a written information request seeking disclosure of information from the Committee and the Committee will, within 15 calendar days of receiving request, respond to that request. The Committee proposes that it not be required to provide or disclose to its non-member constituents, without further Court order (i) any confidential materials; (ii) any other information covered by an applicable confidentiality agreement with the Committee; (iii) any other information whose disclosure would constitute a breach or violation under any agreement or contract to which the Committee; or (iv) any other information the disclosure of which would constitute a waiver of any applicable privilege, including, without limitation, attorney-client privilege and work-product privilege. Any information received by the Committee from any entity in connection with an examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure or in connection with any formal or informal discovery in any contested matter, adversary proceeding, or other litigation will not be governed by the terms of the proposed Order but, rather, by any order governing that discovery. The Committee proposes not to provide access to information to any entity that has not demonstrated to the satisfaction of the Committee that it holds claims of the kind described in Section 1102(b)(3) of the Bankruptcy Code, nor will the Committee be required to satisfy an Information Request, which, in its judgment, is unduly burdensome. If the Requesting Creditor is a competitor or prospective competitor of the Debtors and the information requested may impair the Debtors' business in any material way, no information will be disclosed unless the Court orders the disclosure after notice and a hearing. The determination that a Requesting Creditor is a competitor or prospective creditor will be reviewable by the Court. If the Committee denies the Information Request, then the Requesting Creditor must make a good-faith effort to meet and confer with an authorized representative of the Committee regarding the Information Request. If no consensual resolution is reached through the meet and confer, then the Requesting Creditor may file a motion to compel disclosure for cause. If the Court requires the Committee to provide Confidential Material, the Committee will require any Requesting Creditor to enter into a confidentiality agreement. 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). RESIDENTIAL CAPITAL: Examiner Wins OK for Mesirow as Advisor ------------------------------------------------------------ Retired federal bankruptcy judge Arthur Gonzalez, the court- appointed examiner in the Chapter 11 cases of Residential Capital LLC, obtained the Court's authority to hire Mesirow Financial Consulting LLC. Mesirow Financial will provide financial advisory services and will assist the Examiner in conducting an investigation into the transactions entered into by ResCap prior to its bankruptcy filing. Mr. Gonzalez previously obtained approval to investigate all pre- bankruptcy transactions among Residential Capital, Ally Financial Inc. and its affiliates. He will also investigate the companies' corporate relationships in connection with Residential Capital's decisions to file for bankruptcy protection and pursue a sale of its assets. Mesirow Financial will be paid on an hourly basis for its services and will be reimbursed of its expenses. The firm's hourly rates are: Professionals Hourly Rates ------------- ------------ CEO/Sr. Managing Director/ $855-$895 Managing Director/Director Senior Vice-President $695-$755 Vice-President $595-$655 Senior Associate $495-$555 Associate $315-$425 Paraprofessional $160-$250 Mesirow Financial does not hold or represent interest adverse to the estates of Mesirow Financial and its affiliated debtors, according to a declaration by Ralph Tuliano, the firm's chief executive. No objection to the retention application was filed, according to a certificate filed in Court. 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). RESIDENTIAL CAPITAL: Committee Retains EPIQ as Info Agent --------------------------------------------------------- The Official Committee of Unsecured Creditors in Residential Capital LLC's Chapter 11 cases seeks the Court's authority to retain Epiq Solutions, LLC, as its information agent, nunc pro tunc to May 22, 2012, to enable it to comply with its obligations under Section 1102(b)(3) of the Bankruptcy Code. Section 1102(b)(3) provides that a committee shall (A) provide access to information for creditors who (i) hold claims of the kind represented by that committee; and (ii) are not appointed to the committee; (B) solicit and receive comments from the creditors; and (C) be subject to a court order that compels any additional report or disclosure to be made to the creditors. As information agent, Epiq will: (a) establish and maintain a web site at www.rescapcommittee.com that provides, without limitation general information regarding the Chapter 11 cases, contact information, the claims bar dates, voting deadlines with respect to any chapter 11 plan of reorganization filed in the Chapter 11 Cases, the claims docket, the Debtors' monthly operating reports, a list of omnibus hearing dates, answers to frequently asked questions; and links to other relevant websites; (b) establish an e-mail address to allow unsecured creditors to send questions and comments concerning the Chapter 11 Cases; (c) provide a call center or other creditor hotline, respond to creditor inquiries via telephone, letter, email, facsimile or otherwise, as appropriate, and related services (which will be published on the Committee Web site); (d) assist the Committee with certain administrative tasks, including, but not limited to, printing and serving documents as directed by the Committee and its counsel; and (e) provide a confidential data room, if necessary. Epiq professionals will be paid according to these hourly rates: Clerk $32-$48 Case Manager $76-$116 IT/Programming $112-$152 Snr. Case Manager/Consultant $132-$176 Senior Consultant $180-$220 Jason D. Horwitz, Vice President and Senior Consultant of Epiq Bankruptcy Solutions, LLC, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Committee, the Debtors and their estates. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Plan Filing Exclusivity Extended to Dec. 20 ---------------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York extended the period within which Residential Capital LLC and its debtor affiliates have exclusive right to file a plan of reorganization until December 20, 2012, and their exclusive period to solicit acceptances of that plan until February 18, 2013. Steven Church of Bloomberg News related that during the hearing on the Debtors' request for extension of the exclusive periods, Judge Glenn told them "that to keep control of the reorganization beyond that date, it must open talks with the official committee of unsecured creditors, which has complained about a lack of serious negotiations." "If the debtor wants to maintain exclusivity, it needs to move forward with negotiations," Judge Glenn said, according to Bloomberg. The Debtors originally sought for extension of their exclusive plan filing period by nine months and their exclusive solicitation period by 60 days after the filing of a plan. The extension request, however, was met by several objections, including those raised by the Official Committee of Unsecured Creditors; Aurelius Capital Management, LP, which owns junior secured guaranteed notes; an ad hoc group of junior secured noteholders; and Wilmington Trust, National Association, as indenture trustee for various series of senior unsecured notes. The company's 6.5% bonds due to mature next year climbed 2% to 26 cents on the dollar following the ruling, Bloomberg said citing Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. 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). RESIDENTIAL CAPITAL: Lease Decision Deadline Moved to Dec. 10 ------------------------------------------------------------- Judge Martin Glenn extended the deadline for Residential Capital LLC and its affiliates to assume or reject unexpired leases for real property through and including December 10, 2012. 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). REVEL ENTERTAINMENT: Bank Debt Trades at 21% Off ------------------------------------------------ Participations in a syndicated loan under which Revel Entertainment Group LLC is a borrower traded in the secondary market at 79.09 cents-on-the-dollar during the week ended Friday, Sept. 14, an increase of 0.72 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 750 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 15, 2017, and carries Moody's Caa1 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 169 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Revel Entertainment -- http://www.revelresorts.com/-- owns Revel, a newly opened beachfront resort that features more than 1,800 rooms with sweeping ocean views. The smoke-free resort has indoor and outdoor pools, gardens, lounges, a 32,000-square-foot spa, a collection of 14 restaurant concepts, and a casino. Revel is located on the Boardwalk at Connecticut Avenue in Atlantic City, New Jersey. REYNOLDS GROUP: Moody's Rates New $2.5BB Sr. Secured Loans 'B1' --------------------------------------------------------------- Moody's Investors Service assigned B1 ratings to the proposed new senior secured term loans of Reynolds Group Holdings Inc. and the proposed new senior secured notes of co-issuers Reynolds Group Issuer Inc, Reynolds Group Issuer LLC and Reynolds Group Issuer (Luxemburg) S.A, subsidiaries of Reynolds Group Holdings Limited (RGHL). The proceeds of the approximately $3.25 billion secured notes due 2020, approximately $2.5 billion of term loans (which will include USD and EUR tranches) and cash will be used to repay outstanding secured term loans and tender for the $1.125 billion of secured notes due 2016. All other instrument ratings and the B3 corporate family rating remain unchanged. The ratings outlook is stable. Moody's took the following rating actions: Reynolds Group Holdings Inc. Assigned new approximately $2.5 billion Senior Secured Term Loans, B1 (LGD 2, 26%) Reynolds Group Issuer Inc., Reynolds Group Issuer LLC, Reynolds Group Issuer (Luxembourg) S.A. Assigned new US$3,250M Senior Secured Notes due 2020, B1 (LGD 2, 26%) All ratings are subject to the receipt of final documentation. Ratings Rationale The B3 corporate family rating reflects RGHL's weak pro-forma credit metrics, integration risk and limited operating history for the combined entity. The rating and outlook also reflect the company's lengthy raw material cost pass-through provisions, concentration of sales within certain segments and financial aggressiveness. Additionally, the company has a complex capital and organizational structure and is owned by a single individual. RGHL is still integrating a large acquisition (Graham Packaging in September 2011) and remains acquisitive. The company has only been operating as a combined entity since 2007 and approximately 20.0% of pro-forma revenues are from Graham. Strengths in the company's profile include its strong brands and market positions in certain segments, scale and high percentage of blue-chip customers. The company has strong brands and market positions and there are some switching costs for customers in certain segments. Many of RGHL's businesses had a history of strong execution and innovation prior to their acquisition and much of the existing management teams were retained. Scale, as measured by revenue, is significant for the industry and helps RGHL lower its raw material costs. The company also has high exposure to food and beverage packaging. RGHL also currently has adequate liquidity with approximately $1.2 billion in cash on hand. The rating outlook is stable reflecting an expectation that credit metrics will improve modestly, but remain within the rating category over the horizon. The rating could be downgraded if there is a deterioration in credit metrics, liquidity or the competitive and operating environment. The ratings could also be downgraded if the company undertakes any significant acquisition. Specifically, the ratings could be downgraded if debt to EBITDA increases to above 7.0 times, EBIT to interest expense declined below 1.0 time, and free cash flow to debt remained below 1.0%. The rating could be upgraded if RGHL sustainably improves its credit metrics within the context of a stable operating and competitive environment while maintaining adequate liquidity including ample cushion under financial covenants. Specifically, RGHL would need to improve debt to EBITDA to below 6.3 times, EBIT to interest expense to at least 1.4 times and free cash flow to debt to above 3.5% while maintaining the EBIT margin in the high single digits. The principal methodology used in rating RGHL was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers Industry Methodology published in June 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. REYNOLDS GROUP: S&P Gives 'B+' Rating on Secured Notes Due 2020 --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '2' recovery rating to New Zealand-based packaging producer Reynolds Group Holdings Ltd.'s proposed senior secured notes due 2020 and proposed senior secured term loans. The existing ratings on Reynolds are unchanged. The outlook remains stable. Reynolds will use the notes and new term loan proceeds to repay existing senior secured term debt. "The ratings on Reynolds reflect our assessment of the company's 'strong' business risk and 'highly leveraged' financial risk profile. Reynolds is a market leading provider of food and beverage packaging owned by Rank Group, a New Zealand-based investment firm controlled by a single individual. The company is one of the world's leading and most-diversified consumer and foodservice packaging providers, with annual revenues of nearly $14 billion, pro forma for the September 2011 acquisition of Graham Packaging Holdings Co. for $4.5 billion. We expect credit measures to strengthen to the appropriate 6.5x we consider consistent with the rating," S&P said. RATINGS LIST Reynolds Group Holdings Ltd. Corporate credit Rating B/Stable/-- New Ratings Reynolds Group Issuer Inc. Reynolds Group Issuer LLC Reynolds Group Issuer (Luxembourg) S.A. Senior secured notes due 2020 B+ Recovery rating 2 Reynolds Group Holdings Inc. Reynolds Consumer Products Holdings Inc. Sig Euro Holding AG & Co. KGAA Sig Austria Holding GMBH Pactiv Corp. Senior secured term loans B+ Recovery rating 2 RG STEEL: Hilco & CDC JV Closes Purchase of Baltimore Mill ---------------------------------------------------------- Joint venture partners Hilco SP LLC and Environmental Liability Transfer Inc., an affiliate of Commercial Development Company, Inc., disclosed completion of their purchase of the former RG Steel Mill at Sparrows Point, located in Baltimore County, Maryland. The mill at Sparrows Point was idled shortly after RG Steel filed for bankruptcy in May, 2012. Hilco and ELT successfully bid for the property at a public auction, which began on Aug. 7, 2012. On August 15, the sale was approved in the U.S. Bankruptcy Court in Wilmington, Delaware. Gary Epstein and Randall Jostes, spokespersons for the joint venture, agree, "At this time, we are evaluating all of our options for the property, which include seeking operators for the mill in its entirety or some of the manufacturing facilities and operations within the 3400 acre site. We are also considering removal and resale of industrial equipment and structural demolition followed by environmental remediation of the site as a precursor to redevelopment." Prior to the joint venture's acquisition, Sparrows Point was RG Steel's largest integrated steel production facility. Sparrows Point demonstrated an annual capacity of 3.6 million tons of crude steel, 2.9 million tons of hot rolled, 1.3 million tons of cold rolled, 480 thousand tons of coated and 470 thousand tons of tin. It is the only fully integrated mill on the East Coast of the United States of America capable of producing flat rolled steel. Major components include the second largest blast furnace in North America, a BOF and continuous caster, hot mill, tin facility, and four galvanizing lines. Additionally, the cold mill, which was originally commissioned in 2000, is considered to be one of the most modern in all of North America. Epstein and Jostes added, "The evaluation process is expected to take several weeks given the size and scope of the entire operation at Sparrows Point. Based on our early assessment, we believe the state of the art cold rolled mill complex with tri- modal transportation capabilities including rare access to a deep water port has great potential for the right operator." Key features of the self-contained cold rolling complex include a continuous pickle line coupled to a VAI continuous five-stand cold rolling mill, tandem mill, and a hydrogen annealing system with an annual capacity of 1,200,000 tons. Also, there are a VAI skin passing temper mill/tension leveling line, two automated coil packaging lines, warehouse facilities and a truck/railroad shipping and receiving system. The building is a standalone unit with 880,000 square feet of floor space and a 15-acre outdoor staging yard with two 40-ton gantry cranes to load and unload rail cars. Sparrows Point is located in a strategically important position on Chesapeake Bay at the mouth of Baltimore Harbor. The facility includes its own port with access to the Atlantic Ocean and the capability to dock deep-water vessels. The mill also has its own short-line railroad that connects to both the CSX and Norfolk Southern railroads. Baltimore County officials recently organized the Sparrows Point Partnership, a work group to find ways to develop a sizable piece of land on the Sparrows Point peninsula that is not part of the mill. They believe it has great potential for activities relating to the Port of Baltimore, itself, which will be compatible with the new super-sized ships that will soon begin passing through a widened Panama Canal. Epstein indicated that both Hilco and ELT are, "...committed to working with local and state leaders and will keep communication open over the coming months." The Sparrows Point Steel Mill was opened in 1889 and was the world's largest steel mill, stretching for miles on the southeast edge of Baltimore Harbor. It was first purchased by Bethlehem Steel in 1916 and stood as the largest steel mill in the United States for many years. Over decades, the facility supplied steel for the Golden Gate Bridge, the Chesapeake Bay Bridge and hundreds of ships for World War II. Bethlehem Steel filed for bankruptcy protection in 2001 and Sparrows Point has had four owners since then. OAO Severstal paid $810 million for Sparrows Point 2008. RG Steel bought the mill and other plants from Severstal in 2011. Within the joint venture, ELT purchased the 3,400 acre Sparrows point site along with certain reusable buildings. They have also assumed specified environmental liabilities associated with the land. Hilco purchased the above grade improvements and machinery and equipment. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. RG Steel LLC disclosed $1,293,320,461 in assets and $1,050,005,993 in liabilities as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent and provides administrative services. RG Steel LLC sold the Sparrows Point steel mill to liquidator Hilco Industrial on Aug. 7 for about $72 million, Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Saul Ewing LLP serves as co-counsel. Huron Consulting Services LLC serves as its financial advisor. ROTECH HEALTHCARE: Borrows $10-Mil. Under Credit Suisse Facility ---------------------------------------------------------------- Rotech Healthcare Inc. borrowed $10 million against its revolving credit facility to strengthen the Company's cash position. The Company intends to use the borrowings to pay upcoming interest payments, comprising $12.4 million of interest due on Oct. 15, 2012, under the Company's 10.75% Senior Secured Notes due 2015 and $15.2 million of interest due on Sept. 15, 2012, under its 10.5% Senior Second Lien Notes due 2018. During the second quarter of 2012, the Company paid $10.0 million in non-recurring payments, including a $6.5 million voluntary refund to the United States government as a result of Medicare overpayments, $1.0 million in associated fees and $2.5 million for the mandatory redemption of preferred stock on June 26, 2012. The Company considers these payments non-recurring because it has not experienced similar charges within the prior two years and believes that the charges are not reasonably likely to recur within two years. As of Sept. 14, 2012, and based upon current conditions, the Company believes that cash generated from operations and cash balances will be sufficient to meet its working capital, capital expenditure and other cash needs, including interest payments, over the next twelve months. On March 17, 2011, Rotech entered into a credit agreement with the lenders party thereto, and Credit Suisse AG, as administrative agent. The Credit Agreement provides for a revolving credit facility commitment of $10 million provided that the maximum outstanding aggregate principal balance at any one time does not exceed $10 million. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at June 30, 2012, showed $256 million in total assets, $589.54 million in total liabilities and a $333.54 million total stockholders' deficiency. * * * As reported by the TCR on Aug. 21, 2012, Standard & Poor's Ratings Services lowered its rating on Orlando, Fla.-based Rotech Healthcare Inc. to 'CCC-' from 'B'. "The ratings reflect Rotech's highly leveraged financial risk profile, dominated by its weak liquidity position, high debt burden and overall sensitivity of credit metrics to the uncertain reimbursement environment," said Standard & Poor's credit analyst Tahira Wright. In the Aug. 30, 2012, edition of the TCR, Moody's Investors Service downgraded Rotech Healthcare, Inc.'s Corporate Family Rating to Caa3 from B3 and Probability of Default Rating to Caa3 from B2. This rating action is based on Moody's expectation that Rotech's liquidity and credit metrics -- which are already weak -- will deteriorate further over the next few quarters. Moody's expects continued top-line pressure from Medicare reimbursement cuts in 2013. SAMSON RESOURCES: S&P Affirms 'B+' CCR; Outlook Revised to Neg -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Tulsa, Okla.-based Samson Resources Corp. (Samson) to negative from positive. "We affirmed our 'B+' corporate credit rating on the company," S&P said. "We also assigned a 'B+' issue rating (the same as the corporate credit rating) to Samson's proposed $750 million second lien term loan due 2018. We assigned this debt a '4' recovery rating, indicating expectations of average (30% to 50%) recovery in the event of a payment default. We also lowered our rating on Samson Investment Co.'s unsecured notes to 'B-' (two notches below the corporate credit rating) from 'B'. The recovery rating on this debt is '6', indicating our expectation of negligible (0% to 10%) recovery in the event of a payment default. Samson Investment Co. is a subsidiary of Samson Resources and a borrower of these debt instruments," S&P said. "The revised outlook reflects our expectation that production over the next several years is likely to be much lower than we initially contemplated, leaving credit protection measures weaker than we had expected," said Standard & Poor's credit analyst Marc D. Bromberg. "Under our revised production assumptions, we think that leverage is likely to remain aggressive for the current rating at near 5x through 2013.' If Samson's drilling program is weaker than current expectations (for instance, if hydrocarbon flow rates are below our projections or if it encounters dry holes), production and costs are likely to suffer. We would expect to lower the rating if this occurs, given our view that profitability and credit protection measures would be weaker over the next several years than current expectations." "The ratings on Samson reflect its significant exposure to natural gas prices, aggressive debt leverage, weak profitability metrics, and its private equity ownership. The ratings also reflect the company's relative size and scale, a favorable cost structure, and some good resource acreage positions. Standard & Poor's considers Samson's business risk 'weak', its financial risk 'aggressive,' and its sources of liquidity 'adequate.'" "The negative outlook reflects the possibility that we could lower the rating if Samson encounters further operating setbacks, specifically lower-than-expected production or higher-than- projected costs. If this occurs, we would expect leverage to weaken from our current projections, with leverage potentially breaching 4.5x in 2014. We could also lower the rating if liquidity becomes constrained due to higher than forecasted spending or if Samson embarks on a more aggressive debt financed capital program," S&P said. "We are likely to revise the outlook to stable if Samson's operating performance measures, in particular its production and costs, meet current expectations," S&P said. SBA COMMUNICATIONS: S&P Rates $300MM Term Loan 'BB' --------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue-level rating and '1' recovery rating to SBA Senior Finance II LLC's proposed $300 million term loan, a new tranche to be added to the company's existing $495 million term loan B. "The company will use the proceeds to partly fund the cash portion of the pending TowerCo acquisition, which we expect to be completed before the end of 2012. There is no change in the existing ratings on parent SBA Communications Corp. and its related entities, including its 'B+' corporate credit rating and the 'BB' issue-level rating and '1' recovery rating on the existing secured credit facilities at SBA Senior Finance II LLC, and the 'B+' issue-level rating and '4' recovery rating on senior unsecured debt at intermediate holding company SBA Telecommunications Inc.," S&P said. "With the issuance of the new bank loan tranche, we have also revised the liquidity assessment on the company to 'adequate' from 'less than adequate.' Although we expect sources of liquidity prior to close of the TowerCo transaction to be lower than the minimum 1.2x coverage of uses necessary to support an adequate liquidity assessment, with the completion of the acquisition, we expect sources of liquidity to exceed this 1.2x minimum," S&P said. RATINGS LIST SBA Communications Corp. Corporate Credit Rating B+/Stable/-- New Ratings SBA Senior Finance II LLC Proposed $300 mil term loan B BB Recovery Rating 1 SEARS HOLDINGS: Contributes $203 Million to Pension Plan -------------------------------------------------------- Sears Holdings Corporation has elected to contribute an additional $203 million to its pension plan on Sept. 14, 2012. As a result of the contribution, the Plan is now 80% funded. In accordance with applicable law, Sears Holdings would now have the ability to offer lump-sum settlements to some of its participants. The Company believes that it would be beneficial to settle pension obligations through lump-sum payments so as to reduce the Company's exposure to $6.1 billion of gross pension obligation. The Company now estimates that the required contributions to the Plan for 2013 will be approximately $350 million. On July 6, 2012, federal legislation was signed into law that allows pension plan sponsors to use higher interest rate assumptions in valuing plan liabilities and determining funding obligations. About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at July 28, 2012, showed $21.18 billion in total assets, $16.68 billion in total liabilities and $4.49 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SP NEWSPRINT: Sold, Converted to Chapter 7 Liquidation ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports newsprint maker SP Newsprint Holdings LLC completed the sale of the business on Sept. 10. The Chapter 11 reorganization was converted three days later to a liquidation in Chapter 7 where a trustee was appointed. According to the report, no outside buyer was willing to compete with secured lenders in purchasing the business and the bankruptcy judge in Delaware approved a sale to the lenders on Sept. 7 under a contract with a nominal value of $145 million, composed of some of the secured debt plus about $30 million cash to pay off financing for the Chapter 11 case and professional costs. The report relates that the case was switched to liquidation because there was no ability to confirm a Chapter 11 plan. The sale to the lenders took place while the company was faced with running out of cash from the loan for the reorganization begun in November. When the bankruptcy reorganization began, SP said the lenders were willing to serve as the stalking horse. Before bankruptcy, SP owed $41 million on a revolving credit and $213 million on a term loan with General Electric Capital Corp. as a lender and agent. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $318 million in assets and $323 million in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. SPRINT NEXTEL: Owns 54.3% Class A Shares of Clearwire ----------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Sprint Nextel Corporation and its affiliates disclosed that as of Aug. 29, 2012, they beneficially own 705,359,348 shares of Class A Common Stock of Clearwire Corporation representing 54.3% of the shares outstanding. A copy of the filing is available for free at http://is.gd/isLi5M About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's balance sheet at June 30, 2012, showed $49.02 billion in total assets, $39.79 billion in total liabilities and $9.22 billion in total shareholders' equity. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms, among other things, the Issuer default rating (IDR) of Sprint Nextel and its subsidiaries at 'B+'. The ratings for Sprint reflect the ongoing execution risk both operationally and financially regarding several key initiatives that the company expects will improve cash generation, network performance and longer-term profitability. STAFFORD RHODES: Lenders Move to Dismiss Bankruptcy Cases --------------------------------------------------------- LSREF2 Baron 4, LLC (as to Vista and Wesley) and Wells Fargo Bank, N.A. (as to Rhodes and Beaufort), by and through their attorney- in-fact, Hudson Americas LLC (collectively, the "Lender"), asks the U.S. Bankruptcy Court for the Middle District of Georgia to dismiss the Chapter 11 cases of Stafford Rhodes, LLC, et al., or in the alternative, enter an order lifting the stay in order that the Lender can exercise its state law remedies. Lender avers that the Debtors will be unable to cram down a plan over the Lender's objection. The Lender states in support of its motion: a) that the bankruptcy cases are nothing more that a two party dispute between the Lender and the Debtors. Lender's claims ($27 million) exceed 98% of the amount of all claims against each Debtor, and exceed 99% of the amount of all claims against the Debtors on a consolidated basis. b) that the Bankrutpcy Cases are single asset real estate cases and, with respect to Vista and Wesley, were commenced a few days prior to the scheduled foreclosure sales and, with respect to Rhodes and Beaufort, while foreclosure sales were pending. Further, there is no equity in the Collateral and the Loans are accruing default interest at the rate of 8.25%. c) that the Bankruptcy Cases were commenced in bad faith and should be dismissed. d) that the Debtors lack equity in the Collateral and the Debtors will be unable to cram down a plan over the Lender's objection. About Stafford Rhodes Stafford Rhodes, LLC, owns 27.41 acres of land located in Bluffton, Beaufort County, South Carolina. The land is improved by a 95,233 square foot retail shopping center that has 16 tenants, including Best Buy Stores, Petco, and Dollar Tree. Affiliate Beaufort Crossing, LLC, owns 10 acres of land, improved by an unanchored 19,600 square foot shopping center, the Crossings of Beaufort, in Beaufort County. Stafford Vista, LLC, owns 5.69 acres of land located in Decatur, DeKalb County, Georgia, which is improved by a 45,450 square foot shopping center identified as the Vista Grove Plaza. Stafford Wesley, LLC, has 2.34 acres of land in Decatur, improved by a 30,683 square foot shopping center identified as the Wesley Chappel Retail Shopping Center. Stafford Rhodes and its three affiliates sought Chapter 11 protection (Bankr. M.D. Ga. Lead Case No. 12-70859) on June 29, 2012. Judge John T. Laney, III, presides over the Debtors' cases. Attorneys at Arnall Golden Gregory LLP, in Atlanta, represent the Debtors as counsel. In its petition, Stafford Rhodes listed assets and debts of between $10 million and $50 million. The petitions were signed by Frank J. Jones, Jr., VP, Treasurer & CFO of Debtor's sole member. TESORO CORP: Moody's Rates $925-Mil. Sr. Unsecured Notes 'Ba1' -------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Tesoro Corporation's (TSO) proposed $925 million senior unsecured notes due 2017 and 2022. TSO's Ba1 Corporate Family Rating, SGL-3 Speculative Grade Liquidity rating, and negative rating outlook remain unchanged. Proceeds from the note offering will be used to fund tender offers on TSO's existing 2015 and 2017 senior unsecured notes. "The refinancing will extend Tesoro's debt maturity profile, thus improving its liquidity profile in a debt neutral transaction," commented Gretchen French, Moody's Vice President. Rating Assignments: $925 Million Senior Unsecured Notes due in 2017 and 2022, Rated Ba1 (LGD 4, 68%) Moody's current ratings for Tesoro Corporation are: Corporate Family Rating of Ba1 Probability of Default Rating of Ba1 Senior Secured Revolving Credit Facility rated Baa2 (LGD 2, 18%) Senior Unsecured Notes rated Ba1 (LGD 4, 68%) Ratings Rationale TSO's Ba1 Corporate Family Rating reflects its reasonably large and diversified refining portfolio concentrated in the Western US, and an adequate capital structure and liquidity profile relative to both its ratings and the inherent cyclicality and volatility in the refining sector. The ratings continue to be constrained both by an oversupplied and weak US gasoline market, Moody's outlook for reduced near-term free cash flow as a result of lower EBITDA generation and higher capital spending, and significant crude distillation concentration in California, where TSO faces an increasingly prohibitive regulatory environment. The Ba1 rating on Tesoro's senior unsecured notes reflects both the overall probability of default of TSO, to which Moody's assigns a Probability of Default Rating of Ba1, and a loss given default of LGD 4 (68%). While TSO's unsecured notes are currently rated in line with its Ba1 Corporate Family Rating, if there were to be material drawings for an extended period on TSO's secured credit facility (rated Baa2, LGD 2 (18%)), the notes would be notched downward to reflect their contractual subordination to the credit facility. The credit facility is secured by substantially all of Tesoro's crude oil and refined product inventories plus the cash and receivables of its active domestic subsidiaries. The negative rating outlook primarily reflects the financing risk of the Carson acquisition and the uncertainty regarding the ultimate level of debt, including secured debt, that will be incurred to finance the pending transaction. Initially, Moody's expects TSO to rely on either its revolving credit facility or another form of secured debt to provide the bulk of the interim financing ($1 to $1.5 billion), followed by a certain amount of inventory financing ($500 to $750 million), the terms of which are not known. Over the near-term, given uncertainties regarding the ultimate impact of regulations in California, Moody's does not expect a ratings upgrade. However, over the medium-term, the ratings could benefit from efforts to reduce debt, improve product yields and lower refining unit costs to help better withstand regulatory challenges in California. Moody's could stabilize the rating in the medium term if TSO is successful in executing reasonable financing for the BP assets. Inability to successfully permanently finance the Carson acquisition with a meaningful portion of equity and reduce secured debt balances in a timely manner post closing of the acquisition (within 6-12 months) could result in the Ba1 Corporate Family Rating being downgraded and/or notching down of the Ba1 rated senior unsecured notes below the Corporate Family Rating. The principal methodology used in rating Tesoro Corporation was the Global Refining and Marketing Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Tesoro Corporation is a large independent refiner and marketer of petroleum products headquartered in San Antonio, Texas. TITAN PHARMACEUTICALS: Inks Option Pact to License Probuphine ------------------------------------------------------------- Titan Pharmaceuticals, Inc., has entered into a Stock Purchase and Option Agreement with an affiliate of the potential licensee of the rights to commercialize Probuphine, Titan's novel formulation of buprenorphine in development for the treatment of opioid dependence. Under the agreement, Titan sold 3,400,000 shares of its common stock at $1.25 per share and agreed to an exclusive option period to execute the proposed licensing agreement. The exclusive period expires on Oct. 31, 2012, but can be extended to Dec. 31, 2012, so that the potential partner can complete certain internal tasks. "The Board of Directors is extremely pleased with the progress of the strategic partnership and there is general agreement between the parties regarding the licensing transaction," said Marc Rubin, M.D., executive chairman of Titan. "We believe this investment in Titan is a strong indication of the licensee's commitment to executing the licensing agreement in the near term. It also provides us with the capital to advance the Probuphine program through our New Drug Application (NDA) submission, expected in October, and continue supporting the NDA and other corporate and R&D activities into 2013." About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals, Inc., is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. Following the 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan Pharmaceuticals' ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. Titan Pharmaceuticals' balance sheet at June 30, 2012, showed $10.05 million in total assets, $33.04 million in total liabilities and a $22.99 million total stockholders' deficit. TRAINOR GLASS: Wants Plan Filing Period Extended to Nov. 9 ---------------------------------------------------------- Trainor Glass Company asks the U.S. Bankruptcy Court for the Northern District of Illinois to extend the exclusive periods within which the Debtor can file a plan until Nov. 9, 2012, and seek acceptances for that plan until Jan. 8, 2012. Upon motion filed by the Debtor, the Court extended the 120-day and the 180-day periods in which the Debtor retains the exclusive right to file a plan by an additional 60 days, to and including Sept. 10, 2012, and Nov. 9, 2012, respectively. To date, the Debtor has been liquidating its assets with the authorization of the Court. Substantially all of the Debtor's physical assets have now been liquidated. The Debtor has been working closely with the Official Committee of Unsecured Creditors and its secured lender, First Midwest Bank, to discuss the structure of a plan. The 120-day and the 180-day periods within which the Debtor retained the exclusive right to file a plan were originally July 9, 2012, and Sept. 7, 2012, respectively. About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. The Hon. Carol A. Doyle oversees the Chapter 11 case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge Partners, Inc., serves as its financial consultant. The Debtor scheduled $14,276,745 in assets and $64,840,672 in liabilities. A three-member official committee of unsecured creditors has been appointed in the case. The committee retained Sugar Felsenthal Grais & Hammer LLP as counsel. TRIBUNE CO: Bank Debt Trades at 24% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 76.24 cents-on-the- dollar during the week ended Friday, Sept. 14, an increase of 1.08 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. The loan is one of the biggest gainers and losers among 169 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. Before it formally emerges from bankruptcy, Tribune must still get approval from the Federal Communications Commission on new broadcast licenses and waivers for overlapping ownership of television stations and newspapers in certain markets. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRI-VALLEY CORP: U.S. Trustee Appoints 3-Member Committee --------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Tri-Valley Corporation, et al. The Committee members are: 1. Myers, Widders, Gibson, Jones & Schneider, L.L.P. Attn: Erik Feingold 5425 Everglades St. Ventura, CA 93003 Tel: (805) 644-7188 Fax: (805) 650-5177 2. Petrawest LTD Attn: Gerald T. Raydon 8986 Beacon Hill Trail Reno, NV 89523 Tel: (760) 447-9666 Fax: (866) 756-2758 3. Rutan & Tucker, LLP Attn: Eric Fromme 611 Anton Blvd., 14th Floor Costa Mesa, CA 92626 Tel: (714) 662-4698 Fax: (714) 546-9035 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. TRUMAN BANK: Closed; Simmons First National Bank Assumes Deposits ----------------------------------------------------------------- Truman Bank of Saint Louis, Mo., was closed on Friday, Sept. 14, by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Simmons First National Bank of Pine Bluff, Ark., to assume all of the deposits of Truman Bank. The four branches of Truman Bank will reopen during normal business hours as branches of Simmons First National Bank. Depositors of Truman Bank will automatically become depositors of Simmons First National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Truman Bank should continue to use their existing branch until they receive notice from Simmons First National Bank that it has completed systems changes to allow other Simmons First National Bank branches to process their accounts as well. As of June 30, 2012, Truman Bank had around $282.3 million in total assets and $245.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, Simmons First National Bank agreed to purchase essentially all of the failed bank's assets. The FDIC and Simmons First National Bank entered into a loss-share transaction on $117.8 million of Truman Bank's assets. Simmons First National Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers with questions about the transaction should call the FDIC toll-free at 1-800-823-5028. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/truman.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $34.0 million. Compared to other alternatives, Simmons First National Bank's acquisition was the least costly resolution for the FDIC's DIF. Truman Bank is the 42nd FDIC-insured institution to fail in the nation this year, and the second in Missouri. The last FDIC-insured institution closed in the state was Glasgow Savings Bank, Glasgow, on July 13, 2012. TUTOR PERINI: Moody's Cuts Corporate Family Rating to 'Ba3' ---------------------------------------------------------- Moody's Investors Service downgraded Tutor Perini Corporation's corporate family rating and probability of default rating to Ba3 from Ba2 and the company's senior unsecured note rating to B1 from Ba3. The company's speculative grade liquidity rating remains at SGL-3. The ratings outlook is stable. The following ratings were downgraded: Corporate family rating -- to Ba3 from Ba2 Probability of default rating -- to Ba3 from Ba2 7.625% senior unsecured notes due 2018 -- B1 (LGD5, 75%) from Ba3 (LGD5, 72%) Ratings Rationale The rating action reflects Tutor Perini's weaker than expected operating earnings and debt levels, which have resulted in weaker credit metrics. The company significantly increased its leverage in 2011 with the completion of seven acquisitions. The company planned to reduce the leverage incurred to complete these acquisitions with free cash flow. However, the company's operating results in the first half of 2012 have been weaker than expected. As a result, the company has produced negative free cash flow, which has led to increased debt levels and a lack of improvement in credit metrics. The company's leverage ratio remains elevated at 3.4x and its interest coverage ratio, as measured by its EBITA/Interest Expense, was only 2.3x for the trailing 12-month period ending June 30, 2012 including Moody's standard adjustments for operating leases. Moody's believes the company's liquidity position is adequate but perhaps less than optimal considering the potential for earnings volatility attributable to Tutor Perini's fixed price contract exposure and the lumpy nature of project awards and completion, which can drive significant working capital swings. The company had approximately $75 million of corporate cash, approximately $110 million of joint venture cash along with $257 million of borrowing availability as of June 30, 2012. The company should have ample room to remain in compliance with its amended debt covenants as long as operating results begin to improve within the next six months. Tutor Perini's Ba3 corporate family rating primarily reflects its elevated leverage, relatively thin margins and significant exposure to fixed-price construction contracts. The company is also exposed to contingent risks associated with periodic contract disputes and has a liquidity profile that provides only modest cushion against unforeseen shocks. The company does benefit from meaningful scale, a good market position and diversity across a number of non-residential building and civil infrastructure construction segments. Near term revenue visibility is also good, supported by recent booking trends and a sizeable backlog. The stable outlook signals that Tutor Perini's operating performance is likely to improve in the second half of 2012 based on the company's sizeable backlog and that free cash flow will improve in 2013 as more projects move into a cash generating position. An upgrade in the near-term is unlikely. However, positive rating pressure could develop if the company's speculative grade liquidity rating (SGL) improves to SGL-2, or if the company's Debt/EBITDA declines below 3.0x and its EBITA/ Interest Expense rises above 3.0x on a sustainable basis. A downgrade could occur if the Building Group's operating losses persist and continue to weigh on the consolidated margins of the company. Downward rating pressure could also develop if Debt/EBITDA rises above 4.0x and EBITA/Interest Expense declines below 2.0x on a sustainable basis. Headquartered in Sylmar, California, Tutor Perini Corporation provides general contracting, construction management and design- build services to public and private customers primarily in the United States. The company generated revenue of $4.2 billion for the trailing twelve month period ending June 30, 2012. The principal methodology used in rating Tutor Perini was the Global Construction Industry Methodology published in November 2010. UNITEK GLOBAL: S&P Keeps 'B' Rating on $135MM Term Loan Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Blue Bell, Pa.-based UniTek Global Services Inc.'s term loan facility due 2018, including the 'B' issue-level rating and '5' recovery rating, remain unchanged following the company's $15 million add- on to the facility. The proposal will increase the size of the facility to $135 million from $120 million. The '5' recovery rating indicates expectations for modest (10%-30%) recovery of principal in the event of payment default. The company intends to use funds from the add-on to fund its $14 million initial payment for the acquisition of Skylink, which provides installation services for customers of DirecTV and ViaSat. The acquisition is expected to close on Sept. 14, 2012, and may include earn-out payments of up to $9.5 million, subject to performance milestones. "Our 'B+' corporate credit rating on UniTek and stable outlook remain unchanged and reflect its 'aggressive' financial risk profile. Pro forma for the transaction, our measure of adjusted leverage is expected to be about 4x, which includes the present value of operating leases and partial debt treatment for the insurance reserve liability. We consider the company's liquidity 'less than adequate' based on a leverage covenant cushion of less than 15% as of June 30, 2012. The ratings also reflect what we consider a 'weak' business risk profile due to high customer concentration and participation in a very competitive and fragmented industry. Partially tempering factors include our expectation for good growth prospects over the next two years, driven by healthy capital expenditures by the telecommunications industry which is reflected in the company's sizable backlog," S&P said. RATINGS LIST UniTek Global Services Inc. Corporate Credit Rating B+/Stable/-- $135 mil. term loan facility due 2018 B Recovery Rating 5 UNIVISION COMMUNICATIONS: Moody's Rates $300MM 1st Lien Notes B2 ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Univision Communications, Inc.'s proposed $300 million add-on to its $625 million senior secured first lien notes due 2022. Univision plans to utilize the net proceeds from the note offering to pay down its term loans. Univision's B3 Corporate Family Rating (CFR), B3 Probability of Default Rating, other debt instrument ratings, SGL- 3 speculative-grade liquidity rating and stable rating outlook are not affected. The refinancing improves Univision's maturity profile and reduces refinancing risk related to its 2014 and 2017 maturities at an approximate $7 million annual increase in cash interest expense that is manageable within the company's free cash flow (roughly $104 million LTM 6/30/12). Moody's estimates the increase in annual cash interest costs is approximately $20 million when also incorporating the original $625 million notes issued in August 2012 and the paydown of the term loans from the proceeds thereof. Univision completed an amendment to its credit facility in August to permit the company to apply the net proceeds ratably to outstanding term loans. Univision plans to apply approximately 93% of the proceeds from the $300 million add-on to the 2017 extended term loan and the balance to its 2014 term loans. Moody's believes Univision can fund its remaining 2014 term loans ($389 million pro forma for the proposed offering) through free cash flow and drawdowns under its revolvers ($409 million expiring March 2016 and $120 million receivables facility expiring March 2016). Univision has no meaningful maturities in 2015 and with the next significant maturity hurdle in 2016/2017, the company has additional time to grow earnings and reduce leverage. Assignments: Issuer: Univision Communications, Inc. Senior Secured Regular Bond/Debenture due 2022 (increased to $925 million from $625 million), rated B2, LGD3 - 40% Ratings Rationale Univision is investing heavily for growth to reduce its very high debt-to-EBITDA leverage (approximately 13.1x LTM 6/30/12 incorporating Moody's standard adjustments and excluding non-cash advertising revenue). Investments include the scheduled 2012 launch of three new cable networks (focusing on sports, telenovelas and news) and a joint venture with ABC to develop an English-language news channel targeted to Hispanics. These investments are currently a drag on earnings. Univision has signed four retransmission consent agreements that include these three new cable networks, and is expected to gain carriage with other video operators. Moody's projects revenue growth in the 6-7% range in 2012 and 2013 as the networks are launched, assuming modest U.S. economic growth, and that the company continues to benefit from demographically-aided growth in Spanish-language media notwithstanding heightened competition from efforts by other media companies to target the Hispanic population. Univision's B3 CFR reflects its strong and leading market position in Spanish-language media within the U.S. and good intermediate- term growth prospects tempered by its very high leverage, vulnerability to cyclical advertising and refinancing risk associated with its debt maturities. Growth prospects supported by Hispanic demographic trends and the market position, as well as strong operating margins lead to good unlevered cash flow generation. The risk of a restructuring of its highly leveraged balance sheet nevertheless remains elevated, particularly if economic conditions were to weaken. Moody's believes Univision has adequate liquidity through 2013, although the covenant cushion is likely to diminish to a 10-12% range from approximately 20% when the net senior leverage covenant steps down to 9.25x from 10.25x in December 2012. A covenant amendment could be necessary if the economy weakens. Univision is dependent on access to capital to refinance $5.1 billion of 2016/2017 maturities. Moody's does not believe Univision will generate sufficient free cash flow to retire the debt at maturity, and its ability to refinance will depend on three major unknowns: credit market conditions, Univision's leverage position, and level of free cash flow generation. The 2022 notes are guaranteed by Univision's domestic operating subsidiaries and Broadcast Media Partners Holdings, Inc. (Univision's parent) and are secured by a first lien on substantially all of the assets of Univision and its subsidiaries that secure the company's $5.7 billion senior secured credit facility, $1.2 billion 6.875% senior notes due 2019 and $750 million 7.875% senior notes due 2020. Moody's ranks the credit facility, 2022 notes, 2020 notes, and 2019 notes the same in its loss given default notching methodology based on the instruments' pari passu first lien senior secured claims. The credit facility nevertheless contains covenants that could improve recovery prospects relative to the notes. The principal methodology used in rating Univision was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Univision, headquartered in New York, is the leading Spanish- language media company in the United States. UNIVISION COMMUNICATIONS: S&P Keeps 'B+' Rating on $925MM Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on New York City-based Univision Communication Inc.'s senior secured notes due 2022 remain unchanged following the company's $300 million add-on, bringing the aggregate amount of the issue to $925 million. "Our issue-level rating on the notes remains at 'B+' (one notch higher than the 'B' corporate credit rating on the company) and the recovery rating remains at '2', indicating our expectation of substantial (70% to 90%) recovery for noteholders in the event of a payment default," S&P said. "The company intends to use proceeds to repay its non-extended and extended senior secured term loans on a pro rata basis. Although the transaction reduces 2014 and 2017 maturities, the company still faces significant refinancing hurdles, with $4.8 billion of debt maturing in 2017. Univision's ability to refinance its 2017 maturities will likely rely on its ability to pay down debt and grow EBITDA over the next five years. Pro forma leverage remains unchanged and extremely high at 12.2x for the 12 months ended June 30, 2012," S&P said. RATINGS LIST Univision Communication Inc. Corporate credit rating B/Stable/-- Senior secured notes B+ Recovery rating 2 US XPRESS: Moody's Rates $230-Mil. Sr. Secured Facilities 'B2' -------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to U.S. Xpress Enterprises, Inc.'s proposed $230 million amend and extend senior secured credit facilities consisting of a $40 million revolving credit facility and $190 million senior secured term loan. The B3 corporate family and probability of default ratings were affirmed. Concurrently, the rating outlook was changed to stable from negative based on the moderate improvement in the company's liquidity profile as a result of the proposed transaction. Proceeds from the bank facilities are expected to be used to repay all amounts outstanding under the existing senior secured credit agreement, reduce borrowings under the accounts receivable securitization facility and pay related fees and expenses. Total debt will increase modestly post the transaction. However, the proposed transaction would extend debt maturities and modestly increase availability under the securitization facility. Simultaneously, covenants are expected to be amended and the current securitization facility extended for a two-year period. Ratings assigned: U.S. Xpress Enterprises, Inc. Proposed amended $40 million senior secured revolving credit facility due 2015, B2 (LGD-3, 36%) Proposed amended $190 million senior secured term loan due 2016, B2 (LGD-3, 36%) Ratings affirmed (with updated LGD assessments): U.S. Xpress Enterprises, Inc. Corporate family rating, at B3 Probability of default rating, at B3 Existing $50 million senior secured revolving credit facility due 2013, at B2 (LGD-3, 35%) Existing $170 million senior secured term loan due 2014, at B2 (LGD-3, 35%) Upon completion of the proposed transaction, ratings for U.S. Xpress's existing senior secured revolving credit facility and term loan will be withdrawn. The assigned ratings are subject to Moody's review of final documentation. Ratings Rationale The change in rating outlook to stable from negative reflects the moderate improvement to the company's liquidity as a result of the proposed transaction. The transaction lengthens U.S. Xpress' debt maturity profile, modestly increases available capacity under its securitization facility and increases covenant compliance headroom. The stable outlook is supported by an adequate pro forma liquidity position characterized by positive free cash flow (after maintenance capex), minimal cash on the balance sheet, a proposed amended two-year securitization facility and adequate cushion under financial covenants. Moody's expects modest revenue growth during the latter part of 2012 into 2013, largely driven by contractual price increases rather than volume. The B3 CFR reflects the cyclical nature of the truckload industry and weak credit metrics that are largely in line with the rating category. Pro forma for the proposed transaction, debt/EBITDA stands at 5.2 times (on a Moody's adjusted basis) while EBIT coverage of interest approximates 1 time. The B3 CFR also incorporates the effects of the uncertain economic environment on volume growth and the potential for elevated fuel and driver costs to pressure margin growth going forward. The B3 CFR is supported by a relatively young fleet allowing the company to defer a portion of capital expenditures to preserve liquidity if needed, good scale, a diverse customer base/end markets and the expectation for further contractual rate increases due to continued industry-related capacity constraints. The ratings could be downgraded if credit metrics weaken such that debt to EBITDA exceeds 6.0x, or EBIT to interest declines to 0.5x. A ratings downgrade could also result from deterioration in the company's liquidity profile including a reduction in securitization facility availability, negative free cash flow generation or limited headroom under financial covenants. The ratings could be upgraded if the company improves credit metrics such that EBIT to interest and free cash flow to debt are expected to be sustained at above 1.5 times and 5%, respectively. U.S. Xpress Enterprises, Inc's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside U.S. Xpress Enterprises, Inc's core industry and believes U.S. Xpress Enterprises, Inc's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. U.S. Xpress Enterprises, Inc., a Nevada Corporation, headquartered in Chattanooga, Tennessee, provides truckload transportation services in North America, including line-haul, dedicated and inter-modal freight services. Gross revenues for the last twelve months ended June 30, 2012 totaled approximately $1.7 billion. VALEANT PHARMACEUTICALS: Moody's Confirms Ba3 CFR; Outlook Neg. --------------------------------------------------------------- Moody's Investors Service confirmed the ratings of Valeant Pharmaceuticals International, Inc. and Valeant Pharmaceuticals International (collectively "Valeant") including the Ba3 Corporate Family Rating, concluding a rating review for downgrade initiated on September 4, 2012. At the same time, Moody's assigned a Ba1 rating to Valeant's new senior secured Term Loan B, and a B1 rating to Valeant's proposed new senior unsecured notes. Following these actions, the rating outlook is negative. Ratings confirmed (some with LGD point estimate changes): Valeant Pharmaceuticals International, Inc. Ba3 Corporate Family Rating Ba3 Probability of Default Rating Ba1 (LGD 2, 17%) senior secured revolving credit facility, term loan A and term loan B, from Ba1 (LGD 2, 18%) Valeant Pharmaceuticals International B1 (LGD 5, 74%) senior unsecured notes of $915.5 million due 2016, from B1 (LGD 5, 71%) B1 (LGD 5, 74%) senior unsecured notes of $500 million due 2017, from B1 (LGD 5, 71%) B1 (LGD 5, 74%) senior unsecured notes of $945 million due 2018, from B1 (LGD 5, 71%) B1 (LGD 5, 74%) senior unsecured notes of $690 million due 2020, from B1 (LGD 5, 71%) B1 (LGD 5, 74%) senior unsecured notes of $650 million due 2021, from B1 (LGD 5, 71%) B1 (LGD 5, 74%) senior unsecured notes of $550 million due 2022, from B1 (LGD 5, 71%) Ratings assigned: Valeant Pharmaceuticals International, Inc. Ba1 (LGD 2, 17%) senior secured Term loan B of $1 billion due 2019 Valeant Pharmaceuticals International B1 (LGD 5, 74%) senior unsecured notes of $1.75 billion "Solid cash flow, good organic growth rates, business model diversity, and synergy opportunities from the Medicis acquisition support confirming Valeant's Ba3 rating," stated Michael Levesque, Moody's Senior Vice President. "However, elevated financial leverage and a highly dynamic acquisition strategy result in the negative rating outlook," continued Levesque. Ratings Rationale Valeant's Ba3 Corporate Family Rating reflects its moderately high pro forma leverage of approximately 4.5 times (Moody's estimate),as well as the risks associated with Valeant's aggressive acquisition strategy. The pro forma leverage figure includes estimated acquisition synergies, but the company's rapid pace of acquisitions makes it difficult to ascertain a true run- rate of pro forma EBITDA. Valeant's ratings are supported by its good size and scale, a high level of product and geographic diversity, and the lack of any major patent cliffs relative to other pharmaceutical companies. Further, Moody's expects good free cash flow to continue, but that acquisitions will remain a priority use of cash flow. Moody's sees credit risks associated with Valeant's dynamic acquisition strategy, including rapid international expansion, organizational complexity, integration challenges, and the inability to fully rule out a substantial increase in leverage for an opportunistic acquisition. In addition, a significant increase in secured debt could result in subordination of senior unsecured bond holders. These risks are reflected in the negative rating outlook. Moody's acknowledges, however, that to date Valeant has generally adhered to its publicly-stated pro forma debt/EBITDA target of 4 times. Moody's could downgrade the ratings if Valeant increases its leverage substantially above 4.0 times or if Valeant faces unforeseen integration challenges or legal issues. Moody's could revise the rating outlook to stable if Valeant achieves targeted cost synergies and establishes a longer track record of adhering to stated financial policies including leverage of 4.0 times or below. Over time, Moody's could upgrade the ratings if Valeant sustains debt/EBITDA below 3.5 times while maintaining favorable organic growth rates and a diverse business profile. The methodologies used in this rating were Global Pharmaceutical Industry published in October 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Montreal, Quebec, Valeant Pharmaceuticals International, Inc. [NYSE: VRX] is a global specialty pharmaceutical company formed from the merger of Biovail Corporation and Valeant Pharmaceuticals International. For the first six months of 2012 Valeant reported net revenues of approximately $1.7 billion. VALENCE TECHNOLOGY: Eyes Ch.11 Exit This Year; $10MM Loan Okayed ---------------------------------------------------------------- Valence Technology, Inc. disclosed that it has secured a Debtor- in-Possession (DIP) credit facility of up to $10 million from GemCap Lending I, LLC. The DIP credit facility has been approved by the U.S. Bankruptcy Court for the Western District of Texas and will be used to augment the Company's liquidity and working capital. With this credit facility in place, the Company expects that it will be able to continue to provide its goods and services to its customers without impediment. Valence expects to complete its U.S.-based restructuring before the end of 2012. The Company and its Board of Directors are being advised by Streusand, Landon & Ozburn, LLP. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that although Valence Technology had permission to use cash collateral since the Chapter 11 filing in July, the developer of storage batteries didn't have a loan until Sept. 13. The bankruptcy judge in Austin gave Valence approval for a new $10 million loan that will come ahead of the existing secured lender owed $69.1 million. About Valence Technology Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-11580) on July 12, 2012, in its home-town in Austin. Founded in 1989, Valence develops lithium iron magnesium phosphate rechargeable batteries. Its products are used in hybrid and electric vehicles, as well as hybrid boats and Segway personal transporters. The Debtor disclosed debt of $82.6 million and assets of $31.5 million as of March 31, 2012. Chairman Carl E. Berg and related entities own 44.4% of the shares. ClearBridge Advisors, LLC owns 5.5%. Valence expects to complete its restructuring during 2012. Judge Craig A. Gargotta presides over the case. The Company is being advised by Streusand, Landon & Ozburn, LLP with respect to bankruptcy matters. The petition was signed by Robert Kanode, CEO. The U.S. Trustee for Region 7 has appointed five creditors to the Committee of Unsecured Creditors in the bankruptcy case of the Debtor. WATERWAYS OF MUSKOKA: In Receivership After Running Out Money ------------------------------------------------------------- cottagecountrynow.ca reports that Waterways of Muskoka has gone into receivership after it ran out of money putting a project on hold at a new Bracebridge condominium complex. All work on the development stopped when employees of Waterways of Muskoka were locked out of the office on Aug. 23, according to the report. The report notes that John Sisson, CAO of the Town of Bracebridge, said in an email the receiver plans "to market and sell the assets by private sale." Waterways of Muskoka is linked to Senarra Homes, a group of companies focusing on building new homes, community development, and construction and consulting. WPCS INTERNATIONAL: Reports $993,700 Net Income in July 31 Quarter ------------------------------------------------------------------ WPCS International Incorporated filed its quarterly report on Form 10-Q, reporting a net loss from continuing operations of $692,185 on $13.4 million of revenue for the three months ended July 31, 2012 compared with net income from continuing operations of $169,464 on $18.6 million of revenue for the three months ended July 31, 2011. Including discontinued operations, the Company had net income of $993,701 for the three months ended July 31, 2012, compared with a net loss of $19,221 for the three months ended July 31, 2011. As a result of the sale of the assets of the Hartford and Lakewood Operations on July 25, 2012, the Company recorded the financial results of these operations as discontinued operations. For the three months ended July 31, 2012, the Company recorded an income from discontinued operations of approximately $1.7 million. Included in the income from discontinued operations are an approximately $2,325,000 gain from disposal and $55,000 of expenses directly associated with the sale of the assets of the Hartford and Lakewood Operations. As a result of the sale of the assets of the Hartford and Lakewood Operations as described above, and the common stock of the St. Louis and Sarasota Operations to Multiband on Sept. 1, 2011, the Company recorded the financial results of these operations as discontinued operations. For the three months ended July 31, 2011, the Company recorded a loss from discontinued operations of $188,685, net of tax. The Company's balance sheet at July 31, 2012, showed $26.0 million in total assets, $18.8 in total liabilities, and stockholders' equity of $7.2 million. Going Concern Doubt According to the regulatory filing, due to the operating losses for the quarters ended April 30, 2012, and July 31, 2012, the Company did not meet the Fixed Charge Coverage Ratio of 1.2 to 1.0 for the two quarters ended April 30, 2012, and July 31, 2012, and the Leverage Ratio of not more than 1.75 to 1.0 at April 30, 2012, and the Company is currently in default under the loan and security agreement with Sovereign Bank, N.A. The Company is also not in compliance with the terms of the the Surety Financing and Confession of Judgment Agreement with Zurich American Insurance Company. As a result of the Company's noncompliance, the Company instructed the owner of this project to make at all current and future payments directly to Zurich. "The Company's failure to comply with the terms of the Credit Agreement and the Zurich Agreement, as well as the Company's losses from operations for the three months ended July 31, 2012, raise substantial doubt about the Company's ability to continue as a going concern. "Based on current projections, the Company does not expect its available cash, working capital balances, operating expense management and expected future operating income to be sufficient to cover its liquidity needs beyond the end of its second fiscal quarter or early into its third fiscal quarter for the fiscal year ending April 30, 2013." As reported in the TCR on Aug. 2, 2012, the report of the Company's independent registered public accounting firm for the year ended April 30, 2012, contained an emphasis paragraph indicating there is substantial doubt concerning the Company's ability to continue as a going concern. J.H. Cohn LLP, in Eatontown, N.J., noted that the Company is in default of certain covenants of their credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. A copy of the Form 10-Q is available at http://is.gd/S3vnwS Exton, Pennsylvania-based WPCS International Incorporated is a global provider of design-build engineering services for communications infrastructure, with over 375 employees in five (5) operations centers on three continents. 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. WYLDFIRE ENERGY: Has Court's Nod to Hire Ron L. Yandell as Counsel ------------------------------------------------------------------ Wyldfire Energy, Inc., obtained permission from the U.S. Bankruptcy Court to employ Ron L. Yandell as counsel. As reported by the Troubled Company Reporter on July 19, 2012, Ron L. Yandell has been paid a total of $17,000 in connection with the Chapter 11 proceeding. This amount represents the filing fee of $1,047, as a deposit for U.S. Trustee's fees and $15,593 as retainer in connection with the case. Mr. Yandell will charge the Debtor $25 per hour for work performed. Wyldfire Energy, Inc., Inc. filed a Chapter 11 petition (Bankr. N. D. Tex. Case No. 12-70239) on June 20, 2012, in Wichita Falls, Texas. Ronald L. Yandell, Esq., serves as counsel to the Debtor. The petition was signed by Tamara L. Ford, president. WYLDFIRE ENERGY: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Wyldfire Energy, Inc., filed its summary of schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A - Real Property $40,024,253 B - Personal Property $3,306,740 C - Property Claimed as Exempt D - Creditors Holding Secured Claims $529 E - Creditors Holding Unsecured Priority Claims $0 F - Creditors Holding Unsecured Non-Priority Claims $5,695,714 ------------ ----------- $43,330,992 $5,696,243 A copy of the Schedules is available for free at: http://bankrupt.com/misc/WYLDFIRE_ENERGY_sal.pdf About Wyldfire Energy Palo Pinto, Texas-based Wyldfire Energy, Inc., filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-70239) in Wichita Falls on June 20, 2012. Tamara Ford, 100% stockholder, signed the Chapter 11 petition. Judge Harlin DeWayne Hale oversees the case. The Law Offices of Ronald L. Yandell, Esq., serves as the Debtor's counsel. * Chelsea Targets Two More Properties With Receivership Program --------------------------------------------------------------- Seth Daniel at Chelsea Record reports that Chelsea Restoration, with a hefty state grant in their coffers, is ready to salvage two more Chelsea properties. Helen Zucco of Chelsea Restoration said that the non-profit recently got a $450,000 grant from the Attorney General's Office to pursue receivership of derelict homes in Revere, Chelsea and Saugus, according to the report. The report relates that the grant will allow them to start the process of fixing the homes ? some of them in absolute chaotic conditions ? and then re-selling them to the owner or, preferably, a veteran. The report, citing a press release from the organization, notes that the two properties in Chelsea that will be rehabilitated are: * 70 Addison St. * 101 Shurtleff St. * Resort Moves to Resolve Clash Over Arizona Biltmore Villas ------------------------------------------------------------ Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that lawyers for a group of luxury resorts that are slated for bankruptcy auction are maneuvering to put a lid on a potential sale complication involving one of the properties, the Arizona Biltmore in Phoenix. * Moody's Says US Pharma Research Companies' Profits Will Lag ------------------------------------------------------------- Revenue is growing for US contract research organizations (CROs) in the pharmaceutical services industry, but pricing pressure will hamper EBITDA and free cash flow growth, says Moody's Investors Service in a new special comment "Contract Research Organizations' Revenue Growth Is Strong, But Profits Will Lag." Moody's estimates total R&D spending by pharmaceutical companies globally is around $120 billion, $50 to $60 billion of which is spent directly on pre-clinical and clinical development. With CRO industry revenues currently around $25 billion, the rating agency estimates CROs have penetrated about 40% to 50% of the potential market. "Revenue growth among large CROs is accelerating, driven by strategic partnerships with pharma companies and increased outsourcing by the pharmaceutical industry," said Jessica Gladstone, a Moody's Vice President -- Senior Analyst. "We estimate organic revenue growth among these large CROs was over 8% in the second quarter, and sustained mid-single digit growth is possible over the next several years as outsourcing continues to increase." Increased outsourcing, however, is not benefitting all CROs equally. Strategic partnerships have led to the larger CROs gaining market share at the expense of smaller competitors, as pharmaceutical companies reduce the number of CROs they use. Parexel and ICON have seen the greatest acceleration in revenue growth recently, thanks to their focus on strategic partnerships, while Pharmaceutical Product Development Inc. and Quintiles Transnational Corp. are also well positioned to gain market share due to their scale and breadth of service offerings, says Moody's. But while strategic partnerships are driving revenue growth, they are contributing to pricing pressure and will increase customer concentration among the CROs which is a credit negative, says Moody's. Both increasing salary costs -- as CROs add employees to meet demand -- and pricing pressure will shrink profit margins even as absolute earnings increase, says the report. Moody's expects CROs to also increase capital expenditures on technology upgrades to stay competitive. Moody's also notes that increased consolidation is likely in the fragmented CRO industry. Over time, this consolidation will be a net positive for the industry, but credit quality could suffer in the interim because of integration risks and increased debt loads to fund acquisitions, says Moody's. Moody's research subscribers can access this report at: http://is.gd/jAtCXm * Moody's Updates Study of Default Rates by Regional Governments ---------------------------------------------------------------- Despite the stressful environment since the onset of the global financial crisis, only one non-US regional and local government had defaulted since 2007, says Moody's Investors Service in its second default study for the sector. The report, "Default and Recovery Rates for Regional and Local Governments outside the U.S., 1983-2011," highlights that, from over 200 Moody's-rated entities, the Mexican State of Zacatecas was the only one to default since 2007. Previous defaults by Russian and Argentinean issuers were part of sector-wide defaults during the Russian and Argentinean sovereign crises of 1998 and 2001-2002, respectively. Within the period of study, no regional and local government issuer that ever carried a Moody's investment-grade rating has subsequently defaulted. However, the sector remains under unprecedented stress, particularly in Europe, and a growing number of regional and local governments have averted defaults due to extraordinary support from central governments in recent years. Further, a comparison between sub-sovereign and corporate transition rates by the rating agency shows that rating changes for sub-sovereign issuers have been, on average, less frequent than for corporate issuers. Moody's survey of rated and unrated defaults in the sector shows that, due to institutional framework and financial and economic linkages, regional and local government credit quality is very closely tied to that of its sovereign environment. Strong linkages are especially evident during financial crises since both the central and regional governments are impacted by challenging economic conditions, fiscal austerity measures, and a difficult funding environment. The Moody's study presents an analysis of all regional and local government defaults since 1983 and compares and contrasts sub- sovereigns and corporates with regard to default, migration, and recovery rates as well as rating accuracy measures. The report is available at http://is.gd/HlQoMt * Moody's Says Debt Ratio Tests Have Unequal Investor Protection ---------------------------------------------------------------- A majority of companies use a ratio test in their high-yield bond covenants that may significantly increase potential debt loads, Moody's Investors Service said in a new report based on a review of 432 high-yield bonds in Moody's High-Yield Covenant Database, "High-Yield Bond Covenant: Standard $1 Debt Incurrence Ratio Tests Provide Unequal Investor Protection." High-yield bond issuers usually choose between two types of debt incurrence ratio tests that are intended to regulate the ability to increase leverage in the future, said Moody's. These so-called $1 debt tests usually take the form of either a leverage ratio such as Debt-to-EBITDA or a fixed charge coverage ratio (FCCR) test such as EBITDA-to-Interest Expense. If a company's leverage ratio exceeds or FCCR ratio falls below the threshold established in its covenant, incurring additional debt is more difficult. "Between the two tests, the fixed-charge ratio test gives companies much more capacity to increase leverage because it is usually rubber-stamped into the covenant with a threshold of two times, regardless of a company's actual ratio at the time it issues the bond," said Matt Musicaro, associate analyst at Moody's and author of the report. "The leverage ratio, on the other hand, is usually tailored to the company's actual cash flow at the time of issuance, which reduces the scope for it to issue more debt in the future." According to Moody's analysis of 432 high-yield bonds issued between January 2011 and June 2012, companies that employed the FCCR test had the flexibility to incur additional leverage amounting to 2.1x adjusted EBITDA, on average, compared with 0.74x for companies using a leverage ratio test. More than 80% of the bond issues in the sample used the FCCR test, says Moody's. This greater flexibility to incur debt under the FCCR test is reflected in weaker scores for these debt-incurrence covenants under Moody's covenant quality scoring system. The average covenant quality debt score of a company that uses an FCCR test is 3.4, while the average for a leverage ratio test is a materially higher 2.7, when using a five-point scale in which 1.0 denotes the highest level of investor protection ("strong") and 5.0 the lowest ("weakest"), according to the Moody's report. Moody's report also notes that protection is uneven across sectors and regions. Metals and mining, oil and gas, and automotive are among the industries with the most capacity to issue additional debt under the $1 debt test, while gaming and telecommunications are among those with the least capacity. European companies have less capacity to incur debt than US and Canadian companies. The report is based on a review of bonds in Moody's High-Yield Covenant Database. Moody's expects to launch the database online soon with about 1,000 bonds dating back to January 2010. Moody's research subscribers can access this report at: http://is.gd/ix0zhC * Moody's Changes US Life Insurance Outlook to Negative ------------------------------------------------------- Moody's has changed its outlook for the US life insurance industry to negative from stable, the rating agency says in its new "US Life Insurance Industry Outlook," with low interest rates, in particular, continuing to depress companies' earnings over the next 12--18 months. "The outlook change was driven largely by our expectation that interest rates will remain in the low single digits for the next few years," says Vice President and author of the report Laura Bazer. "We believe that low rates, along with below-trend economic growth and prolonged volatility in the equity markets, will continue to erode insurers' earnings and revenues, gradually weakening their financial flexibility." Spread compression is expected to continue to depress profits from spread business, like fixed annuities and universal life, and from long-tailed products, such as long-term care and long-term disability income, Bazer says, while write-downs on GAAP DAC, goodwill and other intangibles will become larger and more frequent as the high interest rate assumptions baked into product reserving become untenable. Legacy variable annuities will also underperform due to volatility in the equity markets stemming from the European debt crisis. Reserve swings are expected to become more frequent and depress firms' earnings and regulatory capital levels, while market volatility will also make hedging more costly. Additionally, persistent high unemployment and fiscal tightening will constrain life insurers' top and bottom line growth. "We expect high unemployment, weak consumer confidence and potential sharp tax increases to negatively affect the sales of all life products," Ms. Bazer says, while noting that sales of many products are already falling. Moody's research subscribers can access this report at: http://is.gd/xXW0FX * Moody's Says Export Growth Won't Offset Domestic Declines ----------------------------------------------------------- US coal exports will continue to grow over the next decade, but the increase will not fully offset the decline in US domestic consumption, says Moody's Investors Service in its new special comment "US Coal Sees Growing Export Opportunities, But Costs and Geography Pose Limits." The US coal industry is going through a long-term shift in market fundamentals, pressured by abundant, cheap natural gas and ever- stringent environmental regulations, and has shrunk coal's share of the US power market by over 10% in the last four years. This shift has led US coal producers to increasingly focus on exports, says Moody's. "Still, despite Chinese and Indian growth driving demand for both thermal coal and met coal markets, it will be suppliers outside the US that will absorb most of the additional demand," said Anna Zubets-Anderson, a Moody's Vice President -- Senior Analyst. Moody's expects that producers in Indonesia, Australia and Columbia will benefit most from growth in global coal consumption, as these countries have better geographic positions, lower costs, or both. In the metallurgical coal markets, Moody's expects that US producers that focus on higher-quality met coal grades, such as Peabody Energy, Teck Resources, and Walter Energy, will be best- positioned to take advantage of Asia's ongoing expansion. As to growth in seaborne thermal coal trade, producers in the Powder River Basin with port access and low production costs will have an advantage in accessing the Pacific's seaborne market as port capacity remains tight on North America's west coast. Moody's also expects to see growth in exports of the Illinois Basin coals, due to their high heat content and low costs, while producers in the US Appalachian region will struggle to compete in the Atlantic basin seaborne thermal coal market due to high cost structures. * First Circuit Appoints Diane Finkle as R.I. Bankruptcy Judge -------------------------------------------------------------- The First Circuit Court of Appeals appointed Bankruptcy Judge Diane Finkle to a fourteen-year term of office in the District of Rhode Island, Providence, effective September 6, 2012. Honorable Diane Finkle United States Bankruptcy Court The Federal Center 380 Westminster Street Providence, RI 02903 Telephone: (401) 626-3060 Fax: (401) 626-3080 Law Clerks: Jimmy Dahu: (401) 626-3061 Jordan Baumer: (401) 626-3062 Term Expiration: September 5, 2026 * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ --------- -------- -------- ABSOLUTE SOFTWRE ABT CN 129.7 (4.8) 1.7 ADVANCED BIOMEDI ABMT US 0.2 (1.9) (1.5) AK STEEL HLDG AKS US 3,901.0 (360.6) 129.6 AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5 AMER AXLE & MFG AXL US 2,441.2 (394.7) 169.7 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,058.5 (28.0) 42.5 AMYLIN PHARM INC AMLN US 1,998.7 (42.4) 263.0 ARRAY BIOPHARMA ARRY US 108.1 (85.8) 17.2 ATLATSA RESOURCE ATL SJ 886.5 (270.4) 21.8 AUTOZONE INC AZO US 6,148.9 (1,416.8) (623.1) BOSTON PIZZA R-U BPF-U CN 162.9 (92.3) (0.3) CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHENIERE ENERGY CQP US 1,873.0 (442.2) 117.0 CHOICE HOTELS CHH US 857.7 (11.2) 402.1 CIENA CORP CIEN US 1,915.3 (60.3) 710.4 CINCINNATI BELL CBB US 2,702.7 (696.2) (52.8) CLOROX CO CLX US 4,355.0 (135.0) (685.0) DEAN FOODS CO DF US 5,553.1 (3.1) 185.6 DELTA AIR LI DAL US 44,720.0 (1,135.0) (6,236.0) DENNY'S CORP DENN US 328.9 (2.8) (20.3) DIRECTV DTV US 19,632.0 (4,045.0) 520.0 DOMINO'S PIZZA DPZ US 424.6 (1,369.1) 52.9 DUN & BRADSTREET DNB US 1,795.6 (821.9) (655.6) E2OPEN INC EOPN US 29.7 (34.5) (32.5) ELOQUA INC ELOQ US 37.5 (9.6) (14.2) FAIRPOINT COMMUN FRP US 1,877.4 (184.4) 51.6 FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7) FIFTH & PACIFIC FNP US 900.5 (175.5) 130.9 FREESCALE SEMICO FSL US 3,499.0 (4,498.0) 1,374.0 GENCORP INC GY US 874.0 (171.3) 47.3 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HCA HOLDINGS INC HCA US 27,132.0 (6,943.0) 1,690.0 HOVNANIAN ENT-A HOV US 1,624.8 (404.2) 881.0 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HYPERION THERAPE HPTX US 9.6 (41.8) (31.4) INCYTE CORP INCY US 312.0 (217.2) 154.4 INFINITY PHARMAC INFI US 113.0 (3.4) 70.2 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,583.6 (245.9) (227.2) JUST ENERGY GROU JE CN 1,583.6 (245.9) (227.2) LIMITED BRANDS LTD US 6,589.0 (245.0) 1,316.0 LIN TV CORP-CL A TVL US 839.2 (51.8) 52.7 LORILLARD INC LO US 2,576.0 (1,568.0) 881.0 MARRIOTT INTL-A MAR US 6,007.0 (1,124.0) (1,287.0) MERITOR INC MTOR US 2,555.0 (933.0) 279.0 MONEYGRAM INTERN MGI US 5,185.1 (116.1) (35.3) MORGANS HOTEL GR MHGC US 545.9 (110.1) (7.0) MPG OFFICE TRUST MPG US 2,061.5 (827.9) - NATIONAL CINEMED NCMI US 794.2 (354.5) 95.8 NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0 NB MANUFACTURING NBMF US 2.4 (0.0) (0.5) NEXSTAR BROADC-A NXST US 566.3 (170.6) 40.2 NPS PHARM INC NPSP US 186.9 (45.3) 130.3 NYMOX PHARMACEUT NYMX US 2.7 (7.7) (0.9) ODYSSEY MARINE OMEX US 22.4 (29.3) (26.9) OMEROS CORP OMER US 10.1 (20.5) (8.7) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 259.8 (161.1) 144.3 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 454.5 (29.8) 60.7 REGAL ENTERTAI-A RGC US 2,306.3 (542.3) 62.5 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,173.9 (665.6) 177.8 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,813.5 (202.0) 449.5 SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4) TAUBMAN CENTERS TCO US 3,096.1 (295.3) - TEMPUR-PEDIC INT TPX US 865.5 (12.1) 258.9 THERAPEUTICS MD TXMD US 4.9 (0.7) 1.0 THRESHOLD PHARMA THLD US 86.3 (51.4) 71.2 UNISYS CORP UIS US 2,397.9 (1,190.0) 463.1 VECTOR GROUP LTD VGR US 885.7 (119.5) 248.2 VERISIGN INC VRSN US 1,942.0 (59.2) 858.0 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VRINGO INC VRNG US 3.7 (1.4) 2.1 WEIGHT WATCHERS WTW US 1,193.6 (1,784.6) (259.9) ZAZA ENERGY CORP ZAZA US 202.3 (77.9) (18.8) ********* 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, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo B. 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 ***